Chapter 631 Monetary Dividends
It is not surprising that Joseph has such concerns about Brian. After all, the latter had never been exposed to the financial colonial concepts of later generations, and even the application of paper money was still at its most primitive stage.
He looked at the Minister of Finance: "Archbishop Briand, in fact, as long as these countries accept our banknote loans and agree that they can only be used for trade and cannot be exchanged for gold at the French Reserve Bank, Then the money will not affect our financial stability."
Brian, Bai and others looked at each other with doubts in their expressions.
Joseph had to patiently explain to them: "To put it simply, countries that accept franc banknote loans actually recognize the value of these 'pieces of paper'.
"Even if they immediately use all the money to buy our country's goods - in fact this is impossible, the transaction is delayed, and at least one-third of the transaction will flow into their own production and sales channels. .
“Now we are only talking about the extreme case, the money really all returns to France through trade. Then the debtor country that obtained the loan will have to consider the issue of repayment. The method of repayment is nothing more than repayment with gold and silver coins, or repayment with franc notes.
“If it is gold and silver coins, we are equivalent to exchanging paper money for precious metals, which is a major profit. This will even cause the value of paper money to rise.
“Of course, most debtor countries will choose Repay with paper money. Then they must have the means to obtain paper money, which can only be achieved by selling goods to our country. In other words, the franc will become their accepted currency and paper money will continue to enter their market.
“So no matter what the situation, our country will not be severely impacted by banknotes. At most, it will be a short-term and small-scale inflow of banknotes, and the impact on the currency value will be negligible. In the long term, we will Profitable.”
The reason why this situation occurs is entirely because the debtor countries use gold and silver coins themselves, so there is no exchange rate issue in cross-border trade.
If it were in later generations, after a country borrows money, it must first exchange foreign banknotes into its own banknotes, use its own money for internal circulation, and use foreign currency for settlement externally.
As for countries that use gold and silver coins, if you use gold and silver coins to settle the exchange rate with my banknotes, then I will definitely make a lot of money. If you don't exchange it, you can only use my banknotes to circulate in your own market, which is equivalent to exchanging my "pieces of paper" in kind.
So once the other party accepts the banknote loan, France will only need to experience short-term financial fluctuations, and then it will be a sure profit.
Just like the US Marshall Plan after the end of World War II, a large amount of US dollars flowed into Europe through loans, which did not cause any financial risks in the US, but instead rapidly expanded the influence of the US dollar.
Of course, the prerequisite for all this to be true is that France's currency and credit can be trusted by these small countries. At the same time, there is a large amount of trade between the two countries, and others can use banknotes to purchase the goods they need from France.
However, the European continent is currently on the eve of a monetary revolution. With Britain and France taking the lead, various countries have begun planning to launch their own banknotes.
In fact, countries such as Austria and Bavaria have been experimenting with bank bonds in the past few years, but their financial reforms have not been fast enough and have not yet been fully rolled out. Therefore, the dividend of franc banknotes can only be enjoyed for the past two years. After all countries have banknotes, they will enter the normal exchange rate settlement mode.
Brian and other ministers are extremely smart people, and they quickly figured out the twists and turns, with knowing smiles on their faces.
Mirabeau immediately suggested: "Your Highness, then we should definitely expand the loan amount."
"Trade volume." Joseph patted the trade information documents on the table. "If the loan amount exceeds the trade volume too much, these countries will definitely use the remaining funds to purchase land in our country or engage in financial speculation. In that case, we will lose more than we gain. "
Mirabeau was startled and nodded repeatedly: "That's true, I didn't consider it comprehensively enough."
Brian on the side said cautiously:
" Your Highness, the British are probably pushing for this, so they may try to ask Württemberg and other countries to reject our loan plan." "You are right," Joseph nodded approvingly, "This is necessary. Use the deterrence method I mentioned before.
"The South German states must understand that it is absolutely impossible to re-sign the Treaty of the Rhine-Seine. At that time, they will naturally accept loan 'compensation'."
"What you mean by deterrence is ?”
“We will discuss this matter in detail with General Berthier later,” Joseph said, “After that, you may need to go to Baden to discuss with His Majesty Frederick... Well, I’d better go in person.”
The Frederick he was talking about was not the late King of Prussia, but the Grand Duke of Baden, Carl Friedrich von Zeilingen.
A week later.
Baden.
The silver-gray "Jewel 7L" carriage slowly stopped in Karlsruhe Palace Square. As soon as Joseph got out of the carriage, melodious music sounded all around.
Archduke Carl Friedrich greeted us enthusiastically, with a smile on his face.
As a small country adjacent to France, Baden is very dependent on France in terms of economy and politics, and can be regarded as a small follower of France.
So the visit of the French Crown Prince was taken very seriously by everyone in Barden, and the welcome ceremony was quite grand.
After some routine courtesy, Joseph and Frederick walked side by side under the swords raised by the guards. Hundreds of Baden nobles around them followed their steps and saluted one after another.
"Your Highness the Crown Prince, the banquet is ready." Frederick gestured enthusiastically to the palace, "My head chef once served in the Palace of Versailles, and his craftsmanship is very unique."
"Thank you for your hospitality." Joseph responded politely, "Actually, in order to promote the traditional friendship between France and Palestine, I have a gift to give you."
Frederick immediately revealed his surprise Color: "Ah, thank you so much. What kind of gift is it?"
Joseph walked into the small but exquisitely decorated Baroque-style banquet hall. He sat down next to him and said with a smile: "Every year, a large amount of goods are transported from France to the German countries via Baden. If a wooden track is laid in your country, connecting Strasbourg and Stuttgart, and reaching the Rhine River, the transportation will be greatly improved. Volume increased significantly
"Afterwards, warehouses can also be built along the tracks, making Baden a distribution center for French exports.
"Do you like this gift? "
Frederick suddenly felt his breathing became a little short. You know, the trade volume between France and South German countries has increased rapidly in the past two years. If Baden can become a commodity distribution center, the warehouse rent alone will be a A huge income
(End of chapter)