The Qing Dynasty

Chapter 600 Conspiracy
“All foreign loans must also be stopped.”

Teng Yuzao told Xi Ligong, "Just don't tell anyone about tightening the money supply, so as not to cause panic among the people."

Teng Yuzao paced a few steps on the carpet with his hands behind his back and continued, "Tightening the money supply can be achieved by raising the threshold. The reason is to prevent bad debts."

"It is no longer permitted to accept assets such as real estate and high-interest bonds issued by banks as collateral. Only gold, silver, jewelry, valuable calligraphy and paintings, and companies with sufficient profitability or their stocks can be accepted as collateral."

"In addition, we must resolutely stop lending to provincial governors-general to build railways and promote Westernization."

"Also, your bank's acquisition and construction of branches in various places should be suspended."

At this point, Teng Yuzao waved his hand decisively, "In short, it's just one sentence."

"Except for military expenses and the Ordnance Department's expenditures, all other projects must be temporarily suspended. All expenditures in Zhishan Province must also be tightened. All funds must be signed by me or the Lianfu before they can be disbursed."

Xi Ligong said somewhat unwillingly, "The Marshal's actions are to prepare the Aurora Bank for a bank run, but it's not necessary to be so nervous for the time being!"

Teng Yuzao shook his head and said, "Yucheng, although for the time being, it is just someone who wants to maliciously acquire our profitable enterprises, but from the fact that Yikuang is pushing hard to establish the Ministry of Finance Bank and even inserting his Beijing Commercial Bank into it, I feel that something unusual is going on. We still need to prepare for many things."

"Don't forget that we are almost certain that the majority of Yikuang's investment in the Capital Commercial Bank was from the Bank of Japan. Whether it is Yikuang, who has always been hostile to me, or the Japanese who absolutely do not want to see a thriving and prosperous Zhili, they all have sufficient reasons to do something that would endanger our development and even our survival."

Teng Yuzao smiled bitterly and said, "What's more, there is also the imperial court who is also very wary of us and is on guard against us everywhere. If the pillar of our Zhi army, the Aurora Bank, collapses, I think the imperial court will also be happy to see it!"

Teng Yuzhao's words made Xi Ligong feel nervous.

What Teng Yuzao said was not alarmist. Japan and Russia abroad regarded Teng Yuzao and hundreds of thousands of Zhi troops as stumbling blocks in their efforts to encroach on Chinese territory and plunder wealth.

As for the princes and nobles led by Yikuang, who had actually controlled the court since Ronglu's death last year, Teng Yuzhao regarded them as a thorn in his side and wanted to get rid of them as soon as possible!
This group even included Henan Governor Yuan Shikai.

Even Empress Dowager Cixi, the highest decision-maker in the court, had a very complicated attitude towards her own marshal. At least, she did not suppress the forces hostile to Zhili at all, but had always actively supported them.

Teng Yuzao added, "Also, the gold and jewelry, gold and silver utensils, and precious jades hidden in your bank vault cannot be kept from seeing the light of day forever. Now they have to do their part, too."

"Immediately arrange for trustworthy personnel to sort the items. Except for a few valuable jades, the rest of the high-value jewelry will be handed over to Han Hun. He will arrange for people to take them to Shanghai, Hankou, Guangzhou, Hong Kong, and even Southeast Asia to sell them on the black market."

"The rest can be melted down to make gold coins."

Because the Chinese people failed to take precautions in the early days of the invasion by the Eight-Nation Alliance, many people even mistakenly believed that the foreign coalition forces were only there to make trouble for the imperial court and had little to do with them, resulting in heavy losses. Not only were people killed by the coalition forces, but all property was also looted.

When fighting against the Eight-Nation Alliance, the vanguard army seized a large amount of gold, silver, and jewelry. Almost every coalition soldier who was killed or captured had more or less jewelry on him, and some even had large amounts of silver bills on them.

It was completely impossible to find the owners of these jewels because many of them were stained with blood, and it was obvious that their owners were killed by the Allied forces.

But even so, it was not convenient to sell these jewels openly. Moreover, some of them were looted by the Boxers from various royal palaces in the capital, as well as the homes of ministers and wealthy families. The number was extremely huge, so they were kept hidden in the bank's vault.

Although Xi Ligong did not quite agree with Teng Yuzao's statement that adequate preparations should be made in advance to prevent bank runs, he did not dare to say that such a situation would never happen, and it was better to make some preparations early.

If there are sufficient funds, it will be easier to resume lending in the future.

Especially these jewels in the vault, it would be best if they could be exchanged for money this time.

Xi Ligong nodded and said, "I will do this tonight when I get back. I have roughly estimated the total value of those jewels and jewelry, and the total value is at most tens of millions."

"but."

After Xi Ligong looked at Li Yaoting, he said to Teng Yuzao.

"Marshal, you must be extremely careful when using these things. Don't let them get to us, otherwise..."

Although Xi Ligong did not finish his words, Teng Yuzao and Li Yaoting both understood what Xi Ligong meant.

Although no one now mentions that the vanguard army was involved in the looting of princes, nobles and wealthy families in the capital, and it is assumed that it was done by the Boxers, there are still related legends.

If these precious jade jewelry were sold at this time and someone recognized them as having a connection with the Zhi army, it would be a disaster.

As soon as Teng Yuzhao turned to look at Li Yaoting, Li Yaoting said.

"Don't worry, Marshal. This matter will be kept secret and there will be no mistakes. Our people cannot even show up in the black markets anywhere."

"As for Nanyang, there won't be any problems. The Tiandihui there is very violent, and there are also many gangs."

Teng Yuzhao knew very well that the Nanyang Tiandihui was secretly sent there by Li Yaoting according to Teng Yuzhao's instructions. Now they have established extensive organizations among the Chinese in the vast area of ​​Nanyang. With these people, it is indeed the safest to sell these jewelry and jade in Nanyang.

"Commander."

Xi Ligong added, "Since we want to prevent a run on the bank, we might as well do it more thoroughly. This should be applied not only to branches in Tianjin, but also branches in other provinces such as Zhili and Shandong. In addition, we can contact loan customers with better business in private."

"Tell them that as long as they repay the loan ahead of schedule, the interest rate can be appropriately reduced and some discounts can be given to them, so that they can get more money back."

"In addition, we can also ask Jizhi to adopt a similar approach and select a few companies with hot sales and whose products are mainly exported to foreign countries. They can use the reason that the equipment is due for maintenance at the end of the year and say that they will work overtime in the near future and are now available for pre-order. As the pre-order period is extended, they can also give a certain discount, but the prerequisite is that the full payment is required."

"I estimate that if this happens, our bank balance will increase significantly in the short term, and it will be no problem to exceed 100 million, which is completely sufficient to cope with any possible bank runs."

"Also, the bank's stock investment occupies a lot of capital. We can appropriately select some stocks of companies with average profits to sell." After saying this, Xi Ligong said with some concern, "But in this way, our bank will not have to worry, but we may not have enough funds to participate in the stock market protection and prevent malicious acquisitions."

Teng Yuzao nodded and said, "What you said is all very good. You can make arrangements with the bank and Jizhi. However, all these preparations must be carried out as secretly as possible to avoid arousing suspicion."

Teng Yuzao frowned and said, "Yucheng, your words also reminded me that if the seven people just mentioned are working together with the British and Japanese banks, then it is very likely that Yikuang and the Capital Commercial Bank are also involved."

"And if they take action on both the stock market and the banks at the same time, we will be in trouble."

"As you just said, we might lose sight of one thing while focusing on another."

Teng Yuzao took a deep breath and said, "I think this is the way to go. Once the funds are recovered, you should immediately announce to the public that the capital of Aurora Bank has increased to 500 million. The source of funds can be made clear to the public. It is entirely from the profits of the factories affiliated with Aurora Industrial Development Company and the money I earned from overseas patent fees."

"At the same time, you must hurry up and print more banknotes. Prepare to increase the circulation to more than 500 million. My ultimate goal is 1 billion."

Teng Yuzhao's words made Xi Ligong feel mixed emotions, and he said with a wry smile.

"Marshal, announcing that our capital has increased significantly can certainly improve the bank's credibility. Although our own capital is not yet that much, it is not far behind. In addition, Jizhi's factories are constantly replenishing funds every month."

"However, since we want to prevent bank runs, we cannot increase the amount of banknotes for the time being. Otherwise, if there is a bank run, the pressure on our bank will be even greater."

Teng Yuzao said, "You are right. You are only required to print these banknotes and store them in your vault. You are not required to use them right away. You have to wait until this matter is settled before issuing more banknotes."

"However, when you announce the capital increase of Aurora Bank, you also need to announce that the current banknote issuance has just reached 600 million, and the over-issuance is only 25%."

Xi Ligong was a little puzzled. "Marshal, although it is normal for the great powers to over-issue banknotes, the Chinese are still very worried about over-issuance. This may cause fluctuations in our banknotes."

"Although this fluctuation will soon subside, it seems that there is no benefit for us to do this!"

"Besides, we haven't actually issued any more than the original amount!"

Teng Yuzao nodded and said, "It is inevitable that it will cause fluctuations, but this problem will not be a big one. What I mean is that I want to let the court know that Aurora Bank is now so big that no one else can swallow it."

"Even if it is the Ministry of Revenue Bank, it can't swallow up our bank. With the current annual revenue of the court just over 100 million, it won't be able to come up with the 600 million in another 20 years."

Seeing that Xi Ligong understood what he meant, Teng Yuzao continued, "There's more."

Teng Yuzao walked to the desk and picked up the silver cigarette case that Wu Peifu had given him. He took out a cigarette, lit it, took a puff and said.

"It now seems that a bank run is inevitable, especially since the newly established Ministry of Revenue Bank will issue banknotes."

Xi Ligong asked Teng Yuzao in disbelief, "Marshal, you mean that the Ministry of Revenue Bank, under the arrangement of Yixin, will prohibit other provinces from issuing banknotes on their own. Although it will not affect our coinage, it will definitely target our paper money?"

Although Teng Yuzao had just mentioned this matter, he still couldn't believe it. You know, the Aurora Bank has already issued 180 million banknotes. If it is banned from circulation, it will not only cause panic in Zhili, but also cause turmoil in Shandong, Shanghai, and Wuchang, which have close trade relations with Zhili, as well as Guangdong and even Hong Kong.

Since the banknotes issued by Zhili had a high credibility, the banknotes issued by Aurora Bank were not only widely circulated in Zhili and Shandong provinces, but also in Anhui and Lianghuai.

Then, there are the big cities just mentioned, where merchants mainly have large amounts of Zhili paper money in their hands.

If the imperial court really wanted to forcibly ban its circulation, it would cause considerable chaos.

Teng Yuzao nodded, but did not answer Xi Ligong's question immediately. Instead, he followed his train of thought and continued with the topic he was just discussing.

"Aurora Bank is our foundation, and our current focus in preparing countermeasures is also on Aurora Bank. This is because the court, or Yixin, has seen the benefits of issuing banknotes, and they will definitely not allow us to issue banknotes again."

Teng Yuzao sighed and said, "After all, there can only be one legal currency in all countries in the world. The court prohibits provinces from issuing currency, and there are sufficient reasons for this."

Teng Yuzhao's words made Xi Ligong feel a little overwhelmed. If paper money was not issued, Zhili's current huge expenditures might not be able to be coped with by relying solely on Aurora Bank.

Even though there were continuous replenishment of funds from the "Aurora Group" enterprises, and even the money-making construction company headed by Huang Chujiu, which brought in huge amounts of funds every month, the funds needed to implement Westernization in Zhili and Shandong provinces were even greater, and providing military expenses for hundreds of thousands of troops was also an extremely heavy burden.

Although Xi Ligong knew very well that the funds invested in promoting Westernization would bring huge returns, these returns had a long payback period and it would take several years or even more than ten years to finally recover the costs and generate benefits. It felt like distant water could not quench immediate thirst.

Xi Ligong was about to speak when Teng Yuzhao sighed heavily.

"If this had happened two years ago, I would have obeyed the court's request without hesitation. But now, when military funding is urgently needed and the promotion of Westernization in Zhili and Shandong provinces is in full swing, I will never agree to cancel paper money."

"so."

Teng Yuzao said to Li Yaoting, "You should also pay close attention to the Ministry of Revenue Bank and the possible issuance of banknotes."

Teng Yuzao exhaled a puff of smoke and said, "In addition, I am also worried that the stock market and the establishment of the Ministry of Finance Bank, as well as their issuance of banknotes, are related. You have to figure these things out as well."

"Commander."

Li Yaoting said, "I will handle the matters assigned by the Marshal immediately."

"However, my people reported that Yixin is in a hurry. The Ministry of Revenue Bank is likely to be officially established next month. Its address is at the Capital Commercial Bank. The Ministry of Revenue only needs to send the corresponding management officials to officially open the business."

Li Yaoting's words made Xi Ligong shudder suddenly, because he suddenly thought of something.
(End of this chapter)