Rise of the 1630s South America

Chapter 2202 Tower of London

"We must therefore rely on industry and well-regulated trade to help our country." In the Tower of London, Jacob Rutten, a favorite of King William III and a former banker from the Netherlands, is giving his colleagues They teach some professional knowledge.

The Tower of London is the place where the British royal family used to detain senior political prisoners. It is also a well-fortified vault. Many large British gold coins are minted here (small denominations are minted by a special mint).Therefore, the people working here are basically senior bureaucrats who are deeply trusted by the royal family, such as Mr. Rutten, who is from the hometown of William III and has served their family for many years.

Mr Rutten's rise has been a suggestion.After carefully examining the functions and structure of the National Precious Metals Administration of the East Coast government, he immediately proposed to William III the establishment of the same institution.The report he wrote was very detailed, not only carefully describing the situation of the State Administration of Precious Metals on the East Coast, but also referring to the situation of the famous banks in Europe that serve the government, such as Amsterdam Exchange Bank, Venice Circulation Bank, St. George Bank, etc. , Boldly proposed the establishment of the Bank of England to raise funds for the government to carry out various constructions and the most important war expenses.

Rutten directly pointed out that if the Kingdom of England is at war on both sea and land fronts.Although Ireland has the upper hand, it has never been able to drive James II into the sea. The daily expenses of more than 4 English troops are an astonishing figure. Lots of taxes, but still a huge financial burden.

In terms of the navy, this cost even exceeds that of the Lu army. After all, the maintenance cost of hundreds of warships and tens of thousands of sailors is very staggering, not to mention that they often have to find enemies to fight.Whether it is the cost of repairing ships, the consumption of weapons and ammunition, and the cost of pensions for dead and wounded soldiers, each item makes the royal treasurers gnash their teeth with hatred.Not many people are willing to buy the bonds issued by the government now. Ordinary people have doubts about them. The nobles and businessmen have already bought a lot. They know the inside information of the kingdom and will not add their own risks. Therefore, the royal family has a large source of funds. To reduce, new sources of income must be found.

The General Administration of Precious Metals on the east coast is a purely government agency. Apart from issuing currency and formulating various monetary policies, it basically has no commercial activities and cannot directly generate profits.Even the several mints under its jurisdiction are basically shipped a certain amount of gold and silver from above, and designated to be minted into a certain amount of currency, which is a pure part-time job with no room for profit retention.Obviously, the British royal family cannot accept this kind of institution. After all, their original intention of setting up the Bank of England was to solve financial difficulties.To this end, Rutten gave a new suggestion, that is, the royal family delegates the right to issue currency to the Bank of England, and at the same time makes the bank responsible for setting monetary policy in exchange for them buying government-issued bonds.

This suggestion, in essence, is to transfer the long-term benefits of the royal family in exchange for short-term benefits, which is not a very cost-effective thing to say.But in any case, the royal family is really short of money now, and needs to issue its own bonds, otherwise the war may not be sustainable.Speaking of which, I have to mention that the boundary between the royal family and the government in England is still somewhat blurred. Like the previous kings, William III must use the royal family’s funds to fight foreign countries, which is equivalent to the emperor’s use of his own internal treasury in the Ming and Qing Dynasties. The money goes to defense spending, not government money.

Such a situation is actually related to the history of Europe.In a country like England, the king is not only the biggest lord, but also handles various domestic and foreign affairs on behalf of the country.But there has always been a problem here, that is, there is no distinction between the royal family and the government, or the concept is very vague. Other lords contribute less when facing foreign enemies, and most of the consumption of materials and money is paid by the royal family themselves.In British history, the royal family has continuously sold land, even the dowry of their wives, in order to raise war funds. This has led to frequent financial crises for the royal family, which is a typical separation between public and private.

Now William III has less power than any previous king, so he has even less incentive to use his private wealth for the benefit of the country, which is very unfair to him.Therefore, he has been trying his best to clarify the boundaries between the royal family and the government in the past year. Whether it is power or property, they are all being divided. He really doesn't want to be so ambiguous, so that he will suffer in the end, and the rich members of Congress will take advantage of it. .

But this kind of thing cannot be accomplished overnight.At present, the bonds issued by the government are still issued in the name of the royal family, which makes William III very headache, and feels that this is likely to be too overwhelming in the future.Rutten's proposal this time just gave William III a very good opportunity. He intends to use this as an opportunity to transfer many revenues, including customs duties, to the government, straighten out the boundaries between the royal family and the government, and at the same time suppress Many bonds on the head of the royal family were transferred to the name of the government to reduce the pressure on the royal family.Well, the text of the law giving the proposed Bank of England mintage and monetary policy would also be enacted by the government, which would benefit the Crown in the long run.After all, there is still a big difference between taking the initiative to give up power and being forced to give up power by others.

"Industry and trade require smart and capable people. The royal family does not currently have such a talent pool-and never will have such a talent pool-so it is necessary to leave these to the market. Like Siredin The wool spinning in Manchester, the cotton in Manchester, the metalworking in Birmingham, the coal mining in Wales and Newcastle, etc., were all independently carried out without any support from the crown, and worked well.” Jacob Rutten walked to the window and opened the heavy curtains - the Tower of London is not good at this point, it is too dark and damp - and said to several colleagues sitting in the room: "The existence of these companies has given The kingdom's treasury has a lot of support, and we should strengthen that, not change it."

"But the people on the east coast have established a huge state-owned industrial system..." Someone raised an objection.

"This will never be possible in England!" Rutten immediately interrupted the subordinate, and said solemnly: "The situation between the two countries is completely different and cannot be simply compared. Well, I know what you want to say What is it, the Bank of England can never belong to the royal family and the government, unless His Majesty the King stops the war with the French immediately. Otherwise, as long as the war continues, the royal family or the government can only cede this power to obtain funds, there is no third way to go .Do you think the East Coasters will allow us to issue bonds in their financial markets?"

"But the state-owned enterprises of the people on the east coast are very efficient. They have an agency that manages these industries and sets goals. Their bank accounts can be shared to some extent. The cost of financing is also very low, and they can call on almost endless resources. Funds to carry out some kind of action. I think this is very effective, much stronger than a single or a collection of several businessmen, I mean in terms of financial strength." The subordinate still insisted on his views.

"Stop! Charlie, your thinking is very dangerous. Members of Congress will definitely not agree with you. Maybe only Louis XIV will appreciate you." Jacob Rutten's face was a little ugly, I only heard him say with an emphasis: "The establishment of a state-owned enterprise or an enterprise that can be controlled by the king, let alone whether there is such a financial strength, the act itself may offend the gentlemen of Congress. They may think it is a A provocation, a provocation that threatens their status. Charlie, stop discussing this issue, this is not a level that you and I can get into, it's—quite dangerous, understand?"

"Let's discuss the issue of coinage. Last year's Michaelmas Day (the statistical cycle of England's customs duties is from the previous year's Michaelmas Day to this year's Michaelmas Day) the customs revenue was 66 pounds. About half of them are foreign silver coins or worn. His Majesty the King has ordered that these silver coins be re-minted as soon as possible, mainly halfpenny, penny and twopence, and His Majesty will use them to pay the soldiers." Jacob. Rutten turned around and said: "All of them will be cast in the Tower of London! The speed must be fast! In the second half of the year, a batch of gold will be shipped back from Africa, and it will also be cast in the Tower of London. This time it will be cast into shillings and pounds. To pay the maintenance arrears of major shipyards."

"War is really a financial nightmare." An official said with emotion, smoking a pipe.

"Who says no. I have served the Tower of London for more than 40 years, and I clearly remember that during the reign of His Majesty Charles II, we spent a total of 900 million to 1000 million pounds on wars. Now in order to fight against Louis X The threat of four, we will spend 450 million pounds this year to maintain the offensive of the navy and army. In this era of war, the scale is getting bigger and bigger, and the money is getting more and more expensive. Everyone must be crazy. Isn’t peace good?” Another silver-haired official echoed: “I agree with Sir Lutten, the Kingdom must find new sources of funds, whether it is tax increases or loans, otherwise we will definitely not be able to sustain it. Look For the Dutch across the sea, their government’s total public debt has exceeded [-] million guilders, the highest in history!”

"Louis XIV is responsible for this, he provoked the war!" A very young-looking official added: "He built a huge fleet, interfered with the situation in Ireland, and seriously threatened the great kingdom of England. Freedom. If we don't take countermeasures, sooner or later we will collapse because of the loss of trade. This damn tyrant, why doesn't he spend his money on helping the farmers in his country? Their living conditions are not even as good as those in the deserts of North Africa Berbers!"

"I agree with this, Patrick." The silver-haired official said: "Trade is not that important to France, but it is very important to us in England. What Louis XIV wanted to build was a big empire. The formation of an empire is the same as trade. It doesn't matter much. Force builds empires, force maintains empires, and force can plunder wealth from conquered areas. For Louis XIV, wealth comes with force and power, so war is his most important thing. concern, rather than the condition of domestic farmers. But for us in England, trade is one of the main sources of wealth, so we must maintain a fleet of a certain size, in fact we have no choice. None can beat the French Navy Fleet, the wealth accumulated by our years of hard work is likely to be wiped out by the French army landing across the sea. This is a very real security problem for us, and of course for our neighbors and allies, the United Provinces. The same. Get ready to work hard, Patrick, the war will go on for a while, until our interests can be secured by a treaty."

"Our interests can only be guaranteed by our industry and commerce. Look at the people on the east coast, why can they have such a large fleet and such a vast influence?" Jacob Rutten also joined the conversation between them , I just heard him say: "They have grabbed too many benefits in this war. Their fleet only performed some escort or interception missions in the North Sea, and they easily harvested large commercial orders, and even used this to go deep It has been involved in the internal affairs of some countries. What’s even more wonderful is that their navy’s expenses are still borne by the Dutch. There is nothing better than this. I am afraid that people on the east coast will wake up laughing when they go to bed at night. They are the war One of the biggest winners of the country. Now they are the most reliable allies in the eyes of the Dutch, the biggest saviors of the Turks, the Italians are very convinced of them, and the Spaniards are crying to sell their land to them. Even the barbarians who have a problem with them The Russians have not dared to completely turn their backs so far, because they are afraid of losing more things (the Dutch are the number one buyer of Russian goods, followed by the UK). Look, what a perfect layout, what a powerful influence, in our At the door of the Europeans, the people on the east coast played such a beautiful hand. I think there must be many excellent strategists in their country, who helped them formulate one amazing and wonderful policy after another. People are fascinated."

"Okay, gentlemen, stop discussing these irrelevant topics. Let us sit down and make a plan for the next minting, whether it is pounds, shillings or pence, we must plan carefully." Jacob Lu Teng clapped his hands, opened a chair and sat down, and then said loudly: "Cast according to the latest East Coast gold and silver coin formula, which can not only take into account the hardness but also maintain the fineness. Let me emphasize that this is a pioneering work of the people on the east coast, and I think it is very reasonable, so I will print your Majesty's famous saying on it. Gentlemen, for the benefit of England, let us work together."

(End of this chapter)