190 Russia and Great Britain (2)
In the spring of 1838, Russia raised interest rates.
Since the appreciation of the ruble was a promise with the North African credit bank, it was determined that a simple currency recovery would not be possible to fulfill it.
As interest rate hikes took effect, Russian businessmen moved like a fire in their feet.
While buying silver rubles, he contacted German and Austrian financiers to buy foreign currencies.
The financial circles in Leipzig thought that the Austrian Empire’s demand for gold coins exceeded the supply, and they were discussing a corresponding alternative.
“The merchants of the Russian Empire are buying gold coins like crazy.”
“Hmm.”
Austrian Prime Minister Karl Velociha was deeply troubled.
There will be war with Russia anyway.
It is not easy to predict how large the army will be formed by the Allied Forces with Britain, but the two countries have already become rivals from a certain moment.
If this rivalry is simply a relationship that helps each other as neighboring countries, the two have become rivals for territory.
Britain was aiming for the Baltic States and Russia for Eastern Europe and the Italian Peninsula, so it was inevitable to fight Austria.
If so, would it be right to bring them Austrian kroner?
Carl Velociha shook his head.
“It is forbidden to take out gold coins.”
“If that happens, it will be quite difficult for us to trade.”
“Isn’t trade centrally anyway? I think we’d be better off stocking up on purification than taking out the gold.”
It is possible to prevent the export of gold because Central issued by the European Development Bank is in use.
If Velociha’s export of gold coins begins in earnest, the value of Krone will inevitably drop significantly.
In this era, the creditworthiness of banknotes was quite low, so if export of gold was banned, the creditworthiness could be affected.
Therefore, it was clear that the value of the Krone would inevitably fall.
Nevertheless, Prime Minister Velocikha came up with a bill to prevent the export of gold.
“If we block the export of Krone gold coins from our trade with Russia, the export route to Russia may be blocked. But think about it. What do you think will happen in the end if we are repeatedly deprived of gold in our trade with Russia?”
“The more gold coins are taken from them, the more poisonous it will be to us.”
“Yeah, that’s it. If we don’t stop the export of gold coins now, the bomb will definitely explode later.”
It means losing your gold coins, meaning you only have a bunch of Russian silver and banknotes.
In the 19th century, the concept of money was different from that of the future, so there would come a time when no matter how many banknotes you had, it would become useless.
The risk of currency that Prime Minister Velociha thought was that strong.
“We need to operate the currency as safely as possible. You, too, try to be as conservative as possible now.”
As the meeting continued, a messenger suddenly arrived at the Prime Minister.
The messenger was from the Duchy of Haostria.
He sent a telegram to the prime minister.
“A telegram has arrived from the Principality. He told me to tell the Prime Minister directly without telling anyone.”
“Who is it?”
“The Archduke.”
“… … Grand Duke?”
In fact, it is the Archduke who moves the Austrian Empire.
What is the secret he will tell the prime minister?
Velociha opened the telegram with a little trembling heart.
However, his pupils began to enlarge.
“Are you betting compound interest?”
“Compound interest?”
The Prime Minister could understand why the Archduke’s letter had come so secretly.
Russia was trying to escape the crisis somehow through a debt feast.
“They say that if you convert short-term bonds currently sold by Russia into long-term or permanent bonds, they will give you a compound interest.”
“Huh, then I’m sure this blow will come back doubled later. Especially in the case of perpetual bonds, wouldn’t the ripple effect be so close to breaking the economy?”
“right. But if you don’t, that means it’s just as difficult to pay the debt ratio.”
“… … You are indeed a winner. How did you know that and decided to stop the gold leak?”
The Prime Minister’s decision was right.
The export of gold to Russia will be talked about over and over again, and the Prime Minister’s abilities will be praised.
Without further thought, Velociha decided to immediately announce the fiscal policy.
“Notify the Parliament of this fact right now and have it be signed by the imperial family.”
“Yes, sir!”
“And send a messenger to Easterfield right now.”
“You mean Easterfield?”
“You must go to their homeland.”
Velociha began to write something on the spot, kept it on parchment and gave it to the messenger.
After sealing it with wax, the herald kept it in his arms.
“This will allow us to win the war against Russia. However, it is important that the messenger arrives on time.”
“I will run with all my life!”
***
On the other hand, the UK, who heard the news of Russia’s long-term bond issuance, was even asked to make it difficult.
They had been asked to buy Russian bonds.
“I want you to buy ruble bonds. They know we are out of crisis.”
“… … damn it.”
Until now, he was running the country’s livelihood, but now the Duke of Wellington has also hit the limit.
What started to increase fuel efficiency has now reached a point where it is out of control.
“What did the Goldmans say?”
“Once they said they bought as many bonds as they could. However, the actual size of the bond cannot be confirmed.”
If electronic communications were developed in this era, it would be possible to determine the size of the bond in real time, and it would be possible to know who bought how much and when.
However, now everything is traded on paper, and everything is recorded and stored by hand.
For this reason, it was difficult to accurately grasp the number of transactions that exceeded the records of the books or did not have a competent accountant.
For that reason, no matter how well the treaty was signed, there was no way to find out at this moment whether they kept their promise.
From now on, he had no choice but to trust the Goldman family and move.
“Sir, maybe?”
“Hmm, refusing the Russian proposal will surely lead to conflict. If that’s the case, then it’s saying that we also have to pay something sharp… … .”
“I heard they are making contact with a North African credit bank to raise money. Then, how about we line up with you too?”
“Are you going to make a deal with those you will someday turn into your enemies?”
“But there is nothing you can do about it.”
“Well, it is.”
“I’m going to telegram the North African credit bank right now. If that’s how we can make the tangent, we’ll take a breather now.”
It was difficult for the Duke of Wellington, who had been told the reason for the rise in Russia’s interest rates, to make an easy decision.
However, if he had only one choice now, he had no choice but to do so.
“Okay then, let’s make it tangent to North Africa.”
“I’ll telegraph you right now.”
These days, the Federal Territory of Easterfield had at least one telegram wherever they went, and even a foundation for calling by voice.
Recently, Easterfield has been hiding its own technology, so the newspaper cannot be used in other countries, but once contacted with them, the news spread quickly.
Two days after sending the telegram.
Surprisingly, they responded right away.
“Sir, this is news after two days.”
“… … That’s insanely fast. What did you say?”
“First of all, it’s a refusal.”
“What, refusal… … ?”
“It seems that Russia first swept Central in Tunisia, which caused the problem.”
“Well, that would be it.”
No matter how much money the bank had, according to East Stellar’s financial policy, it was true that it was impossible to invest more than a certain part.
If they violated that fact and ran their own money, the bank was likely to go bankrupt.
Because that was Lee Hwan’s way of seeking stabilization.
The Duke of Wellington was still in thought.
Then he suddenly had an idea.
“If you are going to borrow money from the governor, how about borrowing it from the major East Bank?”
“They have to accept that too.”
“Can’t we just take the collateral?”
“Are you sure? What collateral… … .”
“Put the British Empire Museum as collateral, huh?”
“… … Yes?”
***
The unprecedented offer that came to East Bank went straight to Lee Hwan.
“You’re going to take the whole British museum?”
“Yes, it is.”
“Well, it looks like the money was really in a hurry.”
“It seems that Britain believes that occupying the Italian peninsula and advancing into Asia can offset all of that.”
The British side is not entirely wrong.
As long as they took over the Italian peninsula, as they thought, it would not have been difficult to raise additional funds through the enormous wealth that came from there.
But if you think about it the other way around, you get this answer.
“If the occupation of the Italian peninsula fails, what are you going to do?”
“Well, only Arthur Wellesley would know.”
The Duke of Wellington was clearly a brilliant resourceful, supreme, and virtuous man.
However, the Duke of Wellington is also a human after all.
When one’s head rots in the political arena, weaknesses that were previously invisible are revealed.
His weakness was to manage the country’s finance department.
Arthur Wellesley was a man who fed the army with great resourcefulness, but the financial world, entangled in politics, was different.
The Duke of Wellington was overloaded with thinking about politics and finance in the end.
From his point of view now, there was nothing he could do other than give up the entire museum.
This does not simply mean that his ability is insufficient, but that Britain is now in crisis.
“It must be very difficult for England to think of taking a museum as collateral.”
“But there is no clear standard on how to value a collection. Can I get it as collateral?”
Even in the future, the museum would be used as a storage for the slush funds of the chaebols.
Since art works are different from real estate, whose value is calculated through standardized valuation, it was better than any other financial sector if it was assumed that slush funds were entrusted.
But what if you take it as collateral?
Lee Hwan answered him like this:
“Let’s get the museum in its entirety, not the collection. It’s a collateral.”