The Minister of Finance kept shaking his head. "Mr. Pitt, to raise funds for reinforcing the Cape of Good Hope and intervening in the Caribbean over the coming months, I have already borrowed more than 400,000 pounds from the banks.
"At present, the interest rate has been pushed up to 9.5%.
"If we seek a loan of 500,000 pounds, the interest will certainly rise above 12%!"
The British Government's financing channels were mainly private banks—even the Bank of England, the "quasi-central bank," was privately owned. The greater the government's financing needs, the higher these capitalists would set the interest rates, just as France had been before its financial reforms.
Of course, the British Government's debt ratio was not particularly high at the moment, so interest had not yet reached the 20% level France had seen back then.
Petty looked again at Grenville. "Prime Minister, before we resolve the sugar problem, we may still need to borrow heavily. It would not be wise to push interest rates too high right now."
Grenville nodded with a frown. Over the past two years, Britain's fiscal situation had been far from optimistic due to sugar subsidies and France's competition in industrial goods. 500,000 pounds was indeed something he had to consider carefully.
Turning his head toward Pitt the Younger, he said, "Perhaps we should raise Personal Income Tax a little further."
He then let out a breath. "The pressure from Parliament will certainly be enormous."
When Britain had first imposed Personal Income Tax, public resentment had boiled over. Pitt the Younger's resignation had partly been due to this as well. Grenville would face equally immense risks if he raised it.
Yet Pitt the Younger appeared very relaxed. "Prime Minister, there is absolutely no need to raise taxes."
He looked at Petty again. "Nor is