Chapter 1097: The Heat of the Sugar War
The former French Minister of Finance, Charles Alexandre de Calonne, returned the gesture with a smile before raising his voice. "My thanks to Prince Maximilian for hosting this reception. And my thanks to all of you for being here."
He exchanged a few brief pleasantries before cutting straight to the point. "I know that everyone here is deeply concerned about 'that matter.'
"I also know that some of you are probably muttering to yourselves, 'Calonne is most likely a fraud.'"
The crowd chuckled in practiced harmony.
Calonne pointed toward the west. "To dispel your doubts, I would like to invite you all on a journey.
"Granted, the distance is quite vast, but believe me when I say the scenery along the way will make it more than worthwhile.
"Our first stop will be Metz."
Dietrich, the Bavarian Minister of Trade, looked puzzled. "Metz? What could possibly be there?"
"Sugar beet gardens," Calonne replied, his tone as rhythmic as a poem. "And the largest sugar warehouse in all of France.
Wallenberg spoke up loudly, "And the purpose of this visit?"
Calonne winked with feigned mystery. "The warehouse manager happens to be a very dear friend of mine. Therefore, you will be permitted to inspect the interior of the warehouse personally. You may even bring experts to calculate the exact volume of the stock stored there."
The interest of everyone in the room was instantly piqued.
France's sugar reserves were inextricably linked to "that matter."
Calonne continued, "After visiting the warehouse, we will follow the Seine River to the Port of Le Havre. From there, we shall set sail for the Caribbean."
An aristocratic lady in her fifties gasped in surprise. "To go so far? My old bones could never withstand the rough winds and waves."
Calonne smiled and shook his head. "Trust me, the profits from 'that matter' will be enough to make you fall in love with the sea.
"We will be traveling aboard a warship of the Dutch Navy; the vessel is as steady as dry land. Furthermore, I have hired two frigates to escort us and ensure our absolute safety."
Wallenberg narrowed his eyes. "If the last stop was a sugar warehouse, is the destination this time San Domingo?"
"Exactly," Calonne confirmed. "I have some influence with their Speaker of the Assembly. At Port-au-Prince, we will see merchant ships laden with sugar. All of them are destined for the Port of Marseille.
"I guarantee that you may board any ship you wish and inspect exactly how much cargo is packed into their holds."
Dietrich remarked casually, "And then? Where do we go after that?"
Calonne raised his wine glass. "Then, you may send word to your subordinates waiting at the London Futures Exchange and tell them to buy up every single contract available.
"A toast to the generous British government!"
The dozen or so guests at the reception smiled and raised their glasses in unison.
...
London.
In a small villa on the north side of St. James's Park, Henry Petty, the British Chancellor of the Exchequer, looked out at the bustling crowd in front of the nearby futures exchange. His face was nothing but smiles.
Judging by the trading volume of the past few days, the vast majority of sugar buyers in Europe had gathered here. One could only imagine how deserted the exchange in Paris must be.
Because this battle for sugar dominance was of such critical importance, Lord Grenville had ordered Petty to command the operation personally. The latter had moved his office directly to the vicinity of the futures exchange to keep a constant eye on the latest developments.
A knock sounded at the door. Petty’s assistant entered carrying a stack of documents and bowed. "Your Lordship, the report from Paris has arrived.
"The French are consistently matching our prices, but their trading volume is only about ten tons per day."
Petty smiled thinly. "That is merely their government purchasing stock to save face for their exchange."
As he spoke, he flipped open the file. It contained the sugar prices from Paris as of thirty-six hours ago: 3 francs and 2 sous per pound. The French civilian Chappe signal towers could easily transmit messages to the coast, but crossing the English Channel still took a day.
Petty did a quick mental calculation. It was equivalent to 2 shillings and 6 pence.
Meanwhile, the price of sugar in London had already dropped to 2 shillings and 4 pence.
He chuckled. The Parisians were likely on the verge of another fit of rage.
He looked at his assistant. "What was today’s trading volume?"
"Approximately 350 tons, Your Lordship."
Petty nodded and gave his orders. "Tomorrow, list 375 tons for sale at a price of 2 shillings and 3 pence.
"We must suppress the price to 2 shillings before the end of this month."
"As you wish, Your Lordship."
"Couperin’s 'La Monicart,' if you please," Petty signaled to a nearby musician before leaning back comfortably in his chair.
Britain had begun shorting sugar over a month ago. The rhythm of the market was entirely under his control.
The sugar price in the Paris market had already plummeted by forty percent, yet he still held 48,500 tons of sugar in his hands. At the current rate of sales, he could maintain this pressure for at least three and a half months.
By then, the price of sugar would have long since fallen below 1 shilling. He could then simply buy sugar from the Paris market and sell it on the London Futures Exchange after a slight markup—the price difference would be far less than the sugar subsidies paid over the last two years.
This would ensure that London remained the absolute center of the sugar trade for at least the next six months to a year, while the French market would be marginalized.
Of course, the French could try to slash their prices even lower than London’s to win back the buyers.
But that would be doing Britain's work for them by shorting the price. Petty would certainly thank his French counterparts—he would immediately stop his own selling and might even buy from France to replenish his inventory. Once the price in Paris rebounded, he would immediately resume shorting from his side.
The price of sugar was destined to return to the era of 9 pence per pound.
Early the next morning, Petty had just sat down in his office and was considering which piece of music to listen to when he heard a cacophony of noise from outside his window.
He stood up and walked to the window. Outside the futures exchange, the crowd was waving their arms and shouting excitedly, while the exchange clerks were frantically trying to explain something.
He barked an order to his men, "Go see what has happened!"
Even as he spoke, Blount, the manager of the futures exchange, burst into the room with a panicked expression.
Petty looked displeased. "Knocking is a basic courtesy a gentleman should observe."
Blount, however, panted heavily as he gasped out, "Your Lordship, someone just bought up every single contract for the day."
Petty’s heart tightened instantly. "You mean the entire 375 tons?"
"Yes, all 375 tons!"
Petty frowned and turned to his assistant. "Immediately add another 300 tons worth of contracts."
"Yes, Your Lordship. Still at 2 shillings and 3 pence?"
"Yes! Go, quickly!"
However, in less than half an hour, his assistant rushed back. "Your Lordship, those 300 tons have also been bought."
Petty realized something was wrong. He ordered two more rounds of inventory releases. It wasn't until the mysterious buyer had swallowed a staggering 1,850 tons that the futures exchange finally had a surplus of about a hundred tons remaining.
Before Petty could breathe a sigh of relief, the exchange had barely opened its doors the following morning when every scrap of sugar was once again swept clean by the buyers.
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