＜ Meiji Panic. (4) >
Negotiations were quickly established.
The Meiji government of the Empire of Japan wanted to finish this work before the end of the bank closure order and get a bailout at any hand, and decided to take the place as the general minister.
The Japan Settlement Bank responded to the Meiji government’s request for negotiation, and set up a board of directors to suit it.
“Bocchan, why is the Japanese Empire bowing so obediently?”
Tokyo’s chieftain.
I joined the negotiating team and entered the general’s negotiating hall.
The road to the Great Wall.
James asked me a question.
Why are they compliant?
Before I could answer, Samuel Sachs of Goldman Sachs intervened.
“Well, for the simplest reason, the US Navy’s gunship diplomacy must have acted as a powerful deterrent.”
“Is naval diplomacy more powerful than the economic crisis?”
“It created a sense of crisis that war could be immortal. Furthermore, it showed that the Pacific supremacy had passed to the United States.”
Sachs is right.
The Pacific Fleet of the Royal Navy of the British Empire withdrew and the Pacific Fleet of the United States of America took its place.
But these madmen of the United States poured a budget of 7.5 billion dollars to cover the Pacific as a naval base, and literally started printing warships in factories.
It’s a disaster for Japan.
“Japan is basically an island. If the sea is blocked, they don’t have an answer either. But when the US Navy dispatched three fleets, they were terrified, saying, ‘Oh, this is a warning from the United States.’”
“…!!!”
“The chaebol is tied to the banking and industry. The moment maritime trade is stopped, either one is the same.”
The current state is the United States, which has turned its eyes to imperialism and wartime posture.
Sadly, the Japanese Empire was not yet a very important trading country for the United States, and the Pacific Ocean was just beginning to be explored. The federal government of the United States of America will be caught up in the moment when it judges that there are more benefits to be gained from a naval blockade of Japan, a hypothetical adversary.
I’m short on food right now, so I’m going to be blocked from importing rice?
But that’s not all.
This time I answered.
“Actually, the Japanese Settlement Bank will have the biggest impact.”
“Haha, the Detroit director is right. This is another goal hit.”
Samuel Sachs patted his forehead at my words and burst into laughter. James asked with an unfamiliar face.
“Yes? Why is the Bank of Japan Settlement…”
“Did you forget James? The fact that HSBC Bank came to our camp through the British ambassador to the US.”
“I remember.”
“The Japanese Empire basically conducts foreign exchange transactions through the Yokohama Securities Bank. However, the Yokohama Securities and Exchange Banks receive foreign exchange payments through HSBC.”
their vulnerabilities.
It was around 1913 when the Japanese financial institutions started foreign exchange trading in earnest. Until then, Japanese finance was completely dependent on HSBC for foreign exchange transactions.
I poked this.
“At the beginning of this year, the Bank of Japan Settlement was transferred from HSBC Bank to FX supply and demand business with Yokohama Securities Co., Ltd. It was a natural result. The Bank of Japan Settlements was encroaching on the foreign exchange transactions of the Empire of Japan through currency swaps. Japan’s foreign exchange reserves are It has come into our grasp.”
“…and you gave HSBC more delicious food – the Qing Dynasty and Russia.”
“right.”
I paused for a moment.
Japan’s economy still revolved around shipping rather than industry. The industry was still nurtured mainly by light industry, and the full-scale industrialization of Japan as we know it has not come yet, since it was about the time when the chaebols began to dominate after winning the Russo-Japanese War.
“In other words, Japan Settlement Bank has taken over Japan’s foreign exchange reserves. But, stop the currency swap and set up a confrontation with the Japan Settlement Bank? If we block the foreign exchange supply and demand, Japan is an island nation that relies on maritime trade, which requires a lot of foreign exchange. What will the economy be like?”
“…!!!”
“It’s very harpoon.”
2022.
Russia, which invaded Ukraine, imposed economic sanctions on the United States in this way, and the country’s economy was ruined. It is common to think that foreign exchange reserves are in the country, but it was not at all.
Dollars stored in central banks abroad. Dollars at the Bank for International Settlements (BIS). Dollars invested abroad through sovereign wealth funds.
When the US tied it up, it all turned into ‘no money’ in an instant.
The ruble is pound.
Russia’s economy is booming.
The foreign exchange crisis has arrived.
“Is it still the gold standard?”
“It doesn’t matter. There is no foreign exchange used for international trade, so what is the use of the gold standard system that guarantees the domestic currency? The moment a domestic trading company cannot pay foreign currency, it is default (default) bankruptcy.”
“……”
Economically to the Bank of Japan Settlements.
militarily to the US Navy.
Since the Japanese Empire was absolutely in bondage, the moment the Japanese government puts a thorn in the currency swap, the collapse of the national economy is even worse.
Rather, it means that it is better to get hit and set up a negotiating platform like this.
Few banks have gone bankrupt yet.
“You see? They can never challenge us. We haven’t drawn a single sanction card yet.”
“…a game where you win and start from the beginning.”
James muttered blankly.
I smiled and patted him on the back.
“You’ve arrived. Come in.”
profit-
We mixed with the negotiating team and arrived at the negotiating room of the General. As soon as the officers of the Great Wall opened the door, the ministers of the Cabinet, who had arrived in advance, greeted us with a firm face.
“……”
and.
exceptionally.
Emperor Meiji was sitting at the top of the table with a stiff face, glaring at us.
***
Japan Settlement Bank.
In the foreign trade of the Japanese Empire, the foreign exchange bank monopolizing the exchange brokerage and the most important financial institution in this negotiation is in charge of currency swaps.
The composition of the negotiating team was simple.
Directors of Japan Settlement Bank.
Directors of Goldman Sachs.
Admiral Dewey and officers of the U.S. Navy.
It was a secret everyone knew that the United States Treasury and State Department staff were mixed in this.
The representative to lead the negotiations was Samuel Sachs of Goldman Sachs.
He claimed to be my face.
widely-
I deliberately took a seat in the middle, out of sight.
Samuel Sachs looked at me and opened his mouth as I nodded.
“Then I will tell you the conditions that we, the Bank of Japan Settlements, will demand for the financial reform of the current Japanese Empire.”
silence.
The Japanese officials were sitting here quietly as if they were dead.
I said I would accept everything, but I was nervous because no one knew what conditions would come out.
“First of all, it is the opening of the capital market.”
“Is the capital market… open?”
Representative of the Japanese side of the negotiating group.
Minister Matsugata of the Admiralty asked. Samuel Sachs nodded.
“Yes, the condition is to open the capital market of Japanese finance, which is ‘closed’ and ‘unstable’, starting with a foreign investment limit of at least 50% and increasing it to 100% within this year.”
“…..”
priority.
The walls of restrictions that the Meiji government had built up like a fortress were demolished.
The restrictions will be lifted so that we, the foreign investment capital, can sweep away Japan’s faltering blue-chip companies. The same goes for good assets.
“In detail, lifting restrictions on incorporation to allow foreign financial institutions to enter, and increasing the stock acquisition limit under the same conditions as for Koreans. This includes the right for foreign capital to purchase domestic assets such as real estate in Japan. Banks They are going to ruin, should I live?”
“…!!!!”
“Of course, we will also lift the restrictions on the stock acquisition limit and the investment restrictions of Zaibatsu.”
Captain Matsugata’s eyes widened.
robbery from the start.
Even Zaibatsu was showing his intention to devour.
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On the other hand, I curled up the corners of my mouth.
‘This will allow us to acquire assets in Japan.’
The captain bit his lip and blood bled, but Samuel Sachs passed smoothly.
“And fiscal austerity. Well, it’s a big talk, but it’s nothing. To balance Japan’s finances, I will bet on the condition that the base interest rate be raised to a maximum of 15%. It can absorb excess currency and stabilize it.”
“…Wait a minute!!! The base rate is 15%!!! Then, isn’t that saying that Japanese companies and banks are all dead!!!”
bang!
Captain Matsugata screamed with a pale face.
The base rate is 15%.
In other words, it aims to raise the interest rate on the loan to at least 15%.
No matter how much oil he puts on his tongue for Japan’s monetary stability and finances, he is not deceived.
However, Samuel Sachs was ignoring it again.
“The next condition. Let’s hear it all and talk.”
“…!!!”
“I would like to launch an organization called the Bailout Finance Committee. This institution will be in charge of all bailout finance operations in the future, and it is an institution exclusively responsible for transfusing funds to corporations in need of bailouts and monopolizing asset sales and auctions of those corporations. Of course, the Japan Settlement Bank supervises it.”
“…a bailout.”
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Okay.
There is no bailout at all.
Captain Matsugata clenched his fists until they turned white, and listened for a moment. Once there is an external bailout, businesses and banks will survive.
The interest rate would be a killer rate of 15% or more, though.
I couldn’t hold back my laughter as I looked at the shriveled up of Captain Matsugata.
Because you have to listen to what people have to say.
“And this is the most important thing. In the future, Japanese corporations must receive a credit rating from an international credit rating agency and disclose their credit rating. I will put this as a top priority.”
“…..?”
Credit rating suddenly appeared.
This was an unfamiliar concept to Captain Matsugata, too. However, it was a face that did not understand at all what kind of benefit there was to raise this credit rating as a top priority.
‘It’s a pity.’
I thought as I looked at the bureaucrats who changed the color of their faces every minute at the words of Samuel Sachs.
But soon the sharp peaks of their credit ratings would pierce in an instant to take their breath away.
the following provisions.
Samuel Sachs recited the clause with a chilly face.
“The next condition is the establishment of a comprehensive financial company.”
“…a general financial company?”
“Yes, a general financial company will be collectively referred to as a bank company. A bank company is a financial institution in the second financial sector that cannot directly receive funds from the Bank of Japan. .”
low credit rating.
Perhaps an ominous foreboding slowly came over, Captain Matsugata gradually lowered his upper body forward.
Samuel Sachs gave strength to the horse.
“Currently, commercial banks are classified as the first financial sector. Corporations with a credit rating below a certain level are prohibited from lending from the first financial sector.”
“…..What?”
Matsugata’s pupils shook.
The presidents, including the delegates who attended, also opened their eyes. Can’t get a loan from their bank in Zaibatsu?
At least, shaky companies and banks would be classified as insolvent?
“Then how do you get a loan?”
“Insolvent corporations will receive loan payments through a second financial institution, including a newly established financial institution, and the interest rate will be ‘remeasured’ according to the risk of the credit rating.”
“Come on, wait…”
“The Bailout Financial Committee will lend dollars through the respective bank company, and the bank company will again transfer funds to Japanese corporations. The bank companies will remeasure the interest rate under the supervision of international credit rating agencies. Of course, The statutory maximum interest rate will also be abolished for the time being.”
“…what are these f*cking motherf*ckers going to do now!!!”
bang-!
Matsugata’s eyes widened.
General financial company? It’s not much different from the loan companies if it is impossible to directly transfuse funds from the Bank of Japan.
Although it was packaged as a second financial institution, the sound of re-measurement of the interest rate according to the credit rating means that the interest rate will be beaten horribly.
It was said that the moment the international credit rating agency puts the label of an insolvent company on the forehead, the interest rates could be blown up at 25%, 50%, or 100%.
The minimum interest rate is 15%!!!
The lieutenant colonel Matsugata rushed to Sax and grabbed his neck.
“You bastards!!! Are you guys human!!! Are you guys human!!! How dare you crush this great Japanese empire that we have built up so horribly!!! Huh?!”
“…Put this down.”
“Instead of Captain Matsugata!!! Please be patient!!! You have to be patient now!!!”
“Let go of this!!! Let it go!!!! Ughhh!!!”
The other cabinet ministers ripped off the commander-in-chief Matsugata, who rushed at him as if he was about to eat him in surprise.
q-
Samuel Sachs, who was caught by the collar, loosened his collar with an expressionless face. He humbly brushed off his black suit.
“Well, don’t worry. The fairness of international credit rating agencies is a fact recognized by the countries of The Hague Peace Conference, and interest rates will not be set abnormally. I just do it.”
“…..!!!”
There was a scorching heat between the Japanese side of the negotiating team.
I thought it was time to take a break, so I sent a hand signal to the Saxes. Tightening too much has the opposite effect. Sax nodded his head slightly as if he had read the air.
“…Let’s take a break for a while. If you calm down your excitement, I’ll suggest other provisions.”
So I took a break for now.
***
“A murderous rate hike in the name of austerity, infiltration of foreign capital, limiting loans using credit ratings, and even interest pumping. How can you squeeze this out efficiently and effectively…”
break time.
Samuel Sachs came and sat down next to me. He stuck out his tongue, saying that he had never squeezed this far, no matter how Jewish he was.
Still, learning one by one is the herb and the rice grass.
‘That’s what I learned. this.’
“If the Japanese economy is constricted like this, the US current account surplus (national income) will rise tremendously. Capital will pour into Wall Street. The US economy will develop remarkably.”
“That’s why the State Department and the Treasury bastards love it so much.”
Sax smiled and pointed his index finger at the directors sitting on the negotiating table.
They had expressionless faces, but their hand teasing the pen was light, and some even pinched their thighs with their hands.
“The National Tax Service will also play.”
“If Japan’s wealth is absorbed, America’s wealth will increase. It’s an economic colony.”
“Uh huh colony. We’re just here to bail out. Be careful with the words.”
“Haha. Well, it’s like that.”
whatever it was
This will allow Wall Street to vacuum up money.
The interest on the loan to Japan could be enough to generate sales for the year. Not a joke, for real.
But while we laugh like this.
The Japanese side was making a portrait.
“What kind of suffering is this…”
dump.
Captain Matsugata slumped down with a face that had escaped his soul. There was no way. If they didn’t get a bailout, the banks would die right away.
However, Tenno (Emperor) came personally.
The Japanese ministers couldn’t even breathe, their complexions turned black, and they just died.
“I will resume.”
At the end of the negotiator’s break, Samuel Sachs picked up a draft of the treaty.
“…I will mention the two most important provisions, and the rest are specified in the treaty, so I would appreciate it if you could check it out.”
Drooling-
Samuel Sachs pulled the chair back and stood up.
jerk. jerk.
“This is a provision regarding the presence of the United States Navy. American banks, including the Japan Settlement Bank, were unreasonably detained by the combined fleet of the Imperial Japanese Navy, and we, the Japan Settlement Bank, distrust the security of the Japanese Empire and their own corporations. The US Navy’s Pacific Fleet is stationed at Yokohama Port in Tokyo Bay in order to protect the port of Tokyo. In addition, we request free access to open ports including Osaka Port and Nagasaki Port.”
“……”
Following the commander, the foreign minister looked at Saks, who began to walk the negotiating table vacantly, as if at a loss for words. Admiral Dewey nodded with a look of course that he should.
shaking.
“Dogo. Let this go.”
“You have to be patient. Prime Minister Yamamoto. If you make a mistake, you will be disarmed. If you are disarmed, there will be neither the Japanese Navy nor the Combined Fleet.”
“……shit.”
woowook.
The navy minister tried to vomit his boiling anger, but Admiral Togo, who was present, desperately suppressed him.
Awareness that the soft fleet might be disbanded barely caught on to the string of reason.
Samuel Sachs coughed.
“Finally, the issue related to compensation is the amount of damage to the national interest of the United States by detaining a US vessel carrying pesos, and all expenses for dispatching and stationing the Pacific Fleet. I ask you to do it.”
“…!!!!”
Finally, a huge gold outflow.
From one to ten, they were all measures to peel away the skin of Japan.
“The above are the conditions for the Bank of Japan to cancel the currency swap contract and issue a bailout.
bang-!
Samuel Sachs nailed the treaty to the desk. On that stiff piece of paper, the harsh provisions that would hold the corners of the Japanese economy were listed.
The Imperial Japanese side was only terrified with a white face.
I mixed with the negotiating party and sat cross-legged.
“….Hmm.”
That’s why the currency swap stopped at this point. National banks, with a few exceptions, were on the verge of bankruptcy.
This is the best condition for a bailout loan.
When the Japanese economy became obsessed with large dollar debt at interest rates of 15% or higher, the Japanese economy was bound to be tied to the United States. And by twisting the provisions a little, Jonggeumsa forcibly implanted a bomb that no one knows about in this day and age.
And the switch was held by the bailout committee.
Fantastic conditions for the State Department and Treasury Department staff to join hands to tap-dance.
‘So it’s much more profitable to squeeze out a dry towel than to let it ruin it.’
The seven key provisions above are:
I took the idea from the 1997 Asian financial crisis and IMF bailout in Korea, and referred to the unequal treaty offered by the Japanese imperialists to Joseon during the imperialist era. Not exactly the same. Conversely, there are provisions that have been reversed, and I have modified them to my liking.
It was bad, so it was good to refer to.
‘Well, from the point of view of the Japanese Empire, it’s a three-day time attack, so it will pass without any room for negotiation.’
I looked at the top seat where Emperor Meiji was sitting.
His lips were smashed and blood was oozing out, and his nails were digging into the palms of his palms. He closed his eyes tightly, but he couldn’t resist and just quelled his anger.
good flow
I rolled up the corners of my lips while looking at the rigid conference room.
“It’s over.”
After that, before three days.
The Meiji government collapsed helplessly, and the humiliating First Tokyo Treaty was signed.
＜ Meiji Panic. (4) > end
