Washington DC.
A three-story Victorian luxury townhouse on K Street.
Under a magnificent crystal chandelier, a small, private dinner is underway.
The air was filled with the scent of expensive French perfumes and the smoke of Havana cigars.
Black waiters in tuxedos carried silver trays, which held crystal glasses filled with champagne.
Anna was wearing a dark blue silk evening gown.
She wore a priceless diamond necklace, one of the spoils Felix had acquired from Parisian nobles.
Her smile was impeccable as she moved among several portly federal senators and members of Congress.
In this city at the heart of power, Anna's salon had become the most famous venue for political deals.
With the funds provided by Felix in her hands, she turned the villa into an invisible hub of power.
" Mr. Senator, regarding the special hearing on interstate power transmission, when does your committee intend to issue its assessment report?"
Anna, holding a glass of champagne, approached a senior Senator from Pennsylvania.
Senator wiped the sweat from his forehead, his eyes darting away.
" Miss Anna, this is a tricky matter," Senator said in a low voice.
" The Pittsburgh fire certainly had a terrible impact, but recently a group of extremely well-funded lobbyists came to Washington. They represent a newly formed European syndicate."
Senator glanced around and moved closer to Anna.
"That Englishman named Cavendish has been very generous lately. He's been lobbying Capitol Hill to try and overturn state bans on high-voltage Alternating Current. And they've promised the chairmen of several key committees that if Congress is willing to launch a federal investigation into General Electric's 'monopolistic practices,' their United Trust Bank will personally provide several large interest-free loans to the families of these lawmakers' companies."
Anna's smile remained unchanged, but a chilling glint flashed in her eyes.
Old Morgan has finally started throwing money around in Washington.
They bribed politicians with interest-free loans and attempted to dismantle General Electric from an official standpoint using antitrust legislation.
" Mr. Cavendish is indeed a generous English gentleman." Anna gently swirled her wine glass.
"But Mr. Senator, you are a visionary politician. You should know that accepting bribes from foreign capital to suppress domestic industries would be an extremely damaging scandal if exposed by the media in a future election."
Senator's expression changed.
" Miss Anna, everyone is operating within the rules. Cavendish's methods are very covert; the loans are all processed through the Ocean Shell Company's accounts."
"Yeah?"
Anna turned around and waved to her secretary who was standing in the corner.
The secretary immediately came over and handed Anna a thin brown paper folder.
Anna handed the folder to Senator.
"You can open it and take a look, Mr. Senator."
Senator took the folder with a puzzled look and opened it.
Inside were several photos and a photocopy of a bank transfer slip.
In the photo, Senator's brother-in-law is shaking hands with Cavendish at an upscale restaurant in Philadelphia.
The remittance slip clearly shows that $100,000 was transferred from United Trust Bank to a trust fund under Senator's wife's name.
Senator's hands began to tremble violently.
Fine beads of cold sweat appeared on his forehead.
In this day and age, if such solid evidence were presented to a New York newspaper, his political career would be over overnight.
"How...how did you get it?"
Senator's voice trembled.
"In America, bank clerks and photographers are happy to help if you pay enough."
Anna's smile vanished completely, replaced by coldness.
" Mr. Senator, General Electric provides more than just electricity. We also offer rewards for loyalty."
Anna took an Imperial Bank draft from her handbag and discreetly slipped it into Senator's suit pocket.
"This is $150,000, legitimate campaign sponsorship. More than the British gave, and cleaner."
Anna approached Senator and spoke in a voice only the two of them could hear.
"The committee's assessment report must be released by tomorrow afternoon. The conclusion can be summed up in two words: dangerous. Maintain all high-pressure bans. At the same time, it would be best to lock that antitrust investigation proposal away in the filing cabinet forever."
Senator touched the promissory note in his pocket and then looked at the black document in his hand.
He swallowed hard and nodded with difficulty.
"I understand, Miss Anna. The committee will pass a resolution tomorrow."
"Thank you for your wisdom, Mr. Senator. Have a pleasant evening."
Anna put on her charming smile again and raised her champagne glass in a toast.
As Senator walked dejectedly toward the restroom, Anna turned to look at her secretary.
"Go to the study on the second floor and send a secret telegram to New York."
"Tell Felix that I've blocked Morgan's money-spraying offensive at Capitol Hill. But Cavendish is throwing money around like crazy, and United Trust Bank has more money in the bag than we thought."
" Washington politicians are a pack of insatiable wolves. Today it's 150,000, tomorrow it could be 500,000. If we can't cut off European funding at the source, this political lobbying war will become a bottomless pit."
A few hours later.
New York, Empire State Building.
The top-floor office was still brightly lit late at night.
Felix held a copy of the coded telegram Anna had sent him.
Tom Hayes and George Templeton sat opposite each other, both with their ties loosened, and the table was piled high with various financial statements.
"Boss, is Washington about to collapse?" Hayes asked.
" Anna did a great job; she temporarily blocked the antitrust investigation with incriminating evidence and cash."
Felix threw the telegram on the table.
"But she's right. We can't afford to just throw money around in Washington. Old Morgan has eight million pounds in reserves; they can bribe all the MPs."
Felix stood up, walked to the liquor cabinet, and poured three glasses of strong brandy.
He handed two glasses of wine to Hayes and Templeton.
"Defense will never win a war." Felix raised his glass.
" Old Morgan wanted to use political means to dismantle General Electric. So I'll use financial means to blow his heart out."
Templeton adjusted his glasses.
"Boss. You mean to attack United Trust Bank directly?"
"That's right." Felix sat back down in the leather chair.
"The newly formed company is now lending out interest-free loans everywhere, subsidizing the price of Carnegie's rails, and buying off politicians in Washington. They appear to have $40 million on paper, but a large portion of that is secured by fixed assets. Their actual dollar cash flow in New York is definitely not as much as it appears on paper."
Felix looked at Templeton.
" George, use the $14 million in physical gold reserves that were brought back from Europe from the Imperial Bank's vault. Convert it all into highly liquid greenback US dollars and prepare ammunition."
Then, Felix turned to Hayes.
" Tom, Patriot Investment Company has been quietly spreading rumors in the market these past few days. They say that the European syndicate's investment in North America is suffering serious losses, Westinghouse Electric's products are still unable to be launched, and Carnegie Steel's debt default risk is extremely high."
"I want you to use all available funds over the next two weeks to aggressively acquire all corporate bonds related to Morgan and Vanderbilt on the secondary market, as well as various short-term commercial paper issued by United Trust Bank."
Hayes gasped.
"Boss, are you trying to cause a run on the bank?"
"This is called a stress test," Felix sneered.
"Once we've gathered all the notes available on the market, we'll choose a Friday afternoon and use dozens of horse-drawn carriages to block the doors of the United Trust Bank."
"I demand that they immediately, in full, and in physical gold as a guarantee of payment."
Felix downed the brandy in his hand in one gulp.
"If they can't produce the gold, United Trust Bank will go bankrupt within an hour. Old Morgan's massive syndicate in North America will collapse like a sandcastle."
The smell of brandy in the office hadn't dissipated yet.
Felix placed the empty wine glass he was holding on the mahogany table.
" That's settled then, Tom. Go and gather all the bills in circulation, prepare for a bank run. "
Felix looked at Hayes and said in a calm tone.
Hayes picked up the notebook on the table and quickly jotted down what he needed to nod about.
"I understand, boss. I'll have the traders operate across multiple accounts so that no trace is left."
Felix turned his head and his gaze fell on George Templeton, the president of Imperial Bank.
" George, put Old Morgan's matter aside for now."
Felix opened a drawer, took out a photocopy of an official letter stamped with the French government seal, and pushed it across the table.
"Tell me about the situation in Paris. Has the special envoy of the new government of the Third French Republic, that old man Thiers, contacted you?"
Templeton pushed up his gold-rimmed glasses, his expression turning serious.
He picked up the official letter.
"I've looked, boss. Yesterday afternoon, the Thiers government's financial envoy secretly came to the Imperial Bank's underground vault. They looked extremely desperate."
Templeton opened the ledger he carried with him.
"Paris has been breached by the Prussians. A few weeks ago, King William I of Prussia was formally crowned in the Hall of Mirrors at the Palace of Versailles, and the German Empire was established. This is tantamount to stomping France in the face. Bismarck has imposed extremely harsh armistice terms. In addition to ceding Alsace and Lorraine, France must pay five billion francs in war reparations."
"God ~ five billion françois ".
Hayes, who was standing next to him, was shocked.
"This is almost several years' worth of France's gross national income. How are they going to pay it back?"
"Of course they can't afford that money." Templeton looked at Felix.
"Therefore, Bismarck stipulated that the reparations must be paid in physical gold, silver, or reliable hard currency foreign exchange. Before the reparations were settled, the German Empire's troops would continue to be stationed in northern France, and the cost of the troops would be borne by the French government."
Felix leaned back in his leather chair, lost in thought.
"Therefore, the Thiers government must send the Prussians away as quickly as possible. It seems they need to borrow money. What conditions did the envoy offer?"
"They issued ' France Liberation Bonds' in London and throughout Europe," Templeton reported.
"The annual interest rate is five percent, but European capitalists have expressed doubts about France's repayment ability. Although the Rothschild Family took over part of the underwriting business, they lowered the issue price. The Thiers government is now in dire need of opening up financing channels in America. The envoy hopes that Imperial Bank can act as the sole underwriter for the North America region."
Felix tapped his fingers lightly on the table.
"What was their bottom line for Imperial Bank?"
"Eighty percent of the face value," Templeton replied.
"In other words, we buy bonds with a face value of 100 francs for 80 francs. Then we sell them to American investors on Wall Street and East Coast exchanges at whatever price we can sell them for. The difference between the price and the 2% commission is all our profit."
Felix gave a cold laugh.
"Eighty percent of the time, that old man Thiers thinks we're doing charity work." Felix sat up straight.
" George, go see that envoy tomorrow. Tell him that American investors have no interest in the paper money of defeated nations. The Imperial Bank is taking on enormous sales risk."
"Put the bottom line down to 70%, we won't do it for even a fraction more," Felix stated his bottom line.
Templeton paused for a moment.
"Seventy percent? Boss, that's tantamount to profiting from someone's misfortune. The French envoy will be furious."
"Even if he's furious, he has to sign it."
There was not a trace of pity in Felix's eyes.
"Because apart from the Imperial Bank, no institution on Wall Street can swallow up $50 million of European sovereign debt in one go. You tell him that as long as he agrees to a 70% floor price, the Imperial Bank will ship $10 million worth of physical gold directly to the Bank of France's underground vault on the day the agreement is signed."
Hayes couldn't help but chime in.
"Boss, do you really believe the French can pay back this 5 billion franc? If they default, the 10 million gold we invested will be gone for good. Even if we have those bonds, they're just worthless pieces of paper."
"They will pay it back, and faster than anyone can imagine."
Felix's tone carried an air of precognitive certainty.
He knew the course of history.
Although everyone will continue to use the daily breastfeeding method in the future.
Before World War II, although France performed poorly on the battlefield, its people had an extremely deep-rooted wealth.
In an effort to drive out the Prussian garrison, French peasants and the bourgeoisie would pull out every gold coin hidden under their mattresses to buy government bonds.
" France's economy is very resilient, Tom," Felix explained.
"Their agricultural and light industrial base is still there. Once the Prussian troops withdraw and their machinery starts running again, this debt can be quickly covered by taxes. We buy a batch of absolutely safe sovereign bonds at 30% of the price and then retail them on Wall Street at 10% of the price to retired widows and trusts who crave high interest rates."
Felix then looked at Templeton.
"A 20% net profit margin—that's risk-free arbitrage. Go do it, George. Get the agreement done as soon as possible."
Just then, there was a knock on the office door.
Secretary Frost pushed open the door and entered, carrying several copies of international telegrams that had just been delivered.
"Boss, here's the latest political update from Europe."
Frost walked to the table and put the copy down.
Felix picked up the copy.
"The southern German states of Bavaria and Württemberg were formally incorporated into the empire. Bismarck completed the unification."
After reading the contents of the first telegram, Felix turned to the second one.
"The Kingdom of Italy took advantage of the French army's withdrawal from Rome to capture the city. The Pope retreated to the Vatican, and Italy completed the unification of the peninsula."
Somewhat surprised, Felix tossed the copy onto the table and picked up the glass of brandy.
"The map of Europe has been completely shattered and rebuilt."
Felix looked at the world map on the wall.
"A powerful German Empire rose in Central Europe. France was trampled underfoot, and Italy became the new player."
"Boss, will this affect our business?" Hayes asked.
"Of course it has some impact." Felix took a sip of his drink.
"The old balance of power has been broken, and those politicians in London must be having sleepless nights. What the British Empire fears most is the emergence of an absolute hegemonic power on the European continent. The German Empire is too strong now, and British foreign policy will soon shift."
Felix astutely grasped the underlying political context.
" Old Morgan is in London now. He will definitely use this geopolitical panic to lobby the British government. He will tell Downing Street that Europe is out of control and the British Empire absolutely cannot lose the North American market. He will likely portray us as the British Empire's biggest commercial threat in America."
Felix stood up.
" The Wall Street run needs to be accelerated, Tom. Smash Morgan's United Trust Bank before the British government intervenes. Don't give them a chance to breathe."