Chapter 912: 820: The New Back Garden

Chapter 912: Chapter 820: The New Back Garden

Joseph smiled and said, “In fact, when we can exert significant influence on Northern Italy, military occupation is the least efficient means.”

Back when Napoleon hadn’t yet completed his campaign in Alexandria, he had already organized the various tactics used in 21st-century Europe and America. Now, under the expectant and skeptical gazes of Talleyrand and Saigul, he began to speak slowly and clearly:

“We will focus on two areas—economics and propaganda.

“Let’s talk about economics first.

“For example, if we want to strengthen our control over Milan, we could first provide them with a large loan…”

The corners of the two main financial administrators’ eyes twitched.

Traditionally, conquerors have always taken large sums of money from occupied territories, but this was the first time they heard about giving loans to occupied territories instead.

Saigul cautiously asked, “Your Highness, do you mean to force them to accept loans with extremely high interest rates?”

If the interest exceeded 35% and was secured by physical collateral, it would indeed be a good deal.

Joseph shook his head, “No, no, interest rates that are too high will only lead to resistance. Hmm, around 3% interest should be about right.”

“3%? How can that be!” Saigul exclaimed. It’s well known that the Bank of France Reserve doesn’t even accept deposits at less than 3% interest. Lending out at such a low rate would mean losing money on every loan.

Joseph laughed and said, “Actually, I wanted to offer interest-free loans, but doing so would raise suspicion, so I settled on 3% instead.”

“But…”

Joseph motioned for him to calm down and explained, “We want to use low-interest rates to attract the Northern Italian States to actively seek loans, and as a form of ‘special favor’ from France, making them more willing to lean towards France.

“And all these loans will be provided in banknotes, which will not place much pressure on our finances.

“The countries that receive these loans can only use the money to buy goods from our country or the Caribbean Sea region, effectively making them our dumping ground.”

Joseph paused, emphasizing his words,:

“At the same time, these loans will come with some conditions.

“Firstly, loan recipient countries must accept the circulation of franc banknotes within their borders, or at least allow free exchange with their national currency at banks.

“Secondly, these loans can only be used to invest in specific industries, and these industries must have a certain proportion of French shares.

“Finally, the use of the loans must be under our supervision.”

Talleyrand and Saigul, both intelligent men, quickly picked up on the strategy, their looks of bewilderment gradually turning into admiration.

Once the loans are issued, they can immediately secure a large market, and a market under French supervision at that.

With such a low interest rate, the Northern Italian States will be eager to take the loans. France can even add some political conditions that are unlikely to be rejected.

As for those conditions stated by His Royal Highness, aside from the use of circulating banknotes, they are common loan requirements of the time.

However, this method can only be used within France’s sphere of military influence; otherwise, others could easily default.

Joseph continued,:

“Besides loans, we also need to help the various Italian countries develop their industries.”

This time, Talleyrand and Saigul seemed a bit numb, just exchanging a glance and waiting for Joseph to continue.

“For instance, Milan has some silk and steel forging industries, and we can completely provide them with textile and smelting technology, even sell them Steam Engines.” Joseph immediately added, “Of course, limited to rough silk weaving and primary smelting.

“These basic processed goods will enter France for further processing, for example, into fashion items and iron products, and then be sold back.

“If they want support for their industries from our country, they must first accept our ‘Patent Law,’ and secondly, acknowledge the assessments made by our rating agencies on their industries and credit, etc.”

In fact, once France secures financial control over these small countries through loans, patent law and such become irrelevant.

If any issues arise, they can be directly adjudicated using domestic law. If anyone dares to object, a little financial maneuvering would suffice to intimidate them. If that doesn’t work, the French Army is right there watching.

For these countries, which are at a disadvantage, even if France imposed sanctions, it would not face opposition from surrounding countries. They might even join France in denouncing them.

Talleyrand and Saigul felt they understood but not completely, just nodding repeatedly.

Joseph found it difficult to go into depth at the moment; to completely explain it would take a good few months of lessons.

This is essentially the “vertical division of labor system” familiar in later centuries.

Using finance, patents, credit ratings, and similar tools to lock subsidiary nations into the lower end of the industrial chain.

But this is far better than letting them continuously serve as raw material suppliers, as low-end industries still yield some profit.

With these profits, these countries can enhance their purchasing power, better fulfilling their role as a market for France.

Simultaneously, their industrial development will complement France’s. Once separated from France’s upstream industries, they will quickly go bankrupt.

In this way, these countries will be more firmly tied to France.

On the other hand, by Joseph’s deliberate arrangement, the industrial development of these Italian States will lean heavily towards certain fields, while completely abandoning others.

This is why he previously included the condition “loans can only be used to invest in specific industries” in the loan conditions.

Even if this kind of “one-sided” industrial model develops, the entire nation cannot substantially increase its national power. It’s like a certain “Greater Empire” later, appearing to have a few industries that are very strong, but the national economic system is extremely fragile, forever dependent on that major country across the ocean.

Moreover, from the outset, the industrial systems of these Italian States were required to include French shares, allowing France to exert influence over them at any time.

Eventually, this place would just become France’s “back garden.”

As Joseph waited for Saigul to finish taking notes, he continued,:

“The economic measures can ensure that the Italian countries and our nation have ‘aligned interests,’ but to have them willingly follow behind France, propaganda is the most important.

“In fact, if the propaganda is done well enough, if you don’t let them serve France, their citizens will be extremely dissatisfied.”

Talleyrand’s mind was already nearing overload, instinctively asking, “Your Highness, how can propaganda have such a significant impact?”

Joseph signaled for Eman to pour him a new cup of tea, and then said, “The foundation for all this is for the Italian countries to abolish strict news censorship mechanisms.

“At least, they must loosen news control towards our country.”

Talleyrand expressed some concern, “Your Highness, it might not be difficult for countries like Genoa and Lucca, but in Parma and Sardinia, there could be substantial resistance.”