The Crown Prince of France - Chapter 26

Chapter 26: The Terrifying Debt

The next day...

On his first day as Assistant Minister of Finance, Joseph arrived early at the south wing of the Palace of Versailles, where the Minister of Finance's office was located on the first floor.

As he hurried along, he couldn't help but recall his past life, rushing to clock in for work on projects every morning.

Using this as an excuse, he skipped the cumbersome breakfast ritual, opting for a simple meal of bread, grilled fish fillets, and vegetable soup, which saved him considerable time.

When Eymond pushed open the door to the Minister of Finance's office, Joseph immediately saw Bishop Brienne furiously slamming his desk, his voice low and angry:

"Those selfish wretches! They talk of equality and justice, but all they care about is gold! Don’t they understand that this will choke the nation’s finances?"

Joseph stepped forward, righting a brass pen holder that had toppled from the force of the slam. He asked,
"Bishop Brienne, who has angered you?"

The secretary standing to the side whispered hurriedly,
"Your Highness, yesterday afternoon the High Court officially refused to register the tax bill."

Brienne let out a heavy sigh and cursed bitterly,
"Those greedy nobles! All this fuss over a mere land tax—are they determined to destroy France? Do they not realize that when that day comes, they too will go to hell!"

As a relatively upright clergyman, this was the harshest curse he could muster.

Turning to Joseph, Brienne apologized,
"Your Highness, forgive me for letting you hear such impolite words."

Joseph waved his hand dismissively,
"Think nothing of it, Bishop. I understand how you feel."

He then picked up the thick stack of tax bills that had been returned by the High Court, each bearing the seal of “Not Registered.”

"Bishop Brienne, what do you plan to do next?" Joseph inquired.

Brienne closed his eyes, rubbing his temples in frustration.
"We’ll have to make further concessions and seek support from the Church, doing our best to persuade those selfish, greedy nobles."

Joseph shook his head inwardly. Many of those senior clergymen were also nobles; expecting them to abide by doctrine and save the people was pure fantasy.

Seeing Joseph’s silence, Brienne sighed again,
"I know it’s likely futile. May God protect France."

Joseph frowned slightly. He knew he had to intervene in the tax bill issue.

What appeared to be a mere refusal by nobles to pay more taxes was, in reality, a test of royal authority by the aristocracy.

Historically, Louis XVI alternated between hard and soft tactics over this matter but was repeatedly defeated by the nobles, who used the courts and public opinion to their advantage. From then on, the aristocracy confirmed Louis XVI’s weakness and acted with increasing audacity, wresting power from the royal family and plunging the nation into chaos.

Joseph resolved to quash this trend.

The tax bill needed to be implemented in the shortest time possible to suppress the arrogance of the aristocracy and remind them that royal authority would always be their master!

Though seemingly difficult, this task was not insurmountable.

The nobles’ strategy relied on two things: the High Court's registration rights and their ability to guide public opinion, stirring the populace against the monarchy.

Regarding the former, France’s courts were notoriously corrupt. There wasn’t a single person in the judiciary with clean hands, which provided numerous opportunities for leverage.

As for the latter, countering the nobles’ so-called public opinion strategies with 21st-century methods of internet propaganda and new media tricks was akin to an adult playing against children.

After pondering for a moment, Joseph looked at Brienne, speaking as if consoling a despondent elder,
"Bishop, perhaps the situation isn’t as dire as you think. In another three months, the bill might very well pass."

"May it be as Your Highness says," Brienne nodded, his steps heavy as he moved to his private office in the western wing.
"I’ll review the tax clauses again to see what compromises can be made."

Joseph returned to his office in the eastern wing, where he asked his assistant to bring internal financial documents for him to examine closely.

The more he understood France’s financial situation, the more alarmed he became. It was a wonder how previous ministers of finance had managed to stave off total fiscal collapse.

France's total debt stood at 2 billion livres, most of it in national bonds. Sixty percent was held domestically by French citizens, while the remaining forty percent was foreign-owned.

These bonds carried interest rates of 8%-12%, meaning that 200 million livres were paid annually in interest alone! With total yearly revenue amounting to just 500 million livres, 40% of it went to interest payments, leaving nothing for principal repayments.

Historically, it wasn’t until the French Revolution, when the National Convention confiscated all Church property, combined with the war profits gained under Napoleon, that the massive deficit was finally addressed.

In addition to national bonds, there was an even more alarming type of debt: short-term bank loans.

These loans were taken to address cash flow problems in the state treasury, with the promise of repayment upon the sale of bonds. However, their interest rates ranged from 15%-25%!

Although this short-term debt amounted to less than 120 million livres, monthly interest payments exceeded 1.8 million.

Moreover, despite being termed "short-term," France’s financial situation rendered it virtually perpetual. Old loans were repaid by taking out new ones, essentially turning them into long-term liabilities.

As Joseph mulled over this grim reality, his assistant knocked and entered, bowing.
"Your Highness, the representatives from Laborde Bank have informed us that due to unexpected business changes, the loan negotiations must be postponed, with no new date set."

Joseph nodded absentmindedly.
"Thank you. I understand."

He suddenly recalled one of his primary duties as Assistant Minister of Finance: negotiating short-term loans with banks. In essence, it was about rolling over old debts with new ones.

Picking up the list of key tasks that his assistant had prepared, he saw that the agenda included a 2 p.m. meeting with Laborde Bank to negotiate a loan.

The funds were intended to repay a 6 million one-year bond maturing in a month.

The plan was to borrow from two banks, repaying the loan with bond revenues two months later. The interest rates for previous loans had been 18% and 19%.

"Running a bank in this era must be insanely profitable," Joseph muttered, marveling at the interest rates. "In the 21st century, this would undoubtedly be labeled usury."

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