August 1917
The wide fan slowly turned in the high ceiling above his head.
At least as an opinion he held, maybe it wasn't empirical, but it certainly seemed like the thousand 'men around town, journalists of note in Peking wanted to model themselves after yankee muckrakers... and certainly that wasn't a bad thing at least not universally. On the other hand they weren't the only sort. The morning article attributed to Zhong Yin was preaching the latest Beiyang talking points about the war.
Tokutomi had no interest in aping the journalists of Boston or New York, or those who wrote for the Tribune. That was a game for younger men, and in his mid fifties now Soho wasn't that man anymore. He was probably going to nag Nakamichi to death though with an uncounted number of questions all the same.
Allen turned, "We can expect questions, but Nakamichi will keep him mostly busy."
"Just as well, Nishihara's and Cao Julin's bank people have been busy." His body posture shifted, and Bert nodded, "Yeah, that was my response since Reinsch made sure it got to the papers the first time... what do you think?"
"Lansing and Ishi are talking. It sounds mostly like Lansing is agreeing in principle to the Anglo-Japanese agreement."
Bert nodded again, "That's good right?"
The notional agreement was that between the nations involved that they would respect the operation of high signatory nationals to conduct business and construct industry, etc etc, within the region, but fundamentally the US recognized the same special status previously established in Manchuria. All that was fine. "The problem is the situation in Europe winding up. France is certainly going to complain. They complained about Siems Carey, and frankly I don't trust the French not to backtrack on this Trans Siberian business..." he trailed off, "Lansing and Ishi will work something out, that should put this business with the 21 demands idiocy back behind." Hopefully Terauchi's government could actually make good on it all, and they could start looking at other ventures.
The word at least preliminary wasn't any thing of a surprise. He'd seen the Trans Siberian during the Ruso-Japanese war and... decrepit was a good enough descriptor for parts of it... and he doubted that it had much improved in the three years the Russians had been at war. Bert grunted, "Well we have the bank drafts from Tom Boyle, and Powell has things at Urumqi ready." The eagerness had nothing to do with the job so much as leverage to handle motions within the cadre. Powell was aiming to support reforms in both the military as well as for the Middle Amerika venture and given absence this was about showing he was still here.
... the fact that he had actually called it 'the military' showed he'd been gone. Powell had seen what the signal corp had already been getting involved in with air planes... but that would be in the future. "Tell me about the banking situation?" or what had developed.
"Julin is," Bert paused, "Has Sam talked to you about public finances in this country." From his tone he clearly hadn't meant it as a question... and that he wouldn't have to be the one to address whatever was the bee that had crawled up, "Anyway Julin is absolutely going to be the center of any kind of funding, collateral for loans."
Cao Julin was a lawyer, by education. His father and grandfather had both been on at Kiangnan Arsenal. They had tried to get Julin to go into railway but instead he'd decided to study at the English Law School in Tokyo... what had since been rebranded Chuo University and was currently rebuilding from a recent bout of arson. Julin had no military experience. He was a conservative politician who had had a role in the old Qing bureaucracy and then had been in the Beiyang apparatus. Julin had been one of those Yuan had named to drafting a modern constitution for China in 1913... but that had ultimately failed to go anywhere... and well Cao had been running a bank since the previous year as a result of that.
"Zhang Xun is retiring yes?"
He paused before affirming the answer, "He is,"
"Whats his involvement?" Allen paused to glance back down from the bannister of the hotel resturant, "Given his stake in the Communications bank?"
"So far as I can tell none. He owns the stake, but," That made some degree of sense. The pigtail general had never been particularly hands on to begin with when it came to his stock ... why he had even bought shares in the bank on opening was somewhat of a mystery since he had probably never bothered to show up at any of the board meeting. Bert perked up and a little noisier than he had meant, "Are, do you think," He quieted, and leaned forward his elbows pressing down on the stained wood, "Does Zhang Xun, he has the specie of the bank?"
"I don't know," But it would have made since that Zhang had the hard currency. Still the truth was he didn't know one way or another about that. There had never been a reason to ask about it... but Bert wasn't prepared to let it go.
"But what about the silver dollars?"
"I don't know, Bert." He just thought it made sense. People were playing games. People were always playing games. "Alright Nishihara is offering a second loan, do we have a figure?"
"Twenty Million Yen, closing in about a month." That lead to the questions of the banks, "Chosen and Taiwan have both confirmed, we have that independently. IBJ is the last of the three." The Industrial Bank of Japan, which was interesting in itself, "Loan seems boilerplate, they have an advisor for restructuring on the board." Bert paused, "if they weren't so damned circumspect about talking about it I wouldn't think anything of it."
... but they'd been quiet about it with the first one... which had been smaller ... a fourth of the present loan and that had been enough for Reinsch to go running his mouth... "I want you to go ask our counterparts, see what they're short on. In particular, don't come back and tell me they're short on everything."
"They are." Bert replied sitting back on the stool, "Coal, iron, cotton, tobacco, wool, and wood. Steel, and if its on the market, oil and gold." Some of which was then be sold to Europe for the war with the benefit of the maritime trade ties of England and Japan... there were ships from South Africa to the Mediterranean flying the rising sun banner to free British ships for the Atlantic. "Food as well. Do you know how much money is in rubber? There is a big market right now, if anything food prices are too high." The production simply wasn't enough to keep up with demands for the goods... which was the scope of things... Bert blinked, "Oh, there is going to be another one coming down, once Ishi and Lansing hash things out on investment."
"If the state department is serious about the Russian far east, then Lansing and Ishi need to work something out and that means the Russians out of the game entirely."
"The French aren't going to like that."
Allen simply shrugged, "they," Neither hte French, nor the Russians had the capital to sustain an objection... not without hte British agreeing. "don't have the cash for it. If we get settled into Russia that likely means a tripartite agreement with Japan and England on the broad pacific... and potentially that could mean free trade between all of us,"
"That assumes Wilson can get that through the senate."
"Lets focus on here and now, let me know about any moves on currency, but Powell should be able to start work as soon as he's ready."
"Why the currency?"
"Because there is no way Chosen or Taiwan have that kind of capital on hand, the Industrial bank, sure, but I want to know who is actually putting Taiwan's share up because that should foreshadow what in Manchuria they're planning to invest in." Timber and gold were pretty likely candidate but there was coal, and iron too... and if Bill was right and that there was oil in the north ... that could be interesting.
Bert paused, "How do you know the Bank of Taiwan doesn't have the capital?"
"Because Akashi told me he wanted them to support his hydroelectric plan but they'd loaned out money to england their shareholders didn't want to overstretch the bank's equity." Britain was good for the money, but there was no way that their currency reserves had replenished... and Akashi was looking at the Diet to put up funding for electrification. "Also what's this about Julin getting a million yen from Mitsubishi?"
There was a small shrug, and a shake of his head, "I have no idea. It would have been the eleventh, fighting was basically done by that point so I can't see why the money would have been needed. Do you think it coincided with him becoming minister of communication?"
He mirrored the smaller man's shrug, "I don't know. It was just odd given the timing." He shrugged again, and wrapped his knuckles on the table, "We'll figure it out Bert, in the mean time we have other things to do."
Bert banged on the able at that and the wider man smiled, "that's exactly what I wanted to hear. I know but the Federal reserve has done a lot of good, when they're listened to." He shrugged, "Aldrich and Wilson did a good thing. Even if they hadn't the local banks," Meaning the old qing era financial institutions in Shansi "took a hit, we need a scientific policy in Xian. Its the consensus, a central bank, whether its modelled on the bank of England or the IBJ or yeah the Reserve. It would help us. Not everything is a mechanical problem an engineer and rivets and steel fixes."
--
And the truth was of course that the European war had created no end of ventures. The British were paying for the war, and that had meant loaning money to the French for the French, and the Russians both to turn around start buying other goods. The comment on food prices stood out.... especially with word from the states... Wilson was trying to contend with things, by involving experts from all fields.. but they'd have to see how these things would really work in practice.
Thankfully the Virginian was an ocean, and a continent away.
The agreements with the Qing laid out extensive matters of land rights, their use, and responsibilities. There was a reason that Old Man Ma trusted them to deliver his tax revenues to Peking. The old confucian general didn't care that Duan was in charge, the fixed sum of money really wasn't that much. The trust though was important. The demonstration of it.
The railways were the first things to be built, because they conveyed land rights... or they had conveyed land rights from the Qing, and then continued by Yuan Shikai, and now nominally speaking by Duan... but frankly. The agreements were in practice common law of sorts. Whether it was mines or mills what followed were the public works of housing for workers. Mess halls served food ... and that would keep food down because that food was coming now from company farms or otherwise from bulk purchases the company conducted. The construction of schools had followed, and then they needed mess halls, and that was that. It had expanded.
It was what Jun summarized as 'benevolent governance' in the modern day. She folded the newspaper over and looked at him. "What is it?" He asked.
"You are doing what with the army?"
"Sam is going to take the 2nd Regiment and his own staff and establish a second division." He replied thumbing through the papers. It was more complicated than that, but the general idea was that from there 3rd Battalion 1st Regiment would establish the 4th Regiment of Infantry's Headquarters and training battalion. 2nd Regiment would loose it 3rd Battalion to establish a training battalion as well for filling out the ranks of 2nd Division other regiments as well.
"No." She replied flatly.
She didn't clarify more than that other than she had meant something else. He kept thumbing through the paperwork, and then found Banzai's request for the steam casing work. It would have been so much easier if they hadn't forwarded it, the request, so many times... there were phones now, but the request had circled around and it should have really just been included in the gearing box work. Someone had probably broken something. Cracks in the steam case were usually easy enough work, a day or two with a good crew but even with your average yard hand it took a couple hours to strip it out and then braise the casing let it sit overnight check it and then put it back in... or someone wanted an excuse for keeping a train out of circulation... which given the lengths that the railroad had gone to keep their trains from being used to move troops south they might have still been playing that game. "How are things in Kirin? Have you heard anything?" To the best of his knowledge Ae-sin hadn't written anything to Hina, but she also proving a little more tempestuous than usual.
Jun paused over the question, "Nothing beyond the usual banditry among the forest dwellers, and hill folk. When tigers fight monkeys hide and watch."
He paused and put a letter from Noguchi aside. It would take some asking around regarding the bank of Taiwan, but Noguchi might have some insight into whatever Keiretsu was putting the money up through Chosen. He might even have the answers to both, but it would be something to ask. Shitagau was making a tidy prophet manufacturing the explosives going into naval gun shells by using the hydro electric power the dams he had built generated to make fertilizer or rather that had been their original purpose before the war... and with the IJN having cruisers in the Mediterranean, well he probably had new friends in the Japanese government.
Allen knew that the war was having an impact on the whole system of international trade. Europe's consumption of goods seemed to know no end. It was voracious... and that raised questions of production, and for the British whether American banks would continue to support the war effort... it was to that end no surprise the British had passed on the Zimmerman telegraph... but the British political system had not prior to Lloyd George been prepared to make certain steps. The Munitions ministry had a special sort of thing going for it.
The had to be fought to a knock out. That was a position that Lloyd George might still have issues with in dealing with Wilson... and there was only an ocean between the PM and President.
--
Notes: Historical though I believe it does receive a brief mention, it bears stating that the US federal reserve only came into being in December 1913 what occurs in June of 1917 is changes to how the US Gold Standard was applied, as part of plans to finance the war the US was now party to. The IBJ is as stated in this segment is the Industrial Bank of Japan and arguably the most modern and certainly most reliable bank that Japan had during this period. The Nishihara loans were quintessential 19th and 20th century Monetary Diplomacy right down to a government official going to a friend in the banking sector to advocate and underwrite loans to advance national policy.
The problem with the Nishihara loans was the optics of attempting to pursue the 21 demands that Terauchi government had for the most repudiated when they came into power as foreign policy. Now [and I'm speculating here] had Terauchi been in power in 1914 and advanced this policy to Yuan Shikai and then Duan Qirui after as opposed to the original 21 demands there would have probably been less controversy just in terms of optics of the action at the time.
The original Japanese 21 demands followed after a table of demands issued by the russian empire and that was probably the driving impetus to their sudden issuing and the perceived secrecy. Indeed as the US state department observes there was little point to the demands because outside of the last section it gave Japan nothing they didn't basically already have, and at the cost of significant good will with their Ally (great britain), and pissing off her major trading partners, and neighbors (US, China, Russia) because it looked like (and was) blatantly extortion-ary threatening. [and of course the irony is that the demands were not issued by militarists they were drafted by men with no military experience, and the idea of using monetary diplomacy came from a career army officer who had little political experience and was largely looked on as kind of an oaf]