Joseph was pondering how best to deal with these individuals when he heard Earl Capefield chuckle:
"Your Highness, besides us, there are banks such as the Trade Credit Bank and Ravel Bank who also wish to gain your forgiveness..."
The Marquis of Ludo glared at him harshly to prevent him from continuing, thinking to himself that he should not have brought this fool along. If it were not for the Capefield Family's great influence in the Banking Guild, with this fool's brains, the family's properties might have gone bankrupt ten times over!
"Oh?" Joseph, however, looked towards Capefield, "How many banks do you represent this time?"
The latter hurriedly pointed outside the window: "Seven, Your Highness. They are all waiting outside the Palace of Versailles."
Seven banks? All were influential major banks involved in the Necker case. Joseph glanced at the few men, suddenly realizing that this might be an opportunity to prematurely start the "Central Bank" of France.
Moreover, it was difficult for the Bank of France Reserve to absorb so many banks now, so letting them give up some interests and accept regulation was not unacceptable. If this could expedite the establishment of the "Central Bank," that would be a great gain.
Joseph immediately smiled, not following the rhythm of the people in front of him but directly saying:
"Do you wish to preserve your banks?"
The Marquis of Ludo and the others were clearly stunned, then hesitantly nodded their heads "bashfully":
"If you could bestow your grace..."
Joseph smiled lightly: "Can you represent the four banks outside?"
The Marquis of Ludo nodded again and again: "Yes, Your Highness. They have entrusted me with full authority."
"Very well," Joseph nodded, "I have several conditions."
The Marquis of Ludo and the others immediately perked up their ears.
"First, you will reduce the loans to the government by 10%, and the loan agreements will be renegotiated, with interest rates not to exceed 3%."
The three banking tycoons looked at each other, their faces full of agony.
The reduction of loan amounts might seem to be only ten percent, but each one of them had lent tens of millions of livres to the French Government; this amounted to millions of livres in total losses for them.
Moreover, a 3% interest rate at this time was almost like a no-interest loan. You have to know that even the government bonds sold to the public came with interest rates between 9% and 12%.
However, Necker's confession was now in the Bastille, and if they didn't agree, the previously bankrupted four banks would serve as an example.
After struggling for two seconds, all of them gritted their teeth and nodded: "We will follow Your Highness's command."
"Hmm," Joseph continued, "Second, the Bank of France Reserve will obtain 30% of the shares of your banks. You have illegally earned money from the national treasury for more than a decade; consider these shares as a fine.
"And I can promise that these shares will not be sold without the consent of the bank's board of directors."
This time, the Marquis of Ludo and the others agreed without much hesitation.
They already intended to use the shares as a bargaining chip to gain leniency from the Crown Prince. Although the Crown Prince asked for a bit more than they had prepared, they received a promise that the shares would not be sold.
That meant the Bank of France Reserve would only share in the dividends, and their banks would not suffer due to the shares being dumped. They found this condition entirely acceptable.
Joseph was quite satisfied with their attitude, and with added emphasis, said: "Third, and this is the most crucial one.
"Your banks must support the currency policy announced by the Bank of France Reserve.
"At the same time, you will use the influence of the Banking Guild to get more banks to support the Bank of France Reserve."
The Marquis of Ludo's expression changed, and he cautiously asked: "Your Highness, when you mention currency policy, what are you referring to?"
Joseph responded: "In the future, the Bank of France Reserve will issue national banknotes like the Bank of England. Your banks will accept these notes for payment and exchange."
These so-called banknotes are essentially "certificates that can be redeemed for gold and silver coins" issued by the banks. Anyone with these notes could exchange them for money at the corresponding bank.
If a bank is robust and trusted by all, people would, for convenience, accept these banknotes for payments among each other rather than actually exchanging them for gold and silver coins.
They thus become the de facto circulating currency.
In fact, the British Pounds that are currently in circulation in England are strictly speaking, only the banknotes of the Bank of England. But the Bank of England has grown so significant, overshadowing all other banks and obtained the "sole legal banknote" authorization from the British Government, and gradually evolved into England's Central Bank.
At present, the Bank of France Reserve does not have the same overwhelming capital advantage as the Bank of England, so Joseph could only use administrative measures to promote banknotes from the Bank of France Reserve.
However, this process would certainly not be smooth, given the limited capital of the Bank of France Reserve, and the general public would most likely distrust its banknotes. This distrust was the biggest obstacle for the Bank of France Reserve to become the Central Bank of France.
Previously, Joseph planned to take three to five years to gradually cultivate the market's trust in the banknotes of the Bank of France Reserve. But with the endorsement of the Banking Guild and the acceptance of the banknotes by these seven major banks, this process could possibly be shortened to a few months.
At the same time, the Bank of France Reserve and these seven banks, because they have banknotes – that is, paper money as a medium of circulation – will crush other banks in terms of circulation efficiency and convenience.
Before long, other banks, in order to maintain their competitiveness, would also have to accept the banknotes from the Bank of France Reserve.
When the vast majority of the nation's banks have accepted the banknotes from the Bank of France Reserve, it will be possible to enact a decree – designating these notes as the sole legal paper currency of France.