He Became Napoleon’S Genius Son [EN]: Chapter 267

(267) What Great France Needs Is Money

In the end, the reason Eugene risked attending the victory reception was singular.

It’s because the Napoleonic Consulate needs something.

They are undergoing simultaneous innovations, and without innovation, they are bound to fail. Only innovation can secure their position.

But how can innovation be achieved?

Napoleon gestured wildly with both arms and shouted.

“Robespierre would say the guillotine. But no!”

In the office on the third floor of the Tuileries Palace, overlooking the Seine, only three people were present.

Consul Napoleon, Chief Aide Eugene, and Jacques Recamier, currently one of the leading bankers in Paris.

Of course, among gossipmongers, Recamier is more famous for his wife, who is 26 years younger than him, than as a banker.

However, neither Eugene nor Napoleon summoned him to inquire about that truth.

Eugene shrugged and chimed in with Napoleon.

“Actually, Robespierre would have said revolutionary ideals. Liberté, égalité, fraternité [Liberty, equality, fraternity]. Very good words, aren’t they?”

“Those were originally Sieyès’s words. Robespierre didn’t even believe in things like freedom. Equality, maybe.”

“I thought Demoulins wrote them first. Well, anyway. What do you think is needed?”

It’s a question often discussed even in modern history.

Who first proclaimed liberty, equality, and fraternity?

While arguing about this issue, which was not agreed upon even at the time, Napoleon offered a very practical answer.

“Money, Eugene!”

In the end, the driving force that moves ideology, changes the world, and accelerates innovation is capital.

“Why did the revolution happen? Because of the fiscal deficit. The foolish Bourbon dynasty spent all the money on the American Revolutionary War!”

“It’s one of the important reasons. I made quite a bit of money with American treasury bonds myself.”

“Don’t let that kind of talk leak out. Diplomacy, war, internal affairs. Everything costs money. Even the conscripted soldiers with low pay! Oh, are you creating the Consular Guard?”

Suddenly digressing from the topic after a long rant, he asks a necessary question.

It’s one of Napoleon’s famous habits.

Of course, it’s a bad habit that only his close aides know about in this era.

Eugene, without changing his expression at the literally arrogant demeanor of a dismissive genius, replied.

“Yes, I’ve appointed Lannes as the head for now.”

“Lannes? That friend is excellent, but he doesn’t know how to spend money well, does he?”

“He’s good at spending it. It’s just hard to control him. You don’t have to worry too much. I’ve assigned Augereau as the auditor.”

In fact, Lannes also serves as the commander of the Consular Guard in the original history.

Immediately after that, he spends over 400,000 francs and is severely reprimanded by Napoleon.

This is because he splurges a huge amount of money on residences, uniforms, and equipment.

He is flustered by Napoleon’s strict order to return all this money, but he barely survives with the help of Augereau, who unexpectedly had accumulated a fortune.

Eugene knows this fact, so he assigns Augereau from the beginning.

Because he’s a meticulous man who also knows how to take care of his own interests.

Napoleon nodded perfunctorily and asked again.

“Good, that’s also money. Now, Eugene. What do you think? About abolishing income tax.”

This is why Napoleon brought Jacques Recamier.

In the end, the most important channel for the government to raise revenue is taxes.

However, even before the revolution, the French royal family failed to solve the tax problem.

At that time, the revolution was triggered by trying to impose additional taxes on the bourgeoisie [middle class].

After the revolution, France introduced income tax in a revolutionary way.

However, unlike England, it repeatedly fails to collect taxes properly.

In fact, centralization is still more advanced than in England, even though that’s the case.

That also means that the French tax system and economic situation are more backward than in England.

In the original history, Napoleon eventually abolishes income tax and adds numerous additional taxes.

Consumption tax is one of them.

Eugene smiled bitterly and turned his head slightly.

“Here, Monsieur Recamier would love the abolition. Because he has a lot of income.”

“Ahem! Why are you suddenly picking on me? I value doing business by paying taxes fairly.”

“Even though the revolutionary government has continued to fail to collect income tax, income tax itself is an important tax. England alone is using income tax to pay for war expenses right now.”

Napoleon snorted.

“It can’t be collected, I’m saying it can’t be collected! Now, Recamier. This is why I called you. As a financial expert, won’t you give me proper advice on taxes?”

Jacques Recamier rolled his eyes.

Even during the old royal family, the king would always make this choice.

If taxes were insufficient, he would call in financiers and demand money.

It’s in the form of debt, but in the end, it’s a donation.

Recamier, receiving Eugene and Napoleon’s burdensome gazes, changed the subject.

“I’m not a tax expert. So, when it comes to tax issues, I can only say that you should follow the tax laws of England.”

“Collect taxes like hearth tax, toll tax, or window tax? Oh, there’s also land tax.”

“Rather, it’s about having different tax rates for different income brackets. I heard that they impose a 10% income tax on incomes exceeding approximately 200 pounds. And they don’t impose income tax on incomes below 60 pounds.”

Listening to Recamier’s explanation of England’s advanced income tax system, that is, progressive tax, Napoleon asked back.

“Collection will be a little easier. Is that all?”

“Didn’t I tell you that I’m not a tax expert? However, from a banker’s perspective, England doesn’t fight wars with taxes.”

“Then, what do they fight with?”

Recamier, who had been rolling his eyes, smiled.

“National bonds.”

Napoleon frowned.

“Are you telling me to become the second Louis XVI? The old royal family went bankrupt with war bonds.”

“Why do you think the state issues bonds? The Bank of England handles it in England.”

“Are you suggesting we create a national bank?”

Only then did Recamier nod with a satisfied expression.

“It doesn’t necessarily have to be a state-owned bank. For example, even a bank with the Bonaparte family as the major shareholder can be a central bank.”

This time, Napoleon’s eyes began to sparkle.

***

Of course, Recamier’s proposal is, in modern terms, a form of corruption where a powerful person pursues personal gain.

“That’s not what I called you here to talk about, Monsieur Recamier.”

In fact, it’s something that happens even in the original history.

The Banque de France [Bank of France], France’s first central bank, has numerous major shareholders.

Recamier is included as a major shareholder, but the Bonaparte family, including Joseph Bonaparte, also has a stake.

However, they all end up being kicked out during the Bourbon Restoration in the original history.

Recamier is kicked out a little earlier than that.

It’s an example of how fleeting wealth obtained through power can be.

Suddenly, Recamier took a sip of coffee and retorted.

“Didn’t you create the Italian Bank in Genoa? Here, Pierre-Collo is also here to attend the meeting as the head of that bank.”

“Why are you bringing me up? You knew everything but didn’t say anything in front of Consul?”

“What? I’m just a banker, so I don’t know much about national affairs.”

At that moment, Collo, who was sitting in a chair in the Chief Aide’s office in the Tuileries Palace, shouted.

“Money circulates when the war stops! Does credit suddenly appear just by establishing a central bank? Who buys French national bonds? Unless you force them to.”

Currently, Collo is the general manager of the Banque de Boarne in Italy.

He oversees the Banque de Boarne branches scattered throughout Italy, centered around the Italian Bank in Genoa.

Therefore, he had learned something through repeated wars.

It is difficult for the daily economy to recover no matter what you do during the war.

The same goes for finance.

It means that there is nothing worth succeeding except for the military supply business.

But France is still at war.

This is because England has not responded to the armistice agreement.

Therefore, Prussia, England’s ally, was also vaguely withdrawing its troops while watching the situation.

Then Eugene nodded.

“Well, something like the Banque de France is necessary. To catch up with England in terms of trade and industry.”

“Oh my? Even our patron is infected? Put away the central bank omnipotence theory. Even the bankers of Amsterdam failed at that. No matter how much you create a national core bank, it will collapse if you fight a war. The Banco di Amsterdam [Bank of Amsterdam] is on the verge of bankruptcy right now.”

“It won’t go bankrupt yet, Collo. Also, the contribution of national policy banks is essential for industrial revolution, no, industrial development. Because we have to invest in projects that don’t make money right away.”

Now, Eugene and Collo’s conversation is about the long-standing problem of central banks.

Since the Seven Years’ War, England has created a national bond issuing institution through private financiers to raise war funds.

This is the famous Bank of England.

However, the Netherlands, which developed finance a little earlier than England, failed to establish a central bank.

As a result, the Amsterdam Bank goes bankrupt in 1812 in the original history.

It’s still staggering and barely holding on.

Then what about France?

In the original history, the war does not end, so there is no time to restore credit, and it barely survives by issuing so-called gold coins.

It means that it cannot properly issue national bonds or banknotes.

That’s why there’s no point in creating a central bank.

Suddenly, Recamier asked Eugene, who was lost in thought.

“So, are we creating the Banque de France?”

“Consul told us to, didn’t he? But we need to suggest other measures as well.”

“War stoppage. This is not my area of expertise.”

Recamier sat down, tapped the desk, and muttered.

“The problem is England after all? Then, we need to meet an Englishman.”

Eugene blinked at Recamier and widened his eyes.

“An Englishman, who on earth? Wait.”

“Do you remember now? I don’t know if that friend is still alive in prison.”

“I’m starting to wonder about myself. There’s no way someone took care of my prison life.”

Recamier laughed and told Eugene.

“You’re such a heartless business partner. I did it. Francis Baring is still fine.”

It was the moment when they called Recamier to solve the money problem and got an unexpected solution.

***

Of course, a prisoner in jail is dissatisfied no matter how well he is treated.

“I’m going to die. The prison food is very bad. When can I get out? Freischütz [literally ‘free shooter,’ a reference to a protected or favored person]?”

Eugene looked around the prison cell, which looked more like a nobleman’s room than a prison.

This is the Temple Monastery.

Remembering a lonely man who used to live here, Eugene said.

“The original owner of this room only left after he died.”

“Don’t talk about creepy things. I’m not the same as such a big shot prisoner, am I?”

“Isn’t a banker who still has wealth more dangerous than a king who has lost power?”

Soon, standing in the room where Louis XVI died, Eugene’s eyes flashed.

“I’ll release you, Mr. Baring.”

For a moment, Francis Baring, who had stepped back in fright, tilted his head.

“Did an envoy come from England? With the condition to release me?”

“Unfortunately, Prime Minister Pitt is so stubborn that he continues to attack our ports. The government has been newly established, but trade is still difficult.”

“It seems like it’s a party every day outside? I’m a prisoner, so all I’ve heard is from the guards.”

Eugene scoffed.

“Monsieur Recamier told you, didn’t he? It’s just money from the Austrian Empire’s treasury. It’s a war boom, you could say.”

France’s ports are still under blockade.

However, land trade in the direction of Austria, Italy, and Spain has resumed.

Also, the Levant route is being reconnected through the eastern coast of Italy.

With the first installment of Austria’s war reparations coming in, Paris has recovered enough to hold banquets.

However, for the economy to fundamentally recover, Atlantic and Indian trade must become possible.

It is also the reason why we need to negotiate a peace treaty with England.

After roughly calculating the situation, Baring stroked his thick beard.

“Then, what are the conditions for releasing me?”

“You can guess, right? War stoppage.”

“I have no power. Prime Minister Pitt is not so poor that he needs my financial assistance.”

In later original history, the Rothschild family is said to win over British Prime Minister Disraeli.

However, Pitt is a wealthy aristocrat, unlike Disraeli, who was a poor writer.

Also, Baring is not yet a dominant figure in the British financial world.

Nevertheless, Eugene smiled as if he believed in Baring.

“So, you have to make Pitt step down.”

Baring’s mouth dropped open.

“Wait, is my release condition perhaps?”

Eugene nodded and made a terrifying proposal.

“That’s right, Mr. Baring. Please collapse the Pitt administration. Then, I will release you.”

A man who once promoted the Pichegru coup.

Francis, the owner of Barings Bank, is now in a position to overthrow the British government.