Chapter 533

Reparations Negotiations and Arms Deal

The five heads of the autonomous region were once more united.

It was the second day since Claude arrived at the royal capital with Thundercrash. As promised, Blancarte released all the representatives as well as the workers of the region's office in the royal capital. The apprehended guard clan was sent to Thundercrash 4th Folk's encampment. Claude refused to head to an audience with Fredrey I, much to Blancarte's disappointment.

President Henderman and Chairman Bernard also joined the meeting. Like Bolonik, they were completely unharmed in their twenty-odd days of being held captive. Skri, however, had a scar on his face and signs of being tied up on his left arm. Like most other soldiers who were given honorary Titles, he suffered quite a bit. As he refused those unreasonable requests, he was given harsh beatings during the first two days he was captured. Fortunately, the prime minister intervened early so that it didn't turn for the worse.

Claude put a folder on the desk and said, "Take a look, all of you. This is the so-called reparations Prime Minister Blancarte said the king was offering us."

The folder landed in front of Henderman, who picked it up and smiled. "The autonomous region's overseas bank is allowed to open branches across the kingdom and will have to pay a million crowns to the national bank as a management fee. They can issue up to 20 million crowns of paper money in denominations of crown and below as long as they place ten million crowns of reserves with the national bank. The design and picture of these paper notes have to be approved by the kingdom's ministry of finance.

"Additionally, the region's companies are allowed to invest in the Royal Aueran Railroad Company. The kingdom shall own up to 40 percent shares on account of providing land, whereas the autonomous region would own 60 percent for funding, manpower and technical prowess. They will build and maintain the company for up to 50 years. After that period, they are to sell their shares back to the kingdom entirely.

"The enfeoffment of land and elevation of Titles will also be given a 50 percent price cut. Those who were hurt during the recent incident are spared from all fees as a sign of apology and request for tolerance and understanding from the king and queen."

"I'm sorry. Prime Minister Blancarte is really hard to negotiate with. These three conditions are the only ones we could agree on after a whole night of discussion," Claude said.

Bernard and Henderman were elated. Bernard excitedly said, "It's already more than impressive you got us these conditions. Initially, the kingdom was only willing to let us open a branch in Whitestag. Now, we can open branches in the royal and prefectural capitals of the kingdom. In other words, we'll be able to export our paper currency here."

Claude took out a cigar and lit it. "Well, it's not like the kingdom will lose anything over it. Didn't you see the annual million-crown 'management fee'? The branches are essentially considered subsidiaries of the national bank. I recall Viscount Godic telling me that the kingdom's national bank branches don't even make more than a million crowns in annual profit.

"Apart from the management fee, the true goal of the ministry of finance is to lure our paper currency in to replace actual coinage. After all, there isn't much profit in minting coins. In fact, they are at risk of making losses. That's why Blancarte wanted the overseas bank to store ten million crowns in reserves with them to allow the circulation of 20 million crowns' worth of paper currency. They're basically using us as a guinea pig."

Henderman asked, "However, the currency to be released here is not the same with those we use back in the region right? There'll be a need for a redesign and an anti-forge seal, right?"

Claude nodded. "That's correct. We'll need those to be able to issue paper currency here. The prime minister probably wants to use them to replace actual coins. However, that wouldn't stop our region's currency from spreading either. The only difference would be that the kingdom's national bank would only acknowledge the notes they issue and not our own."

Bernard said, "Then it's fine. It doesn't matter that the national bank doesn't acknowledge ours so long as our own bank branches do. As long as we open enough, we will soon be able to surpass the national bank to be the top one in Aueras."

Henderman looked at the second condition in the folder with a smile. "I didn't think the kingdom would be leaving the railroad company with us to make it up to us. They really are sincere. I recall when we first came here, they wanted us to give all our expertise, knowledge and technology to them for free to contribute to the kingdom, prompting our immediate refusal. The second time, they tried to pay us to buy the expertise from us, but they only offered 300 thousand crowns and were chased out by us."

Skri laughed. "Looks like they've learned their lesson that railroads aren't something you can make just because you want to. While we did make lots of profits off our own, we still paid our fair share into researching and implementing this technology. We're on our fifth generation of locomotives now...

"Without us, the kingdom will have to invest a huge sum to reinvent what we already have. They'll save much more time and effort with us working with them. Now, they only have to provide land to get a railroad that will cover the kingdom almost entirely and even earn 40 percent of the profits in the next five decades. There really isn't a better deal for them."

"Prime Minister Blancarte really is quite the smart fellow who knows how to share and cooperate for a win-win situation," Claude said, puffing out some smoke. "We've estimated that connecting all the prefectures in the kingdom with railroads will net in around three million crowns in profit annually at least. However, the investment will cost a total of 20 million crowns or so without counting the cost of land for the railroads to be built on.

"The prime minister said that the planning and operation of the railroad company used to be in the hands of the old nobility. However, they were fighting nonstop over shares and funding and didn't have technology comparable to the region's, causing the railroad plan to be stuck in development hell.

"Now that the nobles finally turned their attention to their own fiefs, the court was able to take over the railroad plans and allow us to be a partner. If we have enough manpower, we'll be able to finish a few transportation routes within two years. We'll continue to expand as we run those routes. In some seven to eight years, all the kingdom's prefectures should be covered.

"I believe we'll need about 15 to 20 years to recoup our investment of 20 million crowns. The three other decades will be pure profit for us. That's why, I suggest that we issue bonds from the overseas bank to gather that sum. The bonds of the railroad company will be transferable and holders will gain annual dividends. They can also be inherited until the 50-year deadline when they will be sold back to the kingdom for cash."

"It's a pretty decent idea," Bernard praised, "Lord Militant's suggestion is brilliant. I believe we should price the bonds at a hundred crowns per unit and open it for sale to our region's citizens. Each household can only purchase one bond and have to be registered with our bank. Every year, their dividends will automatically be deposited into their account. We nobles and council members shouldn't dig our hands into this. Well, I believe it's about time we let our constituents enjoy the spoils of the war. We had the meat, so we have to at least leave some soup for them."

A bond of a hundred crowns and a total valuation fo 20 million would allow 200 thousand households to purchase them. It would be a great boost of confidence towards the administration. Now that the region's economy was developing rapidly, saving money in the bank netted the people a small interest. However, those who bought the bonds might see them double in value in a mere decade.

Claude was well aware that Bernard was trying to please the people. After all, the council members were now hereditary nobles. They only had to pay an elevation fee and land-picking fee to own their own hereditary fiefs on Freia.

If word of that got back to the region, sentiments of being abandoned would no doubt fester there. There would even be those who would use that as an opportunity to cause the council trouble. So, the populace would have to be placated with something as well, and the railroad bonds would be the ideal choice for that.

The rest didn't comment about the railroad and gave their tacit approval for Bernard's suggestion. Next came the last offer from the kingdom to make upp to the region: the 50 percent discount of the fees for the region's nobles. It was the biggest discount the royal family offered anyone, apart from the blood relatives of the royals or the nobles that greatly supported Fredrey I's ascent to the throne.

Not to mention, the nobles who were hurt due to the queen's actions were exempted from all such fees. Skri laughed as he stated that he saved 200 thousand crowns by taking the beating, which turned out to be quite worth it. The ones hurt by the incident were satisfied by the kingdom's show of sincerity.

Bernard and Henderman were happy about the reparations and discounts. As Blancarte told Claude, the ministers were initially ferociously against the region's nobles enjoying the same benefits they did. However, all dissent vanished following the queen's rash actions.

When word came about Thundercrash's march towards the royal capital, the nobles and ministers of the royal capital devolved into chaos. Some blamed the court for discriminating against the region and said they should've given them benefits. Others quietly took leaves and left the royal capital to prevent being embroiled in the matter. Some honorary nobles who lingered around the royal capital even spread rumours about the king's inept handling of the matter.

Had Queen Christie not gotten into conflict with the region's representatives like that, the king wouldn't have an excuse to use to give the region any discount. However, the incident provided both sides an opportunity to compromise. The king gave the region the benefits to make amends whereas the region's representatives were happy they didn't get left out of the good deal.

Claude was thankful he didn't really use force on the royal capital. If the representatives who were hurt could forgive and forget after the king's earnest apology, it wouldn't be Claude's place to stand out and fight the king and queen for their dignity.

Last night itself, Maria came to visit Claude during late hours to put in a good word for her daughter. She was well aware of Claude's current status and power as an undefeated Lord Militant who could influence or exterminate the kingdom per his whim.

Nobody could've predicted that a small-time disciple she got to know at Whitestag would ever have the status he did today. The difference in their social status seemed to be flipped over. Back then, Maria was a much-admired noble lady, being the sworn sister of the late Stellin X. And now, she was the mother of the queen, retaining much of the same status she used to have.

Yet, Claude grew from sharp-witted young man to an inspiring commander in whose hand the fate of the kingdom lies. During their reunion, they didn't talk about Thundercrash's aims in the royal capital at all and instead reminisced on their days in Whitestag.

Maria was quite concerned about Angelina, Claude's sister, having heard that she was already a mother herself. She bemoaned the swift passing of time. The obedient girl from back then had now achieved motherhood. Maria said it was a real shame that her foolish son ruined her plans to make Angelina her daughter-in-law and personal disciple.

She didn't bring up her daughter Christie herself nor did she beg him for mercy. She merely left a thick notebook behind and asked Claude to give it to Angelina. It was her research journal filled with her years of insight as a high-rank herbalist. It was practically priceless.

Claude couldn't bear to tell her that his sister had long changed career paths thanks to him to a firearms expert. Maria said Angelina was the most talented young herbalist she had seen and wanted to leave the note with her in hopes she would further her career in the field.

Since the representatives of the region weren't going to pursue the matter with the queen, Claude went with the flow, though he couldn't deny that part of it was on account of Maria.

Henderman closed his eyes in thought and furrowed his brows. "Even if the king offered us half off and exempted the ones who were hurt, our 30 million crowns still isn't enough to pay for everyone's fiefs. We still lack around 17 million."

"Why don't we just say 30 million is all we have, and if they don't take it, we'll leave? Let's get them to slice the price more," Bernard shamelessly suggested.

Claude almost burst out laughing. "Turn the page. Prime Minister Blancarte included two more conditions at the back. Our region is to provide new rifles and an ironclad fleet to the kingdom to make up for the 16.4 million crowns. I have to make clear that Lord Militant Bolonik was the one who agreed to those terms."

Bolonik, who had been silent the whole time, blushed. "Yes... I was. Now, the factories of the kingdom already managed to recreate our new rifles. A few other shipyards have also teamed up to research ironclad warships and have made good progress. However, the prices they quoted the kingdom was far too ridiculous. Each new rifle cost 45 crowns and each round costs a thale. For one ironclad warship, they're asking for 6.8 million crowns.

"I believe that rather than let the old nobility profit off making arms, it would be better to have the region take their place. I agreed to provide 400 thousand new rifles and 40 million rounds to the kingdom. We'll also build a fleet of 16 ironclad warships for them, which should be just enough to make up for what we still lack."