French Empire: But Napoleon IV

Chapter 119: Some Detailed Discussions (Seeking initial subscriptions, collections, and continued reading)

"Let's talk about the interest rate, Baron. A 6% annual interest rate is too high. This is wartime, and what France needs is support, not usury. I think we can only accept a maximum of 3.5% annual interest."

A 3.5% annual interest rate is not low, but it's nowhere near high either.

During the normal pre-war period in France, long-term perpetual government bonds and large government loans with maturities of 10 to 30 years were at a level ranging from 3.5% to 4.5%.

Even the main bond yield isn't 3.5%, it's at around 4%. However, 3% is the benchmark for French government bonds across the board, and the annualized yield in the secondary market has long been stable between 3.2% and 3.8%.

In peacetime, a 3.5% figure would likely attract many bankers willing to take on such a large deal.

But now... just like Mr. Rothschild with his furrowed brow, I believe all bankers would back down upon hearing this annual interest rate.

Due to the outbreak of war and deteriorating fiscal conditions, sovereign loans have soared to an annual interest rate of 5.5% to 7%, while temporary short-term treasury loans have even reached 7% to 8%.

From this perspective, the Rothschild family didn't really cheat Eugène; the 6% annual interest rate was quite fair, even a bit low.

Clearly, they wanted to use this interest rate to secure their other conditions, especially the passage of the last long and complicated condition.

The conditions have indeed been met, but the 3.5% annual interest rate proposed by Eugène has really stumped Alphonse, as this rate is indeed a bit too low.

"Your Highness, you must understand that France's credit rating is currently very low. A 3.5% interest rate cannot even cover the risks... Perhaps 5% is a range that we can negotiate."

"Baron, the terms we're discussing aren't about what you have, but what I have. If we lose, a higher interest rate won't help. And I think that by proposing these terms, Baron, you still hope that the Empire will win this battle."

Since the goal is for the Empire to win in the end, I think 4% is the best offer for both of us, and I need the first payment of 60 million francs to be in my account by the day after tomorrow.

"the day after tomorrow?"

Camondo, who had been watching the negotiations from the sidelines and favoring the Bonaparte family, and thus had not spoken up until he heard Eugène's request, couldn't help but interject.

6000 million, not 6000 yuan, that's no small sum.

Camondo's intervention was more about easing the tension; the two men's negotiations had become too confrontational, which was not what Camondo wanted to see.

"Your Highness, sixty million francs is no small sum, and we need time to raise the funds."

"Kamondo, I know your difficulties, but I don't have time to wait."

Knowing their predicament, Eugene still shook his head and replied to Camondo.

Eugene was willing to be more tolerant of Cammondo, who was aligned with Bonaparte. However, time was of the essence, and under normal circumstances, he wouldn't have wanted to make things difficult for a banker who belonged to their camp.

"As everyone knows, the Prussians are on their way. If the funds don't arrive soon, Paris is doomed. You, Camondo, know this better than I do."

Actually, that's not the case. The Bank of France still has gold worth over a billion francs, but most of that is used as reserves.

Gold is needed to support foreign exchange, national credit, and currency anchoring.

It is a consensus among countries that if you don't know how to use gold reserves, you shouldn't use them. Therefore, Eugene hopes that their loans can be in place as soon as possible.

With the remaining 20 million francs in his hands and the government's 100 million francs available, it wouldn't last long.

Knowing how critical the current crisis is, he truly hopes the Empire will prevail over Prussia.

After whispering to each other for a while, Rothschild and Camondo exchanged a glance as they parted.

Clearly, the two reached a consensus during their communication. Rothschild then looked at Eugène, nodded, and indicated that he agreed to Eugène's conditions.

"No problem, Your Highness, we'll proceed the day after tomorrow as you wish. However, we have one condition: the decree you signed must promise that the new government will not confiscate private property without parliament's approval. This decree must be issued immediately after the confiscation of the rebels' property."

"There are no problems. I will sign this decree tomorrow and hand it over to Olivier. The government will publish the decree after it has investigated everything."

This decree shows that the Rothschilds were still afraid of Eugène seeking revenge later.

He was not afraid of death, but he was obsessed with money. He could not accept that Eugène would confiscate their huge family business when he settled accounts later, and he could not accept leaving the French region.

Alphonse couldn't accept the fact that he had finally gained a foothold in such a huge market and was now about to hand it over to someone else.

Seeing that the negotiations between the two were progressing well and that the agreement was about to be finalized, Camondo, who was not far away, raised his hands to indicate that he also had suggestions to make.

"Your Highness, I have a suggestion regarding the liquidation of the Republican bankers' assets."

"Kamondo, just tell me."

"I suggest the government avoid a one-time liquidation. Perhaps we could freeze their assets first, and then have a special financial court handle the case step by step. This would avoid causing significant fluctuations in the financial markets and would give the market a buffer period, allowing us more time to digest these assets."

Knowing that this was to facilitate their takeover of the market, Eugène, who was willing to spend a fortune to buy a horse's bones, hoped to show capitalists and nobles in other places how he treated his own people.

Moreover, doing so can indeed stabilize the market and allow the Bank of France, with its size, to grab the biggest slice of the pie.

Therefore, Eugene, having no reason to refuse, readily agreed after only a moment's hesitation. "I must admit, Camondo, you make a very good point. Let's do as you say. We'll freeze the assets first, and then proceed with the investigation step by step."

The agreement has been largely finalized. During the negotiations, both Rothschild and Eugène deliberately avoided discussing one point: the issue of nation-building.

Yes, in order to gain greater support, Eugène had hinted to the Rothschilds that France was willing to support the restoration of the Jewish state and provide some assistance for it.

Unfortunately, Alphonse Rothschild did not respond to Eugène's signal. But then again, the empire was in such dire straits that such empty promises would be unrealistic to expect from a seasoned financier.

However, judging from tonight's events, the promise has been effective. Alphonse, the opportunist, has already leaned more towards the Empire when the situation was unclear, and has become much easier to talk to.

Perhaps, after the war, the two of them can sit down and have a proper talk about this issue. Eugène is not just making empty promises; he genuinely intends to support the Jewish people's desire for a state.

Jews have power and capital, while France has a large amount of land that it cannot develop, and can also draw some of its vast Jewish capital out of the country to facilitate its governance.

From any perspective, this is a matter of only benefits and no drawbacks. Faced with the vast Jewish capital, the empire cannot resort to massacres, so it can only try to lure them out, and establishing a nation is a very good way to do that.