Chapter 590: New Records
Chapter 577 New Records
While the Rhineland region was engaged in a great migration, the London Conference also reached a critical moment. Between Belgium and the German Confederation, the British still chose the German Confederation, while Belgium chose to move closer to France.
Strategically speaking, Belgium’s pro-France was a foregone conclusion. Continental Europe can counterbalance the French only Austria, the British influence, but on land the power of speech is greatly reduced.
Belgium is too far from Austria, too close to France, even if they know that the French have the ambition to annex them, in order to ensure their own security, the Belgian government also had to maintain good diplomatic relations with the French.
Small countries have their own way of survival, the Belgian government in the pro-French at the same time, but also with the British and Austrian countries to maintain good relations, is to use the British and Austrian forces to contain the French ambitions.
It was useless to be strategically correct, the French supported Belgium. Then to contain the French, Austria had to support the German Confederation.
The three powers were divided into two camps, and in a two to one situation, the Rhineland naturally fell into the hands of the German Federal Empire.
Britain and Austria were also worried about the way in which the German Confederation would rule the Rhineland. In order to curb the expansion of the French, the two countries finally had to make a compromise.
As a compromise, the Rhineland was placed under the jurisdiction of the central government, but not the emperor, but the Reichstag.
In a way, this also accelerated the integration of the German Federal Empire. The Reichstag, which was supposed to be a counterweight to the Emperor, was given real power, and the parliament was no longer a sounding board.
But this was a much better situation than if Hanover had been bigger. Trying to solve internal problems through negotiations is not something that can be done overnight, even if it drags on into the next century.
As vested interests, the state governments are unlikely to easily give up the power in their hands, and the Reichstag has always been controlled by the state governments, and wants to turn the tables – hard!
Just because Britain and Austria have reached a consensus doesn’t mean it’s over. The promised auction of the Rhineland region would have to take place.
November 11, 1874, in the presence of European countries, the continent’s highest-grade bulk land auction began.
The Prussian Minister of Foreign Affairs, Geoffrey Friedman, acted as auctioneer, the representatives of England, France and Austria as notaries, and the ministers as spectators.
In order to avoid some people shouting, participate in the auction of Belgium and the German Federation, each pay five million pounds of deposit. If you can’t come up with the money at the end of the auction, the deposit will be confiscated.
There is no doubt that if Belgium and the German Confederation were to pay the money themselves, they would not even be able to come up with the starting price.
The real money is still behind the scenes supporters, the British and Austrian loan to the German Federal Republic, the French loan to Belgium.
This is not only a political game, but also a capital game, and financial strength is also part of strength.
Of course, both sides have a bottom line. It is impossible to compete endlessly and let the Prussians pick up the slack.
Jeffrey Friedman revealed a dead face and walked onto the auction stage with great displeasure: “The Rhineland Regional Auction, now officially begins.
The reserve price is 120 million pounds, and each increase shall not be less than 1 million pounds. If the price increase exceeds its own economic strength, the inability to pay the deposit is directly confiscated. The auction begins, please bid on the participants.”
Obviously Jeffrey Friedman was in a very bad mood, don’t look at the high reserve price, in fact the Berlin government couldn’t get much money at all.
The income from the auction, countries have to prioritize the deduction of part of the debt, the remaining part is the Berlin government’s income.
The Russo-Prussian War not only emptied the Russian treasury, but likewise emptied the Prussian Kingdom’s treasury, and the deficit was even greater.
Even though the European countries sponsored a lot, and Britain and France provided a lot of low-interest loans, the Berlin government still could not pay the interest after the war.
However, the Berlin government did not declare bankruptcy and reneged on the debt, but negotiated with the debtors to deal with it. With the Tsarist government as an example, in order to make the Prussians obediently pay off their debts, this time the debtors were much better to talk to, and many of the debts were allowed to be postponed.
It was only right that debts should be paid. After the auction of the Rhineland, the Berlin government’s pockets were bulging, so naturally it had to pay off this part of the debt first.
It was not only the British and Austrians who forced Prussia to give up the Rhineland, but also the many debtors behind the scenes.
But anyone who understands Prussia’s finances knows that the Kingdom of Prussia is a bad customer, and their debts may become bad debts at any time. It can be said that the creditors were more worried about the finances of the Kingdom of Prussia than Wilhelm I was.
The London government was able to take the initiative to jump in and force Prussia to sell the Rhineland, and the British financial consortium made a big effort to do so. The French consortium was also responsible for the fact that the Paris government did not sabotage the deal.
Hundreds of millions of loans can not be taken lightly, if it becomes bad debt, Britain and France do not know how many financial institutions will be implicated in bankruptcy.
Belgian representative Klaus Jensen took the lead in raising his card, which read +500, which everyone knew was an increase of five million pounds.
So many country representatives watching, want to play word games, drill words? Margin but by the British, French and Austrian escrow, if the rich and powerful do not take the five million pounds as a matter of fact, you can try.
Host Jeffrey Friedman’s voice rang: “125 million pounds.”
Soon the representative of the German Federal Reich also raised his card, which also read +500.
Jeffrey Friedman: “130 million pounds”.
……
“£140 million.”
……
“£142 million.”
……
“£143.5 million.”
……
At first, the price increases all started at 5 million, and after 140 million pounds, both sides tacitly slowed down the amount of the price increase. This was not a brain-dead game of jealousy, but a competition that concerned the national fortunes of both countries, and both sides had to think twice before making each offer.
This era of the pound is not the latter-day pound, the purchasing power that is quite high. Belgium and the German Confederation two countries although the economic development are very good, but after all, are small countries, financial capacity is also very limited.
Jeffrey Friedman’s voice sounded again, “The German Federal Empire bids 152 million pounds, twice!”
After a pause of about two minutes, still no Belgian representative to raise his hand, Jeffrey Friedman could only helplessly announce, “German Federal Empire £152 million, three times …… Sold!”
There is no way, this figure has exceeded the limit of what Belgium can afford. The French only promised a loan of 100 million pounds, and the bottom line of the Belgian government’s heart was 150 million pounds.
To raise the price any higher would be detrimental. In case the price is raised up, the German Federal Empire to give up the bid, fell into their hands finally can not get the money, then it will be a heavy loss.
In terms of value, the Kingdom of Prussia is selling its assets cheaply this time. The industries in the Rhineland region were over 152 million pounds, not to mention the rich mineral resources.
However, the reality is that there is no choice, the price of land transactions in this era are not high, 152 million pounds has set a world record. If the pound doesn’t devalue, it won’t be broken for the next hundred years.
Geoffrey Friedman grimaced and didn’t even bother to offer polite congratulations. The price was significantly lower than expected, and even the buyer wasn’t the Belgian they had hoped for.
There was no way that the strong buyers didn’t come down to bid, Jeffrey Friedman believed that if France and Austria were involved, the final price could definitely break through two hundred million, and three hundred million wasn’t hopeless.
Obviously this is impossible, France and Austria are very clear about each other’s bottom line. Breaking this tacit understanding will not benefit anyone.
At the same time as the treaty signed by Prussia and Germany, the German Federal Empire also signed a loan agreement with Britain and Austria respectively, and the collateral is the mineral resources and factories in the Rhineland region.
Whether these things were owned or not didn’t matter to Britain and Austria, a treaty was enough anyway.
Whether or not the Prussian property rights that had been established by the Prussians would be recognized by the Bundesrepublik Deutschland after a change of country depended entirely on the integrity of the rulers, and at least some of them would be out of luck.
If the vested interests remained the same, what would the Bundesrepublik Deutschland have gained by purchasing the Rhineland, but a mere pittance in taxes?
Private property is sacrosanct, the government will not confiscate private property, but it is still possible to suppress it and make it change owners.
The competition for capital in this era is very bloody, and without enough connections, you simply can’t get along.
Otherwise, the capitalists in the Rhineland region would not have fiercely opposed this land deal, and changing countries has never been a stressful experience for capitalists.
If the Berlin government had paid attention, it would have realized that many strong capitalists had already found new partners, and the rest were on their way to find partners.
Of course, the current Berlin government is not expected to have this kind of leisure. If the 152 million pounds are exchanged for gold, it would be more than a thousand tons, more than three times the total gold reserves of the Kingdom of Prussia.
Obviously this is impossible, the price of 152 million pounds is only nominal, and the Kingdom of Prussia still owes a debt.
This money would first have to cover the debts that had already come due, before the rest could reach the Berlin government. Only the debts already due, not all of them.
The money was not enough to pay off the entire debt. Reality once again proves that war is a beast that swallows gold. After the end of the Russo-Prussian War, the Berlin government has already repaid more than thirty-eight million pounds of debt one after another, and now there is still more than two hundred million pounds of foreign debt.
It can be said that the Russian War knocked out two Rhineland regions. After some negotiation, the huge amount of money obtained from this land auction was offset against the 110 million pounds of debt, and only 42 million pounds fell into the hands of the Berlin government.
After the resettlement of the immigrants, only the revenue of the Berlin government was left. The financial crisis was over, but the funds for the next Russo-Prussian War were still not available.
The only consolation for the Prussians was that the Tsarist government next door was also poor, and poorer than they were. Perhaps the next Russo-Prussian war would break out when one of them had raised enough money to finance it.
Soon Wilhelm I couldn’t be happy, the newly improving Prussian finances had added to the mess that was the Kingdom of Poland.
If possible, William I would not mind declaring Poland bankrupt. Unfortunately, this could only be thought of. Britain and France could tolerate the annexation of Poland by the Kingdom of Prussia, but why should they be allowed to take over Poland’s debts?
(End of chapter)