Chapter 1004 The North and the South Who Borrowed Debt to Fight the War (Don't Ask for a Monthly Pass, Ask for a Subscription)
The Chinese, who had been silent, finally spoke: "Mr. Solomon, Mr. August is right! Let's discuss the current situation in the American continent and how to go in the best interests of all of us. After all, we are all foreigners here, and the purpose of coming here is to make money! Wouldn't it be better if we could work together and make a fortune together? ”
It was Guo Kuntao, who had not long been the deputy governor of the Central Bank of the Chinese Empire. He stayed in Europe for two years, not only learned to speak fluent English, but also systematically understood European finance and economy, and when he returned to Shengjing, he was personally appointed by Feng Yunshan as the deputy governor of the central bank, helping the full-time vice governor Xu Youren to share bonds and overseas investments, and carry out the financial reform of the empire.
Ten months ago, through the intelligence of Guo Songtao, his brother Guo Songtao, who served as a plenipotentiary envoy in Europe, he learned that ordinary bankers in Europe were preparing to design a bureau against the United States, which would have huge benefits and rewards. Guo Kuntao immediately reported to Emperor Feng Yunshan, suggesting that he should come forward on behalf of the Chinese Empire and take the initiative to participate in this attack on the United States by the European financial capitalists, which was highly appreciated and strongly supported by Emperor Feng Yunshan. Even, the emperor specially ordered Peng Yulin, the governor of New Mexico Province, and Lu Ziyue, the ambassador to the United States, to fully cooperate, and personally explained to Guo Kuntao carefully and sent Guo Kuntao to the United States.
Solomon Rothschild was obviously a little jealous of Guo Kuntao, and laughed: "Of course! We are all here for the riches of America! After speaking, he glanced at Guo Kuntao and said tentatively: "Mr. Guo, you see, is it good for us to distribute it like this?" On the part of the Confederate States of the South, according to the agreement reached a few months ago between Sir Valewski of the French Empire and General Peng of your country and President Davis, the distribution is as follows: The Congress of the Federal States authorized the issuance of certificate bonds and bonds, and issued bonds worth a total of $45 million for four two-year periods in March, May, early June and the end of June this year, with interest paid in pounds sterling every six months. Of that $30 million was domestic debt to the people of the Southern states and only $15 million was external, bondholders could convert the bonds into Confederacy cotton certificates, which the Confederate pledged to provide cotton at 6p per pound and to deliver it to within 10 miles of a railway station or navigable river. This is the first batch of bonds, the part of the foreign debt, which has been purchased in full by the Paris branch of our Rothschild Bank. ”
"The second tranche of bonds of the Confederate States of the Southern States, which is also authorized by the Congress of the Confederate States, and the Treasury is preparing to issue $37 million of bonds in late July and mid-August, with an interest rate of the same 8 per cent per annum, of which $25 million of the domestic debt is not sold to us, and the external part of the debt is $12 million, and the other conditions such as the payment of interest and the guarantee of the conversion of cotton certificates are exactly the same as those of the first batch of bonds, and will be subscribed by your Pacific Bank before the end of next month. In addition, the Secretary of State of the Union States, Mr. Robert Tooms, and the Minister of Finance, Mr. Christopherke, mentioned that they were preparing to issue a consignment of Treasury bills of astonishing value in late August due to the northward advance of the war, but for varying periods, and agreed to be due for payment six months after the conclusion of a peace treaty with the Northern Union, totaling about $292 million, with a slightly higher interest rate of 10 per cent per annum. Because it is bearer, you can buy it even if you are not a citizen of the Union State, but the amount is too large and the date of redemption cannot be determined, we are ready to buy 40 million US dollars, I don't know how much Mr. Guo is ready to subscribe? ”
Solomon Rothschild only asked Guo Kuntao, and did not ask for any advice from Auguste next to him, presumably because he had turned the Southern Confederate States into his and Guo Kuntao's sphere of influence, and did not want August to interfere.
"Treasury bills? Why not bonds with shorter maturities? Guo Kuntao still has a good understanding of finance, this kind of does not specify the date of payment, but only agrees that the North and the South will be paid half a year after the conclusion of a peace treaty, in fact, it is already a medium and long-term treasury bonds, although it is also a kind of bonds, the interest rate is also higher, but the risk is large, the liquidity is poor, it is a kind of bearer physical treasury bonds, not as good as short-term low-interest bonds. If, in five or six years, the power of the Confederate States is destroyed and the country loses its credit, these treasury bills will become waste paper. Even if the Southern Alliance still exists, the risk of not being able to cash in on profits and principal will continue to be at war with the Northern Federation. Of course, if the financial oligarchs on both sides make purchases, the risk can be reduced, after all, everyone's interests are here, and for the sake of their own common interests, they will unanimously demand that the governments of the North and the South cease the war as soon as possible and conclude a peace treaty to pay off.
Solomon Rothschild laughed and said, "Mr. Guo, bonds with shorter maturities, the interest rate is too low. After all, our main purpose is to help the Confederate States of America win the war and truly establish their own country, and we cannot open our mouths to call for too high interest rates, otherwise they will be crushed by interest before they can gain a firm foothold, which is not conducive to long-term interests in the future. Moreover, this treasury bill will be stable for a long time, and the income will be good, isn't it? If Mr. Guo is unwilling, he can not subscribe, and we can share a little more. You know, there are a lot of bankers in Paris who have been pestering us at Rothschild. ”
Guo Kuntao guessed the other party's intention, which was nothing more than to pull himself into the water and buy this batch of southern treasury bills together to resist the risk, so that he also admitted his identity as the financial agent of the Chinese Empire, that is, he valued the powerful strength of the Chinese Empire behind it.
Nodding, Guo Kuntao smiled and said, "Mr. Solomon opened his mouth, and Guo naturally wanted to subscribe for some." However, you also know that Guo is a little involuntarily, so he can only subscribe a small amount within his authority, and claim the rest of the fraction, which is 52 million US dollars. ”
After listening to Guo Kuntao's words, Solomon Rothschild and August next to him couldn't help but gasp! They glanced at each other and tacitly expressed their shock.
52 million US dollars, in fact, is not a small amount, although Solomon Rothschild can also come up with it, but with his authority as a descendant, the maximum is only 20 million US dollars, and this time he can subscribe for 40 million US dollars, which has long been planned by Paris. But for this surnamed Guo, the emperor of the Eastern Empire surnamed Feng, is obviously not a royal bloodline, just an ordinary Ministry of Finance official or financial agent, after he just said the news, he casually agreed to subscribe for 52 million US dollars without thinking, or in order to make up for the 92 million US dollars, the real purchasing strength may be far more than that.
In addition to being shocked, Solomon couldn't help but wonder, this Chinese surnamed Guo is so sure that the Treasury bills of the Confederate States of America will definitely make a profit? Aren't they worried that in the event of the defeat of the Confederate Powers in the future, the treasury bills issued will become worthless?
"Mr. Guo is really amazingly rich!" Solomon could only express his admiration with a sour expression.
August also laughed and said, "Mr. Guo is worthy of being the richest man in your country!" Such wealth, such courage, it is amazing! ”
Guo Kuntao shook his head: "Definitely! The richest man in our country has no one but His Majesty the Great Emperor. And there are countless richer than me. Without further ado, Mr. August, it's your turn to talk about the Northern Federation! ”
Augustus nodded and said, "In terms of the American Federation, although its economic strength is much stronger than that of the Confederate States, and its industrial base and population are much better than those of the South, its financial funds are actually weaker than those of the South!" In the early years of the Civil War, the U.S. Union ran a deficit of $65 million, mostly from bankers in the northern states to build railroads and expand the West, and the federal treasury had little cash. To make matters worse, the federal government of the North had neither a standard national tax system, nor a common national currency and central bank to lend money from, so they had to borrow from private bankers in the states in the form of public bonds. ”
However, because the Northern Union still has a strong foundation after all, it was supported for a short period of time by imposing nearly $2 million in tariffs from ports such as New York, Philadelphia, Boston, and Baltimore in March, as well as $1 million in donations from Republicans. In addition, the cabinet members, including President Lincoln, thought that they could win a quick game and defeat the Confederate countries quickly, so they only issued two short-term federal bonds for six months, with an annualized interest rate of 7.5%, and the first installment was $8 million, but the bankers in the states were reluctant to buy it, but Jay Cook, a banker from Philadelphia, bought $3 million, and I came forward to buy $1 million, and finally only sold for $5 million. After the war broke out, Treasury Secretary Chase launched a second issuance plan with a total of 33 million bonds, but most bankers, including New York Philadelphia, refused to subscribe for the bonds, and eventually sold less than $10 million in bonds. In desperation, Chase changed the way he subscribed to bonds, deciding that foreign bankers could also subscribe for bonds, and following the example of the Confederate States, he issued bonds to ordinary people to borrow money and mobilize the people to subscribe. ”
August has lived in New York for more than 20 years, and he is no stranger to the financial situation and every move of the American Federation than Secretary of the Treasury Chase.
In the course of the Battle of Manassas, in June, the federal government began to recruit volunteers, buy weapons, and have a lot of debts to make up for them. This time the matter was urgent, Congress directly passed a total of 250 million US dollars in debt for the next year, of which 100 million US dollars is mainly for Europe and other foreign public bonds, Chase first started foreign borrowing, however, according to the information received so far, most of the bankers in major European powers, including Great Britain and France, Russia, Austria, etc., are not willing to lend money to the American Federation, especially the Federation not only lost the Battle of Manassas, but even the capital Washington was captured by the Southern Confederate States, And no one wants to lend it to them! According to our contact with Treasury Secretary Chase, if there are no foreign bankers to borrow before August, they may abandon the $100 million foreign borrowing program and directly launch another part of the $150 million domestic issuance of public bonds! ”
Guo Kuntao listened to him say so much, and finally got to the point, but he didn't go into detail. He asked directly: "Mr. August, do you want to suggest that we take the $100 million foreign debt together?" Don't know how high the interest rate is? ”
Solomon next to him saw that Guo Kuntao included himself, and was a little surprised, originally he was targeting the debts of the Southern Confederate States, and August was targeting the debts of the Northern Federation, only Guo Kuntao, a competitor who intervened halfway, forced the European side to agree to his interference in the debts of the North and the South.
August saw Guo Kuntao asking about the interest rate, and knew that the other party was tempted, so he blinked slyly and said, "Mr. Guo, I'm sorry, I forgot to say the most important thing." Chase revealed that because it was the first foreign bond to raise funds for the war, the interest rate was 7.5% per year, and the maturity was between 5 and 20 years. ”
Before Guo Kuntao could speak, Solomon on the side had already blurted out loudly: "These northerners, the interest rate is too low!" No wonder no one buys the bonds they issue! ”
Guo Kuntao also nodded in agreement: "This interest rate is too low." Mr. Solomon knows, we are sympathetic to the South, and we support them to have other returns, all of which are borrowed to the Union, but that's it, there is also an interest rate of 8% in the short term, and an interest rate of 10% in the medium and long term. Mr. August, Lincoln and Chase, what did they think in the first place? ”
Auguste said with some annoyance: "Who knows! Chase probably thought that the Philadelphia rich man named Jay Cook would help him and would not raise interest rates. When I approached Lincoln and offered to organize bankers in New York to lend money to the federal government, I directly proposed a short-term two-year loan rate of 24% and a long-term 20-year loan rate of 36%, and I was directly kicked out by the horse-faced president! It's hateful, and it's not that it can't be bargained? Later, I found Chase again and took the initiative to lower the interest rate, the interest rate was only 15% for one year, and it was only 18% for two years, but he still refused! I told everyone not to subscribe to the bonds they issued, and I wanted to force them into trouble, and then they would naturally have to come to me. Unexpectedly, Lincoln and Chase came up with such a criminal trick and tried to issue green coins without any gold guarantee and no value! It's not a pity to die! He's the enemy of the whole world, and he wants to subvert all the rules and turn the gold we have into waste paper......"
The more August spoke, the angrier he became, and if Solomon hadn't stopped him, he didn't know what he would have said.
"Green coins?" Guo Kuntao laughed, but he preferred to believe that the treacherous and cunning August did not say that he leaked his mouth, but deliberately revealed to himself: "So, Lincoln is really ...... Oh, let's not talk about that. By the way, Mr. August, you have been in New York for many years, and the federal government and congressmen are also very familiar with it, knowing that after the next federal capital is moved to Philadelphia, the Confederate countries will continue to attack north, and the Union must be in a hurry, Lincoln also announced a large expansion of the volunteer army before his death, and also announced the standard of soldiers' salaries, which requires a lot of money, and Lincoln's death has changed the plan for the issuance of green coins, I wonder, will Chase accept our loan at a 15% interest rate next? ”