Reborn as King of South America

Chapter 189 Loan Game II

After leaving the Royal Palace in Rio de Janeiro, Witt and Bernard did not separate, but returned to the French Embassy together.

In the reception room, Bernardo took off his coat and said to Witte in a friendly manner: "Pedro II is a man who loves reputation. The British deliberately concealed the defects of the Monarch-class ironclad ship, which is likely to cause his disgust. In this way, the warship transaction between the British and Brazil is likely to fail!"

"Aren't you afraid that the British envoy Edmund will mediate and make the deal a success?"

Witt asked, sitting on the mahogany chair.

"It is undeniable that Edmund is different from ordinary British diplomats. He does not have the arrogance of ordinary British diplomats. Being kind and shrewd is his effective way to handle diplomatic affairs. However, Mr. Witte, please don't forget that the real decision on the direction of British diplomacy is made by those fat gentlemen sitting in London. They are not as easy to talk to as Edmund."

"The masters of the British Empire are used to ordering other countries' affairs. In countries such as Qing, Egypt and Turkey, Britain used brutal force to force other countries to submit and accept the conditions proposed by the British. The British, who have always been used to smooth sailing, will not take the initiative to put down their airs and do business with Brazilians on an equal footing. I guess that Minister Edmund is probably worried about this matter now!"

Witt echoed with a gloating tone.

The conflict between Britain and the United States has a long history. In the recent Civil War, the South had the support of the British and used the support of weapons such as artillery guns and warships purchased from Britain to dare to raise the banner of independence and fight against the federal government. After being armed by the British, the Southern Army gained an advantageous position on the battlefield in the early stages of the war and dealt a heavy blow to the federal army. Later, the federal army relied on the full support of northern industrial and commercial capitalists and the French financial industry, and it took four years and 75 young and middle-aged casualties to win the war.

The southern United States was the main source of raw materials for British merchants. Losing the southern United States market was a big blow to British industry and commerce. Because of the Civil War, the situation between Britain and the United States, which had been easing since the Canadian War of 1812, became tense again. As a result, the relationship between France and the United States, which had a long tradition of cooperation, became closer, and the two countries' envoys cooperated on Brazilian affairs.

The Monroe Doctrine of 1823 was the first attempt by the United States to gain control of the South American continent. At that time, South America was under the control of Spanish colonists. European countries such as Britain, France, and Austria supported the Monroe Doctrine with the intention of dismembering Spain's American colonies, giving Americans the opportunity to enter the American market.

After the Monroe Doctrine, the independent countries that received support from Britain reciprocated the Spanish by transferring the commercial interests left over from the Spanish withdrawal to British businessmen. However, at this time, American capitalists who came for huge profits were turned away by South American countries. Argentina, Chile, Peru and other South American countries set up obstacles to restrict the entry of American businessmen. Only Venezuela and Panama, a few southern South American countries that received a little help in the South American War of Independence, accepted American capital investment. The self-confidence that Americans established after the Monroe Doctrine suffered a severe blow in the South American business competition.

The slogan "America is America for Americans" is in line with the basic interests of Americans. In order to open up markets for domestic industry and commerce, Americans have never given up on expanding their influence in South America.
Similar to the French government's request to the embassy in Brazil, the U.S. government pointed out in a telegram to its Minister to Brazil, Witte: Brazil is the largest resource-rich country in South America, with a huge population and development potential. The United States of America should establish a long-term and stable economic partnership with Brazil. The embassy in Brazil cannot do nothing about the expansion of the British Empire's colonial economic power in Brazil. It should take advantage of the favorable opportunity after the Paraguayan War when Brazil urgently needs foreign financial support to provide support for the establishment of good cooperation between businessmen from Brazil and the United States of America.

Britain and France have vast colonies. Although the South American market is important, it is not the core dumping market for the two countries. The United States is different from them. It is a latecomer. Its national strength and international influence are not even comparable to Italy, which is also a latecomer, and the German Empire, which was established later. The United States has lost the favorable period of the colonial era. If American industrial and commercial capitalists want to grow and develop due to the lack of colonial markets, the most effective way is to sell goods to South American countries and find buyers for domestic industrial products.

So compared to Bernardo, Witte attaches more importance to the trade with Brazil.

The industrial and commercial groups in the United States initially grew stronger during the Civil War, and there were less than ten banks and companies that were qualified and capable of participating in the Brazilian loan. Among them, Citibank, Morgan Bank, and Western Commercial Bank were qualified to participate in the Brazilian loan. The three banks raised 500 million US dollars (about 100 million pounds) in the first phase to undertake the construction of railways in Brazil and obtain the right to mine iron ore. In order to reach a deal, the three banks spent a lot of effort on the Brazilian ambassador Witte. So seeing that there was a high probability of cooperation between the French and Brazil, Witte could not help but ask Bernard directly about the proportion of American businessmen in the transaction contract.

To be fair, the French royal family has always been good to the Americans. During the American Revolutionary War and the Civil War, France provided support behind the scenes. France supported the United States to fight against Britain, but its help to the Americans was also real. This time, the French took the initiative to bring the Americans along in the loan to Brazil, and they would not leave any benefits for the other party.

Witte's question was reasonable. Bernard asked the embassy staff to take out a twenty-page commercial contract and handed it to Witte, saying, "The warship loan will be provided by the Bank of France. Of the one million pounds commercial loan, two hundred thousand pounds can be given to the United States. As for the construction of railways, laying of telegraph lines, and the purchase of agricultural and animal husbandry products, these need to be determined one by one in subsequent transactions."

Witt listened to Bernard's introduction while browsing the contract. After more than ten minutes, Witt said with some dissatisfaction: "Three American banking companies have prepared 1000 million US dollars for the transaction, and your country has only left 20 pounds, which is completely inadequate to the requirements of our entrepreneurs. Should your country carefully consider the position of the United States in the transaction with Brazil and give corresponding commercial interests to American businessmen?"

Witte was dissatisfied in his heart, but he didn't want to say too harshly, because the United States at that time was not the bald eagle that fanned the flames everywhere in later generations. In the eyes of Brazilians, Americans, who lacked strength and influence, were just a country of equal status with Brazil, and did not receive the same attention as Britain and France. Therefore, as the minister to Brazil, Witte could only try his best to fight for the interests of American businessmen.

"No, Witt, you don't understand me." Sensing the dissatisfaction in the other party's words, Bernard explained: "Brazil has a population of 10 million. The proven resources such as iron, copper, and coal occupy the primary reserves in South America. The domestic commercial market in Brazil is very broad. We can't just focus on the loan benefits of one million pounds. We should also focus on long-term transactions in the future."

"What do you mean?"

"Haha, Mr. Witte, don't you understand? Since your country has sufficient funds, you can continue to negotiate new loan transactions with the Brazilians based on the French loan. France will provide support for your transaction with Brazil."

After understanding the hidden meaning of Bernard's words, Witt's eyes lit up and he asked tentatively, "Does the trade between America and Brazil include the sale of warships?"

"After France and Brazil signed the ship purchase deal, if the United States can persuade Brazil to buy your warships again, France has no objection."

After the Civil War, the US government quickly reduced its armaments, and more than half of the warships built during the war were sold to other countries. Naturally, Witte was also responsible for handling the warships when he participated in the Brazilian transaction.

Arms trade between countries is generally carried out at the same time as commercial transactions. By selling retired ironclad ships, Americans will gain more commercial benefits in the transaction, and the French non-objection attitude is the greatest support for the United States to sell warships.

After discussing the content of the transaction for some time, Witt and Bernard returned to the US Embassy to start coordinating and preparing for the transaction.

(End of this chapter)