African Entrepreneurship Record

Chapter 466: Chapter 144 Loan

As development in East Africa is in full swing, other regions of the world are not peaceful. It can be said that the stable development of East Africa benefits from the Far East Empire sharing most of the pressure, with the British, Russians, and Japanese seemingly having made an agreement to invade the Far East Empire from three directions: southwest, northwest, and the western Pacific.

East Africa is not small on the world stage, but Europe does not have deep knowledge about it, while the Far East is the kind that cannot be concealed.

This time France did not join in because it was digesting the results of the Second Franco-Vietnamese War (1873 to 1874). On March 15, 1874, France signed the second Treaty of Saigon with Jiaozhi, stipulating: The French army would maintain order in the areas ruled by the Nguyen Dynasty; Vietnam recognized France’s indisputable control over Jiaozhi; and allowed the French to use the Red River as a trade route with the southwest of the Far East Empire.

Africa, as the last territory for European invasion, can still lie idle for a while. Clearly, the entire Far East region holds more attraction for the great powers than other regions and even Africa (excluding North Africa).

Japan’s probe on Egg Bay Island was thwarted last year, but the northwest and southwest crises are beyond Ernst’s intervention, as both regions are deeply located in the Far East’s interior.

In the southwest direction, the British have not yet taken action. If there are no unexpected events, a crisis will erupt after next month.

The northwest direction is actually an old problem, having erupted in 1864, but within the Far East government, a debate about coastal defense versus frontier defense ensued. This debate lasted ten years, truly efficient.

This year, the Far East government finally resolved to address the northwest issue, to recover lost territories, but even though the decision was made, no one was willing to pay the expense.

The empire’s finances were riddled with holes, with the national army being owed over thirty million taels in salaries, and crucial financial and tax territories being controlled by local forces like the Xianghuai (army), putting Mr. Zuo Jigao, who was actively waging war to defend the nation, in a difficult position.

May 1875.

Heixinggen Bank (Kaifeng).

As the provincial capital, Kaifeng was still relatively prosperous during this era, and simultaneously the easternmost part of the Huaihai economic zone, the focus area for Heixinggen Bank’s inland business, and a negotiation place for the Jin Merchants, Huishi, and Heixinggen consortium.

Today, representatives of the two rare merchant groups came to Kaifeng to discuss affairs with Mayweather, the person in charge of the Central Plains region for Heixinggen Bank, but they also brought someone else along.

”Mr. Mayweather, this is a key official of our Far East government, Lord Zuo Jigao. The reason for visiting today is actually to request something!”

Thinking they came to discuss business, Mayweather laughed, ”No problem, no problem, as long as it isn’t too difficult, I am very willing to serve.”

Qiao Zhiyong: ”To be honest, we’ve come to raise military funds. Surely your bank has heard something.”

Mayweather’s eyes lit up, ”Hades, serve tea to these distinguished guests!”

More than just hearing, in fact, all the major banks operating in the Far East knew. However, why Zuo Jigao would approach Heixinggen Bank was thanks to Heixinggen Bank’s two commercial allies.

Zuo Jigao had a good relationship with Hu Xueyan, and being stationed in the northwest, he had plenty of dealings with Qiao Zhiyong. As a result, following their recommendation, they came to Kaifeng together.

Zuo Jigao: ”Mr. Mayweather, this time we are borrowing funds to deal with the separatist forces in the northwest. The journey there is long, and combined with harsh conditions, the battle might be difficult to fight...”

Mayweather interrupted, ”Sir, just tell me how much you want to borrow!”

So straightforward? Accordingly, Zuo Jigao held up five fingers to see what the strength of this Heixinggen Bank was. He had previously been to HSBC, after all, HSBC’s reputation was bigger, and it had operated in the Far East longer.

”Five million taels of silver?”

”If your bank cannot provide this much money in a short time, that’s fine; we can still contact others.”

”Haha, just joking, five million taels aren’t a lot for us. I just wonder if this amount of money is too little for you? You must know that the separatist forces in the northwest are backed by the Russians.”

”Can your bank lend more?” I asked at HSBC before, and they said to come up with that much requires some operations, which is no small figure.”

”Haha, not to mention five million taels, we can lend even twenty million taels, but not all of it would be silver.”

”If it’s in British Pounds, that would also be acceptable.”

”It’s not, it’s East Africa’s Rhine Shield, which is also a national currency.”

Hu Xueyan explained from the side, ”Rhine Shield is a paper currency issued by the Kingdom of East Africa, one tael of silver equals five Rhino Shield in value.”

”Is this currency reliable?”

”It can be directly exchanged for gold at Heixinggen Bank.”

”!”

Mayweather: ”Rest assured, Sir. The East African Rhine Shield is just not widely circulated globally but is indeed a legitimate currency issued by the East African Kingdom, backed by gold, with very stable value.”

”But won’t buying materials with this currency be very cumbersome?”

”Don’t worry; just tell us what you need. Heixinggen Bank can provide it, be it military grain, uniforms, or arms. We can even bring in European military instructors.”

”This... seems we lack everything.”

Let’s just first see what conditions Heixinggen Bank can offer before worrying about others. Zuo Jigao dismissed his thoughts and said, ”Suppose, just suppose, if our government borrowed ten million taels from your bank, what conditions can you offer?”

Mayweather didn’t take the bait, ”That depends on what price your country can offer.”

Zuo Jigao tentatively said, ”My expectation is no more than five!”

”Deal!” Mayweather immediately responded.

”...” Did I overestimate?

”Of course...”

There were indeed conditions. Zuo Jigao guessed that Westerners wouldn’t easily agree. Currently, according to the international loan market price, the interest rate is roughly four percent. By only slightly increasing it, he feared no entity would readily agree.

Mayweather continued, ”We can lend to your country, but the corresponding procurement of military grain should be fully entrusted to our bank, and we also want a portion in terms of military equipment,” proposed Mayweather, the head of Heixinggen Bank’s Kaifeng branch.

Zuo Jigao: ”Does your bank also engage in the grain business?”

Hu Xueyan explained from the side, ”Mr. Zuo, Heixinggen Bank seems like a money bank, but it’s actually the top Western financial consortium, with diverse operations, and it’s a renowned major bank in the German region.”

Zuo Jigao: ”But this conflict is far in the northwest. Can you deliver the grain to the front line?”

Mayweather: ”This is easy. We have mature commercial routes, able to go from East Africa straight to Jiaozhou, and finally reach Kaifeng via land. Afterward, it’s up to you to handle the rest.”

Qiao Zhiyong, standing beside, said, ”We can handle this, guaranteeing no issues from Henan to the northwest.”

A commercial alliance isn’t mere words. Even without this war, Jin Merchants would still transport grain from the Huaihai economic zone to the northwest.

Zuo Jigao: ”Let’s not talk about the grain issue first; in terms of arms, I’m afraid!”

Mayweather: ”Haha, don’t worry, Sir. We’re quite adept in the arms business. Whether it’s German or Austrian weapons, as long as there’s money, we can obtain them. There are also cheaper options, like the outdated Dreiser rifles; we have a substantial stock, but more advanced rifles are also available. We have sources for Prussia’s most advanced Mauser rifles as well.”

Well, wasn’t it just a while ago that Li Hongzhang had acquired a batch of almost new Dreiser rifle production lines from the Germans, which suddenly became outdated?

Feeling that it wasn’t emphasized enough, Mayweather added fuel by saying, ”As everyone knows, your country’s equipment is mainly British. Although Britain is powerful, it’s mostly in naval matters. In terms of the army, we Germans are the world’s number one, even the once world-first French army has been defeated by us Germans.”

Facts of France’s defeat to the Germans could be something Germans boast about for decades to come.

”All these can be resolved, but what other conditions does your bank propose?”

”Aside from those, we want to see sincerity in the collateral; after all, this is a high-risk investment. There are feelings, and there is business, and we dare not randomly loan without collateral.”

”Surely there are no additional requirements beyond these?”

Mayweather shook his head, ”None.”

It’s not that Mayweather didn’t want to, but orders from above stated that high interest shouldn’t be demanded from the Far East Empire this time. Even though other banks were pricing it low, in Mayweather’s psychological expectations, the interest rate should at least be around seven.

Five is also fine, there are profits to be made. On the market, an interest rate of four is already considerable; ordinarily, people wouldn’t borrow without urgency. Heixinggen Bank’s business in the entire Far East region is similar to HSBC, so they engage in high-interest loans. For instance, in Japan and North Korea, loans can be taken, and if unpaid, population and resources can be used to repay the debt.

Trying to default is not possible, as there are three countries behind Heixinggen Bank, and generally, no country has the guts. Moreover, East Africa also has the capability to armedly collect debts; they might not handle Europe, but against you?