Joseph was pondering how best to deal with these individuals when he heard Earl Capefield chuckle:
"Your Highness, besides us, there are banks such as the Trade Credit Bank and Ravel Bank who also wish to gain your forgiveness..."
The Marquis of Ludo glared at him harshly to prevent him from continuing, thinking to himself that he should not have brought this fool along. If it were not for the Capefield Family's great influence in the Banking Guild, with this fool's brains, the family's properties might have gone bankrupt ten times over!
"Oh?" Joseph, however, looked towards Capefield, "How many banks do you represent this time?"
The latter hurriedly pointed outside the window: "Seven, Your Highness. They are all waiting outside the Palace of Versailles."
Seven banks? All were influential major banks involved in the Necker case. Joseph glanced at the few men, suddenly realizing that this might be an opportunity to prematurely start the "Central Bank" of France.
Moreover, it was difficult for the Bank of France Reserve to absorb so many banks now, so letting them give up some interests and accept regulation was not unacceptable. If this could expedite the establishment of the "Central Bank," that would be a great gain.
Joseph immediately smiled, not following the rhythm of the people in front of him but directly saying:
"Do you wish to preserve your banks?"
The Marquis of Ludo and the others were clearly stunned, then hesitantly nodded their heads "bashfully":
"If you could bestow your grace..."
Joseph smiled lightly: "Can you represent the four banks outside?"
The Marquis of Ludo nodded again and again: "Yes, Your Highness. They have entrusted me with full authority."
"Very well," Joseph nodded, "I have several conditions."
The Marquis of Ludo and the others immediately perked up their ears.
"First, you will reduce the loans to the government by 10%, and the loan agreements will be renegotiated, with interest rates not to exceed 3%."
The three banking tycoons looked at each other, their faces full of agony.
The reduction of loan amounts might seem to be only ten percent, but each one of them had lent tens of millions of livres to the French Government; this amounted to millions of livres in total losses for them.
Moreover, a 3% interest rate at this time was almost like a no-interest loan. You have to know that even the government bonds sold to the public came with interest rates between 9% and 12%.
However, Necker's confession was now in the Bastille, and if they didn't agree, the previously bankrupted four banks would serve as an example.
After struggling for two seconds, all of them gritted their teeth and nodded: "We will follow Your Highness's command."
"Hmm," Joseph continued, "Second, the Bank of France Reserve will obtain 30% of the shares of your banks. You have illegally earned money from the national treasury for more than a decade; consider these shares as a fine.
"And I can promise that these shares will not be sold without the consent of the bank's board of directors."
This time, the Marquis of Ludo and the others agreed without much hesitation.
They already intended to use the shares as a bargaining chip to gain leniency from the Crown Prince. Although the Crown Prince asked for a bit more than they had prepared, they received a promise that the shares would not be sold.
That meant the Bank of France Reserve would only share in the dividends, and their banks would not suffer due to the shares being dumped. They found this condition entirely acceptable.
Joseph was quite satisfied with their attitude, and with added emphasis, said: "Third, and this is the most crucial one.
"Your banks must support the currency policy announced by the Bank of France Reserve.
"At the same time, you will use the influence of the Banking Guild to get more banks to support the Bank of France Reserve."
The Marquis of Ludo's expression changed, and he cautiously asked: "Your Highness, when you mention currency policy, what are you referring to?"
Joseph responded: "In the future, the Bank of France Reserve will issue national banknotes like the Bank of England. Your banks will accept these notes for payment and exchange."
These so-called banknotes are essentially "certificates that can be redeemed for gold and silver coins" issued by the banks. Anyone with these notes could exchange them for money at the corresponding bank.
If a bank is robust and trusted by all, people would, for convenience, accept these banknotes for payments among each other rather than actually exchanging them for gold and silver coins.
They thus become the de facto circulating currency.
In fact, the British Pounds that are currently in circulation in England are strictly speaking, only the banknotes of the Bank of England. But the Bank of England has grown so significant, overshadowing all other banks and obtained the "sole legal banknote" authorization from the British Government, and gradually evolved into England's Central Bank.
At present, the Bank of France Reserve does not have the same overwhelming capital advantage as the Bank of England, so Joseph could only use administrative measures to promote banknotes from the Bank of France Reserve.
However, this process would certainly not be smooth, given the limited capital of the Bank of France Reserve, and the general public would most likely distrust its banknotes. This distrust was the biggest obstacle for the Bank of France Reserve to become the Central Bank of France.
Previously, Joseph planned to take three to five years to gradually cultivate the market's trust in the banknotes of the Bank of France Reserve. But with the endorsement of the Banking Guild and the acceptance of the banknotes by these seven major banks, this process could possibly be shortened to a few months.
At the same time, the Bank of France Reserve and these seven banks, because they have banknotes – that is, paper money as a medium of circulation – will crush other banks in terms of circulation efficiency and convenience.
Before long, other banks, in order to maintain their competitiveness, would also have to accept the banknotes from the Bank of France Reserve.
When the vast majority of the nation's banks have accepted the banknotes from the Bank of France Reserve, it will be possible to enact a decree – designating these notes as the sole legal paper currency of France.
Next, they used the advantage of issuing banknotes to regulate other banks.
"Who dares to disobey? We'll tighten your cash flow tomorrow and see how many days you can last!"
The Marquis of Ludo and his companions exchanged glances once again—accepting the banknotes of other banks meant that others could give their printed paper to customers, who then could bring these papers to their own bank to exchange for silver coins.
Although their own bank could also bring the received banknotes to the Bank of France Reserve to exchange for silver coins, there would be a couple of days' delay in this process, during which their hands would accumulate tens of millions of banknotes, essentially becoming a factual reservoir of paper currency.
Not to mention, interbank settlements could hardly occur every few days; at best, they would take place once a month. All the banknotes for that month would be pressing down on their own bank.
Mr. Bouvarandere said with a stiff upper lip:
"Your Highness, just in case, I mean just in case, the Bank of France Reserve's banknotes depreciate, then wouldn't we..."
Joseph had anticipated their concerns and immediately said:
"The Cabinet will soon issue a decree stipulating the exchange rate between the Bank of France Reserve banknotes and precious metals, and maintain it unchanged. Of course, if you are not at ease, the Bank of France Reserve can also sign an agreement with you to compensate for your losses if the banknotes depreciate significantly in a short time."
He could make such a promise because he had enough confidence. After all, the currency system of that age was based on gold and silver, which meant the value of paper money was very stable, unless there was a major economic crisis.
Moreover, even if a crisis did happen, causing severe devaluation of the French banknotes, it didn't matter. The banks would be compensated according to the agreement. Only that this time, banknotes, already accepted by everyone, would be used for compensation.
Anyway, there was already an economic crisis; just state your compensation amount, and I'll keep the printing press running 24 hours a day to print it for you."
In the end, the Marquis of Ludo and the other participants had no choice but to accept Joseph's terms—they couldn't arm wrestle the thigh, after all, at most they would just settle the accounts more diligently each month, and consider that month's bank flows a gift to the Bank of France Reserve.
Joseph stood up, smiled at the three men in front of him, and raised his arms, saying, "Congratulations to you, oh, and also to those four banks waiting outside.
"From now on, you will no longer be implicated by the Necker case. You are safe."
He then gestured towards Archbishop Brienne and said, "After this, Archbishop Brienne, representing the Bank of France Reserve and the French Government, will sign an agreement with you all."
The three banking magnates hurriedly bowed to express their thousands of thanks for the Crown Prince's leniency. Though they were extremely dismayed in their hearts, not knowing how much money they had lost, they were also relieved that, after all, their banks were saved.
After the Marquis of Ludo and others took their leave, Joseph suddenly remembered a question: there were four banks that had gone bankrupt and been acquired before, and today seven more banks had "surrendered." Including those involved in the Necker case, there were thirteen banks in total—what about the remaining two?
At 4 p.m., Fouche hurried to the Palace of Versailles to answer his question.
"Your Highness, Perni, his wife, and two sons were captured by the Police Affairs Department on their way to Rouen this morning. What should we do..."
"Seize the bank immediately,"
Joseph sighed. These people were too impetuous. If they had fled half a day later, they could have taken a "free ride" with Marquis of Ludo.
But since they fled now, they could only face harsh treatment. He hoped that after taking over the Perni Family Bank, the Bank of France Reserve wouldn't run into a severe staff shortage.
Fouche nodded and continued:
"Your Highness, the two largest shareholders of Denaro Bank happened to return to Switzerland right when the case broke out. It seems they heard the news from Paris and have not been seen since."
Although Denaro Bank's main business was in France, it was a Swiss Bank with headquarters in the canton of Schwyz in Switzerland.
In other words, it was likely that the bank's profits had already been sent to Switzerland, so even if its assets in France were seized, there probably wouldn't be much money to take.
Joseph frowned and said, "It seems we'll have to use diplomatic means."
...
Three days later, a solemn yet low-key recognition ceremony was held in Hague Hall of the Palace of Versailles.
It was solemn because Her Majesty Queen Mary presided over it in person.
Aside from the officers from the Justice Investigation Department who were being commended, the main attendees were senior members of the police system, as well as the Crown Prince and Baron Breti, the Justice Minister, totaling less than 30 people, which could hardly be considered lively.
After a melodious round of music, Queen Mary, dressed in a light purple elegant gown, ascended the platform on the west side of the hall, smiling at Mala and the others, she loudly said:
"Gentlemen of the Justice Investigation Department, with your excellent work and your courageous spirit, you have saved France from enormous losses and have also brought corrupt individuals, who have evaded justice for years, to trial!
"Here, on behalf of the Royal Family, I extend to you our highest respects!"
This time, Mala, with his assistant, uncovered the astonishing corruption case of Necker, and through a series of maneuvers by Joseph, made over a hundred million livres for France's finances, significantly advancing the establishment of the central bank of France; the merit of such achievements was indeed immense.
In previous operations, Evans of the investigation department was killed, and Mala was also injured by a knife, so Joseph decided to properly commend them.
Court officials came forward with wreaths. Queen Mary personally placed one on Mala, who was still using crutches. Director of Police Services Nethanson awarded the others their flowers.
Then, amidst the applause of everyone present, the Queen announced that due to the exceptional contributions of the Justice Investigation Department, the decision was made to elevate it to the Bureau of Fair Investigation, to be directly managed by the Cabinet.
At this point, the French "Anti-Corruption Bureau" finally shed the "mask" of the police system and formally stepped forward with an official identity.
The Bureau's directorship would still be held by the Crown Prince. Mala became the head of operations. Demulan took charge of the archives. The Bureau had four departments under it, with the largest, the operations department, planning to expand to seven teams, totaling more than 200 people.
In reality, this number was hardly significant in the enormity of France's bureaucratic system, but it was the most advanced institution for administrative inspection in all of Europe. While other countries still relied on royal authority to monitor officials, France had already taken the lead in establishing an independent departmental oversight.
This was also why officials were reluctant to attend the commendation ceremony—nobody could guarantee their hands were completely clean. Necker had once been powerful enough to rival France in wealth, and yet he fell from grace overnight, didn't he? If one caught the attention of the investigation officers, it could mean ruin.
Next, Queen Mary publicly awarded Mala with a 500-livre bonus. Other department members who were involved in Necker's case also received a reward of one month's salary. As for Evans, who sacrificed his life, his compensation was a considerable 4000 livres, and the Royal Family sponsored all his son's schooling expenses.
After the award ceremony concluded, the Queen invited all present to join the banquet.
Leaving Hague Hall, Baron Breti was the first to congratulate Mala:
"You really are an outstanding investigator, solving cases that have been unsolved for so many years."
Mala looked at the Baron's luxurious outfit and couldn't help but frown slightly. Before he could decide how to respond, Besancon approached with a smile and said:
"Her Majesty the Queen has high praise for you. I believe it won't be long before you'll be granted a noble title."
Frient and Fouche followed suit with their flattering remarks.
Mala glanced around at the people beside him, but his expression grew increasingly troubled.
Noble title?
He chuckled to himself, wondering if he was really going to become one of these filthy nobles.
He looked up again at the artistic and exquisite sculptures on the roof of the Palace of Versailles.
Why am I here?
What am I doing?
It is ironic that what I've done garners the praise of the nobility!
Have I betrayed the people of France?!
Suddenly he stopped, claiming his wound was too painful to attend the dinner, and, leaning on his crutch, he turned and headed towards the exit of the Palace of Versailles.