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Chapter 1584 Investing in the Bank of England

After three months of discussion, Queen Sophia's reform plan finally formed a final draft and was passed by the House of Commons.

Sir Henry, the director of the Levant Company, came here after hearing the news. He heard that the Parliament and the royal family planned to establish the Bank of England, so he volunteered, so he volunteered to be the operator of the Bank of England and personally participated in the preparation of the Bank of England.

After being approved by Congress, Sophia granted Sir Henry a charter, allowing the Bank of England to break through the legal regulations, establish a joint-stock company with an unlimited number of people, and establish a financing institution with strong capital, provided that the money is lent to Parliament for a long time, and then Parliament It is allocated to the royal family and used for public works according to the budget.The royal family and parliament will jointly guarantee the Bank of England to guarantee the credit of the Bank of England.

Word soon spread through London that the Bank of England was raising funds from the public.One-tenth of the population of England is concentrated here, as well as a large number of merchants. Even when the king is short of money, he has to borrow money from London merchants.

"The Bank of England, which they eventually plan to form, is a private joint stock company, led by a big businessman like Sir Henry, with creditors involved as managers. This means that everyone who invests in the company is a shareholder of the bank, and the company will raise money. lent money to the Kingdom, and the Kingdom repaid the principal and interest on schedule.”

"Won't this put the kingdom under the control of capital? They want to borrow money from the Bank of England, and they need to compromise with the merchant group."

"In order to obtain a stable way of borrowing, they have no choice but to choose this way. Independent private banks seem to be more likely to be trusted by businessmen, squires, and common people here. They are afraid that the royal family will default on their loans like King Charles, so they don't feel at ease. Instead of handing it over to the royal family, I chose to lend it to the parliament, and I also acted as the manager."

"Does this mean that if we inject money into the Bank of England, we can also become its creditors? We can even exert influence on its parliament through the Bank of England?"

"In theory, if we take over 50% of the Bank of England's shares, the parliament and the royal family that borrow money will more or less have to look at our face."

The formation of the Bank of England was closely followed by several directors of Western companies.

If they can't benefit from other changes, they can get a share of the Bank of England.Sophia allowed them to inject capital into the Bank of England, and the more money they contributed, the more they had the right to speak.

"How much money does the Bank of England intend to raise?"

"£100."

"This... This is too much. After all, it is the size of a kingdom. Our western company still needs funds to complete the daily turnover. If we want to own more than 50% of the shares, we need to invest more than 50 pounds. Obviously this It's too much, the most we can come up with is £10."

"Borrow from our military here, this is a rare opportunity to leverage commercially."

Huang Xiushan and other directors of the company went to the Fourth Fleet for a loan.

The Fourth Fleet once attacked the Barbary pirates in North Africa, and many pirates have to send compensation every year. In addition, the mainland has funds for the Fourth Fleet and the Far West Expeditionary Force stationed here, so the Fourth Fleet should be able to get it. A lot of borrowing.

Sure enough, the Fourth Fleet heard their intentions. After a brief discussion, they decided to lend 5 pounds to Western companies to increase their investment in the Bank of England.

Similar to Huang Xiushan and others, prominent businessmen in the city of London regard investing in the Bank of England as an opportunity to make profits. If there was a risk of default when lending money to the king before, the Bank of England now has the royal family and the parliament to share financial revenue. As a guarantee, as long as the kingdom does not perish, they are not afraid of breaking the contract.

A few days after Sir Henry got the franchise, he first summoned his trading partners in the city to call in the distributors, and also called in the Western Company, the supplier that provided him with the smallpox vaccine.

The power of capital is terrible. Before Charles I, he had nowhere to turn for help to pay the Scots 30 pounds of war indemnity. After Sophia made a retreat to capital, it only took 1078 days for 11 shareholders in the city of London Just raised £100 million!
One of the shareholders is a Western trading company dominated by the Huaxia government.

Even if the members of Congress did not want the financial system to easily stimulate the powerful power of private capital, they originally planned to build 50 galleys for the Royal Navy. The investment of 100 million pounds was collected in less than 2 weeks. this huge amount.

"This is probably the power of business..." Everyone from the queen to the councilors felt the horror of capital.

Almost all capital is looking for stable investment opportunities. Except for the homeless and the poor who are struggling on the edge of the line of life, everyone else has more or less spare money on hand, and this vacant fund needs to find a place that is both safe and stable. A place that can generate profits, the guarantee of the queen and the parliament allowed them to find such a place.

When the interests of capital and the interests of the country converge, its energy will be unimaginable.

In return for creditors, Parliament agreed to pay 100% annual interest on £8 million, or £80000 a year, and to pay the Bank of England an administrative fee of £4000 a year.

The Bank of England provided a huge sum of 100 million pounds to the Parliament, and then the Parliament allocated funds to the royal family and the cabinet to use the funds according to the budget.

The members of the Privy Council and other royal institutions turned into cabinet members. In order to win over the parliament, Sophia also allowed some members to serve as cabinet members.

All of a sudden, the relationship between the king and the parliament has improved, presenting an unprecedented situation of cooperation.

Parliament gained the status and power it wanted, and the Queen made another concession, concentrating executive power in the cabinet.

Although the prime minister is still responsible to the queen, the queen can also change cabinet members, and the king still holds great power, but all of these have laws to follow, which is already a great progress, and the Congress is quite satisfied with the current situation.It is much more democratic than King Charles leading troops to forcibly dissolve parliament, arrest members, and formulate laws according to his own wishes.

After the cabinet was established, the House of Commons should have been reorganized according to the adjusted constituencies. However, in order to protect the interests of current members, the new election plan will start after five years.

Perhaps without knowing it herself, Sophia has inadvertently transformed England's monarchy into a system similar to a dual constitutional monarchy.And this system is a compromise between the king and the bourgeoisie.

(End of this chapter)