Chapter 178 A major earthquake in the banking industry

"Haha, that's a funny joke." Charles laughed even louder.

He has been running the Mediterranean route for more than ten years and has some understanding of the conditions in North African countries. The Tunisian pasha in this prison is named Younes, but he is not really a pasha.

"Pasha" is the Ottoman-canonized governor of Tunisia and the de facto king of Tunisia. Eunice led an army to rebel as a prince and called himself pasha, but was suppressed by his father. He later fled to Algiers and was imprisoned.

How could such an important person escape so casually?

Ali took a sip of soup and started today's story. This was a regular program for him and Charles every day, telling each other about their experiences to pass the boring time - the guards would appear from time to time after noon, making it impossible to dig tunnels.

"Actually, you shouldn't mention this to others, but you are an American, so it doesn't hurt to talk about it."

Ali ate all the food, wiped his mouth and said, "Don't think that Master Younis is a prisoner. He used to have many followers in Tunisia, including several generals. And when he came to Algiers, he also Brought a lot of wealth.

“Back then, he was imprisoned here by the Guards, and within a year, someone helped him escape.

"Now he lives on the west coast. He is rich and powerful, and even has a beautiful castle. Many people there depend on him for food."

Charles curled his lips: "These legends always like to exaggerate to the point of being fantastic, just like the ghost pirates in the Caribbean."

Ali immediately said: "This is not a legend, my friend. You know what I do. My boss has met Master Younis and had dinner with him."

Charles knew that Ali was a smuggler with a large business. One-seventh of the goods smuggled from Britain to Algiers every year belonged to his boss. This is also the reason why he was not hanged immediately after being captured - his boss might be willing to pay a ransom for him.

Ali then talked about Younis. It is said that the smuggling business on the west bank of Algiers would not be able to continue without Younis's nod.

Sometimes he would even take a share in the sale of the Algiers Navy.

Charles spat on the ground in displeasure - where he had been caught by the Algiers "Navy".

It wasn't until the sky turned dark and Ali started digging again that their "Story Salon" finally came to an end.

Two days later, when the guards came to deliver meals, they discovered that Ali had escaped.

Charles watched the Algiers soldiers cursing around the hole in the cell opposite. He was shocked and regretful at the same time - if he had believed in Ali and dug a tunnel to the cell next to him, he could have escaped with him. Oh my God!

He sighed heavily, looked at the ceiling, and recalled what Ali had said many times, "My friend, when we leave here, I will treat you to the best fermented grape juice and find the most beautiful girl. Oh, Remember where I live..."

In the afternoon of that day, a piece of news began to spread among the nobles in the Palace of Versailles - Her Majesty the Queen decided to establish the "French Industrial Development Fund".

No one can explain clearly what the "fund" is, but they roughly understand that the government will collect a large amount of money to invest in French industrial industries. At the same time, anyone can invest money in the fund, and after the investment makes profits, they can receive profit sharing.

It sounds a bit like investing in a company, but the risk seems to be much less. However, because the total amount of the legendary fund may be as high as hundreds of millions of livres, it immediately became a topic of concern.

Early the next morning, the "Necker Alliance" gathered in front of the main entrance of the Palace of Versailles and began to protest loudly.

Compared with yesterday, their number has increased and has reached more than 400 people.

In fact, there were thousands of nobles investing in the banks involved in the Necker case, but many of them did not dare to cause trouble.

However, when the few hundred people who take the lead open up the situation, they will inevitably follow suit.

Viscount Prodom stood on the steps in front of the gate. After shouting slogans for a while, he waved his arms: "Everyone, follow me to plead with Her Majesty the Queen!"

It is said that he is begging for mercy, but in fact he is using "not to borrow money from the government" to force him to have a palace.

The crowd was about to turn towards the Little Trianon when suddenly two groups of palace guards in red uniforms came running and stood around in silence following the officers' orders.

The nobles were slightly taken aback, thinking that the royal family was going to use the guards to disperse them. However, they had long been accustomed to seeing such scenes in the Palace of Versailles, and they did not show any fear. Instead, they were prepared to use more fierce protests to fight the soldiers. Confrontation.

At this moment, Brian walked out of the main entrance of the Palace of Versailles, accompanied by the crown prince and officials from the financial system.

The nobles of the "Necker Case Alliance" were stunned for a moment, and immediately turned to the Chancellor of Finance: "Archbishop Brian, please suggest to Her Majesty the Queen that the interrogation of Necker be stopped!"

"It must be a cabinet conspiracy to use Necker to accuse those banks!"

"Archbishop Brian, please seriously consider the financial issues and let the Necker case end."

“Yes, otherwise we’ll just have to stop buying any more bonds!”

Brian smiled and raised his hand to signal everyone to be quiet, and then said loudly: "Necker was seriously corrupt during his tenure, and his trial must not be interrupted."

"And the banks involved in the case will also face heavy fines." Joseph added on the side. He appears here as an assistant to the chancellor, mainly responsible for assists.

The nobles below suddenly became excited: "You can't do this!"

"What if all those banks go bankrupt?"

"Let's go to Her Majesty the Queen to petition!"

"I have good news to tell you." Brian's voice silenced everyone. "The Reserve Bank of France will acquire the Bélanger Bank and take over the bank's previous debts."

The bulk of bank debt was the investment of nobles.

The nobles of the "Necker Alliance" suddenly cheered: "Acquisition? That's great!"

"Long live His Majesty the King! Long live the Reserve Bank of France!"

"There's hope now!"

However, some flexible-minded nobles immediately discovered the problem and asked loudly: "Archbishop Brian, does the French Reserve Bank have so much funds?"

"Yes! There may be many banks that will have problems in the future. Will the Reserve Bank of France also want to acquire them?"

Brian nodded and said: "Yes. The government will invest in the Reserve Bank of France. Adding the bank's original assets, there should be tens of millions of funds."

Before the nobles could raise objections, Joseph stepped forward and said: "Yes, this money is not enough to cover your investment in the bank, but banks that break the law must also be punished!

"Therefore, in order to protect everyone's money from loss, the kind-hearted Her Majesty the Queen decided to establish the French Industrial Development Fund."

He immediately explained the meaning of the fund and finally said:

“The investment certification documents of all banks acquired by the French Reserve Bank can be used to invest in industrial development funds.”

His words immediately aroused everyone's painful memories of the "Mississippi Company Scam" - when John Law asked everyone to exchange national debt for Mississippi Company shares, and in the end they lost nothing.

The nobles broke into a violent protest. After Joseph waited quietly for them to stop shouting, he took out a document and shook it: "The Industrial Development Fund is guaranteed by the French Reserve Bank and the French Finance.

“First of all, the fund’s accounts are completely open to the public, and all customers with purchases of more than 500,000 livres can check their accounts at any time.

“The fund will announce its budget at the beginning of each year. It will also publish financial statements every six months to explain its revenue.

“Secondly, we will require all companies receiving investment to also disclose their operating conditions and accept the fund’s financial review.

"Finally, all matters of the fund are decided by the fund committee and the government is not allowed to interfere."

Open and transparent, these financial policies that seemed very ordinary in later generations were actually very advanced in the 18th century. At present, even the most transparently managed companies such as the British East India Company are far from being able to do this.

The nobles below began to whisper after hearing this, and more than a dozen "entrustees" arranged by Joseph in advance also started work at this time:

"If you can check the accounts at any time, that will be very secure."

"The main reason is that there is financial guarantee from the French Reserve Bank and the government, so I don't think there is any problem."

“And this is a domestic investment industry. Unlike the distant ‘gold mines’ in the United States, the operating conditions can be seen at any time.”

They brought more people along, and for a while the nobles began to nod.

Seeing that the momentum was not right, Viscount Prodom and others hurriedly shouted: "What kind of fund? Who knows how it will operate in the future? It is best to suspend the interrogation of Necker!"

Joseph sneered: "Archbishop Brian just said that the case must be investigated to the end!"

"Then we can only consider not lending money to the government anymore..."

As soon as Viscount Prodom finished speaking, Joseph's "trustees" began to murmur to the people around him: "I think it is impossible for everyone not to lend money to the government."

"Why? Didn't you succeed when you refused to pay taxes before?"

"Haha, you have to pay money. If you say you don't pay, everyone will be happy to cooperate. And this is lending money to the government, and you can earn interest."

"I guess in the end, everyone said they wouldn't borrow it, but privately it was still the same as before."

"Yes, they tricked us into not lending money to the government. When the interest on public debt increases, they secretly invest again."

"It's safest to lend it to the government now. You see, when we invested in banks before, we got into such big trouble."

In just over ten minutes, the nobles were no longer willing to mention the matter of "refusing to lend money to the government" - they said this before to blackmail the royal family, but now that there is an industrial development fund solution, who wants to have to deal with the interest rates?

At this moment, a messenger reined in his horse not far away, then ran over quickly and handed a letter to Brian.

The latter opened the letter, read it quickly, and announced loudly: "Just now, three illegal transactions between Necker and Krasenne Bank were verified, and 11 bank managers were arrested, and the bank accounts are being thoroughly investigated. "

The nobles present immediately panicked, especially those who had investments in Clasonne Bank, who were sweating profusely.

Judging from the previous situation of Belanger Bank, the bank under review will soon go bankrupt. Their money will be lost!

In fact, if these banks operate according to normal practices, even if illegal problems are discovered, they can fully finance and pay fines, and they will be able to recover in a few years.

However, in order to force France's finances into the palace, the Duke of Orleans caused the bankruptcy of Béranger at a rapid speed, frightening the investing aristocrats. This caused other nobles to withdraw their money invested in other banks, significantly tightening the bank's funding.

At this time, if Necker's case comes up again, the bank will be unable to turn around at all, and the only way left is bankruptcy.

Of course, the timing of announcing the accident at Krasenne Bank was also arranged by Joseph in advance.

The nobles present could no longer hold their nerve, especially those who had invested in Clasonne Bank. They shouted loudly: "I am willing to transfer the money in the bank to the Industrial Development Fund!"

"I also invest, please give me an agreement document!"

"I want one too!"

"And I……"

Joseph stood up at the right time and signaled everyone to be quiet: "One thing should be explained in advance. If you use bank investment to invest in industrial development funds, you can only withdraw all the principal after five years."

This is the core of the "debt swap fund" - to buffer panic and avoid runs by the aristocrats of investment banks. In fact, if the fund's profits are good, they will not withdraw their funds after five years. Who doesn’t make money?

People hesitated again when they heard "it can only be taken out after five years."

Brian hurriedly followed the script and delivered the final blow: "In order to ensure the safety of everyone's investment, the Industrial Industry Fund guarantees that if there is a loss for six consecutive months, the investment will be returned in full immediately. If the fund's funds are not enough, the French Finance will take over the repayment !”

The eyes of the nobles present immediately lit up again.

If the fund is making money, just sit back and reap the profits. If you lose money, there is a government guarantee to get your investment back.

What else is there to worry about?

In fact, even if there are risks, I can't care about that much at the moment. It is much better to transfer the money into the industrial development fund than to disappear when the bank goes bankrupt.

The official next to Brian immediately signaled to everyone that they could go to the Chancellor's Office to get the agreement documents for the "Debt Swap Fund".

Almost in an instant, the crowd in front of the gate of Versailles disappeared without a trace. Seeing that he couldn't stop everyone, Viscount Prodom frowned and hesitated for a few seconds, then quietly walked upstairs.

At noon, the king and queen personally held a ceremony to establish the "French Industrial Development Fund", which was once again a platform for the fund in their royal capacity.

As the news spread, all the nobles involved in bank investments rushed to the Chancellor's office, and soon the office door was crowded.

After another day, Necker finally collapsed under the strong pressure of Kalona - his transactions with the bank were accurately restored by the latter, and two banks had collapsed because of this. .

After receiving the promise of a lighter sentence and a frank confession, Necker confessed all the illegal transactions with the bank.

Kalona also breathed a sigh of relief.

He put the cases with more clues and for which he was confident at the front, and that was why the trial could go so quickly.

If Necker keeps biting his tongue, his speed will become slower and slower, and he is even not sure that he will be able to review nearly half of the transactions.

However, Necker surrendered. A major earthquake in the entire French banking industry is coming!