Reborn as King of South America

Chapter 188 Loan Game
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On August 1869, 8, Bernard, the French ambassador to Brazil, wrote in a telegram to the French government: "Brazil's loan is a good opportunity for the French Empire to penetrate into South America and open up a broad space for domestic industry and commerce. The French Empire cannot only view the warship transaction with Brazil from the perspective of economic interests. It should consider it from a political level and regard this transaction as a favorable opportunity to break the British monopoly on South American commerce. It should increase the scale of loans and lower the loan interest rate, making this transaction a great attempt to expand the influence of the French Empire."

France has a developed financial industry, and bankers engaged in lending business occupy an important position in French politics and economy. When the first group of bankers who were unwilling to lower loan interest rates disagreed with the French Minister Bernard, the Bank of France and the Credit Lyonnais in mainland France saw the huge interests behind the Brazilian warship transaction. Then, led by the two large banking companies, more than a dozen weapons, industrial and commercial companies that were interested in expanding overseas markets jointly formed the Brazilian Commercial Transaction Consortium, using the political resources controlled by each company to make suggestions to the French Emperor Napoleon III. With the support of the interest consortium, what was originally just an ordinary warship transaction was given a strong political color and soon attracted the attention of Emperor Napoleon III.

On August 8, Napoleon III personally gave instructions: In order to counter the British alliance with Prussia to fight against France in German affairs, the Bank of France and the Lyon Commercial Bank were allowed to form a trading group for Brazil. In this warship transaction, the French government would provide backing for the domestic business group. This was to achieve the goal of expanding the domestic industrial and commercial market and curbing the development of British power.

Napoleon III made the final decision to support the warship transaction. Within two days, more than a dozen arms, banking and industrial and commercial companies in France took quick action. While evaluating and discussing the scale of commercial transactions and raising loan funds, they authorized French Minister Bernard to handle warship transactions and loan matters with full authority and paid attention to the latest news from Brazil.

On August 8, in order to increase the chances of reaching a deal, Bernardo and American Minister Witte met with Pedro II together.

At the Royal Palace in Rio de Janeiro, Bernard handed over the revised business contract and said, "In order to maintain the friendly relationship between the French Empire and the Brazilian Empire, His Majesty Napoleon III personally inquired about the warship transaction and lowered the loan interest rate and warship price. In addition, some French companies that want to trade with the Brazilian Empire are also willing to participate in the economic reconstruction of the Brazilian Empire. In terms of railway construction, iron ore mining and trading, French merchants will give your country a reasonable price and will not harm the interests of the Brazilian Empire."

"The Brazilian Empire is an open and civilized country that welcomes all merchants who are willing to conduct business here."

After reading the transaction content submitted to him, Pedro II was somewhat tempted by the improved contract proposed by the French.

From Brazil's perspective, the contract proposed by the French is not only much more reasonable than the last time, but also more helpful to Brazil.

In the contract, the French proposed to sell Brazil a 7000-ton combat ironclad warship. The warship was directly drawn from the French Navy and was priced at pounds. After the contract was successfully signed, the warship could be assigned to the Brazilian Navy within two months.

In terms of loans, in addition to the 400,000 pounds for the purchase of warships, the Bank of France and the Credit Lyonnais are willing to provide a low-interest loan of 1 million pounds to help Brazil develop its domestic industry and replace its army's weapons and equipment.

Compared with the 400,000 pounds of warship transaction fee, the 1 million pounds loan is what the French are eyeing. The 1 million pounds will be paid in the form of French goods. In other words, the French want to use the warship transaction to complete a business transaction worth 1 million pounds. Their appetite is indeed not small.

Looking at the transactions and the various types of goods listed above, Pedro II understood that if a commercial loan of one million pounds was obtained, the sluggish economic situation in Brazil would be effectively improved. However, thinking back to the huge foreign debt owed to Britain, he felt a little shaken.

"Thank you, His Majesty Napoleon III, for your friendship to the Brazilian Empire. Please convey my gratitude to His Majesty Napoleon III. I see your country's sincerity in this transaction contract. However, this transaction is of great significance to the Brazilian Empire. I need to discuss it with the ministers before I can reply to you." Pedro II did not give up on the British. He wanted to use the competition between France and the United States to force the other party to lower the price of the warship transaction and reduce the additional conditions brought by transportation. However, his wishful thinking may fail this time.

The American minister, who had been standing aside without saying anything, was accustomed to Pedro II's indifference. When the other party once again used delaying tactics to try to stall the transaction, the silent Witt finally spoke.

"Your Majesty, I heard that the British are planning to help the Brazilian Imperial Navy build the Monarch-class ironclad warships. Is this true?"

"Brazil did have the intention to customize the Monarch-class ironclad ships from Britain, but the two countries did not reach a deal due to some differences." The news of Brazil's purchase of warships first came from the British. Pedro II did not think there was any benefit in hiding it, so he admitted it directly.

After Pedro II finished speaking, he saw a look of astonishment on Witte's face and asked, "Do you think there is anything wrong with the deal with the British, Your Excellency?"

"Whether it is appropriate or not requires your Majesty to make a personal judgment. However, I remember that during the Civil War, two of the three ironclad ships purchased by the Confederate Army from Britain broke down during naval battles, resulting in the defeat of the naval operations. Last May, the first Monarch-class ironclad ship that was launched broke down during sea trials, causing extensive damage to the warship. Now the first Monarch-class ironclad ship is still lying in a British dock for improvement and renovation, and has not been included in the naval combat sequence."

After Witte introduced the basic situation of the British warships, he pretended to be surprised and said, "Excuse me, Your Majesty, when the British traded with your country, didn't they introduce the basic situation of the warships?"

It was impossible for Witte to deceive himself in a formal setting. Since he pointed out the shortcomings of British warships, the information could easily be confirmed.

After hearing this, Pedro II felt humiliated as if he was being played for a fool. It didn't matter if the warship was more expensive, at most everyone could discuss and seek a compromise, but you couldn't fool yourself with a warship full of loopholes.

The warships purchased by Brazil are not for display, but for strategic confrontation with the Chinese and Paraguayans at sea. If Brazilian naval officers and soldiers are allowed to drive warships with immature performance to fight against the enemy navy, wouldn't it be a seriously irresponsible act towards the Brazilian Empire?
Pedro II suppressed his anger and looked at the two people sitting beside him. He said expressionlessly, "Today's meeting ends here. I still have some things to deal with. The two envoys should go back first. I will give you a clear answer tonight."

Pedro II gave a clear time for an answer. Witte and Bernard looked at each other, felt certain, bowed and left the palace.

(End of this chapter)