Nanyang Storm 1864

Chapter 63 The Minister's Promise

For several days, Zheng Guohui met secretly with the Americans to discuss relevant matters until this big deal was reached.

Wanguo Tongbao Company (Note: Primarily engaged in trade, not yet engaged in banking business.)
A simple internal signing celebration ceremony was held. Including Zheng Guohui and Zheng Guotai, there were only about 10 people present, all of whom were staff members of the American Embassy.

Zheng Guohui, holding a glass of champagne in his hand, gently clinked the glass with Minister Smith who came towards him with a cheerful face, then raised his glass and took a sip with reserve, behaving very gentlemanly.

"Mr. Zheng, I believe you are the court official who knows the West best, no doubt about it. The Wan Guo Tong Bao Bank will feel very honored to maintain long-term cooperation with you. We highly recognize your financial analysis." Minister Smith said sincerely.

Zheng Guohui responded with a smile;

"You are very polite, Your Excellency Minister Smith. This is merely a conversation between the two sides. I offer only my humble opinion, and I hope it is of some help."

"It's been a huge help. The share prices of more than 10 banks in the British and French Concessions in Shanghai have plummeted." Minister Smith sighed with emotion. He took a sip of the champagne in his hand and continued with a frown.

"Just yesterday, we received a diplomatic email from the Shanghai area. The truth may be even more tragic than you said.

In the British Concession, bank shares and real estate prices plummeted, and this trend seemed unstoppable. Three British banks had already gone bankrupt.

The first bank to close was Huilong Bank, which had come to China in the 19s. Lisheng Bank followed suit, declaring insolvency and ending its operations on the mainland.

Agala Bank, which was busy with large-scale capital increase and stock expansion at the beginning of the year, ceased operations in April due to debts of 4 pounds. It was the third British bank to go bankrupt.

We believe this will not be the last.

According to internal sources, the cash positions of Lihua and Huichuan Bank are tight, and their operating conditions are not optimistic.

"Fortunately, Bank of China is not among them. My advice to the Minister is to withdraw the money from the bank as soon as possible, and we will also exchange it into British pounds in cash to avoid unnecessary risks as much as possible." Zheng Guohui replied.

Minister Smith agreed with this suggestion and nodded repeatedly in yes.

In deep conversation

Zheng Guohui's analysis is related to the international market. The end of the American Civil War meant the complete lifting of the North's maritime blockade of the South.

The large amount of cotton grown by black slaves in the southern part of North America could thus continuously enter the European market, especially the United Kingdom, which accounted for more than 80% of the United States' cotton purchases.

A rapid resumption of the transatlantic cotton trade would fill the needs of Britain's textile factories.

Such market dynamics will inevitably affect mainland China's cotton exports to Europe, which will definitely be a catastrophic blow.

Due to the long transportation distance, the price of mainland cotton remains high. It is not on the same level of competitiveness as American cotton, which has convenient sea transportation. It is foreseeable that mainland cotton will lose the entire European market.

Shanghai, the main transit port for such bulk cargo, will inevitably be hit hard.

When the cotton trade was booming, these British banks lent large amounts of money to foreign companies and other businesses for re-export trade.

When the crisis hit, cotton speculators had serious inventory backlogs, the market stagnated, bank loans were difficult to recover, funds were tight in the Shanghai financial market, and real estate in the Shanghai Concession was also facing the risk of "collapse."

Another major event was the quelling of the Taiping Rebellion, with hundreds of thousands of wealthy families in Jiangnan returning home with their wealth. Real estate prices in the British Concession in Shanghai fell sharply, and the city lost its convenient "safe haven" status.

This can be seen in Jinling. Since the second half of last year, a large number of wealthy businessmen from Jiangnan have returned, resulting in the rapid prosperity of residential real estate in Jinling City and the increasing prosperity of the city.

on the other hand
A large number of houses in the British Concession were vacant, with long rows of houses waiting to be rented out, and the economic climate plummeted.

Industrial companies such as shipping companies were also hit hard by the difficulty in selling their stocks. "Risky" businesses such as expensively built docks and shipyards, large-scale gas plants, etc. also fell into difficulties, and capitalists were on the verge of bankruptcy.

The British Concession authorities fell sharply from unprecedented prosperity, with revenue plummeting and financial difficulties, and Shanghai went from prosperity to depression.

The failure of Shanghai's real estate and cotton industry speculation under the resonance of the two wars seriously affected the security and turnover of bank funds.

Starting from the first half of the year, Shanghai experienced the biggest financial panic since its opening as a port, with British trading companies bearing the brunt.

The famous firm, Jardine Matheson & Co., had a large amount of funds "trapped" in real estate and was heavily in debt. Its Shanghai branch went bankrupt in April, and Jardine Matheson & Co. and others were also hit hard.

Due to the lack of information, the American-owned Wan Guo Tong Bao Bank is planning to open a branch in mainland China, making a big push into the mainland market and ambitiously preparing to make a big move.

Zheng Guohui's wise analysis
It is believed that the market imbalances caused by these two domestic and foreign wars cannot be resolved in a short period of time and may be the beginning of the crisis rather than the end.

In the next three years from now, investing heavily in the mainland market will be extremely risky, so it is better to take it slow rather than hasty.

After seeing the market report from Shanghai, Minister Smith's heart was suddenly in turmoil, and he couldn't help but look at Zheng Guohui with higher regard.

He said;
"Dear Mr. Zheng, Wan Guo Tong Bao Bank is a large financial enterprise committed to transnational operations. We remain interested in the mainland, which is a very promising market.

Your advice helped us choose the right time and avoided a lot of unnecessary losses.

On behalf of the Bank of China, we would like to express our sincere gratitude for your valuable feedback. We will provide you with the goods you need and offer you some additional gifts. We also believe that Mr. Zheng is a reliable partner who can provide long-term cooperation.

Wanguo Tongbao Bank will provide more favorable conditions and treatment as an equal partner in future cooperation. This is my promise."

"Thank you very much, Your Excellency. We look forward to long-term cooperation with the Wan Guo Tong Bao Bank and are committed to maintaining this precious friendship." Zheng Guohui's eyes sparkled as he spoke, and he continued with a sincere attitude.
“Please believe us, Mr. Minister, when Mr. Joe Smith arrives in Zamboanga, we will further demonstrate our strength and welcome the Bank of China to start full-scale operations in Zamboanga.

This cooperation is just a good start.

I will reiterate
The friendly cooperation with Wan Guo Tong Bao Bank will last for three years, five years, ten years or even longer, and the scope of cooperation will be expanded to a wider range.

The amount of supplies we need will be far beyond your imagination."

"Oh, I believe you and look forward to working with you again."

"For another collaboration, would you mind if we pay you with high-quality copper ingots? This is a very sought-after industrial raw material."

"God! Mr. Zheng, you always surprise me again and again. Of course, we don't refuse any flexible payment terms, including the lovely copper. How much will it be?"

"Each time it's 2 to 3 million pounds, and the quantity will increase. You can get as much as you want."

"Great, cheers!" Minister Smith was delighted to hear this. This was another potential big deal.

Copper is widely used in the industrial field. With the rapidly growing industrial capacity of the United States, the annual consumption of copper will be an astronomical figure.

200 million pounds is less than 1000 tons, and it will be sold out as soon as it is shipped back to North America.

No matter how much copper there is, the United States will swallow it greedily like a hungry man. Even if the number is 10 times or more, the more the better.

Minister Smith was very kind and wanted to introduce Zheng Guohui to Prince Gong Yixin to show the close friendship between the two sides, but Zheng Guohui politely declined and asked to keep it confidential.

These foreigners still don't understand that officials having close relations with foreigners is not a good thing in the eyes of the court. Instead, it will arouse vigilance and exclusion, which will be counterproductive.

After the celebration ceremony at the Wanguo Tongbao Trading Company ended, Zheng Guohui got into the covered carriage in a low-key manner, and Zheng Guotai also got in. Then the covered carriage drove out of the yard of the Wanguo Tongbao Trading Company and went onto the nearby streets of Dongjiaomin Lane.

Zheng Fu, who was in charge of driving the covered carriage, turned left and right, and passed several intersections along the way, always keeping an eye out for people pretending to be peddlers at the intersections.

These people were subordinates who were deployed in advance to prevent the caravan from being tailed.

Sure enough, the imperial court still sent spies to keep an eye on embassies and foreign banks in various countries.

Not long after the covered carriage came out, it discovered a rickshaw following it from behind.

After passing the intersection, the people stationed behind stopped the rickshaw and when they were refused a ride, they got entangled with it.

When the rickshaw driver got rid of the entanglement and looked ahead, there was no trace of the covered carriage.

After shaking off its tail and making another circle, it successfully returned to the mansion and drove the covered carriage directly into the yard.

As Zheng Guohui got off the covered carriage, Zheng Gui came up to him with a beaming face and reported, "General, we've got word from the Lord of the Central Hall. Someone from Prince Gong's residence said the prince will be free to meet with guests in the afternoon."

"Oh, that's great, it's a double blessing." Zheng Guohui blurted out, his face full of joy.

It wasn’t easy. After being left out for six or seven days, there was finally some response from Prince Gong’s Mansion.

It will be easy if we get a response. In the Qing Dynasty, there is nothing that cannot be done with money.

If so, it means that not enough money is spent.

Even Prince Gong would be stunned if he received 2 taels of silver every month!

Zheng Guohui was absolutely confident about this, as it meant that the private salt business could not only continue for a long time, but could also be expanded to Changzhou Prefecture and Gusu Prefecture, and even northern Anhui Province was not impossible.

With the support of Prince Gong, who would dare not give him face?

Whether it's the Governor of Jiangnan, the Governor-General of Liangjiang, or the Governor of Jiangning, they all have to be Muggles. Isn't this a great thing?
So how much silver should I bring with me when I visit you this afternoon?

After much deliberation, Zheng Guohui decided to bring 6 taels of silver to the visit, which was three months' salary and was paid in advance.

It is already mid-May. At the end of the year, when we go to Beijing as usual to present the "charcoal tribute" silver, we can bring the remaining three months' worth of silver, and everything will be basically settled.

Even considering the extravagance of Prince Gong's Mansion, 6 taels of silver was not a small amount and was enough to attract attention.

Okay, let’s do this?

(End of this chapter)