Felix did not immediately reveal his solution, instead asking a seemingly unrelated question.
"Ulysses. How does the Federal Government and the various state governments currently handle public officials who are old and can no longer work?"
Grant was stunned for a moment, not expecting Felix to ask this.
"How else would they handle it?"
Grant leaned back in his chair, appearing somewhat helpless.
"Aside from a meager pension for disabled veterans of the Civil War, the government has no budget for this. If postal clerks or tax office clerks get too old to work, they can only resign and go home. They rely on the greenbacks they saved to get by. If they haven't saved any money, they have to rely on their children for support. Some states provide a small living allowance for retired judges, but it is pitifully small."
Grant snorted, appearing somewhat dissatisfied.
"This is a huge problem. Those old clerks refuse to leave their posts because they know they will starve once they resign. This results in government agencies being filled with the old, weak, sick, and disabled, with extremely low efficiency. But the government cannot just kick them out onto the street."
"That is the problem we are going to solve."
Felix spread his hands flat on the desktop.
"I propose that the Department of the Treasury takes the lead in establishing an independent 'Federal Civil Servant Pension Fund Management Company'."
Felix articulated this concept, which was absolutely ahead of its time in 1871, word by word.
"Pension fund?" Grant frowned. "What is that?"
"It's very simple."
Felix began to break down this financial model in detail.
"It is to pass an act. It would mandate that all employees working for the Federal Government, including clerks in the Post Office, Customs, the Department of Justice, and the Department of the Interior, have three percent of their salaries forcibly deducted every month."
Grant slammed the table.
"Are you joking? Felix! Deduct their salaries? They will go on strike! These people in Washington complain about rising prices every day, and if you go and deduct their money now, they could surround The White House by tomorrow!"
"Don't be anxious, OK? Listen to me, Ulysses."
Felix raised his hand to suppress Grant's temper.
"You deduct three percent from them. As compensation, the Federal Government will also take out three percent from fiscal tax revenues at the same ratio. These two sums of money will be combined and deposited into an independent retirement account under each of their names."
Felix looked at Grant.
"Then, this money will not just sit in the treasury gathering dust. This pension fund company will take this massive cash flow gathered from over a hundred thousand federal employees across the nation and invest directly in General Electric and the American Telephone and Telegraph Company."
Grant's breathing suddenly became rapid.
He was a commander, and although he did not understand complex financial operations, he possessed a keen strategic intuition. He began to vaguely see the outline of this web.
"We will not sell common stock, but instead issue special preferred stock to the pension fund," Felix continued.
"These stocks have no voting rights on the board of directors and cannot interfere with any of my company's daily operations or technical research and development."
"However... it enjoys a fixed, priority right to profit dividends. Every year, a portion of the profits earned by General Electric and the telephone company will be taken out and paid to the pension fund as dividends."
"This dividend, plus the principal, will snowball in the fund pool through compound interest. When those employees have worked for twenty years, or reach retirement age, the fund will issue them a monthly 'pension' sufficient to maintain a decent life."
Felix leaned back in his chair, looking at the President who had been completely stunned by this concept.
"Ulysses, have you figured out the political logic behind this?"
Grant stood up and paced back and forth in the study.
His leather boots made dull sounds as they stepped on the carpet. His brain was spinning frantically.
"If this fund is established," Grant muttered to himself.
"That means the second half of the lives of hundreds of thousands of federal employees will be completely tied to the profits of General Electric and the telephone company."
"Yes, that's right. Perhaps even more than just General Electric and the telephone company; we can also invest in other promising companies," Felix pointed out the core.
"If some future president, or some congressional committee, wants to use antitrust laws to split up my company. Wants to smash my power grid."
Felix let out a mocking laugh.
"Then the first thing they will have to face is the hundreds of thousands of public officials across America who rely on General Electric to pay dividends for their retirement. Those old policemen, old judges, old postmen. They will protect the Argyle Family's industry as if they were protecting their own lives. Any politician who dares to touch General Electric's profits will be torn apart by their votes in the election."
This was an open conspiracy.
Felix had used the pension money of all American civil servants to build himself an impenetrable suit of armor that could never be pierced by the law.
As for the possibility that some people's greed might not be satisfied, and they might want the national fund to swallow the company?
Heh...
That would only make those people's imaginations run wild or send them on a one-way trip to the grave.
"Moreover, this doesn't just solve your concerns about monopolies."
Felix threw out another bait.
"Haven't you always complained that the southern state governments don't listen, and that governors in the West always want to demand power from the Federal Government?"
Felix pointed at the table.
"Expand the coverage of this pension fund and allow employees of various state governments to join voluntarily. As long as they join, the Department of the Treasury will match their three percent. Just think about it."
Felix's gaze was highly provocative.
"When a sheriff in Texas, or a tax collector in Georgia, discovers that the bread and butter for his retirement is not being sent to him by the governor, but is being sent to him punctually every month by the Federal Department of the Treasury in Washington."
"Guess... when the governor wants to oppose federal laws, who will this sheriff point his gun at?"
Grant stopped his pacing.
He turned his head abruptly and stared fixedly at Felix.
This plan was too vicious, but also too wonderful.
This was not about solving a commercial monopoly at all.
This was using money and the guarantee of a future life to buy out the absolute loyalty of all the grassroots personnel running the government across America.
This could weld the loose federal system, through a single ledger, into an iron-clad centralized power.
"Felix." Grant's voice was trembling.
"You are indeed a devil, more terrifying than all the politicians who have spent their entire lives on Capitol Hill."
"NONONO~ I am just a businessman who provides solutions to problems."
Felix picked up the cold tea on the coffee table and took a sip.
Grant walked back behind his desk and sat down; he needed to calm his emotions.
"This plan is excellent, I agree."
Grant hardly hesitated.
"This is the ultimate move to stabilize the foundation of the United States. As long as this system is established, my name will definitely be etched in the history of this country forever, just like Lincoln. Lincoln gave them freedom, but I gave them bread."
Grant picked up a pen and quickly recorded the key points on a blank sheet of paper.
"But this is by no means an easy task; deducting salaries will cause a backlash. This requires an extremely rigorous legal argument to package this as a great gift from the Federal Government for their future lives."
Grant looked at Felix and asked for advice.
"Moreover, the funding gap in the early stages is a big problem. The three percent deducted, plus the three percent matched by the Department of the Treasury. This will be a huge sum of money in the first few years, and those masters in Congress who control the money will not easily approve the Department of the Treasury to pay this money."
"You don't need to worry about the initial funding."
Felix directly dispelled his concerns.
"The Imperial Bank will provide the Department of the Treasury with a special low-interest loan of nearly ten million dollars for three consecutive years. It will be used specifically to advance the government's matching funds for the first three years of the pension fund. This money can be considered a welcome gift I am presenting to the Federal Government."
Grant gasped; such extravagance!
Nearly ten million dollars.
Felix didn't even leave him time to bicker with Congress; he slammed the money right onto his desk.
"Good! Excellent!"
Grant slapped the table in excitement.
He stood up immediately.
"This matter cannot be delayed. We must seize the moment before the British react and set the framework immediately."
Grant walked toward the door.
"I will immediately have Horace call the Attorney General Ackerman and the Secretary of the Treasury Boutwell over. Ackerman will be responsible for drafting the 'Federal Public Servant Retirement Security Act'. Boutwell will be responsible for calculating the capital channels and the structure of the fund management company."
"Both of them are experts. We will finalize this earth-shattering plan right here today!"
Upon hearing the name "Boutwell".
The relaxed expression on Felix's face vanished instantly.
"Wait..."
Grant's hand had just touched the doorknob when he stopped. He turned his head and looked at Felix with confusion.
"What's wrong?"
"Ackerman can come; he is a tough nut who understands the law."
Felix remained seated on the sofa, not moving, just watching Grant quietly.
"But George Boutwell has no qualification to step into this room, let alone touch even a single cent of this fund's ledgers."
Grant frowned and walked back to the desk.
"Felix, Boutwell is the incumbent Secretary of the Treasury. The establishment of the Federal Retirement Fund will be led by the Department of the Treasury. We cannot bypass him. Do you have any dissatisfaction with him? We are discussing national affairs now."
"I have no dissatisfaction with him," Felix's tone was very unpleasant, "I just have no patience for traitors."
Felix stood up and walked over to Grant.
"Ulysses, why do you think I insisted that you revoke the discount authorization for United Trust Bank today?"
Felix stared into Grant's eyes.
"I don't believe you didn't know; just before this, I sent fifty traders with twelve million dollars in commercial paper to stage a run on Old Morgan's bank. I could have sent them directly to bankruptcy court and kept the British money in New York."
"However, your Secretary of the Treasury George Boutwell made a deal with Old Morgan's agent. Not only did he sign that special memorandum, but on the very day I launched the run, he personally ordered the doors of the New York Federal Reserve branch to be opened. He let the people from United Trust Bank push Department of the Treasury carts, hauling gold bricks stamped with the federal eagle emblem out, cart by cart, to cash them out for my traders."
Grant's expression changed.
This, strictly speaking, was his own fault.
After all, he was the one who approved the memorandum as a means to politically balance Felix.
But he had never ordered the Department of the Treasury to completely carry the burden for a foreign bank during a specific run.
After all, that was the physical gold reserve of the national treasury!
"He used the physical gold from the Federal Reserve branch to cash out promissory notes for the British?" Grant's voice raised.
"Is he crazy? This is a serious violation of regulations!"
"He's not crazy, he's just hedging his bets."
Felix sneered; he didn't know if Grant was aware or not.
But now, it must be that Grant was unaware.
"Perhaps he knew you were going to investigate me and thought I was about to fall. So he ran off to lick Old Morgan's boots. Then, he used the United States treasury to exchange for personal favor and future political contributions from European capital."
Felix pointed at the paper where Grant had just recorded the fund's framework.
"Ulysses, this retirement fund concerns the pension money of hundreds of thousands of public servants. It concerns the lifeblood of controlling local state governments in the future. The capital flow within this is an astronomically large number."
"Tell me, do you dare to entrust such a fund that concerns the foundation of the nation to a politician who, for personal gain, would sell the back-door keys to the national treasury to foreigners at any time?"
"If one day the British offer him a higher price, would he take this pension fund and mortgage it to a bank in London?"
Felix's questioning was like a rapid drumbeat, pounding on Grant's nerves.
Grant's face turned livid.
What he hated most was not greed, but betrayal and loss of control.
Boutwell had bypassed him and directly used gold reserves to quell the run on Wall Street; this had already touched the President's bottom line.
Although he did ask him to help United Trust suppress Imperial Bank, he never said to pour his heart and soul out for European capital!
More importantly, Felix was right.
The retirement fund was the core of the strategic alliance they had reached.
This fund must be in the hands of someone absolutely reliable, absolutely neutral, and who would not be bought by foreign capital.
Now it seemed that Boutwell was out.
But Grant also had his own political considerations.
"But Felix, Boutwell is one of the Republican Party leaders in Massachusetts. He has deep connections in Congress. If I dismiss a Secretary of the Treasury from the cabinet without any legitimate reason, it will cause an uproar within the party. The opposition will use it as an excuse to make trouble."
Grant appeared somewhat hesitant.
"As for the reason, I have already prepared it for you."
Felix walked back to the sofa and picked up the water glass on the coffee table.
"The Legal Department of Imperial Bank has all the detailed bills of Boutwell receiving four hundred and fifty thousand dollars in political contributions from European capital. There is also a copy of the contract for his one hundred thousand dollar unsecured loan from Imperial Bank."
Felix looked at Grant.
"You only need to tell him: either he announces to the public that he is in poor health and gracefully submits his resignation to go back home and farm, or... these bills will appear on the front page of The Washington Post tomorrow. The Department of Justice will prosecute him for bribery, causing him to lose his reputation completely."
Grant felt his gums ache slightly.
He looked at the young man in front of him.
Felix had not only thought of the solution to the problem, but had also sharpened the knife to clear the obstacles to an incredibly keen edge.
Grant quickly weighed the pros and cons in his mind.
On one side was a Secretary of the Treasury who had overstepped his bounds and betrayed him; keeping him would only lead to trouble.
On the other side was a pension system worthy of being recorded in history, as well as an unbreakable alliance with the Argyle Family.
This political calculation was too easy to make.
"Good." Grant nodded heavily.
"Boutwell must go. I will have him put his resignation on my desk this afternoon. If he doesn't know what's good for him, I will have Ackerman audit his accounts."
Grant walked behind the desk, picked up the paper recording the rough framework of the retirement fund, and read it over.
This massive plan required someone who not only understood finance and law but also had to command absolute trust between The White House and the Argyle Family to execute it.
The position of Secretary of the Treasury had now become more critical than ever.
If there wasn't someone approved by Felix sitting in the position of the Department of the Treasury, he would absolutely not cough up that nearly ten million in startup capital, nor the special preferred shares of General Electric.
And without Felix's cooperation, this historic fund plan would just be a piece of waste paper.
Grant put down the paper and looked up at Felix, who was sitting on the sofa.
"So Felix, do you have any suitable candidates?"