The Crown Prince of France - Chapter 177

Chapter 177: The French Industrial Development Fund

“Oh? They certainly know how to exploit the government's weaknesses.” A glint of coldness flickered in Joseph’s eyes.

Since becoming Assistant Minister of Finance, Joseph had gained a clear understanding of France's financial situation. A significant portion of the money borrowed by the government came from the wealthy nobility, accounting for over 20%. Including the funds nobles deposited in banks and their purchases of government bonds, they were undoubtedly the largest creditors of the state.

In other words, if the nobility ceased to provide funding to the government, the national finances would soon collapse. Historically, these nobles had even formed "tax resistance leagues" to coerce the royal family by refusing to pay taxes, ultimately succeeding in their demands.

No wonder Brienne had rushed to Paris in such a panic to see him. He truly feared that the nobles would push the government into a situation of mutual destruction.

Brienne, looking anxious, said, “Your Highness, do you think we should delay Necker's trial for now and extract a fine from him instead?”

Joseph frowned slightly. “What? Are you intimidated by the nobles?”

“No, it’s not that,” Brienne replied, though his nervous expression suggested otherwise. “But you know, if even a small fraction of them act, the finances will…”

Before Brienne could finish, Joseph gestured toward his carriage. “Let’s head to Versailles and talk on the way.”

The carriage began moving slowly. Inside, Joseph asked, “Archbishop Brienne, in the past, when banks went bankrupt, did it ever cause such an uproar?”

Brienne shook his head as he recalled. “Your Highness, in the past, it was usually one bank facing issues, and since there were no related legal cases, the bankruptcy process was slower, giving people time to handle their investments.”

“This time, however, Béranger Bank collapsed too quickly. Moreover, over a dozen other banks are expected to fail in its wake, terrifying everyone.”

Joseph nodded. “So, the nobles’ strong reaction stems mainly from Béranger Bank’s failure to settle its debts or provide a debt-equity swap plan, leaving all its investors in limbo?”

“That’s essentially it, Your Highness.”

Joseph squinted in thought for a moment and then said, “If someone were to acquire Béranger Bank now and assure the nobles their investments would be acknowledged and repaid, they would likely calm down and disperse, wouldn’t they?”

Brienne frowned bitterly. “But no one is willing to acquire it right now because no one knows the extent of the fines Béranger Bank will face…”

He paused, as if struck by an idea. “Your Highness, do you mean waiving their fines?”

Joseph shook his head decisively. Waiving penalties would let these culpable banks get away with siphoning off tens of millions or even billions of livres from the government without consequence.

The current issue revolved around how to compensate the nobles for their investments.

Joseph sifted through modern banking practices in his mind but couldn’t find a ready-made solution. Brienne was equally clueless, wearing a worried expression.

As trees and buildings flashed past the carriage windows, Joseph thought of the many times these powerful nobles had obstructed him and sabotaged the country. His anger flared.

He slammed a fist onto the seat, gritting his teeth. “Why not just confiscate all their money!”

He exhaled slowly, realizing this was merely an expression of his frustration...

Wait... A thought suddenly struck him. While he couldn’t confiscate the nobles’ money, he could delay paying them!

If the funds could be held for five or seven years, until France’s financial situation improved, the government would be fully capable of paying them back by then.

What was needed was a method to make the nobles “voluntarily” leave their money with the government.

Considering his options, Joseph immediately thought of “debt-for-equity swaps.” However, he found the idea unsuitable. The current stock ownership mechanisms were underdeveloped, and managing such large sums would be challenging.

Then he thought of an alternative—“debt-to-fund conversions.”

As the carriage exited the city limits of Paris, Joseph turned to Brienne with a smile. “If no one else will acquire it, let my French Reserve Bank take over Béranger Bank.”

“Your bank?” Brienne was stunned. “Your Highness, acquiring Béranger Bank would not only require purchase funds but also a significant sum to pay back any noble investments that might be withdrawn.

“Even if you could muster the funds to acquire Béranger Bank, there are still over a dozen banks expected to fail. You can’t possibly acquire them all, can you?”

Joseph chuckled. “Why not? I do plan to acquire them all.”

“But where will you get the money for this, Your Highness?”

Joseph shook his head. “Very little money is actually needed.

“The banks’ assets, after subtracting their debts, usually leave a surplus of a few million to tens of millions of livres. With this case, the government can impose fines equivalent to their assets.

“The government can then inject these fines as equity into the French Reserve Bank, allowing the bank to complete the acquisitions at no cost.”

Bank assets primarily consisted of loans, most of which were extended to the government. Debts, meanwhile, comprised public deposits and noble investments. After offsetting the two and factoring in cash and physical assets, the remaining balance represented the bank’s net worth.

Brienne patiently countered, “Your Highness, while that may be true on paper, if you acquire those banks and nobles decide to withdraw their investments, you’ll still need to pay them. Meanwhile, the loans extended to the government can’t be immediately recalled.”

Joseph replied calmly, “As long as the nobles don’t withdraw their investments, there’s no problem.”

Brienne sighed. “Your Highness, what if they refuse to cooperate? After this turmoil, they will certainly view bank investments as unsafe…”

Joseph waved dismissively, smiling. “That won’t be up to them.”

…

Two hours later, the carriage stopped at the marble courtyard of Versailles.

As Joseph stepped out, he heard loud cries from outside the gates of the palace:

“For the stability of French finances, you must halt Necker’s trial!”
“Your Majesty, grant us your mercy and leniency!”
“If more banks fail, I’ll never buy government bonds again…”
“Yes, and government loans too! We must hold tight to our purses!”

Joseph, amused by the passionate nobles blocking the gate, turned to Brienne. “Archbishop Brienne, it seems the gate is clogged. Let’s head to the Petit Trianon instead.”

“Very well, Your Highness.”

As they began walking, a portly figure with wavy hair came jogging toward them.

“Count Morneau?” Brienne stopped in his tracks.

The Minister of the Interior greeted Joseph and Brienne with bows, then hesitated before saying, “Your Highness, where are you headed? I, uh, have a suggestion.”

Joseph smiled. “We’re on our way to see the Queen. You’re welcome to join us. What is it you’d like to suggest?”

Morneau quickly followed, smiling ingratiatingly. “Your Highness, regarding Necker’s case, perhaps it might be prudent to delay it for a while.”

“Oh? Why?”

“You see, many nobles will suffer great losses because of this matter. Helping them through this crisis would greatly enhance the royal family’s reputation.”

Joseph cast him a sidelong glance but said nothing.

After rambling further, Morneau eventually confessed, wringing his hands awkwardly. “To be honest, Your Highness, I also have some investments in Clarsenet Bank.

“Of course, I’ve already requested to withdraw my funds, but as you know, banks need 20 days to prepare. If Necker’s case could wait until after that…”

“How much have you invested?”

“Well… around 700,000 livres.”

Joseph rubbed his forehead and said coldly, “You know how significant Necker’s case is. At this point, will you stand with me, or with your 700,000?”

Morneau, sweating profusely, stammered, “O-of course, I’ll stand with you, Your Highness. You know I’ve always followed your instructions. It’s just that the bank…”

“Good.” Joseph gestured toward the Petit Trianon. “Come with me to convince the Queen.”

“Convince her of what?”

“To establish the ‘French Industrial Development Fund.’”

…

An hour later, Queen Marie Antoinette gazed at the three men before her, finally turning to Brienne. “Are you certain this ‘Industrial Development Fund’ will stop those people outside from bothering me?”

Brienne quickly replied, “Yes, Your Majesty, I guarantee it.”

Joseph added, “It will also significantly reduce the national debt.”

The opinions of her two most trusted cabinet ministers reassured the Queen, and she nodded. “Very well, do as you suggest. After all, it won’t cost the government anything.”

She frowned slightly. “But these terms—‘funds,’ ‘bonds,’ and so forth—are rather complicated. I’m not sure I’ll remember them all by tomorrow morning.”

Joseph immediately offered, “I can handle the explanations for you.”

The Queen smiled and patted his head affectionately. “My dear, your mind is always so sharp. I’m almost jealous. Very well, you shall present it tomorrow.”

As they left the Petit Trianon, Joseph turned to Brienne. “Archbishop Brienne, please proceed as discussed and announce this to the nobles.”

“Understood, Your Highness.”

As Brienne departed, Joseph addressed Morneau. “Frankly, I didn’t expect you to disrupt my plans over a paltry sum of money.”

Morneau was alarmed and stammered, “Your Highness, please forgive me. I didn’t mean to—”

Joseph raised a hand to silence him. “Rest assured, your money will remain intact and will even grow. Especially your shares in the Reserve Bank—they will yield enough profits to keep you wealthy for a lifetime.”

Leaving the bewildered Minister of the Interior behind, Joseph strode toward Louis XVI’s workshop.

Compared to convincing the Queen, dealing with the King was far simpler. Within ten minutes, Joseph had secured his agreement to attend the next day’s presentation on the Industrial Development Fund.

In truth, most of those ten minutes were spent calming the King’s nerves about addressing a crowd of dozens, perhaps hundreds, of people.

…

North Africa.

Inside a fortress-like prison east of Algiers in the Mitidja region, Charles idly sculpted the dust on the floor into a miniature castle, occasionally glancing back at a tiny ventilation slot in the wall.

The sunlight filtering through it told him he had been imprisoned in this forsaken place for a full eight months.

The crewmates captured with him had long since been ransomed or reduced to corpses.

Only he remained, unable to return.

It wasn’t for lack of concern—quite the opposite. As the first mate of the Golden Wheat, Charles was the highest-valued captive after the captain’s death in the pirate attack.

Truthfully, he hated his “noble” status, which made it impossible for the state assembly to raise enough funds to ransom him.

From the far end of the dim corridor came the sound of shuffling footsteps. Charles quickly lay on the ground, peering through a crack in the wall toward the adjacent cell. It was empty.

His anxiety mounted, and he kicked the bars of his cell, whispering urgently, “Ali! Ali, the guard’s coming. Did you hear me?”

As the footsteps approached and their owner’s legs emerged from the shadows, a bearded man in the next cell swiftly lifted a corner of his bed frame. Sliding through a hole beneath it, he concealed the opening with debris in an instant and positioned himself casually on the bed.

The guard stopped at Ali’s cell, glanced inside, and slid a piece of hard bread and a bowl of yellow-green soup through the slot at the bottom of the door.

He repeated the process at Charles’s cell before continuing on.

Charles, relieved, whispered toward the crack, “Hey! Could you be a little more alert? I thought I’d never get to talk to you again.”

Ali, speaking in heavily accented English, chuckled. “Don’t worry. I always know where the guard is. I just wanted to finish some work.”

“Oh, by the way,” Ali added, “you’ll have to find someone else to chat with soon.”

“Someone else?” Charles sat up in surprise. “What’s wrong? Are they going to execute you?”

“Watch what you say,” Ali grumbled while chewing his bread. “No, I’ll be gone in three days at most.”

“Did someone pay your ransom?” Charles asked, disheartened. “Still, congratulations. I’ll miss talking to you. You’re the only one here who speaks English.”

Ali smirked. “No ransom. My tunnel will be ready soon.”

“A tunnel? Ha!” Charles laughed. “Do you really think you can dig your way out of this place?

“This is Algiers’ most secure prison!”

Leaning closer to the wall crack, he continued, “Did you know even the Pasha of Tunis is imprisoned here? I heard he’s locked up in one of the upper cells. And you think a tunnel you’ve been digging for two months will get you out? Hah!”

Ali scoffed. “Clearly, you’ve never lived in Mitidja.”

“That’s right. I’m an American. This is my first time here.” Charles shrugged. “Brought here as a guest of the hospitable pirates.”

“Then you wouldn’t know. The Pasha of Tunis escaped over a decade ago. The guards here are fools; it’s easy to get out.”

“What? Escaped?” Charles’s eyes widened. “How is that possible?”

“Everyone in Mitidja knows about it,” Ali said, pointing upward. “The man locked upstairs is an imposter, kept to fool the Janissaries during inspections.”

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