Chapter 590: One Person Forged the Account, and the Whole Family Was Shot

Chapter 583: One person forged, the whole family was shot

"Continental currency?" Speaking of paper currency, this was Robinson's first reaction, "Can the issuance of this paper currency succeed?"

Given the final outcome of the Continental currency, Robinson was worried about the future of paper currency.

Continental currency, that is, the earliest US dollar, was the US mainland banknote. These continental banknotes were issued by the Continental Congress between 1775 and 1779 to finance the American War of Independence. These banknotes were printed with the words "United States", so they were called Continental currency.

However, the fate of the Continental currency was the same as that of the early paper currency. It depreciated rapidly shortly after its issuance and soon became invalid. The reasons are nothing more than the following.

Inflation and depreciation: The Continental currency was issued in too many quantities, and there were not enough precious metal reserves and credit endorsements from government banks, which led to rapid inflation and rapid depreciation of the Continental currency. Eventually, it lost the trust and acceptance of the people.

Counterfeiting problem: Because the printing process of the Continental currency was relatively simple at that time, it was easy to be counterfeited. As a result, the number of counterfeit coins increased, causing people to doubt the authenticity of the Continental Currency, exacerbating the crisis of trust in the Continental Currency.

Insufficient government credibility: The issuance of the Continental Currency did not receive sufficient government support and credibility guarantee, and the American government at that 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 problems. The problems of inflation and depreciation can be regulated by controlling the issuance of currency. At present, the governments of the three states on the West Coast, especially the California government, have a good reputation and can provide strong credit endorsement for paper currency.

Furthermore, as the world's major precious metal producing area, the West Coast currently has enough precious metals to endorse paper currency.

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

"If paper money can be circulated, it will be a great thing for the public, business and the people. I am just afraid that it will become waste paper like the Ming Dynasty treasure notes."

Pan Zhengwei's first reaction was to think of the Ming Dynasty treasure notes. He picked up a $2 red note and looked at it carefully. He wanted to raise the issue of counterfeiting among the people again, but after seeing the warning words printed in both Chinese and English on the note: legal tender, one person counterfeiting, the whole family shot, he suddenly felt that his worries were unnecessary.

One person counterfeiting, the whole family shot. If this slogan was proposed by someone else, Pan Zhengwei might not take it seriously, but with Liang Yao's thunderous means of doing things, he would really do such a thing.

Pan Zhengwei also understood why Liang Yao had to deal with the case of the Funing Group's private currency casting so high-profile. It felt like killing a chicken to scare the monkeys and build momentum for the issuance of these banknotes.

Even the core members of the California consortiums such as the Jardine Matheson Group, the Tongfu Group, and the Boston Group who were involved in the case of minting private coins will be shot. Other dishonest people who want to print these banknotes in a crooked way must carefully consider before taking action.

"As long as we have sufficient gold and silver as reserves to cope with the exchange of private money and do not over-issue banknotes, we can stabilize the value of banknotes." Liang Yao said, "Furthermore, the use of banknotes can not only provide convenience for the people and promote commercial trade, but 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 kind of banknotes in foreign trade?" Wu Yuanhua is also a little worried about the future of this paper currency.

"You are right. Europeans are not fools. If they can exchange these papers 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, in addition to the more troublesome real gold and silver for payment, the most commonly used cross-border payment method for trade between the West and Europe, and even parts of East Asia, is to use payment guarantees, bills of exchange, and banknotes from major banks for payment.

These methods have their own disadvantages. The disadvantage of real gold and silver is that it is not easy to carry and the transportation and storage costs are high, especially when conducting large transactions.

The payment guarantees, bills of exchange, and banknotes of major banks are very dependent on the credit and payment commitment of the bank, and there is a risk of bank default or refusal to pay. During this economic crisis, some banks in the eastern United States, such as the Bank of Philadelphia and Manhattan Company Bank, refused to pay payment guarantees and bills of exchange for European customers, which gave European customers a little American shock and also damaged the credit of American banks and even the entire business community in Europe.

Of course, in addition to facing the credit risk of banks, cross-border transactions also face low payment efficiency. Payment for cross-border trade may take a long time and steps, especially for letters of credit and bills of exchange, which require a relatively long processing and confirmation time. With the communication efficiency of this era, it is normal for a bill to take a year or two to process.

This is not a big problem for the wealthy tycoons present with sufficient cash flow. But for small businessmen who are looking for high capital turnover, it is very fatal.

This is not only true for international trade, but also for interstate trade in the United States. In the West, bankers from different regions are in harmony and allow branches to be opened in major cities between each other. This harmonious scene is unimaginable in the East.

Banks in the eastern states are basically kings of their own territory, monopolizing the financial resources of their own states and refusing foreign bank capital to enter their own states to participate in competition. Therefore, the payment efficiency of bank payment guarantees and bills in the United States is also shockingly low.

This situation did not last until Lincoln came to power, promoting the modernization of US dollar banknotes, formally stipulating the US paper currency system, and issuing the first set of official US dollar banknotes, which is what is called greenbacks in later generations. Only then were the trade barriers between the states in the United States gradually broken down.

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

After the US dollar was paperized, the federal government started the printing press and issued banknotes on a large scale to meet military expenditures. During this period, the Lincoln government issued many banknotes of various denominations, including $5, $10, $20, $50 and even $100.

The first set of paper currency in the western region only issued up to $10, which was quite restrained and conservative.

The war was not only about industrial strength, but also about economy.

The reason why the South was defeated by the North in later generations was that in addition to the absolute crushing advantage of the North's industry over the South, the fact that the elites of the North were better at integrating economic resources than the elites of the South was also a very important reason.

In terms of wealth, the wealth held by the Dixie rich who had sold cotton for decades would never be less than that of the Yankees in the North. It's just that all the wealth of the Dixie rich in the South was spent on the hilt.

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

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

On a smaller scale, promoting the paper currency of the US dollar will help promote private trade and facilitate the lives of ordinary people. On a larger scale, it will also help the government to implement monetary policy and conduct macroeconomic regulation of economic activities in the future. Of course, once a war breaks out, in the case of financial constraints, we can also learn from the federal government and start printing money to ease the pressure of military expenditures and prolong our lives for a while.