Persian Empire 1845

Chapter 577 French Loans
The following morning, the new bank's management team took over as scheduled, and Ottoman Credit Bank was officially renamed "Eurasian United Bank." It was jointly owned by Lion Bank, Crédit Agricole, Sepa Commercial Bank, and more than thirty local commercial banks, with Salkisyan serving as president.

The first management meeting was underway. Looking at the Ottoman map on the wall, his eyes gleamed with ambition: "From today onward, we will integrate Ottoman financial resources and open up trade routes across Eurasia. Before long, the Eurasian United Bank will become the most powerful financial institution in the entire Mediterranean region!"

A round of enthusiastic applause filled the conference room, everyone brimming with anticipation for the future. Meanwhile, faraway France, an even greater financial storm was brewing, a storm that would not only sweep across Europe but also reshape the global economic landscape.

In order to quickly raise compensation, the French government first chose the most direct but also the most dangerous method—the excessive issuance of paper money.

The Bank of France suffered heavy losses in its gold reserves during the war, and the issuance of paper money, no longer adequately backed by gold, surged threefold within a year. At this point, the actual purchasing power of one franc was less than 60% of its pre-war value.

Bread prices quadrupled within six months, making it difficult for ordinary families to afford daily sustenance even with their best efforts. Prices of necessities such as coal and cloth followed suit, and the streets were filled with ordinary people shivering because they couldn't afford fuel, as well as small shops going out of business due to soaring prices.

The war also severely damaged the industrially and agriculturally developed northeastern region. The suppression of the Paris Commune uprising caused immense destruction to Paris. Even worse, France was forced to cede the provinces of Alsace and Lorraine, both renowned for their textile and steel industries and rich in mineral resources. France had historically lacked coal resources, and with the cession of the iron-rich Lorraine region to Germany, the previously not-so-scarce iron ore resources became increasingly scarce. The severe shortage of these two main industrial raw materials, coupled with the loss of these two highly industrialized provinces, severely hampered the development of French heavy industry.

Thiers had to seek help from the Bank of France and the National Assembly, but the issue of reparations led to their scathing criticism. Eight billion francs! France wouldn't be able to recover for the next twenty years.

The bankers were overjoyed; the profits were unimaginable. Even just 1% would amount to 8000 million francs. When the French government began its first bond sale of 20 billion francs, all the banks sprang into action, determined to secure a share.

When Ghahraman arrived in Paris, he saw a city still reeling from the fighting; everywhere was in ruins. The week of bloodshed had destroyed a large portion of the buildings, and many people were reportedly beginning to rebuild their homes.

Upon arriving at the Élysée Palace, this magnificent building is one of the few survivors of the Paris fire. Now the presidential residence, the president's secretary greets us at the entrance.

"Welcome, Mr. Ghahraman. His Excellency the President has been waiting for you for some time."

Thiers was also troubled. Besides the 20 billion euros in reparations, France needed substantial loans to restore Paris and the national economy. Meanwhile, the Jewish bankers were underwriting bonds, so they had to find other lenders. And that's how they found Gahraman.

There was another reason for finding Gahraman: he wasn't a Jewish banker, which would prevent him from having any secret dealings with them. This would also allow France to secure better terms; France couldn't afford any more turmoil.

"Ah, Mr. Gahraman, I've finally been waiting for you."

"Mr. President, you are too kind."

Thiers gestured for Ghahraman to sit down, his fingers unconsciously tapping the economic report spread out on the table. The report was covered in alarming red annotations: "Industrial output has fallen by 42% compared to pre-war levels," "Unemployment rate exceeds 25%," "Reconstruction funding gap estimated at 100 billion francs." "Mr. Ghahraman," Thiers said in a low voice, his tone carrying a barely perceptible plea, "the 80 billion francs in reparations are a mountain, but rebuilding homes and feeding the people are equally urgent matters. Those Jewish bankers are eyeing bond profits but are indifferent to the nation's fate; they are only willing to provide high-interest, short-term loans—this is undoubtedly drinking poison to quench thirst."

Ghahraman picked up the black tea his secretary offered, his gaze sweeping out the window—the lawns of the Élysée Palace had been restored to their former neatness, but in the distance, the Latin Quarter still bore the rubble of burned buildings, scaffolding standing like a steel forest. "Your Excellency, I wonder what you need me to do?"

Thiers approached Ghahraman and said, “Money, the more the better. The government is short of funds and needs start-up capital to keep things running. But the government doesn’t trust Britain and other countries, so it has no choice but to turn to you.”

Ghahraman's mind raced; a large portion of his earnings had already gone to Iran. However, he still had 300 million rials in his account, which, at the current exchange rate, was roughly 12 billion francs. He could also raise some more from other banks.

“I can provide France with a long-term, low-interest loan of 6 million francs, with an annual interest rate of only 3.5% and a repayment period extended to 15 years,” Ghahraman said firmly, but then added, “but I have two conditions. First, we need to acquire a 20% stake in French Railways, especially in the southern trunk line connecting Lyon and Marseille. Second, the French government must allow us to establish a dedicated bonded zone in the Port of Marseille for the storage and transshipment of goods, with tariff exemptions for 10 years.”

Thiers's expression instantly turned serious. Railways and ports were the lifeblood of the French economy; relinquishing even a portion of their rights was tantamount to opening a hole in the nation's veins. But then he considered that the Bank of France's gold reserves were less than a third of their pre-war levels, and the currency was depreciating like a runaway horse. If they couldn't secure low-interest loans quickly, let alone reconstruction, they might not even be able to guarantee the money for next year's spring planting.

“Of course, if Your Excellency finds this too difficult to accept, we can hear about another proposal.” Gahraman then changed the subject. “The railway can be abandoned, but Mediterranean ports such as Marseille and Toulon need to be acquired. In addition, tariffs on certain goods need to be reduced or exempted.”

He paused, then added, "Furthermore, I need a written commitment from the French government guaranteeing that it will not requisition or nationalize our shares in the port under any pretext within the next 10 years. After all, I'm here to help France through this difficult time, not to do a deal that could go down the drain at any moment."

Thiers fell silent. He looked out the window at the scaffolding in the Latin Quarter, thinking of the starving and freezing civilians on the streets, the bankrupt shops, and the members of the National Assembly who avoided the word "reparations" like the plague. 6 million francs, an annual interest rate of 3.5%, and a 15-year term—these were terms that Jewish bankers wouldn't even mention as "lifesaving money." While Ghahraman's demands touched upon national interests, they were far from warranting a "cutting off a piece of flesh."

“It seems I have no other choice,” Thiers said with a wry smile. “I hope you will keep your promise.”

Gahraman stood up and nodded slightly: "Your Excellency, rest assured, I never do anything that my partners will regret."

Thier and Ghahraman signed a loan agreement, marking the first major loan disbursement for Iran. This is Iran's first loan to a Western European country, a landmark achievement.

As he left the Élysée Palace, the Parisian sunset cast a warm golden glow on the burnt ruins, gilding the blackened wood. Ghahraman looked up towards Marseille in the distance, a barely perceptible smile playing on his lips—with the port and tariff reductions secured, Iran had taken the first step in opening up trade routes between Europe and Asia.

(End of this chapter)