Chapter 630 Currency Bonus

Chapter 631 Monetary Dividend

Joseph was not surprised that Brian had such concerns. 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 Finance Minister: "Archbishop Brian, 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 affecting our financial stability.”

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Brian, Bai and others looked at each other, their expressions full of doubts.

Joseph had to patiently explain to them: "To put it simply, countries that accepted franc banknote loans actually recognized 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 process will flow into their own production and sales channels .

"Now we are only talking about extreme cases. All the money really returned to France through trade. Then the debtor country that obtained the loan will have to consider 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 to repay with banknotes. Then they must have the means to obtain banknotes, which can only be achieved by selling goods to our country. In other words, the franc will become the currency they accept in circulation, and banknotes 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 make profits."

The reason why this situation occurs is entirely because the debtor country itself uses gold and silver coins, 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.

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.

Therefore, 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 U.S. Marshall Plan after World War II, allowing a large amount of U.S. dollars to flow into Europe through loans did not cause any financial risks in the U.S., but instead rapidly expanded the influence of the U.S. 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 currency revolution. With Britain and France taking the lead, various countries have begun planning to launch their own banknotes.

In fact, Austria, Bavaria and other countries 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 were all 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 shocked and nodded repeatedly: "That's true. I didn't consider it comprehensively enough."

Brian on the side said cautiously:

"Your Highness, it is likely that the UK is driving this matter, so they may try to ask Württemberg and other countries to reject our loan plan."

"You are right." Joseph nodded approvingly to him, "This requires 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. By then, they will naturally accept loan 'compensation'."

"What do you mean by deterrence?"

"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... Forget it, I'll go in person. "

The Frederick he was talking about was not the late King of Prussia, but the Archduke 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 him enthusiastically, with a smile on his face.

As a small country adjacent to France, Baden is very dependent on France from economics to politics, and can be regarded as a small follower of France.

Therefore, everyone in Barden paid great attention to the visit of the French Crown Prince, and the welcome ceremony was quite grand.

After the routine etiquette, Joseph and Frederick walked side by side under the guards' raised swords, and hundreds of Baden nobles around followed their steps and saluted one by one.

"Your Highness, the Crown Prince, the banquet is ready." Frederick gestured to the palace enthusiastically, "My chef has served in the Palace of Versailles, and his cooking skills are very unique."

"Thank you for your hospitality." Joseph responded politely, "In fact, in order to promote the traditional friendship between France and Baden, I have a gift for you."

Frederick immediately showed a look of surprise: "Ah, thank you so much. What kind of gift is it?"

Joseph walked into the small but exquisitely decorated Baroque-style banquet hall, sat down next to Frederick, and smiled: "Every year, a large number of goods are shipped from France to German countries via Baden. If a wooden track is laid in your country, connecting Strasbourg and Stuttgart and directly to the Rhine River, the transportation volume will be greatly increased.

"After that, warehouses can be built along the track to make Baden a distribution center for French export goods.

"Do you like this gift?"

Frederick's breathing became a little rapid. You know, the trade volume between France and the southern German countries has grown rapidly in the past two years. If Baden can become a commodity distribution center, the warehouse rent alone will be a huge income.