The Crown Prince of France - Chapter 180

Chapter 180: Marat's Self-Doubt

Joseph was pondering how to respond to the group before him when Count Kappfeil chuckled and said:
"Your Highness, besides us, there are also the Ravelle Bank, the Laborde Bank, and others who wish to seek your forgiveness..."

Marquis Ludo shot him a sharp glare to stop him from speaking further, silently regretting bringing him along. If not for the Kappfeil family’s significant influence in the banking guild, this man's ineptitude might have already led their family enterprise to ruin ten times over!

"Oh?" Joseph turned to Count Kappfeil. "How many banks do you represent this time?"

Count Kappfeil hastily pointed out the window. "Seven, Your Highness. They are waiting outside the Palace of Versailles."

Seven banks? The ones involved in the Necker case were all influential institutions. Joseph glanced at the group, suddenly realizing this might be an opportunity to establish a "Central Bank" in France ahead of schedule.

The French Reserve Bank could not easily absorb so many banks at once. However, allowing them to yield profits in exchange for supervision might be a viable compromise. If it could accelerate the creation of a "Central Bank," the benefits would be immense.

Joseph smiled, deliberately ignoring the group's pacing, and said directly:
"Do you wish to save your banks?"

Marquis Ludo and the others froze briefly before nodding "bashfully."
"If you could show us mercy..."

Joseph smiled faintly. "Can you speak on behalf of the other four banks outside?"

Marquis Ludo nodded repeatedly. "Yes, Your Highness. They have entrusted me with full authority."

"Very well," Joseph nodded. "I have a few conditions."

Marquis Ludo and the others immediately perked up.

"First, you will reduce the loans provided to the government by 10%. The agreements will be renegotiated, and interest rates shall not exceed 3%."

The three banking magnates exchanged pained glances.

A 10% reduction might seem small, but each of their banks had loaned tens of millions of livres to the French government. The total reduction would amount to millions—a massive loss.

Moreover, a 3% interest rate was practically equivalent to zero interest in this era. Even government bonds sold to citizens carried interest rates between 9% and 12%.

Yet Necker's testimony remained in the Bastille. Refusal meant ending up like the four previously bankrupt banks.

After two seconds of internal struggle, the three reluctantly nodded. "We obey, Your Highness."

"Good," Joseph continued, "Second, the French Reserve Bank will acquire 30% of your bank shares. Consider these shares a fine for the illicit profits you’ve siphoned from the Treasury over the past decade."

He added, "I can assure you, these shares will not be sold without the bank board's approval."

This time, Marquis Ludo and the others agreed more readily.

They had intended to offer shares as a bargaining chip to gain clemency from the Crown Prince. Though Joseph’s demand was slightly higher than expected, his promise not to sell the shares alleviated their concerns.

In essence, the Reserve Bank would merely receive dividends, sparing their banks from suffering losses due to share sales.

Satisfied with their compliance, Joseph pressed on with greater emphasis:
"Third, and most importantly:

"Your banks must support the monetary policies issued by the French Reserve Bank.

"Moreover, you must leverage the influence of the banking guild to rally other banks to do the same."

Marquis Ludo hesitated briefly before cautiously asking, "Your Highness, what monetary policies are you referring to?"

Joseph replied, "The Reserve Bank will issue a unified national banknote, similar to the Bank of England. Your banks must accept these banknotes for transactions and settlements."

Banknotes, essentially certificates redeemable for gold or silver coins, could become de facto circulating paper currency if backed by a trusted institution.

In England, the pound was originally a banknote issued by the Bank of England, which gained supremacy and eventually became Britain’s sole legal tender.

The French Reserve Bank lacked the overwhelming capital strength of its English counterpart, so Joseph planned to implement administrative measures to introduce its banknotes.

The process would not be easy. The Reserve Bank’s limited capital meant the public might distrust its banknotes. This was the biggest obstacle to establishing a central bank in France.

Joseph had initially estimated three to five years to build market trust in the banknotes. However, with the guild's endorsement and the seven major banks accepting the notes, the process could be expedited to mere months.

With banknotes as a medium of exchange, the Reserve Bank and the seven banks would outpace others in efficiency.

Before long, other banks, seeking to remain competitive, would also accept the Reserve Bank's notes.

Once the majority of banks accepted these notes, a decree could be issued declaring them France’s sole legal currency.

Control over currency issuance would then enable the Reserve Bank to regulate other banks.

Any resistance? Simply tighten their cash flow and watch them falter within days!

The three banking magnates exchanged uneasy glances. Accepting another bank's notes meant customers could redeem paper money for gold or silver coins from their banks.

While their banks could return these notes to the Reserve Bank for redemption, even a few days’ delay could see them amass millions in paper liabilities.

Braving his concerns, Mr. Boislandal asked:
"Your Highness, what if—just hypothetically—the Reserve Bank’s notes depreciate?"

Joseph anticipated this and replied promptly:
"The Cabinet will soon issue a decree fixing the exchange rate between the Reserve Bank’s notes and gold or silver. If you’re still uneasy, the Reserve Bank can sign agreements to compensate your losses in the event of a sudden devaluation."

Joseph made this promise confidently. The era's gold and silver standards ensured stable currency values unless a major economic crisis occurred.

Even then, compensation could simply involve printing more notes, as the public would have already adopted paper money.

Ultimately, Marquis Ludo and his companions reluctantly accepted Joseph’s conditions, resolving to settle accounts monthly to minimize risks.

Joseph rose, smiling at the trio, and raised his arms:
"Congratulations to you—and the four banks outside.

"From now on, you are no longer implicated in the Necker case. You are safe."

He nodded to Bishop Brienne. "The Archbishop will represent the Reserve Bank and the government to formalize the agreements with you."

The three banking magnates bowed deeply, expressing their gratitude for Joseph’s mercy. Though the losses stung, they felt relieved their banks were saved.

As Marquis Ludo and the others departed, Joseph pondered another matter: Four banks had already been acquired after their bankruptcy, and seven had just surrendered. Thirteen banks were implicated in the Necker case. What about the remaining two?

At 4 PM, Fouché arrived at the Palace of Versailles to provide an answer.

"Your Highness, Perna, along with his wife and two sons, was apprehended by the Security Bureau while fleeing to Rouen this morning. What should we do?"

"Seize the bank immediately," Joseph replied with a sigh. Their impatience had cost them an opportunity to join Marquis Ludo's "safe passage." Their attempted escape necessitated harsher measures. Joseph hoped the acquisition of the Perna family’s bank would not stretch the Reserve Bank’s resources too thin.

Fouché nodded. "As for the Denaro Bank, its two largest shareholders returned to Switzerland upon hearing the news from Paris and have not resurfaced."

The Denaro Bank, though conducting most of its business in France, was based in Switzerland, with its profits likely funneled there. Even if its French assets were seized, the yield would be minimal.

Joseph frowned. "We’ll have to resort to diplomatic measures."

...

Three days later, a modest but formal commendation ceremony was held in the Hercules Hall of the Palace of Versailles.

It was formal because Queen Marie Antoinette presided personally.

Apart from the decorated officials of the Bureau of Fair Investigation, the event’s attendees included high-ranking police officials, the Crown Prince, and the Minister of Justice, Baron de Bréteuil—fewer than 30 people, making it far from lively.

As soft music played, Queen Marie, wearing an elegant lilac gown, ascended the west podium. Smiling warmly, she addressed Marat and his team:
"Gentlemen of the Bureau of Fair Investigation, with your outstanding work and courage, you have saved France from immense financial loss and brought long-escaped embezzlers to justice.

"On behalf of the royal family, I extend to you our highest esteem!"

Marat had exposed Necker’s colossal embezzlement scandal and, through Joseph’s actions, recovered billions of livres for the Treasury, significantly advancing the establishment of the Central Bank. His accomplishments were indeed remarkable.

During their investigation, Evans was killed, and Marat himself sustained injuries. Joseph had resolved to recognize their contributions properly.

Royal attendants presented wreaths, and Queen Marie personally crowned Marat, still leaning on his cane. Police Commissioner Besançon distributed wreaths to the others.

Amidst applause, the Queen announced that the Bureau of Fair Investigation would be elevated to the Bureau of Fair Enforcement under direct Cabinet oversight.

France’s “anti-corruption agency” thus shed its police system façade to assume a formal role.

Joseph remained its head, with Marat as chief of operations and Demoulin as head of archives. The Bureau comprised four divisions, with the largest—the Operations Division—planned to expand to seven teams totaling over 200 members.

While modest compared to France’s vast bureaucracy, this marked Europe’s most advanced administrative oversight body.

This also explained the reluctance of officials to attend the ceremony—no one was certain their own records were spotless. If Necker, once the most powerful man in France, could fall, who was safe?

Queen Marie then awarded Marat a 500-livre bonus. Those involved in the Necker case received a month’s salary as a reward, and Evans’s family was granted 4,000 livres in compensation, with the royal family covering his son’s education.

After the ceremony, the Queen invited all attendees to a banquet.

As they left the Hercules Hall, Baron de Bréteuil was the first to congratulate Marat:
"You are a truly remarkable investigator. Even cases buried for years could not escape your scrutiny."

Marat frowned slightly at the Baron’s luxurious attire. Before he could formulate a reply, Besançon approached with a wide grin:
"Her Majesty holds you in high regard. I suspect it won’t be long before you’re ennobled."

Froyent and Fouché joined in with further flattery.

Marat glanced at those around him, his expression growing darker.

Nobility?

The thought amused him bitterly. Was he to become one of these corrupt aristocrats?

Raising his eyes to the ornate carvings of the palace ceiling, he wondered:

Why am I here?

What am I doing?

The irony struck him. Everything he had done was now celebrated by the very elite he loathed.

Had he betrayed the people of France?

Abruptly, he halted and excused himself, citing pain from his wound, before turning away from the banquet and walking out of the Palace of Versailles on his cane.

Table of content - Next Chapter >>>