Elonc Mirabeau, as a capitalist, naturally had frequent dealings with banks, and knew this man was Necker’s steward, whose death was likely linked to the Marquis of Ludo.
Mirabeau heaved a sigh and thought wistfully, “This steward is truly a loyal servant who values deep relationships…”
Before long, the carriage stopped outside the University of Paris.
Mirabeau and his servants and guards alighted, to be greeted by a large group of the school’s senior officials, who bowed and greeted him attentively.
Now a Minister of Industry, he was a senior official who could speak before the King; naturally, the school authorities did not dare to neglect him.
Like stars circling the moon, the group escorted Mirabeau to the main building engraved with the word “Sorbonne,” where colourful ribbons were everywhere, bands played in unison, and the wooden sign at the entrance bore gold-embossed letters — The French Standards Committee Measurement Standards Release Conference.
The journalists lingering outside recognized Mirabeau. Dozens of them suddenly gathered around, bombarding him with loud questions.
With the guards’ escort, Mirabeau made his way through the crowd of journalists and headed to the first floor’s hall with the school officials, where many old friends awaited.
The venue was an assembly of stars, with nearly all of France’s famous academics present if they could attend. There were even a large number of foreign scholars present.
With Mirabeau at the forefront, all government officials related to the industrial sector had also arrived, along with people from Paris City Hall, packing the large hall so tightly there was barely room to move.
It took Mirabeau over ten minutes to exchange greetings with everyone before he finally managed to take his seat at the front and heave a sigh of relief.
He glanced at his watch; there was still a little time before the conference would start. He started a conversation with the thin-faced, bushy-browed, long-nosed middle-aged man beside him, “Dear Sylvain, how’s the situation in Nancy?”
The middle-aged man showed a weary smile, “Look, assigning me such a high position has really put me in a tough spot. I’ve been busy for over two months, and only one-third of the track to the mining area in Nancy is finished. I’m utterly exhausted.
“The good news is that a large coal mine has been discovered on the western side of the mine, and the coal seam is quite shallow. Now, the daily coal production is tens of thousands of pounds, and it is still expanding.”
“You’ve done very well, indeed,” praised Mirabeau, “That area is rather remote and funds are tight; laying the tracks is certainly no easy task.”
This scholar named Jean Sylvain Bailly was the current assistant to the Minister of Industry of France. At the time Mirabeau recommended him, he worried there would be resistance, but the Crown Prince seemed to appreciate him and agreed immediately.
Joseph certainly remembered Bailly, a Feuillants party heavyweight with decent administrative skills, and as a scientist, was quite suitable for the industrial position.
Bailly continued, “I’ll try to speed up. Perhaps you could allocate more British technicians to me. I must admit, they lay the tracks remarkably fast.
“Once this railroad is finished, the output of the United Steam Engine Company will soar. That British engineer is always complaining to me about the lack of pig iron, while the mine area is full of iron ore.”
Mirabeau nodded; France was suffering from a severe drought, and pumping machines, that is, steam engines, were crucial for ensuring agricultural output. The Crown Prince had repeatedly instructed that production must be increased as quickly as possible.
He contemplated, “Some crude iron has been shipped by Russian merchant ships recently. I’ll see about getting some for the steam engine factories.”
The quality of Russian iron ore was somewhat superior to France’s, but the transportation costs were also higher. To resolve the iron shortage, it would be necessary to expedite the exploration of iron mines in France and enhance smelting techniques.
Mirabeau added, “Once the track construction in Nancy is finished, you’ll need to head to Saint-Etienne.”
Bailly looked surprised, “You mean the new industrial development area there?”
“Yes, His Royal Highness the Crown Prince has already asked me to prepare the planning proposal.”
“But that would require a substantial investment, wouldn’t it?”
Mirabeau smiled slightly, “Do you know about the Bank of France Reserve issuing banknotes?”
“Of course, I do. Half of the salary I received last month was in banknotes,” Bailly’s tone was clearly disgruntled. There is currently only one branch of the Bank of France Reserve in the entire Lorraine Province, a bit far from Nancy, and he had wasted quite a bit of coach fare to exchange the banknotes for silver coins.
And that is for those in the provinces. If you were an official in Paris, your salary would be entirely in banknotes.
Mirabeau lowered his voice, “As far as I know, the Cabinet will soon pass the ‘Banking Industry Management Bill.’
“What is that?”
“Essentially, it means all banks will be under governmental supervision. For example, banks will have to undergo fiscal inspection by the government, accept banknotes from the Bank of France Reserve, and moreover, hand over 10% of their deposits as a reserve fund.”
Upon hearing that banknotes could be exchanged at any bank, Bailly’s expression instantly brightened, but then he asked, “What do you mean by ‘reserve fund’?”
“It’s meant to prevent the bank from accidentally going bankrupt and being unable to pay back depositors. Therefore, 10% of the funds must be given to the government for safekeeping. If anything goes wrong with the bank, the government can return this money to depositors. It’s said that this 10% is just the start; later on, the proportion may be increased.”
Reserve requirements are a common financial regulatory tool in later eras, but they first appeared in the mid-19th century. This is also one of the major powers of central banks in various countries.
After these past few months, the Bank of France Reserve had completed the absorption and reorganization of the banks it had merged with. Thus, implementing the “Banking Industry Management Bill” and completing the transformation of the Bank of France Reserve into a central bank was immediately put on the agenda.
What Mirabeau didn’t know was that the “Banking Industry Management Bill” would also stipulate that the banknotes issued by the Bank of France Reserve would become the sole legal tender of France, with their value directly linked to gold and silver. The current practice of paying officials with paper currency was to get everyone accustomed to it ahead of time.
With a central bank in place, along with the enactment of the banking law, any bank that wanted to collude with officials to profit or threaten the French government with loans would have to think twice.
As for any banks that might object?
There just weren’t any.
Almost half of the big shots in the Banking Guild were under Joseph’s control. The influential banks in Paris had mostly signed agreements to accept paper currency, coupled with the government’s focus on financial issues, and the current influence of the Bank of France Reserve, non-compliant banks were destined to be only knocked about.
Mirabeau’s voice dropped even lower: “The Crown Prince hinted to me that the reserve funds collected by the Bank of France Reserve would be channeled into the Industrial Development Fund.”
Bailly immediately understood and smiled with comprehension. The Industrial Development Fund was intended to support French industry; as long as the fund had money, it would naturally be invested in the development zones.
As they were speaking, Venio from the row behind came over, bowed to them, and then asked Mirabeau, “Count Mirabeau, excuse my boldness, but I heard that the Cabinet is going to issue a ‘Guild Restructuring Bill,’ is that true?”
Now serving as a Commissioner for Industrial Technical Management, subordinate to the Minister of Industry, Mirabeau didn’t hide it from him: “Indeed there is such a bill, and it is to be implemented soon.”
“According to the Crown Prince’s wishes, all existing guilds will be abolished. The government will organize personnel uniformly, assess the technical abilities of craftsmen, and issue certificates.”
Enthused, Venio said that his job was to promote the transformation of old workshops into factories, but the current guild system caused him great impediments. In some places, guilds even threatened workshops en masse, forbidding any improvements in management.
Mirabeau continued, “But as you know, guilds have a substantial influence, so abolishing them will have to be carried out gradually. The first step might be to turn the current guild leaders into government employees and then abolish the apprenticeship system. To completely remove the guilds’ influence on factory production will take at least a year or two, or even longer.”
At that moment, academics such as Lavoisier, Lagrange, Monge, Condorcet, and others arrived at the front of the hall.
The Chancellor of the University of Paris presided over the meeting in person, made some routine pleasantries and exchanges, and then announced loudly, “The French standards of measure will be officially published today!”