Chapter 1096: The Sugar War Begins
Joseph thought for a moment before gesturing to Eman. "Please have Archbishop Brienne and Archbishop Talleyrand come to see me immediately. Oh, and Mr. Lavalette as well."
Half an hour later.
Once Bailly had finished briefing the senior cabinet members on the general situation, Joseph scanned the room and spoke with gravity.
"The British are hoarding sugar in massive quantities. It is clear they intend to short the price of sugar, perhaps even seize control over sugar pricing entirely."
Brienne and the others exchanged worried glances, their brows furrowed in concern.
Sugar was not merely a vital financial pillar that brought tens of millions of francs into France every year; it was the primary livelihood for over a hundred thousand French farmers who grew sugar beets.
If the price of sugar were to plummet, a vast number of farmers would face bankruptcy. When that happened, it wouldn't be surprising to see riots break out.
Finance Minister Gaudin was the most anxious of all. He knew that sugar was the anchor of stability for the franc. In current international trade, many countries accepted the franc for settlements, largely because anyone wanting to buy sugar had to use francs—the Paris Futures Exchange accepted no other currency.
If the center of the international sugar trade shifted to London, countries outside the Iberian-Apennine Common Market would likely demand that transactions be settled in gold and silver coins instead.
Joseph paused for a heartbeat before declaring in a firm voice, "I have decided that we will launch a full-scale counter-offensive to crush the British short-selling operation."
Gaudin's eyelids jumped in shock. "Your Highness, if the British dump over sixty thousand tons of sugar onto the market, it will be impossible for us to buy it all up."
Britain's goal in shorting the market was clear: they wanted to force the Paris Futures Exchange to lower its prices. If Paris didn't follow suit, all the buyers would be lured away to London.
But if France did match the price, London would simply keep dropping it until it reached whatever target the British had in mind. Eventually, the international sugar market would fall into a trend where it followed London's lead.
If France wanted to break this predicament, there was only one way: they had to absorb every single gram of low-priced sugar the British threw out, ensuring that buyers could still only find sugar at the Paris Futures Exchange.
At the current price of 3 francs and 7 sous per pound on the London futures market, buying sixty thousand tons would require a staggering sum of over four hundred million francs!
Naturally, to maximize the impact of their short, the British would continue to suppress the price. Even if they pushed it down below 2 francs, it would still require two hundred and fifty million francs to buy it all up.
France absolutely could not produce that kind of capital.
Furthermore, Britain certainly wouldn't accept payment in francs, so that two hundred and fifty million would have to be in gold and silver coins.
Joseph corrected him. "No, the British only have about forty thousand tons of sugar."
Though Gaudin didn't know how the Crown Prince could "deduct" a portion of the British inventory, he still shook his head. "Even then, it would require nearly two hundred million francs..."
Joseph smiled calmly. "It does require a massive amount of capital, but that money can come from others."
Gaudin and the others looked at him in surprise.
Joseph continued, "In the futures and financial markets, the most important thing is confidence.
"As long as we convince everyone that the British attempt to short the market will fail, a flood of capital will rush in to help us buy up every scrap of cheap sugar in London."
If the short failed, the price of sugar would rebound to its current highs. Those who had snapped up the cheap British sugar could then turn around and sell it for a massive profit. No one would refuse such a lucrative opportunity.
The key, however, was how to make people believe the short-sellers were doomed to fail.
Joseph looked at Bailly first. "Our first targets are the speculative investors from various nations, and even government funds. You need to select someone with a government background who also has deep connections in the financial world. Have them do this, and then..."
He then turned to Brienne. "You must personally instruct the three major domestic sugar refineries and the large sugar merchants. They are strictly forbidden from lowering their prices to match the British. I will have the Intelligence Bureau assist in monitoring them to prevent any clandestine deals.
"You can promise the merchants that if the price drop causes them losses, the government will provide compensation."
"Yes, Your Highness," Brienne replied.
Joseph then turned to Lavalette. "The British domestic market is also crucial. You can have those Irishmen help spread certain rumors far and wide..."
Finally, he looked back at Gaudin. "How much money can the Ministry of Finance produce right now?"
"At such short notice, only fourteen million francs, Your Highness."
Joseph shook his head. "Too little. Very well, I will find a way to handle that."
The ministers quickly departed to carry out their respective orders, while Joseph headed straight for the Hall of Mirrors.
The Countess of Provence was hosting a ball that evening, and most of the high nobility of Versailles were expected to attend.
Half an hour later.
Amidst the melodious strains of dance music, on the balcony of the second floor of the Hall of Mirrors, three top-tier nobles, including the Countess of Provence, stood around Joseph. Their faces were masks of pure shock.
"A return of eighty percent in less than six months! That is truly unimaginable, Your Highness."
Joseph nodded with absolute certainty. "Eighty percent is merely the floor. It could very well double."
"You are far too generous, Crown Prince," Duke De Brizard said with a fawning smile. "But for you to take only twenty percent of the profits... that is far too little."
The Countess of Provence immediately chimed in. "Indeed. For such crucial information, we must give you at least thirty percent."
Joseph nodded as if relenting with great effort. "I cannot always refuse your kindness."
He then added a stern warning. "Remember, this information must not be shared with anyone else."
"Rest assured, Your Highness. Our lips are sealed," they promised.
As soon as the ball ended, Duke De Brizard practically dragged his father-in-law home. He dismissed all the servants and locked the doors before whispering with an air of mystery, "How much liquid capital can you produce right now?
"Eight hundred thousand francs?
"Oh, excellent. There is a massive deal on the horizon. We can double our money in no time!"
The Countess of Provence sent a servant through the night to summon her closest friend. The moment they met, she said excitedly, "My dear, I remember you just sold your estate. That money can be put to very good use..."
...
Karlsruhe, the capital of Baden.
A special cocktail party was being held at Prince Maximilian's villa.
The guests came from various backgrounds, but all were individuals of significant standing.
Salomon Rothschild leaned in and whispered to the Swedish banker Wallenberg, "Do you have any inside information regarding that matter?"
The latter shrugged. "Only what's available through public channels. And frankly, I don't quite trust the French."
Rothschild nodded. "I have heard that the British have stockpiled quite a bit of sugar."
His voice dropped even lower. "Likely over fifty thousand tons. The French are likely trying to use us just to keep the sugar prices from falling."
Just then, a Frenchman holding a wine glass squeezed into the group.
Wallenberg immediately bowed slightly in greeting. "You've finally arrived, esteemed Count Calonne."
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