Chapter 1105: Fiscal Crisis and Strategic Contraction
A heavy, contemplative silence filled the room, serving as the unspoken theme for today’s meeting at 10 Downing Street.
Everyone present was haunted by the memories of the chaos that had gripped London following the collapse of the Lightning Coal Company. The mere thought of it left them breaking out in a cold sweat.
Boulton-Watt was even larger than Lightning Coal. If it fell, the resulting devastation would be far more catastrophic.
Grenville stared at Reid's report, his eyes suddenly widening in shock.
The document stated that the share price of the Chatham Dockyard had already plummeted by a third. Furthermore, as more customers cancelled their orders for ships, the decline was only accelerating. Currently, the shipyard’s liquid assets amounted to less than 30,000 pounds sterling.
Chatham was even more massive than Boulton-Watt. If any "accident" occurred there, it wouldn't just be the Navy's new warships at stake; the resulting economic "earthquake" would likely level the entirety of London.
He immediately turned to Reid. "What will it take to save this company?"
Reid gestured toward the report. "As long as they can normally supply their 52-horsepower steam engines, they can maintain basic operations. However, solving the technical issues required for that will take several months.
"The primary difficulty, however, is that they must constantly pay out penalties for breach of contract."
The Earl of Spencer frowned. "I heard they significantly lowered the power output of the new engines?"
"Indeed," Reid nodded. "But even if they only reach 80 horsepower, those would still be the highest-output steam engines in the world. This would allow their company to rapidly monopolize the entire European market."
Grenville rubbed his temples and asked, "In total, how much capital is needed?"
"400,000 pounds, Prime Minister," Reid replied. "And that's assuming the Chatham Dockyard can hold on. Otherwise, we might need an additional 150,000 to 200,000 pounds to rescue them. The shipyard’s stock price is in a precarious state, which could easily lead to insolvency."
Grenville turned to the Chancellor of the Exchequer. "So, you need to prepare 500,000 pounds. You also need a portion of funds to stabilize the stock price."
Petty’s face turned a sickly shade of green. He shook his head repeatedly. "Prime Minister, that would have to wait until the third round of the new share issuance, which is nine months away.
"Alternatively, we could reduce the sugar subsidies."
Grenville waved his hand irritably. "We cannot cut the subsidies. You must find another way."
Petty looked as if he were on the verge of tears; the thought of resigning had already begun to cross his mind.
It was then that William Pitt Junior cleared his throat and spoke. "I believe that given the current situation, our only options are to increase income tax and seek assistance through bank loans.
"Of course, we also need to minimize expenditures as much as possible to ensure our finances do not spiral toward total collapse."
Grenville frowned. "Increase taxes... Do you really think there is any room left for that?"
"Of course there is, Prime Minister." Pitt gestured toward the window. "The primary reason people are protesting is the exorbitant price of sugar. If we increase the sugar subsidy to 2.5 million pounds, we can satisfy everyone.
"A lower sugar price will reduce people’s daily expenses. The money they save will then be used to pay the increased income tax.
"You see, no one actually loses out, and the problem is completely solved."
Petty immediately voiced his agreement. "You are absolutely right. The protests will vanish the moment the price of sugar hits two shillings per pound."
Pitt continued, "We should also increase our support for the steam engine industry. I have spoken with many scholars recently, and they all believe that steam engines will dictate the future landscape of industry and trade."
Reid nodded vigorously from the side.
Pitt glanced at the map on the left. "Our army has been bogged down in Portugal for a full year and a half. We have spent an astronomical amount on military expenses with almost no return.
"I suggest we maintain only a portion of our forces to hold the Lines of Torres Vedras. This would allow the Royal Navy to keep the supply port in the Bay of Cádiz and maintain the ability to quickly reinforce Gibraltar.
"Marquis Wellesley has been continuously committing resources to reinforce the Lines of Torres Vedras. They now extend to the north of Lisbon and consist of over a hundred bastions of various sizes.
"By transporting supplies by sea from the west coast, we can ensure the defensive line has more than enough logistics.
"This way, we only need about 20,000 troops to secure the vital ports on the western coast of Portugal."
Petty calculated the figures rapidly and chimed in, "That would reduce our annual military expenditure by approximately 400,000 pounds."
Pitt went on, "Furthermore, there is no longer a need to continue restricting France's sugar sources."
No one raised an objection. Britain had already lost the Sugar War spectacularly; going forward, they would focus merely on protecting their own Indian sugarcane plantations.
"Moreover, the Caribbean has fallen into utter chaos. We should completely withdraw from that region."
Petty’s mind whirred, and he quickly supplied a figure. "Canceling 'aid' to the Caribbean nations would save 280,000 pounds a year."
Foreign Secretary Fox added, "From what I understand, the new Tsar in Saint Petersburg lacks interest in invading Persia.
"Therefore, Russia is very likely to withdraw its troops to the north of the Caucasus.
"Our investments in the Middle East can be reduced accordingly."
The Chancellor of the Exchequer’s expression grew increasingly relieved. "If we simultaneously end our operations in Afghanistan, we can reduce spending by another 230,000 pounds annually."
Grenville was clearly reluctant to commit to such a massive strategic contraction, but the thought of lightening the fiscal burden by over 900,000 pounds a year made him hesitate.
In particular, withdrawing the bulk of the army from the Iberian Peninsula would likely leave Portugal in a desperate situation.
As if reading his mind, Pitt said, "Prime Minister, we must admit that France's momentum over the last two years has been incredibly aggressive.
"We should not ignore the core strategy of the Empire for the sake of secondary interests. It is time to prepare."
Grenville felt a sudden jolt in his heart.
He was right. For Britain, the most fundamental national strategy was ensuring that no single hegemon emerged on the European continent to overwhelm all other nations.
And France was gradually assuming the posture of such a hegemon.
The balance of power in Europe had to be adjusted.
To do that, Britain first had to restore its finances, expand its armaments, and then set about building a system of alliances to counter France.
Grenville nodded solemnly. "Thank you for the reminder. We must indeed accelerate our movements."
...
In the western suburbs of London.
Inside a small pub called The Avenue, posters reading "Let our members be countless" and "Human Rights and Liberty" were plastered on the walls. A dark-skinned man in his forties stood atop a wooden table, addressing more than twenty people in the bar with an impassioned and stirring voice:
"The great Magna Carta granted us the right to be born free, yet those corrupt officials and black-hearted factory owners never intended for us to truly possess it!
"The workers who drop dead in the mines, the young girls scalded to death by steam engines—their freedom and human rights have been ruthlessly ground into the dirt!"
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