Chapter 663:
Chapter 648 – Mobilizing Funds
In the evening, the Russian Imperial Embassy in Vienna was brightly lit, with bursts of music coming out from time to time, and there was no doubt that a diplomatic reception was going on inside.
Participants are not a lot of people, the banquet organizers only invited with the tsarist government better relations with the national envoys, as well as part of the tsarist Russian nobles in Austria.
This kind of diplomatic reception, almost every month will be carried out once, a little unremarkable. The only noteworthy thing was that the Austrian Minister of Foreign Affairs, Wessenberg, attended the banquet in person.
Before the breakup of the Russo-Austrian alliance, Wessenberg’s presence was not surprising. But not now, when Russian-Austrian relations are beginning to drift apart, Wessenberg’s presence is to be pondered.
……
With a loud snort, Weissenberg couldn’t help but spray the wine in his mouth. Eyes widening, he stared at Russian Minister Alexander Nikolaevich Herr: “Your Excellency, surely there is no joke?”
Nikolayevich nodded seriously and answered cautiously, “No!”
After saying that, he unapologetically locked eyes with Weissenberg.
After pausing for a moment’s effort, Weissenberg rejected outright, “That’s impossible!”
“Your country’s financial revenue is only how much?500 million divine guilders is already far more than your government’s debt capacity, don’t forget that your country still has a large amount of debt that has not been paid off.”
Fortunately, the two were talking in the corner, and no one was insensitive enough to come over and disturb them, or else the whole place would have been in an uproar.
“500 million guilders” this is not a small number, equivalent to £ 250 million, about 1830 tons of gold, relative to the total financial income of the three countries of Britain, France and Austria in a year.
Borrowing, not to mention now, even the honeymoon period of the Russian-Austrian alliance, Austria has not provided the Russians with such a huge sum of money.
Of course, this is not the tsarist government did not want to borrow, mainly because some years ago Austria is not rich. Although it is the old empire is deep, Austria is really rich only in recent years.
Capital accumulation also takes time, even if it has become the world’s largest economy, the Austrian financial sector is still very limited capital accumulation.
Now about to catch up with France, from England there is still a long way to go. To put it bluntly, Austria’s fortune depends on industry, not finance.
500 million guilders is not impossible to take out, the problem is that after taking out, Austria will be short of money.
Not to mention Austria, even the richest capital of Britain, let them take out this huge sum of money at once, the same will affect the whole financial market.
Wealth and cash are two concepts, the gap between paper wealth and liquidity, but also a world of difference.
Of course, it’s just immediately going to be difficult to take out. If there is enough time, Britain, France and Austria have the ability to raise this money.
Reference to the Franco-Prussian War will know that the French lost 20 billion francs (about 1.6 billion guilders) in the war, and then paid out 5 billion francs (about 400 million guilders) after the war, which was paid off in just 3 years.
Weissenberg refused flatly, not even mention the conditions, the most critical or the tsarist government has no credibility, now lending money to the Russians, is a meat bag to beat the dog – there is no return.
Russian Minister Nikolayevich said without changing his face: “Your Excellency the Minister, this time we are very sincere. The interest on the loan, we are willing to calculate according to the monthly interest rate of 0.5%, this gain ……”
Weissenberg directly interrupted, “With all due respect, with the credibility of your government, no bank would dare to lend you money.
Not to mention the monthly interest rate of five thousandths, even if the daily interest rate of five thousandths is the same. Who dares to lend money that is destined to be uncollectible?”
According to the practice of international loans in this era, the handling fee, exchange fee, guarantee fee, and one year’s principal and interest and then release the money, five thousandths of a percent of the monthly interest rate is indeed very generous, not to mention that there are a series of additional conditions.
Thousands of good all good, can not withstand the sentence “poor credit”. Even if the income is high, the money must be recovered before it is income.
Nikolayevich hurriedly explained: “We can provide physical collateral, if you are unable to fulfill the debt, your country can directly withhold the collateral.”
Weissenberg glanced at Nikolayevich and said in an icy tone, “If your country can use gold as collateral, naturally there is no problem.
Not to mention 500 million divine guilders, even if it’s 1 billion divine guilders, I can do the honors of lending it to you, and I can even waive your interest.”
Nikolaevich frowned, his heart secretly bitter. If there was that much gold as collateral, the Tsarist government would have already started printing money.
In the gold standard era, gold is wealth. Whether it is acting as the standard gold issue currency, or directly as currency use, there is no problem.
“Your Excellency, this joke is not funny at all. If we have so much gold, why do we need a loan?”
It was true, 500 million Shendian was about 1,830 tons of gold. Apart from Britain and Austria, there was no third country that had that much gold reserves.
The private ones don’t count. If you count civilian gold, then India and the Far Eastern Empire, both exceed that figure.
Nikolayevich’s words reminded Weissenberg that there was still a considerable amount of gold in the hands of the Tsarist government.
“Your Excellency, the Minister, is too modest. As far as I know, your country has always been an exporter of gold, so how can it be short of gold?
How about this, your government deposits the native gold of the ruble issue in the Austrian National Bank and uses this gold as a guarantee.
For the sake of friendship between the two countries, I can make the decision to give you interest-free. Your government can get a huge sum of money to use without having to pay anything.”
“Gold exporter”, this was not what the Tsarist government wanted. Even if the Russian Empire’s gold production wasn’t low, but the demand was high!
Because of the credibility of the relationship, the ruble in addition to the domestic circulation, international settlement in the international settlement is simply no one to buy, forced the tsarist government can only use foreign exchange or gold for settlement.
In order to promote industrialization, in recent years the Russian Empire imported machinery and equipment, in order to calm the trade deficit, the tsarist government had to take gold to fill the pit.
Weissenberg let the tsarist government to deposit the gold into the Austrian national bank, naturally, not for the sake of the Russians, to mobilize an additional sum of money.
Taking out the gold was easy and only required a decision by the Tsarist government. Trying to redeem the gold? That was a joke.
The Tsarist government is borrowing money now to finance the war. As soon as the Russo-Prussian War starts, the money will soon be consumed in the war.
Even if it wins the war, the Tsarist government will not have the money to redeem the gold for a long time to come.
There would be no return, and that would be dangerous. It may seem as if the use of financial means to obtain the use of a large sum of money was earned, but in reality it was based entirely on the fact that Russian-Austrian relations had always been friendly.
In case one day the two countries turned the other cheek, the Vienna government swallowed these gold, the ruble instantly turned into waste paper.
After thinking clearly about the risks involved, Nikolayevich immediately refused, “This is impossible. Mr. Minister, we can use the territory as collateral, but not the gold.”
Weissenberg smiled slightly, did not answer directly, the two hastily ended this conversation.
……
Early the next morning, the information on the Tsarist government’s efforts to raise funds for the war appeared in front of Franz.
“The Tsarist government wants to advance the war, it seems that Alexander II has put down blood money this time, and is willing to take out his own territory to mortgage it.
If they had done so earlier, the last war, would not have lost so badly. People, they always have to suffer a loss before they know to learn a lesson!”
Prime Minister Felix: “Although the reasoning is true, but how can one know the consequences of failure without experiencing it?
The Tsarist government is using the defeat of the last war to buy a lesson, without the arrogance of the invincible world of the past, it knows that it has to keep its feet on the ground.
War fighting is all about money. In a way, the key to deciding whether to win or lose this Russo-Prussian War is no longer military, but depends on how much money the two governments can raise for the war.
With the volume of the Russian Empire, as long as there is enough war funding, even if we drag it out, we will be able to drag out the Prussian-Polish Confederation.”
“Dragging the Pupo Federation to death”, this concept flashed in Franz’s mind. It was based on the ideal situation where there was no outside interference, and the Berlin government wasn’t stupid, co-opting was a must.
“Send men to keep an eye on the financial worlds of the countries, and keep a close watch on the movement of large sums of money. Both the Prussian and Russian governments are poor, and the war can’t be fought until they get enough funding.
War is a gold swallowing beast, once it is fought it is spending money like water, the only people in the world who have the financial power to fund them are us and Britain and France.
Everyone’s money doesn’t fall from the sky, and without enough interest, it’s hard for Prussia to raise enough funds.
Geopolitically, we are the best debtors, and we are the only ones who dare to receive land mortgages.
The Russians have delivered, so let’s figure out the Czarist government’s bottom line as soon as possible and grab the most for Austria.”
Franz didn’t mention the gold mortgage; no one would hand over their lifeblood to someone else until they were at the end of their rope. This was much more serious than a territorial mortgage.
Territorial mortgages may seem serious, but the risk is manageable. As long as you win the war, even if you can’t pay back the money, there is enough maneuverable space, for example: to replace the mortgaged territory.
Take your own territory to offset the debt, the domestic may not be good to explain; take the enemy’s territory to offset the debt, then there is no pressure.
Lose the war, and there’s no need to say anything. The government has changed, and the next government will be responsible for cleaning up the biggest mess.
The same goes for monarchies, maybe not necessarily changing the emperor, but changing the ministers is a must. Defeat is always someone’s responsibility, and the bureaucrats see it clearly.
Naturally, this could not be hidden from Alexander II, and the mortgages of territory were all made with his tacit approval. But the gold mortgages, definitely exceeded his bottom line.
To put it bluntly, the Russian Empire is a big family, as long as it is not the core territory, it does not matter to sell a piece. The sale of territory is not without precedent, and the political risk is limited.
Sent the gold to Austria as collateral, that is completely different, which means that the economic lifeline of the Russian Empire fell into the hands of Austria.
Merry Christmas!
Bitter author, still a single dog ????
(End of chapter)