Chapter 316: Rhine Shield
When discussing the financial bonds traded between East Africa and Abyssinia, one particular bond stood out—issued by the Bank of Hechingen under the East African government's watchful eye, it served as a currency instrument within East Africa.
At present, the East African government was contemplating the issuance of its very own currency, and Ernst found himself deeply involved in this endeavor.
On March 14, 1871, the East African Kingdom delegation, led by Ernst and consisting mainly of Hechingen Bank employees, officially embarked on an investigative mission to the Swedish Mint. Their visit had received the blessing of the Swedish royal family.
Weins, the President of the Bank of Sweden, was in charge of welcoming the delegation. He began by recounting Sweden's remarkable history in banking and currency. He explained that Sweden had introduced the first banknotes in Europe in 1661, which marked the onset of banknotes as a recognized form of currency in the continent. While these initial banknotes were introduced to supplement the insufficient metal currency supply, they soon gained widespread acceptance as genuine currency. The notes were government-issued and backed by gold, assuring their stability and credibility. These Swedish banknotes became the very first officially issued banknotes in European history, akin to East African financial notes, although East Africa did not produce metal currency.
Weins continued, "The Swedish krona you see before you is predominantly composed of cotton fibers, with a small percentage of hemp fibers and a significant amount of wooden pulp."
Ernst added, "Our East African banknotes are primarily composed of cotton, high-quality sisal, and a minor proportion of wood pulp."
Weins expressed curiosity, "Ah, I see. I'm not very familiar with sisal. In Sweden, wood is of paramount importance. We even import substantial quantities of cotton."
Ernst seized the opportunity to extol the virtues of sisal, which East Africa produced abundantly. "Sisal boasts long fibers with exceptional strength, durability, resistance to corrosion, heat, and rapid moisture absorption and release. These qualities make it ideal for paper production. Not only does it yield robust paper, but it is also easy to store, flexible, and provides a comfortable feel. It serves as a primary raw material for our banknotes."
Intrigued, Weins inquired further, "What about its price and production volume?"
Ernst clarified, "Sisal's hallmark is its high yield, typically averaging around three tons per acre annually. However, it thrives exclusively in tropical and subtropical regions, making it an ideal crop for the entirety of East Africa due to its tropical climate. Currently, Mexico stands as the world's largest sisal producer."
Weins considered, "I see. Well, we can substitute wood pulp with sisal, provided it's cost-effective. We could enhance the quality of our banknotes."
Ernst promptly assured, "That won't pose a problem. We maintain a sisal processing facility in Hamburg, dedicated to manufacturing raw materials for ship cables. If you're interested, you can visit Hamburg to make purchases. We can even offer you a 50% discount."
Ernst's offer wasn't about being frugal; rather, it reflected the surging demand for sisal in East Africa. If more buyers were interested, East Africa would gladly oblige. Expansion of sisal cultivation was a possibility in response to market needs.
Weins chuckled, "Hahaha, that sounds agreeable. We'll dispatch technicians and procurement personnel for an assessment."
Subsequently, Weins led Ernst and his delegation to inspect the mechanical equipment within the Swedish Mint.
Weins shared insights, "This printing machine was specially commissioned from the United Kingdom. Although we in Sweden slightly lag behind in manufacturing capability, the design is entirely our own. Consequently, it bears our unique brand. This level of precision can be found in France and Prussia, but the initial contract was awarded to the United Kingdom due to their lower pricing. The equipment was designed in Sweden, then fabricated in London, and later shipped back to Sweden for final adjustments."
Ernst probed further, "To what standard would you compare it?"
Weins clarified, "There is virtually nothing more advanced than this machinery. However, if you intend to acquire a set, certain internal components like molds would require modifications. Each set of banknotes is unique, catering to different requirements from each customer. Although there are few such customers nowadays, numerous countries still rely predominantly on coin currency."
Weins' concluding remark hit the mark—this was why Ernst had journeyed all the way to Sweden.
If the Austro-Hungarian Empire possessed mature technology in this domain, Ernst would have unquestionably prioritized cooperation with them. However, the Austro-Hungarian Empire still adhered to coin currency, lacking experience in banknote production. Additionally, the strong ties between the Hexingen royal family and the Swedish royal family influenced the decision to collaborate with Sweden.
As for why Germany wasn't chosen, it was because Germany's banknote technology was akin to that of Hechingen Bank. While paper currency existed in numerous states, metal coins remained prevalent throughout the empire. This trip to Sweden revolved around gaining insight into Swedish banknote anti-counterfeiting technology, benefiting from their centuries of experience in this field.
In East Africa, counterfeiting concerns were relatively insignificant, given the general population's limited education and counting abilities. However, with East Africa introducing its own currency to the international stage, particularly to Germany and the Austro-Hungarian Empire, stringent anti-counterfeiting measures became imperative.
Hechingen Bank had gathered experience through the issuance of financial bonds, which also served as banknotes. While they possessed unique expertise, their involvement in the field was relatively recent, spanning just two to three years. Hence, this visit to Sweden aimed to rectify this shortfall—accumulating knowledge from a nation with two to three centuries of banknote technology expertise.
Most of the inspection team members hailed from Hechingen Bank and were here to impart Sweden's advanced technology and experiences. In partnership with Sweden, they would combine this newfound knowledge with their existing banknote expertise to launch East Africa's own currency.
This currency was christened the "Rhine Guilder" and represented a significant departure from the Rhine Guilder circulating in Germany.
Firstly, the East African "Rhine Guilder" was a banknote, whereas the European Rhine Guilder was a gold and silver coin.
Secondly, the East African "Rhine Guilder" featured denominations of one, five, ten, twenty, fifty, one hundred, and five hundred guilders.
The term "guilder" shared the same unit as the "kroner" but meant "gold coin," and "Rhine" denoted the currency's name.
Lastly, the currency bore Constantine's likeness on the front, featuring a bust of Constantine wearing a distinctive pointed hat reminiscent of German military headgear. The reverse side of the currency bore the Hohenzollernburg's image, adorned with symbols such as the national emblem. Each "shield" was equivalent to 0.22 grams of gold, with gold reserves derived from gold mines in East Africa, particularly within the Great Lakes region. For security, Hechingen Bank had established several vaults in Europe.
East Africa's currency, known as the "Rhine Guilder," lacked alternative names. However, to differentiate it from the internationally circulated Rhine Guilder from the Austro-Hungarian Empire