The Joseon Prince Went To America And Didn’t Return – 22



< Hogu or Prophet (4) >

“….”

“….”

Giannini looked at me biting his lips tightly.

I guess he was taken aback by my unexpected investment proposal.

“Hahaha. Hahahaha.”

But soon Giannini began to laugh loudly.

He resumed his conversation with me with his characteristically playful expression.

“Your Majesty you are very good at joking. You would invest in Bank of Italy which has not even been open for a year? Hahaha.”

Despite his cheerful laughter I continued to maintain a blank expression.

It was an expression that showed that he really wanted to invest not that he was making the offer in jest.

Then Giannini’s face changed again.

He also wiped away his smile and looked at me with a rather serious expression.

“Are you really going to invest in me?”

“okay.”

“Why would you make such a suggestion? We just met.”

The eyes are sharp.

I felt like they were looking at me like I was a bit of a fraud.

Well that makes sense.

It was a stranger who suddenly made an investment proposal out of the blue.

If money weren’t so tight I would have been suspicious of the country too.

“This is our first time meeting but I already know a lot about you.”

“My rumor?”

“Yes. Aren’t you the million-dollar man who turned a $10000 bank into a million-dollar bank in just one year? There’s a lot of talk about your outstanding management performance so how could I not invest in you?”

In fact such rumors had not yet spread in San Francisco social circles.

Rather a considerable number of people were still looking at Giannini with concern.

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But I lied very calmly.

To naturally make an investment proposal to him.

Moreover my conscience was not pricked because there was not a single lie in what I said.

“You. What do you think will happen to this country’s financial sector in the future?”

“Well how would I know I’m a short-strapped person? It’s a tough life living from hand to mouth.”

Giannini spoke in a condescending manner and added foul language to his conversation.

As he said that he crossed his arms.

I knew a little bit about psychological theory.

According to him crossing your arms while speaking means that you are taking a very defensive stance towards the person in front of you.

To make sure he wasn’t letting his guard down and to curry a little more favor I spilled some future information about the American banking industry to him.

“This country’s financial world will soon be turned upside down. The entire system will change.”

“How do you say that?”

“The federal government will soon allow banks to open branches nationwide.”

The banking system of the early 20th century was quite different from that of today.

This is because the ‘single banking system’ is in place which requires each bank to have one branch.

But this system will soon disappear into the back alleys of history.

As the communications and transportation industry developed the ‘national branch’ format changed with one bank having branches in multiple cities.

“Like nearby Canada?”

“Yes. Since you mentioned Canada right in my words… I guess you are well aware of that. And you must also be well aware of the advantages of the banking system in the neighboring country. I don’t need to tell you how convenient it is do I?”

Many American financiers also recognized the advantages of a nationwide branch system.

But the majority were opposed to this new paradigm.

Under the pretext of preserving tradition.

They expressed their opposition on the grounds that a certain power should not monopolize the financial industry.

‘Because of the complex about their short history Americans value really useless traditions.’

This is true even in modern times.

It’s also not uncommon to not use standard units without looking too far ahead.

Isn’t the electoral system also strange?

Indirect election through the electoral college.

‘Well anyway.’

I tried to recall the information about Giannini again.

I don’t know what it is like now but according to history he was a very positive financier toward national branching.

How will Giannini react to my dim guess of a prophecy?

“but….”

Giannini began to point out to me the obstacles to the national branch system he was thinking of.

“The current president is wary of the expansion of corporate octopus. Will he allow the expansion of existing large banks when he is even breaking up existing companies?”

okay.

Roosevelt is not like that.

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Unusually for a Republican known for supporting corporations he was not very pro-business in this regard.

‘In fact he is closer to a fundamentalist. In some ways he is a true marketeer.’

Because we believe in a market economy we are wary of the emergence of excessive monopolistic companies.

That was the economic philosophy of the current US President Theodore Roosevelt.

‘This law can never pass while he is in power.’

Because I will exercise my veto.

Giannini emphasized this point by mentioning Roosevelt again.

“I wonder if Your Highness doesn’t know… His popularity is immense. Furthermore he is known for his uncompromising personality.”

know.

His popularity is really amazing.

If past Republican presidents had shown a pro-business side and focused on building their own people

Theodore Roosevelt pretended to care about the common people while he was taking down the monopolies one by one.

Then and now.

The common people of America have a strong aversion to Wall Street.

There’s no way Roosevelt wouldn’t be popular if he was beating up those Wall Street guys.

But there was one thing Giannini overlooked.

The point is that America is a democracy.

“Even if you’re right… do you think Roosevelt will last forever? He’s already in his second term. That means there’s no next time for him.”

“Well I don’t think so.”

“Of course I know he’s special. This is his first time being elected.”

Roosevelt was fortunate enough to become president without a vote as his predecessor was assassinated.

however?

“But anyway if he runs as a candidate again next time he will be running for a third term. Will he take that risk?”

No U.S. president since Washington has sought a third term.

Because being in office for more than 10 years could lead to dictatorship no U.S. president has served a term longer than 8 years except for one.

Since Theodore Roosevelt is not one of those “ones” his term will end in 1909 unless some extraordinary circumstances arise.

“hmm….”

Giannini thought for a moment.

He also knows America’s past history well so he reminisced about the past and asked me a question.

“Even if Roosevelt steps down from the presidency the next person to be elected is Taft. As you know Taft is Roosevelt’s closest aide.”

right.

Since they were so close Roosevelt would not have run for a third term and would have supported Taft in the party primary.

“Yes you are right. But Taft is only listening to Roosevelt for now. It will be different when he is elected president.”

“How can you make such boasts?”

“Because power cannot be shared.”

Even though the second-in-command has ascended to the position of first-in-command will he really follow the words of his former predecessor?

Power is a truly scary thing.

Those at the top never share their power with others.

Even if he is a political master.

Or maybe it’s my father or my child.

It has a tendency to want to be independent from the shadow of its predecessor.

“Taft will try to erase Roosevelt’s shadow. If he were to worship his predecessor as president his position would be weakened. To prevent that from happening he will ask for help from Wall Street which has been ostracized so far.”

Even after he steps down Roosevelt’s popularity will continue for some time.

They will try to fill their empty power with other things.

‘The power of this country comes from money.’

The place where the richest people gather these days is of course Wall Street.

Under the very good pretext of advancing finance Taft would favor nationwide branching of banks.

This was a little explanation of the future to Giannini.

“….”

“….”

Giannini listened to me and thought hard.

Well I guess you probably already guessed the interest rate.

This might be the first time you’ve heard something like this from someone else so giving it some time didn’t seem like a bad idea.

“So… you’re saying that you want to invest in me because the federal government will soon allow banks to open branches nationwide?”

“okay.”

“I still don’t understand. Why me? There are so many others.”

I answered his question with a snicker.

“That’s because you’re a heretic.”

“Are you a heretic? I am a devout Catholic. How can you….”

know.

If you’re of Italian descent you’re probably Catholic.

I quickly corrected Giannini’s misunderstanding.

“Not that kind of heretic but a heretic in the banking industry. Haven’t you been acting differently from the existing banks for the past year?”

Giannini knew that he was taking a very unconventional approach.

That’s why he seemed to somewhat agree with my argument.

“In times of chaos like this only disruptive innovators will survive. The greenhouse plants that have been living by following the existing order will all drown in the sea during this storm.”

Giannini suddenly got up from his seat.

Then he stroked his beard thought about something and soon took out a bottle of alcohol placed on one side of the office.

“Would you like a drink?”

“I’m done. The sun is still high in the sky. What kind of alcohol is that?”

“I think I should drink.”

Giannini stood up from his seat and took a gulp of strong whiskey.

Then he sat down and looked at me.

“I think so too. Roosevelt will not last forever and the nationalization of banks will soon be achieved. Listening to the prince’s advice I think the nationalization of banks will be passed in three years at the earliest or in five years at the latest.”

also.

I guess I was expecting the interest rate too.

“But even so I cannot accept a huge sum of money like a hundred thousand dollars as an investment. I have one firm principle.”

I know I know.

I had also prepared for this in advance because I had analyzed him sufficiently through prior research.

“I’m sorry I don’t want to give all the management rights to one bastard… I don’t want to give all the management rights to one shareholder.”

Yeah that damn 3% rule.

How much did you struggle with Giannini’s unwavering convictions?

I lost several sleep trying to figure out a way around this.

“I’m sorry but the amount of stock I can give you Prince is about 100 shares. I don’t think 100 shares are worth a hundred thousand dollars.”

“I think so too. Even if Bank of Italy is a fast-growing bank it’s not worth $100000 per 100 shares. It’s too expensive.”

I snapped my fingers and pulled out one of the documents in my pocket.

It was a proposal.

“So I’m going to give you an idea. Do you know about preferred stock?”

“First of all I’m not sure.”

Giannini is not from Wall Street.

A true self-made man who started out as a fruit shop owner and worked his way up from the bottom.

That’s why Giannini didn’t seem to understand the concept of priority.

“Preferred stock has the same rights as existing stock.”

“Your Majesty as I said earlier I have been living for over 100 weeks…”

I see you have a hasty personality.

I interrupted Giannini and quickly continued the story about preferred stocks that I had been unable to finish.

“You have to listen to the end. Preferred stocks have the same rights as existing stocks. There is only one difference from common stocks.”

“What is it?”

“You’re saying there’s no voting rights.”

Lack of voting rights means that one cannot participate in corporate management.

However as I said at the beginning other rights are the same as common stock.

This meant that dividends from corporate activities could be received regularly.

“I heard that there are about 3000 shares of Bank of Italy common stock currently in circulation. I would like to invest a hundred thousand dollars and buy 100 shares of common stock and 3000 shares of preferred stock.”

You manage and I make money.

ah.

Some may be concerned.

Because the value of preferred stock may appear to be significantly lower than that of common stock.

But that’s not necessarily the case.

This is because there are many people in the United States who like me are not interested in management but only want to focus on investing.

Even Google today is like that.

There is almost no difference in price between alphabet A and alphabet C.

In some cases preferred stock may even be worth more than common stock.

‘But I guess we should put one restriction on it?’

I also added a restriction that even if I can split the preferred stock I issued this time no additional preferred stock can be issued in the future without the consent of preferred stockholders.

Because the priority values ​​I hold should not be diluted.

“If common stocks are issued without payment preferred stocks must also be issued without payment.”

“hmm….”

Giannini narrowed his eyes.

When I pushed for preferred stock and urged him to invest he kept his mouth shut as if he needed time to think.

Until now we have rejected large-scale investment proposals based on the principle of not concentrating management rights on one person.

Because my proposal could not be accepted by this logic.

“Your Majesty as you know I also own exactly 100 shares of the Bank of Italy.”

“I guess so.”

“This is a matter that needs to be discussed with shareholders. How can I who owns only 3% of the stock handle this on my own?”

“I understand.”

“Please give me some time.”

“Don’t keep me waiting too long.”

Giannini partially accepted my investment proposal by issuing 100 new shares of common stock.

However the issuance of new preferred stocks was put on hold for the time being.

‘Gianini will eventually approve my proposal.’

How can you be so sure?

Because a major earthquake is just around the corner.

Most of Giannini’s lenders are small business owners in San Francisco.

Their livelihoods are hit hard by the earthquake.

Additional funds were desperately needed to rebuild their lives.

This will soon lead to an explosion of demand for loans and Giannini will soon think of my investment.

‘Because with just a hundred thousand dollars in investment capital you can lend a million dollars to your customers.’

Typically banks’ reserve requirement ratio is around 7-10%.

In other words this means that banks should hold 7 to 10 percent of the amount they lend as assets.

‘It’s an opportunity to expand the business. Giannini will never miss this.’

Next time we meet I will be able to negotiate with Giannini on more favorable terms.

In an age when great calamity has descended upon this land there is no stronger opponent than the rich with cash and gold.

‘You will regret not accepting my offer right now.’

I walked out of the Bank of Italy building with a happy smile on my face.

Now it was time to prepare for a real earthquake.

< Hogu or Prophet (4) > End