Chapter 1299: Cashing In on War Dividends
The elite 6th Grenadier Regiment of the First Army marched across the square in crisp twelve-deep ranks, glancing towards the viewing stand and roaring, "Long live His Majesty the King! Glory to France!"
Berthier waited until the wave of cheers subsided, then carefully suggested, "Your Highness, Monsieur Godan's proposal is to disburse the pensions in installments over three years, with a 3% interest subsidy for the soldiers."
Over 80 million francs was a colossal sum that would vex even France's national treasury. After the Second Military Reform, France's pension standards were unrivaled across Europe — a necessary price for forging a powerful army.
Joseph immediately frowned. "Has the pension plan been announced?" he asked.
"Not yet, Your Highness. The Ministry of Finance still needs time to finalize the budget, and only then can the General Staff present a detailed plan."
Joseph sighed in relief. 'Thank goodness it hasn't been announced yet,' he thought. 'Such a thing would be a disaster that would shake the very foundation of the army!'
He turned to Eman, who stood behind him. "Has Minister Godan arrived?"
Eman hastily replied, "He's on the viewing stand behind us, Your Highness."
On an occasion of national celebration such as this, France's cabinet ministers would certainly not be absent.
"Yes, Your Highness."
Soon after, the Finance Minister appeared before Joseph and bowed deeply. "Your Highness."
Joseph gestured for him to sit beside him, then asked directly, "Can the national treasury currently spare 80 million francs?"
Godan glanced at Berthier, then nodded. "Yes, Your Highness, the Ministry of Finance still has 93 million francs on the books."
"Then why are we not fully disbursing the soldiers' pensions?"
"Well, Your Highness, if this sum were disbursed, we wouldn't be able to commence the railway construction to Lyon this year, and repairs to numerous bridges and water conservancy facilities would also have to be suspended."
Seeing the Crown Prince frown, Godan hastily added, "Moreover, the Ministry of Finance will soon face an expenditure of 17 million francs, which could only be drawn from the pension fund—"
Joseph raised a hand, cutting him off. "What could possibly be more important than soldiers' pensions?"
Godan said nervously, "Your Highness, after the army conscripted for this campaign has fully returned home within approximately three months, over 200,000 soldiers will face demobilization. This will require a substantial amount in severance pay.
"General Berthier and I have discussed this. Even if a third of the soldiers accept 'land compensation' and the demobilization of some is postponed until next year, we would still need to pay out 17 million francs before the end of this year."
Joseph couldn't help but rub his forehead.
'True,' he thought. 'France had never before mobilized such a massive force; the financial pressure was indeed unimaginable.'
He was confident that if he issued a call, most soldiers would choose to forgo their severance pay, or even their pensions. But that would mean countless French families would bear an extremely heavy burden, and some might even starve to death as a result—
Workers of this era practically lived paycheck to paycheck. Soldiers who had fought for months on the battlefield might return home only to find themselves jobless, and their families would immediately run out of food.
Joseph then noticed the figure for the severance pay and immediately turned to Berthier. "How much severance pay does each soldier receive?"
"110 francs, Your Highness. If they accept land compensation, it's 60 francs."
Joseph couldn't help but remark, "That's far too low."
"Your Highness, that's enough for them to live on for three or four months," the Chief of the General Staff defended. "70% of British soldiers only receive land compensation, and the rest are given at most three pounds sterling—
"Moreover, our country's severance pay is guaranteed not to be embezzled by officers."
Joseph knew that so-called 'land compensation' was tantamount to exile. For example, Britain compensated soldiers with land in Canada or Australia, while Russia even offered plots in Central Siberia.
He shook his head. 'They absolutely could not stoop to such standards.'
However, even with the current severance pay standard, it would require 17 million francs. Add that to the 82 million francs for pensions, and it was roughly a hundred million francs.
While these costs could be covered by war reparations in the future, for now, they placed immense pressure on France's treasury.
Moreover, having achieved victory in the war, France was bound to enter a period of rapid development. Both railway construction and new factory builds would require enormous amounts of capital.
Oh, and the navy was waiting for funds to build its steam fleet – that would be a true money-guzzling beast...
Joseph couldn't help but sigh again. Since taking charge of France, he had never ceased his struggle with money.
'How could he get his hands on a significant sum of money in a short amount of time?'
He fell into deep thought. There were only a few ways to raise money quickly: loans, issuing bonds, or selling off assets.
The first option could be immediately ruled out; the Bank of France had long since been loaned dry.
Issuing bonds... several rounds of national debt had already been issued in France and the Italian territories; it would likely be difficult to raise much more money.
As for selling off assets, that was an option only considered when all else failed.
He revisited the first two options. If he could provide some collateral, perhaps he could secure funding.
In truth, France's greatest asset was the victory in the war, but that couldn't be used as collateral.
And actually cashing in on war dividends would take at least three or four years – things like increased public confidence, attracting investors, and establishing dominance over the international order...
It was no wonder that historically, Napoleon had chosen to directly plunder occupied territories. Now, even Joseph couldn't help but feel tempted to ransack Vienna himself.
Wait, Joseph suddenly thought of something. 'War dividends,' 'Vienna'...
How did those financial geniuses of later generations operate? Financial derivatives, securitization, refinancing—they kept making money even from subprime loans.
'He could totally package these "war dividends" as collateral and inject them into the financial market!'
He roughly outlined his plan and said to Godan, "You are to immediately issue a batch of national bonds, for a total of... 150 million francs. The interest doesn't need to be too high, around 4%."
"Well," the Finance Minister hesitated, "as you know, we issued several batches of national bonds before the war. Now, whether in Italy or the Netherlands, it would likely be difficult to sell many more..."
Joseph smiled faintly. "We'll sell them in Austria. Oh, and Prussia, Saxony, Cologne—the whole of Germany, for that matter."
Godan still shook his head. "Your Highness, these countries largely engaged in financial cooperation with Britain before. I'm not entirely sure about their appetite for bonds. Austria, in particular, won't even permit our national bonds to enter their market."
Joseph immediately said, "We'll use the war reparations from Austria and Prussia as collateral. The bonds will be discounted by 6% upfront, plus the interest—such a high return will surely attract capital.
"The bonds will be bearer bonds, allowed to be purchased with florins, and redeemable at any bank in France upon maturity. This way, even if the Austrian government prohibits it, their private citizens will purchase them discreetly through various channels."
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