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Chapter 1385: Bank for European Settlements

France, Paris.

In the corridors of Versailles, Crown Prince Ludovico of Parma nervously glanced at the large doors ahead, then turned to Bailly beside him. "Later, I'll need you to explain the advantages of the new trade policy to His Royal Highness the Crown Prince as thoroughly as possible."

"I will, Your Highness," Bailly replied.

Ludovico followed Eman into the Crown Prince's reception room, and couldn't help but recall the painting he had received over a month ago.

At the time, he had just returned to Parma from the World's Fair in Karlsruhe. He had boastfully explained to his father and wife how, through his own ingenuity, he had acquired the full set of Railway patent technology from his brother-in-law for only a small sum.

However, once he finished his account, the King immediately tore into him with a furious scolding.

Only then did he realize the enormous blunder he had made—the model of secondary Railway patent authorization could potentially cost France hundreds of millions of Francs in patent revenue.

Other countries had saved money because of his actions, but the brunt of the French Crown Prince's wrath would fall squarely on him.

Just as the Parma royal family was agonizing over how to salvage this disastrous situation, a painting arrived from Versailles.

The painting depicted a banquet in Karlsruhe, with the French Crown Prince holding a wine glass in his left hand, laughing and joking with everyone, his face flushed with wine. His right hand held a pen, poised to sign the document before him.

Portions of the Railway patent secondary authorization could be seen on the document.

Ludovico's face went green; it was clear His Royal Highness the Crown Prince was telling him that this matter was far from over.

However, after seeing the painting, Thérèse sighed in relief and comforted him, "It seems all of this was planned by my younger brother long ago. You don't need to worry so much."

"Ah? I don't quite understand what you mean."

Thérèse explained, "Look, the painting is extremely detailed. Even a top artist would need at least half a month to complete it."

"You left Karlsruhe less than ten days ago. Adding the travel time from Paris, it suggests the painting must have been completed before the banquet that day."

Ludovico immediately felt a sense of relief, but then a cold sweat broke out on his back.

He had thought he'd 'fooled' his brother-in-law at the banquet, never realizing he had been following his lead the entire time.

Even if the French Crown Prince hadn't reprimanded him, the Parma royal family still dared not relax, especially since Ludovico's initial motives were questionable.

It wasn't until Parma's Minister of Finance proposed a plan that Ludovico saw a glimmer of hope for earning his brother-in-law's forgiveness.

"Your Highness, Prince Ludovico has arrived," Eman announced.

Eman's voice interrupted Ludovico's thoughts. He quickly stepped forward and bowed, "Your Royal Highness, the esteemed Crown Prince..."

Joseph, however, warmly embraced him. "Ludovico, there were too many people at the wedding; we didn't get a chance to talk properly."

"Yes, indeed, it was quite lively that day," Ludovico said, forcing a smile. "I hope the Crown Princess liked those two 'little fellows'."

"Oh, she loved them very much. Though the imperial chefs nearly stir-fried them."

Ludovico had brought gifts worth over 800,000 Francs to Paris this time. Among them were two extremely rare manatees, which the Versailles imperial chefs recognized as top-tier ingredients. They argued with the zoo officials for over an hour before the matter was finally brought to Joseph, who resolved it.

Well, in truth, what Ludovico had sent really was meant as food. However, they were now the zoo's newest exhibits.

Once Joseph had pulled Ludovico to sit down, the latter eagerly began to speak of the true "grand gift." "Your Highness, you may have heard that our country began issuing paper currency late last year."

Joseph nodded. "Yes, the Parma Lira."

Ludovico continued, "To regulate international trade, and upon the advice of Baron Luciani, my father has issued a decree stating that in future trade, our country will only accept Parma Lira and Francs."

Joseph had already heard a general report from Bailly two days prior, but he still feigned delight as he said, "That is a very wise decision. Please convey to His Majesty Ferdinand that this will greatly boost trade volume between our two nations."

Parma was also putting everything on the line to smooth over the 'getting the Crown Prince drunk' incident.

Parma's current trade volume ranked third in Northern Italy. Since other countries would likely be unwilling to accept its own Lira paper currency, its foreign trade would almost entirely be settled in Francs.

This alone would expand the market capacity of the Franc by at least tens of millions.

Moreover, Parma would henceforth be firmly tied to France's trade system.

Ludovico felt a sense of relief; the Crown Prince was indeed quite pleased with this gift.

Unexpectedly, Joseph suddenly shook his head. "However, have you considered that this approach might create many problems?"

Ludovico paused, then nervously asked, "What problems are you referring to?"

"Please, try some green tea, just arrived from the East," Joseph said, gesturing to the teacup. "If you are trading with the states of Northern Italy or South Germany, then your new trade regulations are perfectly viable."

"But if you sell goods to the Ottoman Empire, they won't have Francs. Oh, even trading with neighboring Naples will present the same issue."

Ludovico quickly explained, "Baron Luciani has already considered this situation, Your Highness.

"Our country will establish three exchanges along the border to 'purchase' the currencies of these nations, paying them in Parma Lira, which will then allow for transactions."

Joseph shook his head again. "Then the Ottomans won't be able to buy your goods with bills of exchange. Instead, they'll have to carry large amounts of Kuruş or Ducats, and then exchange them for paper currency at the border.

"If I'm not mistaken, Ottoman merchants will surely be unwilling to trade in Parma in the future.

"Of course, there's another possibility: countries holding Francs, such as Genoa, could buy your popular sausages or cheese with Francs, then accept silver coins from the Ottomans and resell them."

Ludovico couldn't help but frown. Baron Luciani had never mentioned any of this, but it was clear this would allow the Genoese to siphon off a significant portion of Parma's rightful profits.

Indeed, people in this era were accustomed to trading with gold and silver coins. It was perfectly natural that, in adopting France's paper currency system, they hadn't immediately considered issues like settlement and exchange rates.

Ludovico instinctively asked, "What... what should be done about this?"

"It's not insoluble," Joseph said with a slight smile. "First, we need to establish an exchange rate between different currencies."

When using gold and silver coins, currency exchange only required weighing them. But for paper currency, which has no intrinsic value, an exchange rate was an insurmountable hurdle.

"Next, we establish a bank responsible for currency exchange between different countries. Through it, we can 'intermediate' transactions involving various currencies."