Chapter 1189: 1095: The Sugar War Begins

Chapter 1189: Chapter 1095: The Sugar War Begins

Joseph pondered for a moment, then motioned to Eman: “Please have Archbishop Brienne and Mr. Talleyrand come see me immediately. Oh, and Mr. Lavallette too.”

Half an hour later.

After Bailly briefed the key cabinet ministers on the general situation, Joseph surveyed everyone and said solemnly:

“The British are stockpiling a large amount of sugarcane, clearly preparing to short the sugar price, even aiming to control the pricing of sugarcane.”

Brienne and the others all showed worried expressions, frowning as they looked at each other.

Sugarcane is not only an important financial pillar that brings tens of millions of francs to France each year, but also the livelihood upon which hundreds of thousands of French sugar beet farmers depend.

Should the price of sugarcane plummet, it could bankrupt a large number of farmers, and it wouldn’t be surprising if it led to riots.

Finance Minister Godin was the most anxious of all, because he knew that sugarcane was a stabilizing anchor for the franc. In current international trade, most countries accept francs for settlement. One important reason is that to buy sugarcane, one must use francs—the Paris Futures Exchange only accepts francs.

If the center of international sugarcane trading were to shift to London, aside from the member countries of the Iberian-Apennine Common Market, other countries might demand transactions in silver and gold coins.

This would cause a large amount of francs to flow back into France, rapidly increasing the inflation level there.

Joseph paused, then said loudly: “I’ve decided to go all out to thwart the British shorting activities.”

Godin was so startled that he blinked rapidly: “Your Highness, if the British release more than 60,000 tons of sugarcane into the market, it would be impossible for us to purchase it all.”

The British intent to short is clearly aimed at forcing the Paris Futures Exchange to follow suit and lower prices, or else buyers would all be drawn to London.

And if France follows suit, London will continue to lower prices until it reaches the ideal price in the minds of the British. Ultimately, the international sugarcane market would follow London’s lead.

The only way for France to break this pattern is to buy all the low-priced sugar thrown by the British, forcing other buyers to purchase sugarcane through the Paris Futures Exchange.

At the current market price of 3 francs 7 sous per pound on the London futures market, buying up 60,000 tons would require a horrifying 400 million plus francs!

Of course, the British will likely further lower the price to maximize their shorting efforts, but even if it drops below 2 francs, it would still require 250 million francs to buy it all.

France certainly cannot come up with such a large sum.

Moreover, the British are unlikely to accept payment in francs, so this 250 million would need to be in silver and gold coins.

Joseph corrected: “No, the British only have over 40,000 tons of sugarcane.”

Godin, although unaware of how the Crown Prince could “deduct” from the British inventory, shook his head: “Even so, it would still require nearly 200 million francs…”

Joseph smiled calmly: “Indeed, a large sum is needed, but this money can be covered by others.”

Godin and the others immediately looked at him in surprise.

Joseph continued: “For futures and financial markets, the most important thing is confidence.

“As long as we make everyone believe that the British shorting will not succeed, a large amount of capital will help us buy up London’s low-priced sugar.”

If the shorting fails, sugar prices will rise back to the current high point. Those who bought the British low-priced sugar could sell it off and make a huge profit, and no one would refuse such a lucrative deal.

But the key is how to assure people of the inevitable defeat of the shorts.

Joseph first looked at Bailly: “Our first target should be the speculative capital from various countries, including even government funds. You need to select someone with a government background and connections in the financial world, like this and that…”

Then he turned to Brienne: “You need to personally instruct the three major domestic sugar refineries and the big sugar merchants to absolutely not follow the British in lowering prices. The Intelligence Bureau can help monitor this to prevent private transactions.

“You can promise the merchants that if they suffer losses due to the drop in sugar prices, the government can provide compensation.”

“Yes, Your Highness.”

Joseph then turned to Lavallette: “The domestic market in England is also very important; you can have those Irish spread plenty of news…”

Lastly, he looked at Godin: “How much money can the Treasury pull together now?”

“Only 14 million francs in the short term, Your Highness.”

Joseph shook his head: “That’s too little. Very well, I’ll find a way to handle this.”

Soon, each of the ministers left with their orders, while Joseph headed straight to the Hall of Mirrors.

Tonight, there is a ball organized by the Countess of Provence, which means the great nobles of Versailles are expected to attend.

Half an hour later.

Amid the melodious dance music, on the balcony of the second floor of the Hall of Mirrors, Joseph was surrounded by three top nobles, including the Countess of Provence, all of whom appeared shocked.

“An 80% return in less than six months! That’s incredible, Your Highness.”

Joseph nodded with certainty: “80% is just the base, it could even double.”

“You’re so generous, Crown Prince,” said the Duke De Brousse ingratiatingly, “but you’re asking for only 20% of the profit; that’s just too little.”

The Countess of Provence immediately concurred: “Indeed. For such important information, you should at least get 30%.”

Joseph nodded with some difficulty: “I can’t always refuse your goodwill.”

He reminded them very seriously: “Remember, this information must not be shared with others.”

“Rest assured, we’ll keep our mouths shut, Crown Prince.”

The ball ended.

The Duke De Brousse immediately took his father-in-law home, dismissed all the servants, and locked the doors before speaking mysteriously: “How much can you put together now?

“800,000 francs?

“Oh, great. There’s a big deal coming up, and it will double very soon!”

The Countess of Provence had a servant summon her best friend overnight and said excitedly upon meeting: “Darling, I remember you just sold an estate; that money could come in handy…”

…

Baden Capital, Karlsruhe.

A special party was being held at Prince Maximilian’s villa.

The guests were diverse in identity but all remarkably distinguished.

Salomon Rothschild leaned over and quietly asked the Swedish banker Valenberg: “Do you have any inside information on this matter?”

The latter shook his hands: “Only information from open sources. To be honest, I don’t really trust the French.”

Rothschild nodded: “I heard that the British have stockpiled quite a bit of sugarcane.”

He lowered his voice further: “It might be over one million quintals. The French might be leveraging us to protect the sugar price.”

At this moment, a Frenchman holding a wine glass squeezed into the crowd.

Valenberg immediately bowed to him: “You’re finally here, esteemed Count Carona.”