1850 American Gold Tycoon.

Chapter 724 Making Money

Liang Yao and Napoleon III reached a consensus, and the next thing the two delegations had to discuss was the detailed terms of the alliance.

After two days of consultation and revision, the "Treaty of Alliance between the American Republic and France" was finally signed in Omaha, and the American Republic and the Second French Empire formally concluded an alliance.

After the treaty was signed, Liang Yao's biggest headache next was getting money.

The two canal projects, the development of the central frontier areas, blood transfusions for the Southern Confederacy, and the joint development of new ironclad ships with France to narrow the gap with the British Navy.

Any one of these is a money-eating beast.

The Panama Canal project can be temporarily delayed, but the remaining four projects cannot be delayed in any way.

"Bank of America can provide 525 million Republican dollars, which is the largest amount of funds we can currently use." Deng Wenyao said as if he were counting all the details.

“The American Group, the central government, and the Los Angeles City Government still hold a combined 61% of the shares of Los Angeles Petrochemical, but dividends will not be paid until the end of the year.

There is still 752 million Republic dollars left from the military funds raised before the war. The French are pressing for money, so why not use some of the military funds for emergencies?"

The initial value of 35% (140 million shares) of the Suez Canal Company was 7000 gold francs, equivalent to $876 million in Republican dollars.

This part of the American Republic was exchanged for 35% of the shares of Los Angeles Petrochemical, without raising additional money.

Liang Yaode found a way to raise an additional 626 million Republican dollars (5000 million gold francs) to purchase French government bonds.

This is one of the conditions for the alliance between the two sides.

In return, France would unconditionally stand on the side of the American Republic in the North American Civil War and do its utmost to promote a ceasefire between the American Republic and the Northern Confederation when the American Republic needed it.

"The war is not over yet, and the subsequent development of the central border areas will require a lot of money. Military spending must not be used." Liang Yao rejected the suggestion to use military spending.

"The 525 million Republic dollars in the Bank of America are what I kept for emergencies. I can only take out 100 million Republic dollars to buy French government bonds as a model. The remaining 526 million Republic dollars in French government bonds will all be issued to the public."

The Central Railroad Company (formerly the California Railroad Company) has planned four railway trunk lines in the central frontier region: Omaha-Kansas City, Omaha-Sioux City, Des Moines-Minneapolis, and Des Moines-Dingyuan City.

According to preliminary estimates, these four railway lines will require an investment of at least 680 million Republican dollars.

If all of the 525 million Republic dollars from the Bank of America were used to purchase French government bonds, the railway trunk line project in the central border area would inevitably be affected.

Therefore, Liang Yao decided that the Bank of America would first take out 100 million Republic dollars to stabilize the French, and the remaining 526 million Republic dollars of French government bonds would be issued directly to the public.

During the West Coast period, there was already a precedent of private individuals purchasing French war bonds, and the public was relatively accepting of French government bonds.

As long as there is enough time, it is still possible to sell all the French bonds worth 526 million Republican dollars.

If the French are really pressing, we can also ask other major banks in the American Republic, such as Jardine Matheson Bank, Citizens Bank, and Bank of Boston, to give the French some more money to buy them some time.

"I personally also contributed 20 Republican dollars to subscribe to some French government bonds." Sartre also set an example.

Buying French government bonds is not a losing investment. Sartre was happy to spend $20 to gain favor with Liang Yao.

"120 million Republic dollars will at least be enough to keep the French stable for a while."

"It is urgent to open up new tax sources. Relying solely on issuing bonds is not a long-term solution." At the beginning of the founding of the People's Republic of China, Liang Yao had the idea of ​​reforming the tax system and opening up new tax sources.

It’s just that due to the urgent war situation, these two things have been put on hold.

Now that the war in the central border areas has entered its final stage, there is finally enough time to consider tax reform and the imposition of new taxes.

The tax system of the American Republic is inherited from the United States of America, and the central government's main fiscal revenue also comes from tariffs. Although the proportion of tariffs in fiscal revenue is not as exaggerated as that of the United States of America, it still accounts for 47%, nearly half!

Other major taxes include business tax, mining tax (mining rights fee), license fees issued by the central government or governments at all levels, property tax paid by industrial and mining enterprises to local governments, and real estate property tax (mainly levied in medium and large cities on the west coast).

However, the collection of these taxes is rather chaotic, and most of them are intercepted and used by local governments.

During Fremont's first term, California was the only state on the West Coast that had a high level of development and could receive stable taxes. Therefore, Liang Yao did not interfere with the Oregon and Liangzhou governments paying taxes on their own.

After all, at that time, governments at all levels in these two states still needed to rely on financial support from California to maintain normal operations.

After Fremont's second term, the population size and industrial level of Oregon and New Mexico reached the level of third-tier states in the United States.

Not only have the two states achieved independence from transfusions from California, but they have also both run fiscal surpluses.

Liang Yao now has to find a way to collect taxes from Oregon and Liangzhou and redistribute them for the subsequent large-scale development of the central region.

"What kind of taxes are you planning to introduce?" Deng Wenyao asked with great concern.

"We are planning to impose consumption tax on tobacco, alcohol, sugar and luxury goods. I will ask Zeiss to send a telegram to Fremont and ask Fremont to draft a proposal to impose consumption tax first." Liang Yao said.

"We also need to find a way to collect taxes from Oregon and Liangzhou."

By the mid-19th century, although modern consumption taxes in the strict sense had not yet become popular, many countries had begun to impose indirect taxes on specific consumer goods, which were similar in nature and function to later consumption taxes.

For example, Britain began to impose indirect taxes on consumption products such as spirits, tobacco, and sugar in the 17th century.

France imposed similar taxes on alcohol, salt, and other luxury goods.

Some states in the United States have imposed taxes on certain consumer goods, such as tobacco and alcohol, as early as the Revolutionary War.

If nothing unexpected happens, the Lincoln government will impose a comprehensive consumption tax in all areas ruled by the Northern Union next year to maintain the Northern Union's huge military spending.

"It may not be that easy to transfer the tax revenue from Ozhou and Liangzhou to the central government," Deng Wenyao reminded.

"Besides, the tax revenue that these two states can contribute is probably less than that of Los Angeles. Our country is just established and the situation is unstable. We need to consider this matter carefully."

From ancient times to the present, from the Qing Dynasty to the United States, collecting taxes has always been a big problem.

Deng Wenyao felt that it was too hasty to ask Ozhou and Liangzhou to pay taxes to the central government now, and the benefits would outweigh the costs.

"It's not a question of how much tax can be paid," Liang Yao said.

“This is a matter of principle. If we don’t find a way to increase tax revenues in Ozhou and Liangzhou, we won’t be able to collect taxes even if other states develop.

Although California is rich, we cannot always count on California to support the whole country. The American Republic is not the Republic of California, but a whole. We should not favor one over the other. "

Rather than a federal government with a weak central government and strong local governments, Liang Yao prefers to build a government with a strong central government and weak local governments.

Each state has different administrative and financial powers, and their power is too great. Once the contradictions escalate to the point where they are difficult to reconcile, the worst outcome is independence and separation, and the worst is civil war.

The current civil war is a lesson for us.

California, as a single state, contributes more than two-thirds of the country's fiscal revenue. Ohio and New Mexico do not have to pay any other taxes to the Sacramento central government except tariffs.

California's top leaders have already complained about this. If they continue to leave it alone, what is happening in the United States today will be what will happen in the Republic of America tomorrow.

Now Liang Yao had just won a victory in a personal expedition and facilitated an alliance with France, laying the foundation for the establishment of the American Republic, and his domestic prestige had also reached a certain point.

Now is the best time to sort out and resolve the domestic central-local conflicts, while the state rights faction has not yet risen.

Once this window of time is missed, the cost of resolving issues between the central government and the states will only become higher and higher.

(End of this chapter)