Chereads / Surviving as a Writer in the British Empire / Chapter 33 - Chapter 32 – The Barings Scandal (2)

Chapter 33 - Chapter 32 – The Barings Scandal (2)

William Lauderdale, the Governor of the Bank of England, whose stock trading was suddenly banned, felt unjustly treated.

"No, do you think I did this for personal gain, just to pocket a few shares?!"

"But, Governor, there are allegations that Antony Gibbs & Sons, the family company of former Governor Henry Hucks Gibbs, utilised the organisational power of the Bank of England for personal purposes during the consortium formation..."

"So, as the Governor, should I have just turned a blind eye to a situation that could lead to a food crisis in the British Empire!?"

He even appeared in person before the London Securities Committee, arguing his case and expressing his frustration.

At the age of 62, considered quite elderly even in Britain, which lacked the concept of the sixtieth birthday, Lauderdale had to experience first-hand what high blood pressure felt like.

Objectively, his decision wasn't particularly problematic.

Firstly, Barings Bank was difficult to view as just an investment bank.

It was so closely linked with the British government that it was often called 'the Queen's Bank' and played a critical role in the food security of the island nation of the British Empire.

The problem was that this food security was under threat.

The coup in Argentina in 1890 triggered a sudden halt in food supply, causing Barings Bank's performance to plummet instantly.

Moreover, consecutive poor wheat harvests halved the food imports the British Empire needed.

Therefore, it was true that Barings Bank had to bear responsibility for this.

But in such a situation, what were Lauderdale and the Bank of England supposed to do?

Were they supposed to blindly trust the self-regulating order of the sacred and inviolable 'invisible hand' and let Barings Bank go bankrupt?

The economic panic starting in London had already spread to America. If this continued, everyone would starve.

Wasn't the so-called 'invisible hand' just a pathetic excuse to avoid welfare?

Using a sword meant to counter the logic of the Reds against our own is nonsensical.

Rather, by bringing in funds from the private company Antony Gibbs & Sons, they could patch the hole as much as possible, ultimately succeeding in the bailout and saving a significant amount of taxpayers' money.

It was more a case of using a hoe to stop what could have been blocked with a sickle (A stitch in time saves nine).

He could confidently say that what he did deserved praise, not criticism.

However...

This time, the person who raised a strong objection was a significant figure.

─The Bank of England's bailout of Barings Bank was nothing short of covering Barings' reckless management with taxpayers' money. The Bank of England should have found ways to import food from other sources, much like how they used to...

Alfred Marshall.

A political economy professor at Cambridge, responsible for the intellect of the British Empire, and the slayer of the labour theory of value.

This economist, hailed as the 'St.George' of the economics world for vanquishing the dragon of Marxist economics with his bare hands, shook Britain with his editorial in a liberal economic journal.

─Of course, I do not believe that our esteemed Central Bank Governor and former Governor committed this act with the malicious intent of privatising Barings Bank for personal gain like Gregory Villiers.

─However, it is also not desirable for taxpayers' money to be used to cover the losses resulting from Barings Bank's exceedingly lazy investment that solely relied on Argentina! Especially if the benefits flow to private companies like Gibbs & Sons!!

Not only the journalist from The Economist, who wrote a follow-up article, but also the British public who read this, especially Governor Lauderdale and former Governor Gibbs, were bewildered.

What were Alfred Marshall's usual arguments?

It's one thing to be a leading figure in British economics, but what did his office nameplate say?

[Cool head and warm heart.]

He always criticised the government for leaving the market economy to its own devices under the excuse of the invisible hand, advocating for practical economics and aid for the poor.

But now, he was criticising the government for bailing out a bank that would otherwise fail.

Shocked by this, Bank of England employees hurried to his office to appease him.

And then...

"Professor, why are you doing this?"

"If Barings Bank had failed, the price of bread in London would have skyrocketed. Why are you, of all people, doing this?"

"I don't care."

"Professor!!"

"If the bank didn't want to fail, they should have managed better! Why should the taxpayers' money cover Barings' failed investments? Isn't that the 'individual choice' you always talk about?"

"No, but taxpayer money wasn't mostly used. Gibbs & Sons' investment played a larger role..."

"Oh, really? Then Gibbs & Sons must be Gregory Villiers!"

The civil servants' faces turned pale at his words.

They had a gut feeling that any wrong word could drag them into a strange situation.

In this truly unguardable situation, the Bank of England was helplessly subjected to Alfred Marshall's academic onslaught.

Even over time, figures like George Bernard Shaw and other left-wing figures began to support him.

"Professor Marshall is right. The Bank of England was lazy with welfare while talking about the 'invisible hand,' but why did they generously extend a hand when a corporation was failing?"

"Gibbs & Sons, which became a major shareholder of Barings Bank, is a private company run by the family of the former Governor! Isn't this the result of Gibbs attempting to privatise Barings like Gregory Villiers?"

"Former Governor Gibbs, explain yourself! Did you really incite the coup in Argentina from behind the scenes for personal gain? Did you endanger the public's food supply for your own benefit!?"

"Hey, does that even make sense!? If I had that kind of power, I'd be a king, not just a bank governor!!"

There were countless maddening events, but this was just the beginning...

The next day, former Governor Henry Gibbs had to clutch the back of his neck when he saw the front page of a yellow journalism paper screaming, 'Former Governor Gibbs Confesses to Coup Conspiracy!'

"Governor, if this continues, we will be held responsible."

"If we make one wrong move, we could even be blamed for the current economic downturn!"

"No, why is it our fault? What did I even do?"

Once again, William Lauderdale felt genuinely wronged.

The coup in Argentina and the subsequent food price surge, followed by the economic recession, were unexpected events for him and, naturally, for anyone in Britain.

Even Barings Bank didn't foresee it.

If an economist or international political scientist, not a web novelist, had travelled from the future, they could logically explain how Barings Bank's indiscriminate unfair dealings in Argentina led to the spread of anti-government sentiment.

Additionally, they could cynically add, 'This is why those Anglo-Saxon pirates are inherently ignorant.'

But since it was a novelist who crossed over, this complex mix of issues turned into a sensational story, complicating matters for those involved due to unnecessarily detailed content hitting the core ambiguously.

This was another unfortunate accident intertwined with the times.

In any case, they had no choice but to take the hits without saying a word.

The solutions presented in the journal seemed plausible on the surface.

'Damn it, Hanslow Jin. What grudge does he hold against me... Did he overhear me criticising the Royal Literary Society with other members at the party?'

If so, that meant he was there.

A shiver ran down his spine. Hanslow Jin... a terrifying person!

Misunderstandings deepened.

And here,

Alfred Marshall's true intentions were revealed.

─What we must realise is that Adam Smith's 'invisible hand' was never about complete market autonomy, but about companies focusing their self-interest on self-improvement without colluding with politics.

─But what are we doing? Politics and businesses are joining hands for convenience, sometimes arbitrarily excluding competitors, and wielding the 'invisible hand' conveniently like a universal sword in matters unrelated to cronyism!

─The government should implement welfare policies equivalent to or exceeding what was done for Barings Bank! More households in crisis must be rescued just like Barings!!

In the end, William Lauderdale had no choice but to raise the white flag.

Of course, this didn't mean he resigned.

No matter how significant Alfred Marshall was, the governor of the central bank, responsible for a nation's economy, couldn't just follow his words blindly.

But conversely, he could bow his head and yield to someone higher.

"Oh, Minister!!"

"Governor, what's the matter?"

"I can't stand this injustice. What did I do wrong!?"

"Haha, calm down."

William Harcourt couldn't help but suppress a smile as he spoke.

Having served from the Gladstone Cabinet to the Primrose Cabinet, being a pro-Liberal Party figure, he couldn't be happier to see the Bank of England, a bastion of the Conservative Party, grovel.

'This is a good opportunity.'

If he could gain a favour now, ensuring that the central bank wouldn't hinder future Liberal Party actions, how much freedom could the Liberal Cabinet enjoy?

Harcourt thought so and offered a remedy.

"First, the problem started with the London Stock Exchange's ban on your trades, sparking the stock manipulation suspicion."

"Yes, Minister."

"Then we should address that issue first."

"Oh...!"

Lauderdale finally saw a ray of hope.

Thus, an administrative lawsuit against the London Stock Exchange's ban on William Lauderdale and Henry Gibbs' trades was filed in the London Administrative Court.

And naturally, the Administrative Court, through Scotland Yard, demanded documents from the author of the novel, Hanslow Jin, as submitted by the London Stock Exchange.

***

"So, that's what happened."

"No, so what exactly did I do?"

I muttered unfairly.

Mr. Miller, who told the whole story, looked at me with concern, and Mr. Bentley also trembled as he asked me.

"Um, Mr. Writer. You really didn't know anything?"

"Of course I didn't."

I said confidently.

Of course, it's not like I knew nothing.

It's just that what I knew was about the recent economic downturn in the UK, the coup in Argentina, and the crisis of Bearings Bank.

Rather, I looked towards Mr. Miller. After all, I knew this partly thanks to him, following around art auctions and picking up information from the upper class.

I simply adapted that information, mixing the cliché of 'evil economicists manipulating the economy from behind' common in chaebol dramas with the trope of 'catching information in advance and striking from behind' typical in reincarnation stories.

But why are the current and former governors of the Bank of England involved in this? And why drag in his family company in the first place?

"What should we do about this? Now that it's come to this, it seems we should cooperate with Scotland Yard."

"First, we should cooperate."

I was a law-abiding citizen of South Korea in any case. Therefore, I thought that if necessary, I should cooperate as much as possible.

No, honestly, it's ridiculous when you think about it again.

Why did my writing become such a detonator blaming the UK economic downturn?

I don't like sticking my neck out like Jean Valjean, a normal citizen.

But the world doesn't stand still. Why are there so many people who can't distinguish between fiction and reality?

"For now, in writing, I'll just add imagination to what happened in reality and send it off as knowing nothing at all."

"Will that be okay, Mr. Writer?"

"Well... For now, I hope this will be overlooked."

Of course.

It was far from okay.