Chapter 453 Loans
While East Africa was developing in full swing, other regions of the world were not peaceful. It can be said that the stable development of East Africa benefited from the Far Eastern Empire sharing most of the pressure. Britain, Russia and Japan, as agreed, invaded the Far Eastern Empire from the southwest, northwest and western Pacific directions.
East Africa is not small in size in the world, but Europe does not have a deep understanding of East Africa, while the Far East is the kind that cannot be hidden.
France did not join this time because it was digesting the results of the Second Franco-Vietnamese War (1873 to 1874). On March 15, 1874, France signed the Second Treaty of Saigon with Jiaozhi, which stipulated that: French troops would maintain law and order in the Nguyen Dynasty's ruling areas; Vietnam recognized France's indisputable control over Jiaozhi; and allowed the French to use the Red River as a channel for trade with the southwest of the Far East Empire.
Africa, as the last territory invaded by Europeans, can still remain in power for a while. It is obvious that the entire Far East region is more attractive to the great powers than other regions and even Africa (excluding North Africa).
Japan's attempt on Danwan Island had been thwarted last year, but the crises in the northwest and southwest were not something Ernst could intervene in, as both places were located deep in the interior of the Far East.
In the southwest, the British have not yet launched any action. If nothing unexpected happens, the crisis will break out after next month.
The northwest direction is actually an old issue, which broke out in 1864. However, a debate about coastal defense and border defense arose within the Far East government, and this debate lasted for ten years, which was very efficient.
This year, the Far East government finally made up its mind to solve the Northwest issue and recover the lost territory in the Northwest, but once the decision was made, no one was willing to pay.
The empire's finances were in tatters. The entire nation's army owed more than 30 million taels of silver in wages, and important financial and tax areas were controlled by local forces such as the Hunan-Huai (Army). This put Zuo Jigao, who was actively advocating war and defending the country, in a dilemma.
May 1875.
Heixingen Bank (Kaifeng).
As the capital of a province, Kaifeng was relatively prosperous in that era. It was also the easternmost end of the Huaihai Economic Zone, a key area for the inland business of the Heixingen Bank, and a place for negotiations between Shanxi merchants, Huizhou merchants and the Heixingen Consortium.
Today, representatives of two business groups came to Kaifeng to discuss matters with Mayweather, the head of the Central Plains region of Heixinggen Bank, but they also brought someone with them.
"Mr. Mayweather, this is an important official of our Far East government, Mr. Zuo Jigao. I came to visit you today because I have a favor to ask of you!"
Mayweather, who thought he was here to discuss business, smiled and said, "Sure, sure, as long as it's not too difficult, I'm happy to help."
Qiao Zhiyong: "To be honest, we are here to raise military funds. I'm sure your bank has heard about this."
Mayweather’s eyes lit up: “Hades, show these distinguished guests tea!”
Not only had they heard of it, in fact all the major banks doing business in the Far East knew about it. But why Zuo Jigao found the Hexingen Bank was thanks to two business allies of the Hexingen Bank.
Zuo Jigao had a good relationship with Hu Xueyan, and since he was working in the northwest, he had to deal with Qiao Zhiyong. So, with the recommendation of the two, they came to Kaifeng together.
Zuo Jigao: "Mr. Mayweather, this time we borrowed money to deal with the separatist forces in the northwest. The journey is long and the environment is harsh. I'm afraid this war will be difficult to fight..."
Mayweather interrupted, "Mr. Zuo, just tell me how much you want to borrow!"
So straightforward? So Zuo Jigao stretched out five fingers to see what strength this Heixingen Bank had. Zuo Jigao had been to HSBC before. After all, HSBC had a greater reputation and had been operating in the Far East for a longer time.
"Five million taels of silver?"
"It doesn't matter if your bank can't come up with so much money in a short period of time. We can still contact other people."
"Haha, just kidding. Five million taels is not a lot for us. I just wonder if this amount of money is too little for you. You know, the Russians are behind the separatist forces in the northwest."
"Can your bank lend more money? I asked HSBC before, and they said it would take some work to get out that much money. It's not a small amount."
"Haha, let alone five million taels, we can lend you even twenty million taels, but the twenty million taels may not all be silver."
"If it's in pounds, that's fine."
"No, it's the East African Rhine Guilder, which is also a national currency."
Hu Xueyan explained: "The Rhine guilder is a paper currency issued by the East African Kingdom. One tael of silver is equal to the face value of five Rhine guilders."
“Is this currency reliable?”
"You can exchange gold directly at the Hexingen Bank."
"!"
Mayweather: "Don't worry, Your Excellency Zuo. The East African Rhine Guilder is not widely circulated in the world, but it is indeed the genuine currency issued by the Kingdom of East Africa. It is backed by gold and its value is very stable."
"Isn't it troublesome to buy supplies with this currency?"
"Don't worry. Just tell me what you need. We at Hei Xingen Bank can provide you with all that. We can provide you with military rations, uniforms, or weapons. We can even hire military instructors from Europe."
"This..." It seems that everything is missing.
Regardless of other things, let's see what conditions the Heixinggen Bank can offer. Zuo Jigao put aside the thoughts in his mind and said, "If, I mean, if our government loans 10 million taels to your bank, what conditions can you offer?"
Mayweather refused to respond: "That depends on what price your country can offer."
Zuo Jigao probed: "My expectation is no more than five!"
"Deal!" Mayweather said directly.
“…” Did I give too high a price?
"certainly……"
As expected, there were conditions. Zuo Jigao guessed that Westerners would not agree to his request so easily. According to the current market price of international loans, the interest rate was about 4%. If he only raised the interest rate a little, no one would agree to it easily.
Mayweather then said: "We can borrow money from your country, but the corresponding military food purchases should all be handed over to our bank, and we also need to take a share of the military equipment." said Mayweather, president of the Kaifeng branch of Heixingen Bank.
Zuo Jigao: "Does your bank also run a grain business?"
Hu Xueyan explained on the side: "Mr. Zuo, the Hexingen Bank may look like a money house, but it is actually a top Western financial group with many businesses. It is a well-known large bank in the German region."
Zuo Jigao: "But this war is far away in the northwest. Do you have the ability to deliver food to the front line?"
Mayweather: "This is easy to do. We have a mature commercial route that can go directly from East Africa to Jiaozhou and finally reach Kaifeng by land. The rest is up to you to consider."
Qiao Zhiyong said, "We can take care of this. We can guarantee that there will be no problem from Henan to the northwest."
The commercial alliance is not just talk. In fact, even without this war, Shanxi merchants would still trade grain from the Huaihai Economic Zone to the northwest.
Zuo Jigao: "Let's not talk about the food problem, I'm afraid the arms problem!"
Mayweather: "Haha, Mr. Zuo, don't worry, we are also quite good at arms business. Whether it is German or Austrian weapons, as long as we have money, we can get them. We also have cheap ones, such as Dreiser's backward rifles, we have a lot of stocks. If it is a more advanced rifle, we can also supply the most advanced Mauser rifles from Prussia."
Good thing! A while ago, Li Hongzhang bought a batch of 90% new Dreiser rifle production lines from the Germans, and now they have become outdated rifles?
Feeling that this was not enough, Mayweather added fuel to the fire: "As we all know, your country's equipment is mainly British. Although Britain is powerful, it is more reflected in the navy. When it comes to the army, we Germans are the best in the world. Even the French army, which used to be known as the best in the world, was defeated by us Germans."
The fact that France lost to Germany will probably be on the lips of the Germans for decades to come.
"These are easy to solve, but what other conditions does your bank have?"
"In addition to these, we need to see sincerity in the collateral. After all, this is a high-risk investment. Relationships are important, but business is business. We dare not lend money without collateral."
"Apart from these, are there really no other additional requirements?"
Mayweather shook his head and said, "No."
It’s not that Mayweather doesn’t want to, but there is an order from above that the interest rate for the Far East Empire cannot be too high this time. Although other banks are trying to lower the price, according to Mayweather’s psychological expectation, the interest rate should be at least around seven.
Five is not bad, there is still some profit to be made. The interest of four in the market is already quite high, and most people will not borrow it unless it is an emergency. The business of Hexingen Bank in the entire Far East is similar to that of HSBC, so it also operates usury. For example, in Japan and North Korea, you can borrow money, and if you can't pay it back, you can use population and resources to pay off the debt.
It is impossible to default on the debt. There are three countries behind the Hexingen Bank. Most countries do not have the courage to do so. Moreover, East Africa is also capable of armed debt collection. If they can't deal with Europe, how can they deal with you?
(End of this chapter)
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