Chapter 466: To Win, We Must Defeat Britain
If France had a financial situation as strong as Britain's, it could issue special government bonds to sustain itself through six months of fiscal shortfall. However, to manage its over 20 billion in debt, the French government had already exhausted the market for bond subscriptions. Even if they raised the interest rate on bonds to 12%, it's doubtful how many would actually sell.
Joseph nodded gravely. Based on France's annual fiscal income of 500 million francs, they'd need to raise at least 250 million francs in one go to start reforming the tax system—enough to cover the first half of the year, after which the taxes collected could sustain the rest. But to be on the safe side, they might need 300 million francs.
Joseph quickly reviewed some case studies on raising funds from the future. There should be some untapped potential in the banking, insurance, and securities sectors.
After selecting a few options, Joseph said to Mirabeau, "I'll find a way to handle the financial side. Tax reform needs to start soon. You can begin rallying support for the reform, gradually releasing the idea to gain momentum. I'll propose establishing a tax office at the next cabinet meeting to initiate government control over tax collection. The rest will have to wait until the money issue is resolved."
"Understood, Your Highness."
Upon hearing "tax office," Bailly immediately thought of another concern. "Your Highness, all tax collection is currently handled by tax farmers, and the government has no experience in this. I'm worried this could lead to chaos in tax collection."
Initially, Louis XIV had delegated tax collection to tax farmers because government tax officials were incompetent, leading to widespread tax evasion. These officials often colluded with taxpayers, taking bribes to turn a blind eye, resulting in unpaid taxes.
When tax farmers took over, they paid a lump sum to the government upfront and were then responsible for making a profit, ensuring that not a single coin was left uncollected.
Joseph smiled, "I have a solution for that, no need to worry."
For an 18th-century government, preventing tax evasion was a major challenge, but Joseph had already studied the "textbooks" of the future—just copying the methods of the IRS from future America would suffice.
The IRS, or the Internal Revenue Service, was so feared in the future that even the most hardened criminals wouldn't dare mess with them. There was even a notorious gangster who evaded justice for years until the IRS stepped in, swiftly throwing him in prison and dismantling his entire criminal empire.
Beyond the IRS, Joseph had many other tax "weapons" at his disposal, such as the invoice system, individual income tax, and tax reporting procedures.
Future governments had developed countless methods to ensure taxes were collected. If these systems could manage to catch professional accountants in the 21st century, they would have no trouble dealing with 18th-century taxpayers.
Of course, these were just theories, and Joseph knew that implementing tax reform would likely cause some upheaval. But for the sake of France's business environment, it was a necessary step.
Moreover, eliminating the tax farming system could recover millions of francs annually that were currently lost to tax farmers, significantly improving France's finances. The risks would be worth it.
Bailly then submitted last year's commercial development report. The two ministers discussed France's industrial and commercial affairs with Joseph late into the night, only leaving after Aymard subtly hinted it was time to go.
The clock showed 11:30 PM, but Joseph remained in his study, reading the report in his hand, occasionally taking a sip from his teacup.
Last year, France's total trade reached an astounding 1 billion francs, nearly catching up with Britain's 49 million pounds, or 1.22 billion francs.
However, France's profits from foreign trade were far less than Britain's, primarily because most of France's trade was with nearby European countries. To compete with these nations' own products, France had to keep prices low.
In contrast, Britain could ruthlessly exploit its colonies, buying raw materials cheaply and selling industrial goods at high prices, without worrying about competition. British tariffs were almost nonexistent.
Even France's supposed ally, the United States, still relied heavily on Britain for trade, due to its history as a British colony. Although the U.S. was now independent, its trade with Britain was only slightly less than during colonial times.
In short, France's annual trade profits were roughly half of Britain's, yet France had to support a population three times larger—Britain had fewer than 10 million people, while France had 30 million.
This was despite Joseph's ongoing efforts to boost France's economy. Historically, by 1790, France's industry was already collapsing, with wine being one of the few products still selling well—until Napoleon's cannons opened up European markets and pushed out British goods.
Joseph knew that as the most powerful country on the European continent, France would always face the threat of war from Britain, which adhered to a policy of maintaining balance on the continent.
The so-called policy of continental balance meant that Britain would never allow a single dominant power to emerge in Europe, ensuring its own influence over the continent.
In practice, this meant that whoever was the strongest in Europe, Britain would ally with the others to bring them down.
Historically, the Coalition against France appeared to be a reaction to the French Revolution, where the execution of the monarchy prompted other European kings to unite against France.
But the root cause was the persistent weakness of Prussia and Austria, which allowed France to stand out on the continent, triggering Britain's fears.
Otherwise, it would seem hypocritical for Britain—a country that had already undergone its own revolution and executed its king, with parliament in charge—to join other monarchs in opposing France. In reality, Britain was simply using the war to weaken France.
So, after largely neutralizing the domestic revolutionary threat, Joseph's current strategic focus was preparing for the inevitable "continental balance" attack from Britain.
In the age of the Industrial Revolution, challenging Britain meant first surpassing it in industry and trade.
Joseph glanced at the world map on the wall, where Britain's vast colonial empire stretched from India to North America, from the Pacific to the Atlantic. It was an overwhelming pressure.
But soon, his eyes filled with determination and confidence. He was certain that he could lead France in catching up to Britain in industry and commerce. Then, he would build a powerful fleet, defeat Britain's proud navy, and finally break the curse that had always limited France's growth—a feat Napoleon had never achieved.
To win, we must defeat Britain!
Of course, such goals had to be pursued step by step.
For now, the priority was completing domestic reforms, laying a solid foundation, and then securing and expanding the markets in Germany and North Africa to pave the way for France's industrial revolution.
(End of Chapter)
Friends, if you want to read chapters in advance, subscribe to my patreon.
Read 20 Chapters In Advance: patreon.com/johanssen10