Chapter 1099: The Sugar War Counterattack
As for the situation in the Caribbean, British newspapers had been reporting since last year that the region was plagued by frequent riots. At this point, no one doubted that the chaos of war would lead to a total crop failure.
Indeed, rumors that were eight-parts truth and two-parts falsehood were always the most difficult to debunk.
Earl Spencer published refutations that very day in several of London's largest-circulation newspapers. However, in such matters, the more a government denies something, the more the public becomes convinced that there is a underlying problem.
Furthermore, there were always newspapers that took pride in their independence and insisted on opposing the government, which largely offset the news of the refutation. Naturally, these included press outlets controlled by the Society of United Irishmen.
Another week passed, and the panic buying of sugar in Britain showed no signs of slowing down. Some sugar shops, seeing the explosive demand, even began to surreptitiously raise their prices.
This only served to further substantiate the content of the rumors.
Finally, under heavy protest from Petty, Spencer was forced to issue a restriction order: no individual could purchase more than one kilogram of sugar per month.
To his dismay, this restriction only made people more certain that a severe sugar shortage was imminent. After all, if there were no shortage, why would the government need to limit purchases?
While the order could restrict the average citizen, those with connections and resources still found ways to acquire sugar.
Even the British upper classes believed that the price of sugar would skyrocket in a short period of time.
Due to the influx of British capital, Petty was forced to increase the amount of sugar released into the market to approximately 450 tons per day.
However, under his determined short-selling strategy, the price of sugar continued to dip, reaching one shilling and five pence per pound.
This caused those who intended to buy the dip, as well as those panic-hoarding, to begin to calm down. The daily trading volume at the London Futures Exchange returned to the range of 350 tons.
Petty, who had finally resolved the trouble, breathed a sigh of relief. He had no idea that the scythe of the Grim Reaper was about to swing down upon him.
...
Northern Caribbean Sea.
Port-au-Prince, San Domingo.
Calonne pointed to the dense rows of cargo ships in the harbor and introduced them enthusiastically to the men beside him. "Every day, ten ships fully loaded with sugar depart for France.
"The San Domingo Parliament has an agreement with France; their sugar must be sold to French sugar merchants. In fact, a quarter of the merchant ships here belong to the Gemini Trading Company. You all know whose business that is."
As he spoke, a middle-aged male servant stepped forward quietly and whispered into Salomon Rothschild's ear, "Master, it has all been confirmed. Every ship is filled with sugar. The warehouses in the nearest towns are also overflowing. We haven't had time to investigate further inland yet, but according to passing merchants, all the plantations have had a bumper harvest this year."
Rothschild turned and whispered a few words to Wallenberg, who nodded in agreement.
They had indeed brought professionals with them and spent a considerable amount of money to gather information. It was now basically confirmed that San Domingo had harvested at least 27,500 tons of sugar this year.
Furthermore, the San Domingo Parliament had already written into law that sugar could not be purchased with any currency other than the Franc. This sugar would undoubtedly end up in French warehouses.
At the lunch table, Rothschild raised his hand to draw everyone's attention and nodded. "I believe everyone has finished their calculations.
"There are over 27,500 tons of sugar here.
"We saw more than 10,000 tons in the warehouses in Lorraine, which indicates that there are no issues with the French sugar beet harvest. Even according to last year's production levels, there should be 37,500 tons."
He gestured toward a man of Greek appearance nearby. "Mr. Labed has confirmed that all of the Ottoman sugar has been sold to France, with a company called the Eastern Mediterranean Trading Company handling the acquisition.
"That accounts for approximately 10,000 tons.
"Therefore, the Paris Futures Exchange will hold a stock of over 75,000 tons of sugar.
"As for the London side, they have made some reserves, but it likely does not exceed 55,000 tons.
"I believe 'the operation' has a high probability of profit. However, we must wait for the market to consume more of the British 'ammunition' first."
Before his voice had even faded, Calonne followed with a smile. "I must correct you on one point, Mr. Rothschild. The British do not have 55,000 tons."
Rothschild turned to look at him. "I have some friends on Downing Street, my dear Viscount Calonne. I guarantee that figure is correct."
Calonne curled his lip. "Well, unfortunately, the British themselves don't even know that all of Prussia's sugar will be sold to France.
"In other words, at most, only 35,000 tons will appear on the London Futures Exchange, while Paris will have 95,000 tons."
The group of capital giants looked at one another. Finally, Wallenberg spoke up. "You must be mistaken. The Prussians must use those 20,000 tons of sugar to repay their loans to the British government."
"No, first they must ensure that nearly one hundred thousand serfs who plant sugar beets do not go bankrupt," Calonne countered. "They must rely on France's High-Yield Sugar Beet Seeds; otherwise, they will be unable to carry out the spring sowing next month."
Wallenberg immediately replied, "They have thousands of hectares of seed-breeding fields."
"But those will not produce a single viable beet seed, I can assure you. This is a special variety of sugar beet developed by France; only the breeding laboratories in Lorraine can produce the seeds."
There was no need for Calonne to hide this, as the news would soon spread throughout all of Prussia.
He added, "You can instruct your people to confirm the situation in Prussia before the transaction begins."
Rothschild and Wallenberg looked at each other again and nodded almost simultaneously.
With the French holding 95,000 tons of sugar, they were absolutely capable of dominating the international sugar market.
The 35,000 tons the British held could indeed cause some trouble for France, but at least 5,000 to 7,500 tons of that would have to be used to crash the market.
At the same time, the French government would certainly strike back with full force and would likely be able to absorb over 10,000 tons.
That meant London would be left with, at most, 20,000 tons of sugar.
And the nine men sitting here were exactly there for 'this matter'!
Yes, they were the top capital giants in Europe, and the money in their hands was more than enough to buy up all 20,000 tons of sugar.
When that time came, the British government's short positions would be liquidated.
Then, they would transport the purchased sugar to the Paris Futures Exchange and sell it according to the French pricing. The profit would undoubtedly exceed one hundred percent.
Rothschild smiled and nodded at Calonne. "You truly are the most brilliant commercial genius I have ever met. I have never before engaged in a business where making money was so effortless."
He then looked at the others. "I have decided to place my bet. What say you all?"
"I'm in as well."
"This is a guaranteed profit; how could anyone refuse?"
"I can't have come all the way to the Caribbean for nothing. Of course I will do it."
Soon, everyone reached an agreement and began to sign and seal the letters they had already prepared.
More than forty days later, the fast ships carrying their instructions arrived at the Port of London, and over a hundred people immediately swung into action.
Massive amounts of capital flooded into the London Futures Exchange from over a dozen British banks, devouring all sugar contracts like a pack of starving ghosts.
Petty was already accustomed to such situations and calmly ordered his subordinates to replenish the short positions.
However, he completely failed to realize just how terrifying the appetite of these particular ghosts truly was.
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