bullyxtreme Chapter 127, The North American Paper Money Act
Chapter 127, The North American Paper Money Act
Chapter 127, The North American Paper Money Act
Chen Wenbin understood his father-in-law's meaning, but he could only pretend not to understand and instead chatted with old da Costa about the specific operations of the British banking and financial industry.
He already knew that the two old guys had just been testing his reaction time—that's just the weird, silly fun of bored old people!
But he couldn't just grab the two old men and beat them up, so he simply changed the subject and took the opportunity to get some useful information out of old da Costa.
He had wanted to start a bank for a long time, but he lacked enough experience and talent and was worried about problems, so he delayed it until now.
He actually knew how modern banks, which rely on the internet and computers, operated, but it was 1764, and there were no computers, no internet, and not even telegraphs.
If one opens a bank without considering the factors of the times and does so impulsively, losing money is one thing, but damaging one's reputation and credibility would be even worse.
That's why he wanted to hear the advice of old Da Costa, the Jewish financier from Europe, who had the most relevant experience in banking and finance in this era.
"—You really need a private bank, Robin."
After listening to Chen Wenbin's request, Benjamin da Costa nodded and said, "On the 19th of last month, His Majesty officially signed the North American Paper Money Act, which prohibits the North American colonies from issuing new paper money to pay for and repay public and private debts, effective September 1st of this year."
This would obviously lead to a lack of currency circulation in the North American colonies, triggering a commercial depression.
North America has no gold or silver mines; the nearest silver and gold mines are in Spanish-controlled territories.
You can take advantage of this opportunity to purchase goods needed by the Spanish in the North American colonies, then ship them to Mexico and South America by merchant ships, exchange them for gold and silver coins, and then load them with local sugarcane and tobacco to sell back in the North American colonies—a continuous cycle that earns you double profits from trade and currency differences.
A well-funded and reputable private bank can help you mobilize more funds to purchase ships and cargo, thereby increasing your trade profits.
As he said this, he glanced at Chen Wenbin, thinking that this guy had considerable influence in New England in North America, and because of the London Textile Company and Robin's Pharmacy, he was not short of capital.
The king even supported him in establishing a North American charter company to open cotton plantations, if he also owned a reputable bank—
He will probably become the richest person in all of North America and the UK in less than five years!
The primal instinct to hunt for money in his bones really tempted old da Costa!
If they could seize this opportunity to acquire a stake in this bank, the Da Costa and Mendes families would gain a foothold in North America in the future.
He knew that old Robert and Chen Wenbin were not the kind of mediocre nobles who could be easily fooled, so after making up his mind, he said directly, "Robin, I wonder if your bank accepts equity investments?"
I'm very optimistic about this bank's prospects. How about I exchange five thousand pounds for 30% of its shares?
I can find the most professional people to handle the bank's operation and management, guaranteeing that I'll recoup my entire investment within five years!
broken!
The Jewish guy can smell meat!
Chen Wenbin's heart sank. He was about to refuse, but then he thought again that he could never fully own this bank.
At least one share should be given to George III; he is the king and his patron, so at least 20% should be given!
The Spencer family also deserves a share; they are Diana's maternal family and need her support.
The Russell family also had to give him some shares. He had a good relationship with Francis Russell and they had worked together happily on London real estate projects.
Old Joseph and the East India Company shareholders also need a share, otherwise the Pacific Trading Company's immigration plan will be disrupted.
Furthermore, to break free from the constraint that North America cannot issue paper, it is necessary to bring in the Bank of England as a shareholder.
Finally, those local tyrants and old friends in New England should get a share, since they haven't made much money from the PUIC project and need a new platform for mutual benefit.
After all the calculations, he'd be lucky to get 30% of the shares. If the Bank of England were to be brought in, he'd probably only get a little over 10%.
Therefore, after thinking it through, he smiled at the old Jewish man and said, "Mr. Da Costa, I personally welcome you to invest in this bank!"
Just as the old Jewish man's face lit up with joy, Chen Wenbin spread his hands and said, "But I must consult with His Majesty the King and Mr. John Whelan of the Bank of England before I can determine the specific shareholder list of this bank, because this bank and the Southern Development Company should be paired up."
The bank needed to provide loans and savings services to the cotton farms under the Southern Development Company, while the Southern Development Company could also provide the bank with a steady stream of interest.
Even in the future, when the cotton industry in North America matures, a cotton futures exchange could be established, with the bank providing margin and settlement services for cotton futures.
In short, you're unlikely to acquire 30% of the shares. However, this bank greatly needs your extensive experience and connections, and I personally agree that you should own no more than 5% of the bank's shares.
Only five percent?
Old Da Costa frowned in thought, but he quickly realized that with the involvement of the King and the Bank of England, it would indeed be difficult for him to obtain 30% of the shares. Moreover, Chen Wenbin had many nobles and New World merchants behind him, and he was just one of the leaders of the Jewish community in London. He could not possibly compete with these people.
"----All right!"
He nodded helplessly and said, "I will get the staff ready as soon as possible to help you set up this bank—Robin, could you explain the cotton futures you just mentioned in detail? I am also very interested in this business."
Chen Wenbin smiled and said, "Cotton futures are my idea."
As we all know, with the widespread use of the Jenna spinning machine, the cotton supply will soon be severely scarce, and the cotton plantations of the Southern Development Company can make a quick buck by selling cotton in the short term.
However, if a large amount of cotton floods the market in a short period of time, and the market cannot absorb it in time, resulting in oversupply, cotton prices will fall rapidly.
This is detrimental to the company and the British cotton textile industry, so it is necessary to establish a cotton futures market in North America to stabilize cotton prices and expectations.
Can cotton production truly exceed market demand?
Old Da Costa thought for a moment and said, "Most of the cotton in the London market now comes from the Mediterranean and the West Indies, with some also coming from Virginia and Georgia in North America."
However, according to my research, Sea Island long-staple cotton is only suitable for planting along the Gulf Coast of North America, while inland North America, only upland short-staple cotton can be grown. But this type of cotton is very difficult to husk, requiring manual labor, which is very inefficient. How can these two problems be solved?
>