My Italy - Chapter 687 Collateral

The Battle of Paris caused huge casualties of nearly 1.5 million people, shocking countries all over the world. This huge number scares other countries that are interested in fishing in troubled waters. This is too scary.

However, although most countries have vowed not to join this bloody war, there are still countries that are overjoyed.

Among them, the most important and most influential one is the United States.

As the world’s largest industrial country, the United States, protected by two oceans, is often called the chosen country.

Abundant food and minerals and a superior external environment have created a unique industrial base in the United States.

The United States has always had a unique appeal to Europeans, especially the poor. The United States brought abundant human resources and also allowed the United States to accelerate the progress of industrialization.

Especially the outbreak of World War I caused a large number of wealthy people to flee to America, which was far away from the war.

The rich and industrialized United States has become the first choice of the rich.

These wealthy Europeans who fled to the Americas brought a large amount of capital and technology to the United States. Take the New York stock market as an example. After the war broke out, the New York stock market was closed for four months in response to public panic. Later, after seeing the war getting bigger and more brutal, Americans slowly realized that this war allowed the United States to provide ammunition, raw materials, and other commodities to both warring parties, which would lead to a huge increase in public interest in stocks.

Sure enough, after the stock market opened, the stock index soared, with an increase of up to 5%, and then the stock index continued to rise. By October, the New York Index had risen 120% from the close, and the situation was excellent. The reason why the United States is in better shape than in history is that the Allied Powers attacked more fiercely, and the European Entente suffered much greater losses than in history.

As for the United Kingdom, the mainstay of the Allied Powers, its Royal Navy, which is the foundation of the country, suffered two consecutive defeats in the North Sea and the Mediterranean, with considerable losses. This performance was really shocking, and it could not maintain the arrogance it had before the war.

Not to mention the land battles, except for Austria-Hungary, which was a little more arrogant, Germany and Italy were both very fierce, and France occupied a large area of ​​territory. If it hadn’t been for the tragic victory in the Battle of Paris, the Allies would have been defeated this year, and the United States would have been worried about the money it lent.

Yes, before the war broke out, Britain and France held US$3.7 billion in US debt and were creditor countries of the United States.

After the war started for more than a year, the United States has not only paid off its debts, but also owes the United States $2.3 billion in debt. France, which owes the most, owes the most, with a total debt of US$1.4 billion. The UK is in much better shape. It only owes US$700 million, and the remaining US$200 million was borrowed by Russia.

Compared with the Entente camp, the Alliance camp is much worse. Since the beginning of the war, the total amount has not even reached 100 million US dollars.

The main reason is that the Atlantic Ocean is basically filled with British and French ships. The German navy is trapped in the North Sea, and Italy is in the Mediterranean. Currently, neither Germany nor Italy has the ability to open the Atlantic Ocean, so even if Rose wants to trade with the alliance camp, it will be quite difficult.

Of course, compared with Britain and France, which have accumulated wealth for hundreds of years, it is difficult for the alliance camp to earn much money. This is nothing more than the fact that American factory owners would feel more comfortable putting away pounds and francs.

However, it is not good to charge more pounds and francs, because on the one hand, they will depreciate, and on the other hand, it is difficult to exchange them for gold. As a gold standard society, the difficulty of converting currency into gold is a huge social problem. This will lead to a significant devaluation of the currency, and will also make people reluctant to accept it.

Of course, the best way is to borrow money, so after the victory in the Battle of Paris, a wave of proposals for issuing national debt was submitted to Washington.

At this time, the issuance of debt by Britain and France in New York required the approval of the U.S. government. A series of previous defeats made British and French debt unsaleable in New York, even if the interest rates were raised. After all, although people want their high interest rates, they are still afraid of losing their principal.

Taking advantage of the victory in Paris, Britain and France went all out to publicize this victory, calling it a turning point in the war. It is believed that after the victory in Paris, Britain and France obtained the password to deal with the Germans. Next, as long as we follow this method, we can use battles to drive the Germans out of France, and then the British and French forces can invade Germany and push them across the Rhine River all the way to Berlin.

Of course, this is the worst situation for the Germans to refuse to surrender. If everything goes well, they will declare surrender after crossing the Rhine because all their troops have been exhausted. In terms of strength consumption, Britain and France had huge colonial armies. Even if ten of these people died and one German was wiped out, they would still make a profit.

Don’t underestimate the methods used by Britain and France to guide public opinion. A defeat can be promoted as a victory, let alone a victory in itself.

Therefore, under the propaganda of victory, the application submitted by Britain and France to issue bonds of up to 1.5 billion US dollars in New York was not placed in front of President Wilson. Such a large bond issuance quota cannot be decided by just the New York Stock Exchange.

President Wilson, who had been in office for almost two years, pondered for a while while looking at the bond sale application submitted by the British and French Treasury Departments.

“What’s the reaction from Wall Street?”

Faced with the president’s inquiry, the stock exchange opened its mouth. “Wall Street hopes to undertake the issuance of this debt.”

Wall Street definitely supports it. This time, Britain and France have made huge profits. This is not the style of Wall Street. What should we do if the British and French bonds fail to depreciate or become useless paper?

This is a problem for those who buy bonds. Bonds are risky and need to be cautious when entering the market. They can definitely ask the government to help them demand wages by force, and Wall Street is very willing to provide financing to the government.

After asking about the stock exchange, President Wilson looked at others. “Do you think this debt can be issued?”

Faced with the president’s words, Secretary of the Navy Josephus Daniels spoke at this time. “I don’t know if this debt is allowed to be issued, but I think we cannot lack the ability to collect debt.”

The Secretary of the Navy, a former publisher, was a model of a civilian navy. As soon as he took office, he rejected the naval officers’ request to establish a staff, and believed that this was to Prussianize the U.S. Navy. Later, he suppressed the conspiracy of the navy’s top brass and supporters to formulate naval reforms, and dismissed seven conspirators in one go. Senior naval officer positions.

It can be said that he suppressed the navy from top to bottom and was quite skillful.

Of course, he also developed the navy and constantly applied for shipbuilding. Of course, in addition to expanding the strength of the navy, he also gave benefits to the then chairman of the U.S. Senate Naval Affairs Committee, Benjamin Tillman (the backer), and handed over orders to him. businesses in the constituency. Although the construction of warships was a bit slow for the first time, the Navy Minister was not in a hurry, and he was not in a hurry to go to the battlefield now.

Under the leadership of this wise Secretary of the Navy, the current training level of the U.S. Navy has skyrocketed. It has a reloading speed three times lower than that of the navies of Great Britain, Germany, Italy and other countries, and has a dispersion area that is more than twice as high. If others found out, they would definitely be shocked. What kind of African navy is this?

Daniels’ words made the audience burst into laughter.

At this time, Army Secretary Newton Buck said with a smile, “I agree with Daniels’s opinion. Our Army also needs to increase its ability to collect debts to ensure that the money lent can be recovered.”

It is obvious that the two military chiefs are asking for more military spending.

Wilson said nothing and looked at the other one, Secretary of State Robert Lansing.

“I think the current situation is because we have agreed to the debt applications from Britain and France, but the amount has to be reduced to some extent. In addition, we can ask for a mortgage, such as Bermuda.”

Okay, everyone understands what Secretary Lansing said. This requires taking collateral.

Faced with the Secretary of State’s proposal, Wilson looked to the others. “What’s Lansing’s idea?”

“Yes, that’s entirely possible. At least there must be collateral, otherwise we will be too risky.”

“Yes, only those we can get. The ones from the Americas and the Atlantic are very good.”

…

In the midst of everyone’s discussion, President Wilson finally agreed with the Secretary of State’s words, and then President Wilson looked at the Secretary of the Treasury, Mr. McAdoo.

“President, please be assured that I will work with the Secretary of State to express our attitude to Britain and France.”

After receiving the Secretary of the Treasury’s reply, President Wilson looked at the two secretaries of the Navy and the Army. “Your proposal is good. I will push for it to be passed and you can come up with a feasible and feasible plan.”

“OK.”

As for why the United States actually asked for collateral, in the final analysis, the Entente camp was too overwhelmed. Although it has made a strong effort, the United States is afraid of shrinking again, so it is not surprising that it needs collateral.

Faced with the United States’ request for collateral, Britain and France were naturally unwilling. But with the Treasury Secretary and Secretary of State insisting that if you want to issue huge debts in the United States, you must have collateral, which is your responsibility to the American people. Faced with the unrelenting conditions of the Americans and the urgent domestic needs, Britain and France had no choice but to grit their teeth and agree. Take out American islands and colonies for mortgage.

However, since a mortgage was required, Britain and France naturally had to borrow more. After packing up a large package of North American islands, Caribbean colonies, etc., Britain and France asked for a debt of US$2.5 billion. After some haggling, it was eventually reduced to $2 billion.

From then on, the issuance of bonds was accomplished.

Compared with Americans who are not happy, Britain and France are more happy. I am not afraid that you will become my creditor, but I am afraid that you will not lend me money.