1850 American Gold Tycoon

Chapter 583: One person made a fake, and the whole family was shot

"Continental currency?" When talking about paper currency, this was Robinson's first reaction. "Can it be successful just by issuing this kind of paper currency?"

Given the eventual fate of the Continental, Robinson is concerned about the future of paper currency.

Continental currency, the earliest U.S. dollar, is the continental U.S. banknote. These Continental notes were issued by the Continental Congress between 1775 and 1779 to finance the American Revolution. These notes were stamped with the words "United States" and were therefore called Continental dollars.

It's just that the fate of the mainland currency was the same as that of the early paper currency. It depreciated rapidly not long after it was issued, and soon became invalid. The reasons are nothing more than the following.

Inflation and devaluation: The issuance of too many Continental coins and insufficient precious metal reserves and credit endorsement from government banks have led to rapid inflation and rapid depreciation of Continental coins. Eventually it lost the trust and acceptance of the people.

Counterfeiting problem: Because the printing process of mainland coins at that time was relatively simple, they were easily counterfeited. As a result, the number of counterfeit coins is increasing, making people doubt the authenticity of mainland coins, exacerbating the crisis of trust in mainland coins.

Insufficient government credibility: The issuance of the Continental currency did not receive sufficient government support and credibility, and the American government at the time was unable to fulfill its promises while supporting the war.

Impact of the War: The continuation of the War of Independence and the uncertainty of the outcome of the war also had a negative impact on the stability of the Continental Currency.

Liang Yao has also considered the above-mentioned issues. Inflation and depreciation can be adjusted by controlling the issuance of currency. At present, the governments of the three West Coast states, especially the California government, have a good reputation and can provide a strong support for banknotes. Credit endorsement.

Furthermore, as the West Coast is currently the world's main producer of precious metals, there are enough precious metals to back paper currencies.

As for the problem of counterfeiting, the printing technology in 1859 has been greatly improved compared to 1775. As long as the printing of banknotes is sophisticated enough, the threshold for counterfeiting is raised, and those who forge counterfeit money are punished with capital punishment, this problem is not unsolvable.

"If paper currency can be circulated, it will be a great good thing for the public, business, and people. But I am afraid that like the Ming Dynasty treasure banknotes, it will eventually become waste paper."

Pan Zhengwei's first reaction was to think of Ming Dynasty treasure banknotes. He picked up a 2-dollar red banknote and looked at it carefully. He originally wanted to raise the issue of private counterfeiting, but when he saw that the banknote was used After the warning was printed in both English and English: Legal currency, if one person makes a counterfeit, the whole family will be shot, I suddenly felt that my worries were unnecessary.

One person made a fake, and the whole family was shot. If this slogan had been proposed by someone else, Pan Zhengwei might not have taken it seriously, but with Liang Yao's thunderous methods, he would really do such a thing.

Pan Zhengwei also understood why Liang Yao dealt with the Funing Group's case of minting private coins in such a high-profile manner. He felt that he was killing the chicken to show the monkeys and build momentum for the issuance of these banknotes.

Even the core members of the California consortium such as Jardine Matheson Group, Tongfu Group, and Boston Group who are involved in the minting of private coins will be shot. Others who are dishonest and want to use evil ways to print these banknotes must carefully consider before taking action. Weigh.

"As long as we have sufficient gold and silver as reserves to cope with private exchanges and do not issue banknotes indiscriminately, we can stabilize the value of banknotes." Liang Yao said, "Furthermore, using banknotes can not only provide convenience to the people, Promoting commercial trade can also reduce the outflow of our local gold and silver to a certain extent."

"Those Europeans, especially the British, are very smart. Will they accept our use of this paper currency in foreign trade?" Wu Yuanhua is also somewhat worried about the future of this paper currency.

"You are right, Europeans are not fools. If they can use these pieces of paper to exchange for gold, silver, kerosene and other hard currencies in Europe without hindrance, I think they will slowly accept this currency. "Liang Yao said.

At present, for trade in the West, Europe, and even parts of East Asia, in addition to using real gold and silver, which is more troublesome, the most commonly used cross-payment method is to use payment guarantees, money orders, and bank notes from major banks.

Each of these methods has its own shortcomings. The disadvantages of real money are that it is difficult to carry and the transportation and storage costs are high, especially when conducting large transactions.

Payment guarantees, bills of exchange, and bank notes from major banks are very dependent on the bank's credit and payment commitment, and there is a risk of bank default or non-payment. During this economic crisis, some banks in the eastern United States, such as the Bank of Philadelphia and the Manhattan Corporation Bank, refused to pay letters of guarantee and money orders from European customers. This gave European customers a small shock to the United States, but also damaged the United States. The credibility of banks and indeed the entire business community in Europe.

Of course, in addition to facing bank credit risks in cross-border transactions, low payment efficiency is also a problem. Payment for cross-border trade may require longer time and steps, especially for letter of credit and bill of exchange payment methods, which require relatively long processing and confirmation times. With the communication efficiency of this era, it is normal for a money order to be processed for a year and a half.

This is naturally not a big problem for the large chaebols present who have deep pockets and sufficient cash flow. But for small businessmen who pursue high capital turnover, it is very fatal.

This is not only true for international trade, but also for interstate trade within the United States. A harmonious situation like that in the western region, where bankers from all over the country are harmonious and allow branches to be opened in each other's major cities, is unimaginable in the eastern region.

Banks in the eastern states basically encircle their respective territories, monopolize the financial resources of their states, and refuse capital from banks from other states to enter their states to compete. Therefore, the payment efficiency of bank payment guarantees and bills of exchange within the United States is also appallingly low.

This situation continued until after Lincoln came to power, he promoted the modernization of U.S. dollar banknotes, formally stipulated the U.S. banknote currency system, and issued the first set of official U.S. dollar banknotes, which were later known as green bills. The barriers were gradually broken down.

Of course, Lincoln initially promoted the modernization of U.S. dollar banknotes. The main purpose of issuing banknotes was not to break trade barriers between states, but to raise war funds.

After the U.S. dollar became banknotes, the federal government started printing money and issued banknotes on a large scale to meet military expenditures. During this period, the Lincoln administration issued many banknotes in various denominations, including $5, $10, $20, $50 and even $100 bills.

The first set of banknotes in the western region was only issued with the highest face value up to US$10. Liang Yao was already quite restrained and conservative.

The war was fought not only on industrial strength but also on the economy.

The reason why the South was defeated by the North in later generations was not only because northern industry had an absolute crushing advantage over the South, but also because the elites in the North were better at integrating economic resources than the elites in the South.

In terms of wealth, the wealthy Dixie man who has been selling cotton for decades will never have less wealth than the Yankee man in the north. It's just that all the wealth of the Dixie Guys in the South was used on the handles of knives.

The Southern Army was short of supplies at the front and could not even pay military salaries. The rulers of the South would rather encourage civilians to donate jewelry and clothes to support the front line than touch the piles of gold coins lying in cellars and vaults of the slave owners in various states. and silver coins.

In order to cope with the coming crisis, Liang Yao must integrate the limited economic resources in the western region.

On a smaller scale, promoting the paper currencyization of U.S. dollars will help promote private trade and facilitate people's lives. On a larger scale, it will also help the government implement monetary policies to carry out macro-control of economic activities in the future. Of course, once a war breaks out and finances are tight, you can also learn from the federal government and start printing money to ease the pressure on military spending and survive for a while.