Rise of the 1630s South America

Chapter 2315 Legal Currency

"Irrelevant people leave immediately!" On December 1696, 12, outside the United Industrial Credit Bank branch on Expo Street, Qingdao Port, more than 31 police officers from the Ministry of Internal Affairs with live ammunition were orderly dispersed, and controlled various points at the gate of the bank. .Behind them, a number of bank staff were struggling to lift out boxes one by one from the carriage of a heavy freight carriage, and walked to the inside of the bank.

Inside the box is the soon-to-be-issued French currency, which is called "Golden Exchange Notes of the National Treasury of the Eastern Bank of China". Because the main unit is "yuan", it is also commonly known as "Golden Yuan Notes" among the people.The new fiat currency, the Golden Yuan Coupon, was originally not planned to be fully implemented so soon. After all, it is a country’s legal currency, which is very sensitive and involves all aspects of the country. It will only be fully rolled out after trial and trial.However, due to some unspeakable financial factors, the executive committee finally decided to issue ahead of schedule, and on the last day of 1696, major banks in major cities across the country began to issue.

There are six basic denominations of 300 jiao, 20 jiao, [-] jiao, [-] yuan, [-] yuan, and [-] yuan, which are often used in people's daily life, so the printing volume is the largest. The Shipu Mint and the Capital Mint The factory issued [-] million in the first batch.In addition, a total of [-] yuan was printed for the three large denominations of ten yuan, fifty yuan, and one hundred yuan. This is for internal settlement between banks and large transactions between enterprises or individuals on the market. It may appear in the circulation market, even if it is possible, people will not dare to accept it, fearing that it is fake.

320 million yen in French currency sounds like a lot, but it is really a drizzle.With a total population of 958 million in the East Coast (as of the middle of this year, 67.4% of them were native-born East Coasters), well-developed industry, commerce and foreign trade, the total amount of money needed by the country may be three More than [-] million yuan.

After all, this is a population of 1000 people. If it weren’t for the relatively well-developed bank transfer system on the east coast, well-developed transportation infrastructure (roads, railways, waterways, and cable telegraphs), and a relatively fast flow of funds, the amount of currency required may be still If it is bigger, it is very possible to double this basis, which shows the degree of "gold absorption" on the east coast.

It can be seen from this that the money supply of more than 300 million is really a drop in the bucket.The Shipu Mint and the Capital Mint have to run at full capacity, print more, and strive to print 1000 million yuan a month. It will take three years to slowly absorb the precious metal currencies on the market and complete the final replacement of legal currency. ——Judging from the current production capacity and the supply of special-demand paper and ink in Jingjiang Paper Mill, it is basically impossible. The number of production lines must be increased, or the Qingdao Mint under construction should be completed as soon as possible. Printing ability is stronger.

In addition to banknotes, French currency also includes three coins of one cent, two cents, and five cents, all of which are made of copper-nickel alloy and used as auxiliary coins.With the current wages and prices on the east coast, this kind of secondary currency is also very useful. After all, the simplest work meal for non-national laborers at a roadside stall costs only a few cents, and they may only use legal currency if they want to eat in a regular restaurant. ——It is said that the National Precious Metals once planned to print cent coins, but the production potential was seriously insufficient. At the same time, some financial officials believed that "some coins should be kept", and finally did not print cent coins, and replaced them with a new version of copper-nickel alloy. This time also cast a lot.

The currency of the people on the east coast, whether it is gold, silver or copper coins, has been very stable for decades. Not only has it circulated in large quantities in the east coast, but it has also invaded Portuguese Brazil, Spanish America, New Courland and many places in the Caribbean , the circulation is very large, and it has earned a lot of benefits for the East Bank government.After the launch of legal currency this time, it is expected that it will slowly flow overseas-this will obviously increase the demand for legal currency. Whether the [-] million yuan can be stopped has become a problem-after all, the legal currency is linked to gold, and one yuan There is a fixed exchange rate of two grams of gold, and the east coast is such a powerful and rich country with a good reputation and no record of breach of contract, so the legal currency is still very worth investing in - think about the severely depreciated Levre and gold during the war. Geng, Rial and other European currencies, the poor quality coins are really disgusting to hold in the hand, it is better to hold the gold round coupons issued by the people on the east coast, you must know that the currency can only be used as a general equivalent if the value of the currency is stable.

"New currency, new harvesting machine." Not far from here, in the Golden Deer Commercial Hall, England Ambassador John Scott looked out from the window with a pipe.

"In England, bank notes issued by reputable banks (generally stipulating how much gold and silver can be exchanged for) can be used as currency almost without hesitation. I have seen it in Birmingham. The main means of payment in the local factories is the undue bill of exchange , are issued by these banks, and can be redeemed when they expire. Think about it, sir, the notes of these banks can be used as currency, let alone the exchange notes issued by the East Coast government? You know, this government controls Several banks in the world are reputable in the whole world, such as the East Coast Agricultural Bank, Unicredit Industrial Bank, if not as good as the Amsterdam Exchange Bank and the Bank of England, they are at least in the same class. In fact, I think they may be worse than the Amsterdam Exchange Bank Be healthy and trustworthy.” George Montgomery also looked at the bank diagonally opposite, and said with a smile: “But it may be more difficult to replicate all the legal currency on the East Coast in England, although some of the The benefits are great."

"Yes, people in England generally have less trust in banks than people on the East Coast. Although the currency (shillings, pence) issued by the Bank of England (shillings, pence) is unimpeded, people generally trust bills of exchange more than this. This is probably because the back of the bill The credibility of the big names who signed the signature is more reliable than that of the bank, and the Bank of England still has a long way to go if it wants to change all this, and even let people accept banknotes." John Scott sighed, Said.

Because of the large number of the Bank of England and the large number of bankrupt banks in history, people do not trust the gold and silver exchange certificates issued by the banks.A money order is different. A money order worth a hundred pounds may be endorsed by more than a dozen well-known nobles or big merchants on the back, which is more reliable than a small bank—sometimes even a jewelry craftsman opens a bank, and the customer sends money to the bank. The gold and silver deposited with him as capital-much higher.Although many bigwigs have joined forces to establish the Bank of England, it will obviously take time to reverse the bad reputation of the banking industry.

"Is there any news about the gold round coupons we collected and sent back to London at the beginning of the year?" John Scott turned around suddenly and asked Montgomery.

"I have already received a reply. I just arrived yesterday afternoon, and I haven't had time to report." George Montgomery replied immediately: "In fact, Congress and the Bank of England are very interested in this, and they have a strong urge to launch the English version of legal currency. However, I was worried that the market would not buy it, so I did not take any action for the time being. However, it is said that the Board of Directors of the Bank of England has decided to use the banknotes to be issued for transactions between domestic banks. Promote it to other fields and even the whole country.”

On Lombard Street, where banks in London are crowded, a large number of commissioned brokers are running around all the time, lending the balance of one bank to another for various periods, one day, two days, one week, etc., and even three in the afternoon. At four o'clock, it will be paid in the clearing house by draft.They function like water pipes, and banks are like water storage tanks. The water pipes connect all the water storage tanks together and adjust the water level of each water tank-this is necessary because banks often transfer customers' funds. However, it also has a lot of cash disbursement business, so it sometimes needs interbank lending. There are also many such brokers on the Expo Street of Qingdao Port on the east coast.

The current idea of ​​the Bank of England is to first complete the debt settlement of this kind of interbank lending with banknotes. The value of the banknotes is guaranteed by the Bank of England-it has this power and status because it is not a bank for merchants or citizens, but a banker. Bank of England - in the future, it may gradually force large-value transactions between some enterprises to be completed with banknotes issued by the Bank of England, further making the market familiar with and recognize the value of banknotes.

No way, the national conditions and systems of England and the East Coast are different, and they cannot be ordered by the government to forcibly promote banknotes like the people on the East Coast.They can't force merchants to use paper money to pay taxes, and they can't force people to use paper money to spend. They can only make a gradual transition step by step.Fortunately, now that there is a Bank of England that coordinates the interests of bankers across the country, it is much more convenient to do this kind of thing. If there is no such thing, I am afraid that even the interbank lending between banks will have to be completed by precious metals.

"This prudent approach is correct. Paper money is of great advantage to bankers, and of great advantage to commerce. In times of emergency, it is also of great advantage to the national treasury." Paul S. Cotter commented: "The East Coast government has now acquired a 'superpower', which is really enviable."

"Your Excellency, do you think the East Coast government will use this superpower in an emergency?" George Montgomery asked.

"They won't hesitate to use it," said Ambassador Scott. "Don't worry, George. Maybe in a few years, we'll see."

"You mean the outbreak of war?" George Montgomery quickly understood, and said with a smile: "They are very greedy, and they should actively participate in this war. But if they want to join the European battlefield, their supply lines are very difficult. It's been too long, God, bless the pockets of the East Coasters, how much money will that cost? Maybe that's why they rushed to introduce paper money, which is always easier to find wealth."

"After tasting the benefits of paper currency, no one will be able to resist this temptation, whether it is on the East Coast or England." Paul Scott took a breath and said: "It's a pity that England probably won't have time to prepare for it." But we must learn from the thinking of the people on the east coast. Banknotes are the future trend, and we must move faster. In fact, to some extent, the conditions for the French to issue banknotes are better than those of England because of their high power. Unification, but the credit of their government is too bad to support fiat currencies like fiat currencies.”

"Perhaps the Amsterdam Exchange Bank could try it?" asked Montgomery.

"No, they can't. The bank took in so much government debt during the war that it might cause a crisis of confidence. And the big wholesalers in Amsterdam aren't very interested, at least not yet. interest.” Ambassador Scott said: “Let’s wait and see. People on the east coast have come up with this kind of thing, which is a kind of innovation to a certain extent. Many countries will definitely follow suit in the future, but it must be limited. The number of banks that are eligible to issue banknotes. I think England must be the first to successfully introduce banknotes, credit currency versions of pounds and shillings, and I am looking forward to it.”

"I look forward to it too, sir, if it helps us win the war," said George Montgomery, smiling.

(End of this chapter)