Napoleon in 1812 - Chapter 83
Chapter 83
13. Golden War – 7
“Our kingdom’s war expenses include diplomatic payments to Russia, Austria, Prussia, Spain and our other anti-French allies. The Prince Regent knows about the amount, so I’ll skip the explanation.”
George IV pressed his forehead without saying a word.
Since the resumption of war with France, Britain had been sending astronomical financial aid every month to France’s rival countries, including Austria, Prussia, Russia and Sweden.
It was part of a typical British strategy to feed the European continent with money instead of projecting direct power.
In other words, the huge amount of funding was also a form of employment of the other countries’ troops as mercenaries. The size of the funding was truly enormous, as it was to buy a nation’s army.
Last year, the British government provided £28.8 million in aid to Russia, which was preparing for a major war with France, given in nine times. Of course, the results of the investment were disastrous.
The annual spending on Spain and Portugal, which were currently waging direct war on the peninsula, was smaller than of Russia. But the war was lasting much longer.
Whig party figures criticized the current cabinet for spending tens of millions of pounds on foreign aid. They said that the United Kingdom should rather support the vulnerable or pay off its snowballing national debt.
The citizens of London, who initially supported the stance of the cabinet investing in the war against its archrival, France, were increasingly leaning toward the Whig party’s claims as time went by.
“Then, the Prime Minister… wants to cut the government funding that has been used to finance the sea blockade?”
“When Sir Perceval was still around, the financial situation of the kingdom was good. Unfortunately, that’s not the case now. You should know how to tighten your waist when you’re hungry.”
Prime Minister Jenkinson’s confident claim to reduce the Navy and other countries’ financial aid was all for a reason.
Because there were no more maritime forces that could pose a threat to the Royal Navy. The Battle of Copenhagen destroyed all of Denmark’s main fleet, and the Battle of Trafalgar destroyed the French and Spanish naval forces.[1]
In other words, under the current circumstances, the naval power of the enemy countries had almost evaporated, so even a small cut in the kingdom’s naval budget posed no threat to the status of the maritime empire.
Even after the Battle of Trafalgar, Napoleon lived on the promise of landing the Imperial Guard on the British mainland, but all the British leaders knew that it was a bluffing delusion.
“I recommend reinforcing the army’s strength and training new recruits by using even a part of the navy budget cut. If you invest a million pounds in the army, they will present you with 30 elite divisions.”
“The army…”
“The Marquis of Wellington has a defensive strategy in the peninsula, which is largely due to his lack of power. Your Highness knows what he’s capable of, right? If you give him enough troops and weapons, he will surely turn things around.”
Invest in the army with the navy’s money. It was Prime Minister Jenkinson’s real intention, which he could never say in front of the citizens who had the right to vote.
If they invested in the army and formed new units to join the peninsula, they would eventually have to recruit additional soldiers and conscripts, so who would welcome it?
Just in time, France also reduced its army by abolishing the Imperial-Federal Mobilization Decree issued early last year. If there was a time to send power into the peninsula, it was now.
George IV nodded as if he thought Prime Minister Jenkinson had a point. The countries fighting on the Iberian Peninsula were the only ones resisting Napoleon’s tyranny on the European continent.
Britain’s long-standing grand strategy had been passive intervention in the continent, but nonetheless, there was one reason why Prince Regent George IV and Prime Minister Jenkinson were thinking of doing a ‘grand intervention’.
This was because, now more than ever, Napoleon and France’s expansion and possibilities were making Britain anxious.
Now the two were incompatible. Either the Empire was taken down or the Kingdom bowed its head to them.
“But apart from that, the Treasury Department believes that tax increases are inevitable. Last month, the total amount of government bonds sold in the name of the government surpassed £900 million. Their view is that if more debt is accumulated than this, it could lead to financial health issues.”
Britain, which had previously established a monopoly on foreign trade by assembling trade networks between India, China and the New World, had become a country that could produce as much wealth as all European countries combined through the mechanical revolution.
Nevertheless, the long-standing war was proving that Britain’s wealth had limits.
The card that Prime Minister Jenkinson pulled out to make up for the sold government bonds that showed signs of turning into increasingly bad debt was to cut London’s financial self-governing districts.
Many businesses and financial firms with subsidiaries in their autonomous districts were nonetheless paying lower corporate and income taxes than other regions.
In addition, they were openly committing tax evasion by manipulating books and deliberately omitting contracts. So far, these violations had been overlooked for the sake of the ‘economic of scale’.
But now that London’s financial markets had become a unique hub in the world, raising taxes would not make capitalists leave, and on the contrary, Britain could not be any more patient because of the increasing urgency of the war.
How many preferential treatments had been given to capitalists and financiers? Jenkinson thought that this was enough.
“Let’s do as the Prime Minister wants. But… let’s keep this matter to ourselves.”
“…All right, Your Highness.”
George IV was drawing a line as to what could be a political risk.
But anyway, after receiving tacit permission, Jenkinson left the house with a confident face. With this reform, the country would be able to overcome this crisis wisely… That was what Jenkinson believed.
===
The tax increase that the Earl of Liverpool, Prime Minister Robert Jenkinson, came up with was very efficient and reasonable, at least for the management of the state.
Capitalists in financial self-governing districts accumulated enormous wealth through business and finance, but they represented only a small minority of the entire nationwide population.
There was no one more suitable to be cut to match the slogan of the philosopher Jeremy Bentham[2] ‘it is the greatest happiness of the greatest number that is the measure of right and wrong’.
Politicians and journalists who received regular sponsorship or back money from capitalists would probably go crazy, but the prime minister’s power and speech were stronger than expected in wartime.
Prime Minister Jenkinson, the members of the Tory Party and of the Cabinet were optimistic about the situation. But if everything in the world flowed solely on efficiency and rationality, why did conflicts and disputes occur, and why did people cry over accidents?
A series of unexpected events was enough to shock the otherwise disturbing British economy. With a tremendous ripple effect that no one in the Treasury had expected.
It was two days before the Second Treasurer officially announced the new tax bill publicly.
As a result of having spies everywhere in the Cabinet to get important information before anyone else, London’s leading financial firms were able to hear it before the announcement was made.
The tax reform plan, led by Prime Minister Robert Jenkinson, was a very reasonable improvement in the system to remove blind spots in the law, which legally prevented small increases in corporate and income taxes, tax evasion and book manipulation.
However, people were more angry and sensitive to giving and taking than to receive nothing from the beginning.
The feeling they felt was anger, not shame, as the everyday things that they had become used to do were blocked, even if they were illegal.
Even if they were not wealthy capitalists with a business or financial company, for workers who were tied up in property or work in the financial autonomous district, the above-reorganization plan was only ‘a play of a country taking away their living money’.
“Raising corporate and income taxes? And they’re different depending on the profit of the year? Then there’s no point in investing in financial institutions, right?”
“Requesting statements from double accounts!? This means censoring our investors! From what kind of idiot’s head did this bill come!?”
“The reason for the establishment of a corporation in the financial autonomous district is that taxes are low, so if they raise taxes, there is no reason to be in a place boasting this crazy land price.”
“It’s the financiers who are leading the British economy that’s about to fall behind, and that’s how they thank us?”
All the routes trying to bypass this new regulation with bribes were cut off, as if something had been firmly ordered from above.
The tax officials said that the incident had nothing to do with them and that they could not let the surveillance personnel go because they were dispatched separately, but that could not provide any consolation.
Companies in London’s financial borough had to pay full taxes, which were raised by the revision of the tax law.
The revised tax law included measures to block tax evasion networks and monitor corrupt officials, as well as increase corporate and income taxes, but excluded securities and bond trading and dividend income taxes.
That meant that the amount of tax payable when buying and selling securities, bonds, or holding securities assets was the same as before the tax amendment.
They seemed to have thought that there would be no adverse effect on the market itself if they did not touch securities transaction and dividend income taxes, but the securities market began to freeze rapidly.
February 10, 1813, at 9 a.m. The London Stock Exchange opened. As soon as the trade began, the first runners to come were Jewish capitalists, like the Rothschild family.
The next group of people to do so was the City of London’s major financial institutions, which had ties to Westminster courts and politics.
They competitively poured their bonds and securities into the market instead of secretly trading like in the past. As if they were being chased by something.
The shockwave was bound to spread in the market when the financial conglomerates dominating the City of London were ruthlessly pouring out such amounts.
Five hours later, at 2:00 p.m., the London Stock Exchange was bustling with people who came to sell stocks and bonds.
“Sell these bonds right now! Even if there’s a 20%, no, 30% loss, it’s okay, so hurry!”
“I came here first! Just sell this quickly!”
“Please wait in order! Only those who bring the applicable number can trade!”
“Darn it, get out of the way! Do you want to see people die!?”
“You think you’re the only one who bought stocks here!? Take your turn!”
There had never been such a mess since the London Stock Exchange was established in the City of London.
Prices of various securities and bonds were falling in real time, reminding them of the South Sea Company[3] crash that occurred 90 years ago.
The panic-stricken investors sold their assets randomly, further accelerating the crash.
“We’re screwed… screwed!!…”
“The water of the Thames must be warm, right?… Is it okay if I go in?”
At 6 p.m., the market closed. Outside the exchange, it was full of investors who could not sell their securities and bonds. It was a legendary crash that would go down in history. The market had to be closed to protect the good half of the stocks.
For those who did not receive the information in advance, the crash was a big event that occurred without any warning or sign. Only anger and rage filled their heads, as they were slightly dazed.
“The Jews and the financial tycoons who had information about the crash have siphoned off all our investments!”
A cry from someone determined the direction that this anger should take. The glaring eye of investors turned to managers of Jewish capital and financiers in the City of London.
Yes, that’s them!
The stock and bond prices plummeted because they poured out big amounts randomly! Instinctively threatened, the Jewish capital managers and the financiers of the City of London shook their arms and made excuses.
“That’s ridiculous nonsense! We-we’re just employees! All we can do is follow orders!”
“We’ve lost a lot of money, too! We’re victims just like you!”
“C-calm down first!…”
The Jewish capitals and large financial institutions who were informed quickly were able to sell, of course, quite a lot of stocks at reasonable prices.
However, they had so many securities and bonds that it was impossible to sell everything at once, and the transactions were controlled due to the heavy traffic on the stock exchange, making it difficult to sell anything. It was not wrong to say that they lost money in the process.
However, their situation was very different from the one of small investors who lost most of their wealth.
“We followed the principle of investing in securities. We just moved quickly based on our judgment on the market values. Don’t blame others for losing money.”
A man who managed Jewish capital did not understand the atmosphere and uttered harsh words.
Normally, people would have laughed at the person who lost money or would have agreed with his provocative words, but the problem was that the target of his remark was the absolute majority of the people gathered here.
They could ridicule other people’s failures, but not their own. Some of them snapped. And the result was terrible.
“Die!!”
“Argh!”
With his eyes wide open, an investor rushed at him, pulling out a sharp blade. And he pierced the stomach of the man who said the cheeky remark.
There was a moment of panic at the shocking situation. Some investors were extremely excited to see the pouring red blood. They needed to find the cause of this painful failure and a target for their anger.
To them, there were no targets more suitable than Jewish capital managers and employees of large financial companies who had siphoned off money.
“Since you stole our money, we will take your lives!”
“Death to the filthy Jews!”
“Ugh… Argh!”
At first they punched and kicked, but later they brought stones, clubs, and even shovels, causing merciless violence.
The indiscriminate violence, which left a total of 5 people dead and 38 seriously injured, continued until officers rushed in. But what happened today was just a preview of the beginning of the tragedy.
TL notes
[1] Battle of Copenhagen, Battle of Trafalgar
[2] Jeremy Bentham
[3] South Sea Company
