I am the Crown Prince of France Chapter 178: The Bank of France

In the third-floor interrogation room at the Bastille, Calonne was contentedly organizing Necker's confession. He glanced at Necker from the corner of his eye and said, "Mr. Necker, thank you for cooperating with my work. My task here is now complete. The rest is between you and the royal representatives."

As he spoke, the door opened, and several secret police officers escorted in a nobleman dressed in a luxurious blue coat with silver-edged glasses.

"Look, Count Herman has arrived," Calonne remarked as he stood up to greet Herman and made way for him to take the main seat. However, Herman did not sit down but instead took a docunt from his assistant and placed it in front of Necker.

"Mr. Necker, based on the evidence reported by the investigation committee, the total amount you embezzled is 8,927,000 livres," Herman said, glancing at Calonne, who nodded to confirm the accuracy of the figure.

Count Herman continued, "As promised by Her Majesty the Queen, your punishnt will be lenient, so you are only fined 2 million livres. That brings the total to..."

"11,927,000 livres," Calonne answered with a smile.

"Oh, yes. Thank you, Viscount Calonne." Herman then turned to Necker, saying, "So, all you need to do now is return the embezzled funds and pay the fine, and you will be free to leave. Her Majesty has also shown special rcy by allowing you to choose between exile in Lorraine or Foix."

He patted the docunt on the table. "This is the pardon signed by Her Majesty."

Considering the gravity of Necker's cris, being exiled within French territory was indeed a generous act of clency.

Necker, having lost all will to resist, took the pen and paper and wrote down an address and a string of numbers. Handing the paper to Herman, he said dejectedly, "Go to this location; there's a safe containing bank notes and the withdrawal instructions. This is the code. I'm not sure if it's enough to cover the 12 million livres, but it should be over 10 million... That's all I have left."

Herman took the paper and nodded. "Thank you for your cooperation. You will have to stay here until the funds are retrieved and the fine is paid. I should also inform you that any shortfall will have to be covered by your properties and estates."

"Do as you wish..." Necker replied with resignation.

As Herman left, Calonne couldn't help but feel a bit disappointed. He had expected Necker to face several years in prison, not just simple exile. What he didn't know was that Joseph had no intention of letting Necker off so easily.

Necker's predecessor as French finance minister was Jacques Turgot, a highly capable economist. During his tenure, Turgot implented a series of fiscal reforms that laid the foundation for France's capitalist economy, earning the era the nickna "France's 18th Century Golden Age." However, when Necker succeeded him, he quickly halted Turgot's reforms, relying instead on heavy borrowing to maintain the finances, eventually plunging France into a deep debt crisis.

For such a "parasite," Joseph couldn't just let him off with simple exile. France's tradition of lenient punishnt for the upper class would not apply here.

Of course, Joseph planned to let Necker cough up all the money first, without tarnishing the royal family's reputation by going back on their word.

...

At the Palais-Royal, Duke of Orléans stared grimly at the newspaper in his hand. Nearly every paper in Paris today had published an announcent about the French Industrial Developnt Fund. In addition to basic information about the fund, the announcent prominently outlined the composition of the fund's sole managent body—the Fund Committee.

The committee consisted of ten seats: six would be elected by the largest investors, one would be held by the finance minister or a designated representative, one would be designated by the French Reserve Bank, and the last two would be appointed by the royal family. All decisions regarding the fund would be made by the committee, with neither the royal family nor the governnt having any right to interfere.

What Duke Orléans didn't know was that Joseph had built a "back door" into this structure—since the largest investor would be the French governnt, followed by the Crown Prince and the royal family, they would control at least four of the six elected seats. Along with the two royal appointnts and the Reserve Bank's seat, Joseph ensured absolute control over the fund.

Duke Orléans irritably tossed the newspaper aside. He had anticipated that the banks' malicious bankruptcies would cause panic among the nobles and that the French governnt would be unable to reimburse their investnts. He had expected the nobles to unite and pressure the court, forcing the royal family to halt the Necker case.

But he hadn't foreseen the governnt creating an "Industrial Developnt Fund"! With just one concept, they had "sucked" all the nobles' investnts into the fund, quickly quelling their fears.

When he first heard about the fund, he had planned to draw parallels to the Mississippi Company fiasco to make the nobles think it was a scam. However, after reading the fund's transparent managent and operational structure, he knew this tactic wouldn't work.

The Industrial Developnt Fund's managent was too transparent, with a committee-based model, investor audits, and imdiate refunds if there were any losses—there were no obvious flaws to exploit. The post-modern fund had evolved over many years, and Joseph simply had to replicate its safeguards.

Duke Orléans realized that without the nobles' support, the banks implicated in the Necker case would fall one by one. And without his influence over these major banks, his standing in the banking guild would plumt.

To make matters worse, he had over 10 million livres tied up in several of the banks involved, with no way to withdraw his money.

He sighed heavily. Would he really have to invest in that Industrial Developnt Fund himself?

The door opened, and his butler, Donnadieu, entered, bowing. "My Lord, all the guests have arrived."

Duke Orléans nodded, rising wearily to make his way to the second-floor hall.

As the two large doors were pushed open by guards, the scene inside chilled him—a re handful of nobles and around ten mbers of the banking guild were sparsely scattered throughout the hall.

Just days ago, when he had rallied the nobles to resist the Necker case by refusing to lend money to the governnt, this place had been packed, with barely room to stand.

The unity had vanished...

The remaining attendees hurried over to greet their "leader."

Duke Orléans was about to deliver a morale-boosting speech when Marquis Ludo, looking anxious, spoke up. "My Lord, I heard from a friend that Necker's interrogation is over, and he's confessed everything."

He glanced around nervously. "What are we going to do?"

Duke Orléans had known this for so ti—if there were a solution, he would have acted already.

Seeing his silence, Marquis Ludo hesitantly suggested, "Should we perhaps try negotiating with the royal family?"

Duke Orléans stared up at the crystal chandelier in resignation. Just then, soone entered and whispered to the butler, who imdiately inford the Duke, "My Lord, we've just received word that a large group of police officers is heading to the City Trade Bank."

The bank's owner, Delachapelle, turned pale, not even bothering to excuse himself before bolting out the door.

...

On the streets of Paris, everyone was talking about the recent string of bank failures.

"The City Trade Bank was raided today—I wonder if it'll go bankrupt too."

"That's as certain as the sun rising tomorrow. I saw the police shoving the bank officials into carriages at noon."

"I've heard there are many more banks involved. Who knows when this will end..."

"Oh God, my 60 livres in that bank are gone!"

"What? Haven't you been reading the papers?"

"The papers?"

"They say that the French Reserve Bank is buying up all the failed banks, and you can withdraw your previous deposits from them."

"Really?! You're not joking?"

"It says so in the papers. You just need to submit an application, and you can get your money back within two weeks. Or you can transfer it to a Reserve Bank account."

"That's amazing! Thank you! I'll apply right away!"

...

At Versailles, Joseph was reviewing the latest acquisition reports.

In recent weeks, the Reserve Bank had completed the acquisition of four bankrupt banks and was now inventorying assets and taking over various properties. The number of Reserve Bank branches in Paris had suddenly increased to over a dozen, though most still hadn't even had their signs changed.

Joseph frowned as he read about the problem of insufficient staff—particularly a shortage of managent personnel.

Most of the managers at the banks involved in the Necker case had been arrested, and the Reserve Bank didn't have enough people to replace them all at once. Joseph had intentionally slowed the pace of the bank collapses; otherwise, if all thirteen banks had gone under simultaneously, the financial market across much of France might have been thrown into chaos due to managent issues.

"The foundation isn't strong enough," Joseph thought to himself. It would take at least six months to fully absorb these financial assets.

But ti wasn't the main issue. No one was willing, nor would they dare, to compete with the Reserve Bank for these bankrupt banks.

While the Reserve Bank didn't have much cash, its list of shareholders was enough to scare off any competition—5% each for the King and Queen, 4% for Prince Condé, 4% for Count of Artois. The finance minister, interior minister, and head of the secret police also had shares. Of course, the largest shareholder was still the French Crown Prince.

However, with the creation of the French Industrial Developnt Fund, the French Treasury had also beco a major shareholder in the Reserve Bank.

After Joseph himself added a large investnt, the other shareholders' stakes were diluted sowhat. The current ownership structure was as follows: the French governnt held 40%, the Crown Prince held 41%, the King and Queen each held 4%, Prince Condé and Count of Artois each held 3%, Monno held 2%, and Brienne and Robert each held 1.5%.

After acquiring four major banks, the Reserve Bank's nominal assets had soared to an astonishing 190 million livres! However, the vast majority of this was in loans to the governnt. The bank's debts had been transferred to the Industrial Developnt Fund through the nobles' agreents, aning the Reserve Bank now owed over 100 million livres to the Fund.

Fortunately, the agreent stipulated that the principal couldn't be withdrawn for five years, or the Fund would almost imdiately collapse.

Going forward, the French Treasury would invest in various industrial sectors through the Developnt Fund, and this money would be treated as repaynt to the Reserve Bank. The Reserve Bank would then transfer these investnts to the Developnt Fund. As the investnts generated returns, the Fund would see profits.

This would ensure that the French Treasury's spending didn't all end up in the pockets of bank capital but was instead used to boost industrial developnt. The profits from the industrial sector would then feed back into the Treasury, creating a virtuous cycle.

Of course, this was Joseph's theoretical design. In practice, there would undoubtedly be many challenges, but these were the inevitable costs of industrial developnt.

At the very least, after the Reserve Bank took over the bankrupt banks' loans, it would renegotiate the loan agreents with the French governnt, significantly lowering the interest rates.

As for the exact reduction, Joseph planned to wait until the entire acquisition process was complete, allowing Brienne to calculate the total loans the Reserve Bank had acquired, then determine the interest rate needed to keep the French Treasury's finances balanced.

The new agreents would then be signed at that interest rate.

In any case, the rates would be far below the current 15% interest that French Treasury loans demanded.

Once the Reserve Bank had acquired all thirteen banks involved in the scandal, Joseph's next step was to use the Reserve Bank's massive size—although it didn't have much cash, its loan book was enormous—to gradually control the French financial industry and eventually transform the Reserve Bank into the "Bank of France."

This process would inevitably face so administrative challenges and resistance from existing bank capital. But if successful, the French royal family, or rather the French Crown Prince, would hold the financial lifeblood of France firmly in their hands!

Joseph signed off on the Reserve Bank manager's operational plan and was contemplating when to trigger the next bank collapse when Aymon lightly knocked on the door. "Your Highness, Archbishop Brienne has arrived with three bankers."

"Bankers?" Joseph was surprised but rose to his feet. "Please escort them to the drawing room."

Shortly afterward, in the spacious drawing room, Brienne and the others respectfully greeted the Crown Prince. Then Brienne introduced them, "Your Highness, may I present Marquis Ludo, Count Keppel, and Monsieur Boisrandar."

Joseph squinted slightly. He had been studying the Necker case and was familiar with the banks involved. These three were the owners of three of those banks and also leaders of the French banking guild.

He invited them to sit down and smiled, "To what do I owe the pleasure of your visit?"

Marquis Ludo and the others were on the verge of tears.

The Duke of Orléans couldn't help them, so they had decided to seek rcy from the governnt.

However, they couldn't even find the right place to beg for rcy. They started by approaching the secret police, only to be told that they were rely assisting in the arrests. Then they went to the police bureau and eventually found their way to a mysterious departnt called the Intelligence Office, only to be told that they were just following orders.

Next, Marquis Ludo and the others tried the high courts and the Ministry of the Interior, but to no avail. Finally, they approached the Ministry of Finance and, after paying considerable "favors," learned that the true mastermind behind the Necker case was none other than the Crown Prince.

After spending even more money, they finally gained an audience with the Crown Prince, led by Brienne.

Marquis Ludo, trembling with anxiety, chose his words carefully. "Honored Crown Prince, the actions we took with Necker were grievous errors—no, grave cris! We now fully recognize our mistakes.

"We do not dare to ask for your forgiveness; we only wish to make ands for our past wrongs.

"rciful Prince, from now on, we are your most humble servants. Whatever you ask of us, we will obey without hesitation!"

(End of Chapter)

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