LIGHTNOVELONLINE Chapter 432 Franc and the Gold Standard
Chapter 433 The Franc and the Gold Standard
When people in the Bastille Square heard that there was a currency regulatory department, and that banks and chambers of commerce were involved, most of their concerns were immediately eliminated, and they began to nod and discuss.
In fact, Joseph has absolute control over this regulatory meeting - it goes without saying that the royal family and financial officials will speak according to his requirements. He is still the largest shareholder of the French Reserve Bank. Even the French Chamber of Commerce is currently controlled by the capital aristocracy and still follows his lead.
So monetary policy is basically his decision. This is not to create a monopoly - at present, his financial concept is more than 200 years ahead of the world. Rather than letting today's economists try randomly, it is better for him to get it right in one step.
Of course, in the future, this regulatory agency will still have to standardize and form a scientific and effective currency management system. After all, he will grow old one day, and he cannot always rely on his "great prophecy" for financial management.
The reporters present had their pens flying and the crowd was talking a lot. Although they knew that the government had announced an important economic policy, no one realized that this would be an epoch-making moment for the French economy.
The series of monetary policies announced by Joseph are exactly the gold standard system that has been followed by all the powerful countries in the world since the mid-19th century.
For ordinary people, it seems that they can only use banknotes when buying things. The previous livres are still used as usual, and nothing is different.
However, at the national level, the underlying logic of currency and economics has changed.
After this, all French currencies were based on gold.
The livre can be used for trading, not because of its silver coin properties, but because the French government stipulates that 1 livre can be exchanged for 0.3 grams of gold.
In other words, if the French finance declared that the livre could no longer be exchanged for gold, then people would have to sell the silver coins as silver into francs before they could be used for circulation.
This may seem ordinary to people in the 21st century who are accustomed to relatively stable currency values and mature exchange rate systems, but in the 18th century, it was a pioneering move that could significantly improve the national economic environment!
You know, in this era, there is almost no concept of national legal tender. Whether it is rivers, florins, ducats, North African rial, or Ottoman Akche, as long as you take real gold and silver, it can circulate freely in the French market. Even pound notes were accepted, as they could be exchanged for gold coins at the Bank of England.
So you can imagine how chaotic it was when conducting trade.
For example, someone said that this batch of goods would be paid in ducats, but when the money was paid, it was found that half of the money was in rials, mixed with some Ecuits. Okay, don’t do anything else today, and let’s do the math slowly.
Different places have different exchange ratios between various currencies. For example, in provinces along the Mediterranean, 1 rial can be exchanged for 22 livres. After all, it can be used directly to buy things from North Africa. In northern France, it may only be worth 20 livres and 10 sous - purely based on its gold content.
As a result, southern merchants were extremely reluctant to sell their goods to the north. Even two towns not far apart don't like doing business with each other because they are accustomed to using different coins. This has seriously affected the country's business operations.
Don't underestimate the impact of this. Business relies on the circulation of money and goods. If the circulation is slightly blocked, the trade volume will be cut in half and then cut in half, let alone such a situation where everything is stuck.
In addition, the gold standard system can be used to prevent currency wear and tear, undervalued currency, and the impact of the rise and fall of the exchange price between gold and silver on the value of currency, etc.
At present, in the entire world, except for the United Kingdom, which implemented some gold standard models under the auspices of Newton, yes, the man who was beaten by Apple, all other countries still use precious metals for transactions.
It was Newton's operation that made Britain's business environment second to none in Europe. Coupled with their excellent tax policy, it paved the way for them to become an empire on which the sun never sets.
Now, Joseph is about to introduce a complete version of the gold standard system to France. The crown of Europe's best business environment may soon change hands.
In addition, the implementation of the gold standard system also gave the government more ability to regulate financial markets, and the exchange rate was very stable. Therefore, until the 1970s, many countries were still using the gold standard.
Joseph had also been planning to implement the gold standard for a long time, and he chose this time point after careful consideration.
The first is that France has recently gained a large number of overseas markets. According to the news returned last week, Moro and Ney's legions have completely controlled the city of Tripoli and continue to march eastward.
70% of Tripoli's population is concentrated in Tripoli city and surrounding areas, and the east is relatively desolate. Morrow and the others should not encounter any decent resistance. It is estimated that they should have arrived in the Sirte area in the east by now [Note 1].
Together with Tunisia and the Annaba region of Algiers, France now has a solid foothold in central North Africa. Although these places are not large in area, they are fertile lands and rich in products. They are also transfer stations for Mediterranean trade, and the trade volume is very considerable.
In addition, in the Walloon region of the Southern Netherlands, French investment has begun to take shape recently, and a large number of coal mining and coal refining companies have been established. And as a fertile European region, its economic capacity is almost equal to that of the entire Tunisia.
At the same time, after more than a year of continuous promotion by Joseph, France's industrial development has also achieved remarkable results.
At present, Lyon has put into use more than 200 automatic looms and nearly 3,000 spindles, and the number is still increasing. With the supply of wool from New Zealand and cotton from Russia, the cost of textiles in Lyon has been reduced to about 120% of that of the British.
You know, this figure was at least 150% a year ago. If you take into account France's fashion appeal and advantages in style design, Lyon's textiles can already grab a large piece of meat from the British in Europe.
There are also winemaking industries in Bordeaux and Champagne, steel and steam engine industries in Nancy, papermaking, luxury goods, machinery industries in Paris, etc., which have made great progress. And industries such as gas lamps, chemicals, and furniture are also waiting to be "online".
Now there are a large number of factories and immigrants who are looking forward to obtaining funds.
And Joseph can take advantage of this opportunity to let banks issue a large amount of banknotes as loans.
Afterwards, the factory will use these francs to purchase equipment and raw materials, or pay workers wages. Immigrants will also use it to buy daily necessities from locals or hire locals.
In this way, it won't take long for the franc to become very popular.
[Note 1] At the end of the 18th century, the relatively wealthy Benghazi region was still under the control of the Egyptian Mamluks, so it did not belong to Tripoli. The territory of Tripoli ended at Surt to the west of Benghazi, and the area was not large.