Chapter 586： The Gold Standard Reform

In this world, there will always be people who are proud and frustrated.

The biggest losers of the London Peace Conference are undoubtedly the Ottoman Empire and the Kingdom of Poland. The former has lost its land, exhausted its people ’s livelihood, and is half dead. The latter has even achieved autonomy.

Leaving aside details, from the overall strategic point of view, the five countries of Britain, France, Austria and Russia are all winners, each achieving its strategic purpose.

The performance of the Russians was particularly outstanding, taking advantage from both sides, as if the imperishable Russian empire had returned.

But Alexander II, who is considered the biggest winner, is indeed unhappy now. Regaining the lost ground this time has greatly boosted the morale of the army, which was originally a good thing.

It is a pity that the Tsarist government cannot afford to use it. It is a word that makes it "poor". After the battle is over, the reward for merit is always indispensable, and the pension must be given a little bit. Who will die if he doesn't pull it out?

The destructive power of the war is huge. The lost land recovered by the tsarist government now also needs to invest funds to restore people's livelihood. There is no return in the short term.

All these require money, seemingly inconspicuous, but in fact it is not enough without hundreds of millions of rubles.

Loans Alexander II had long been hopeless. International financial institutions were scared by them. Whoever lent money to them would be a fool.

The Hermitage, St. Petersburg

Alexander II asked uncertainly: "Can the gold standard reform really help us through the financial crisis?"

At present, only the British and Austrian countries have completed the reform of the gold standard among the powers. Everyone knows that the gold standard is conducive to the stability of the currency value and increase the international competitiveness of the currency, but everyone is still watching.

I do n’t want to follow suit. The problem is what to do with insufficient gold reserves? Britain and Austria have monopolized more than 75% of the world's gold, making other countries desperate.

The Russian Empire is good, because Russians have low demand for foreign industrial and commercial products because of low market purchasing power. After the foreign exchange created by the export of agricultural products smoothed out the expenses, it was still in a state of overrun.

However, this good day only lasted before the Russian-Prussian War. Because of the war, the tsarist government's finances deteriorated and it owed a large amount of foreign debts. In order to repay debts, a large amount of gold and silver began to flow out.

The outflow of gold and silver led to domestic deflation and further deterioration of government finances. In order to avoid aggravating the crisis, the Tsarist government was forced to declare bankruptcy.

After a few years of rest, the Russian Empire took a breath. Through diplomatic means, most of the debt was wiped out, and an agreement was reached with the British to use food to offset the repayment, and the Russian Empire's economy gradually normalized.

However, the financial problem is still the biggest problem for the Tsarist government. In order to change the financial difficulties, the Tsarist government issued paper rubles in 1871 with the help of Austria.

This is just a test of the water. The number of the first wholesale bank is only 50 million rubles. The gold and silver compound standard system is implemented. The tsarist government reserve is sufficient and it is quickly digested by the market.

With the deterioration of Russia-Austria relations, the financial circles of the Tsarist government tend to cooperate with the British, and the situation has changed drastically.

Without Austria's endorsement, the second batch of paper roubles was issued too much, which was cold in the capital market. In order to keep the ratio, the tsarist government had to stop printing.

Britain and Russia have agreed that the ruble will join the pound-gold system, and the tsarist government will then have to reform the gold standard.

The Russian Empire is also the world's major producer of gold and silver. The domestic economy is not large, and the import and export trade is generally in a balanced state. In theory, the tsarist government has no problems in reforming the gold standard.

This is only theoretical. With the credibility of the Tsarist government, this situation has changed. International capital is not recognized at all. Unless it is linked to international currencies, the tsarist government alone cannot complete the gold standard reform.

This also involves the issue of currency settlement. No matter it is linked to the British pound or Aegis, people are very welcome. The conditions are very simple and they can only use other people's currency for settlement.

No matter who it is, the Russian Empire will need to be sheared. Alexander II did not care about shearing sheep. He was more concerned about how much benefit the currency reform could bring, and whether he could get out of the financial crisis.

Chancellor of the Exchequer Kristanval: "His Majesty, theoretically after the currency reform is completed, we can obtain a coin tax of 52 to 55 million rubles per year.

This money is constantly increasing as the economy grows. It will be of great help to improve our financial situation. "

(Note: 1 new ruble = 0.774 grams of gold)

More than 50 million gold rubles, this number is no small, more than one-tenth of the tsarist government's fiscal revenue.

To keep the coinage tax growing, in addition to economic growth, it is necessary to ensure that there is enough gold.

Kristanval is not worried about the reserve problem, and the Russian empire's annual gold production is still enough to reserve. Otherwise, he would not dare to reform the gold standard.

We must know that after the currency reform, the newly issued gold ruble will be linked to the British pound. The exchange rate will fluctuate and there will not be enough reserves to stabilize the value of the currency.

After hesitating for a moment, Alexander II made the decision: "Let's get started! But when working with the British, you must be vigilant and not be pitted by them."

This step means that Russia and Austria have begun to split financially, and it also marks the end of the Russian-Austrian alliance.

There is no way, it is the fault of interests. The Tsarist government suspected that Austria's bid was too low, and Franz felt that the Russians were too greedy to invest too much to recover the costs.

The French were crying in horror in time and space. The Tsarist government fell and all the huge debts owed to it were blown away. The French consortium was severely damaged.

With lessons to come, Franz naturally chose to be cautious. The risk of investing in the Russians in Austria is greater than that in the French. In the style of the Russians, no one can guarantee that the debt is as high as possible. Will the Russians provoke war between the two countries in order to rely on their accounts.

Of course, it is also an important factor that Austrian financial circles do not have British financial tyrants. After all, Austria itself also has a huge demand for funds, and is unable to fill the pits for the Russians.

If the tsarist government cannot come out of the financial crisis as soon as possible, once the currency reform is completed and the ruble is tied to the British pound, it is also unknown if the British will not borrow money.

The debt between Russia and Austria is already a dangerous number. Franz dare not take hundreds of millions of SHIELD to accompany the Russians to take risks. Once they have lost their money, they will be hit hard by the economy in Austria.

...

It is not only the Russians who want to reform the gold standard, but also the French more urgently.

In recent years, the output of silver has been increasing, and the ratio of gold to silver exchanges has also been constantly changing. This is a big problem for multi-standard currencies.

Affected by the exchange ratio of gold and silver, the value of the franc also changes frequently, which can make people cry for businessmen engaged in international trade.

The unstable value of the franc is undoubtedly weakening the overseas competitiveness of French goods. With the vigorous development of international trade, this change has become increasingly serious.

Before 1854, France's total export trade was more than 1.5 times that of Austria. By 1870, the total export trade of the two countries had been almost the same, and now it has been directly attacked by Austria.

Of course, there are natural resource advantages. For example, the development of the Austrian agricultural product finishing industry has increased the added value of products and boosted export growth. And the benefits of being the first to start the second industrial revolution.

The instability of the value of the franc is also an important factor. In order to avoid the risk of uncertainty caused by changes in the value of the currency, under the same conditions, many capitalists would prefer the products of the British Olympics.

In the past five years, the average annual growth rate of export trade between Britain and Austria has been no less than 3%, while France has only a poor 0.8%. This number is still declining.

Are French industrial and commercial products of poor quality? the answer is negative. Except for individual industries, there is no epoch gap in industrial technology in the three countries.

Now the market competition has not reached a stage of intensification, everyone has maintained relatively high profits, or they will not grow together.

However, it is an indisputable fact that France is gradually falling behind, and the market share of French goods in the international market is getting smaller and smaller.

Of course, compared with the original time and space, France's situation is still much better, the domestic economy has not been hit hard.

In order to increase the competitiveness of export commodities, the reform of the franc's currency value has gradually been put on the agenda, and it was Napoleon IV who led the reform of the franc's gold standard.

This can also be regarded as the political legacy left to him by Napoleon III. As long as the reform of the franc and gold standard is completed and the international competitiveness of French goods is increased, it can be supported by capitalists.

As early as 1870, the French government began to prepare for the reform of the gold standard, constantly buying gold from the international market. No way, who keeps France from producing enough gold?

God did not care for France this time. In addition to the lack of coal on the French colonies, gold production was also very low.

If you do n’t have your own home, buy it. Compared to the tragic Tsarist government, the French government can be said to be wealthy.

After several years of preparation, the French made up a total of 800 tons of gold, and Napoleon IV did not think it was enough.

For most countries, this number is already a lot, but it is far worse than that of Britain and Austria.

Moreover, with the current economic volume of the Greater French Empire, it is really not much to take 800 tons of gold as a reserve. The bottom line of Napoleon IV's mind was one thousand tons. If the reserve was low, some people would speculate on the exchange rate of the franc.

Palace of Versailles, Paris

Napoleon IV asked incredulously: "What, the market cannot receive gold?"

This news is definitely a big news, at least the price of gold will soar sharply.

Minister of Finance Alan explained bitterly: "His Majesty, there have been many countries in the gold standard reform in recent years, and everyone has snapped up gold in the market.

At present, the main gold producing areas in the world are in the hands of Britain and Austria. They intentionally control the outflow of gold, and the amount of gold in circulation on the market is seriously insufficient.

In recent years, due to insufficient gold circulation, the price of gold has continued to rise, and the gold-silver exchange ratio has risen from 1: 18.6 last year to the current 1: 23.5.

Even at this price, it is difficult for us to buy enough gold. At present, there are only two or three hundred tons of gold flowing out of the international market each year, which is not enough for everyone to share. "

There is no way. Many countries have recently carried out the gold standard reform.

In 1873, the Nordic Federation began the reform of the gold standard, followed by the German Federal Empire and the Kingdom of Prussia also announced the reform of the gold standard, and now another Russian empire has been added.

Regardless of the Russian Empire, the domestic gold circulation can basically meet the needs of currency reform, and the remaining few countries are not the main producers of gold.

The output of gold can be insufficient, but the reserve of the currency to be issued must be sufficient, and it can only be bought on the international market.

At the critical moment of the reform of the gold standard in European countries, it happened that the capitals of the British and Austrian countries jointly pushed up gold and made huge profits from it.

It should not be said to be just right, this is the inevitable result. Capital is profit-seeking, and the bamboo poles delivered to the door are not knocked out.

In this context, not only the French lack gold, but other countries that are reforming the gold standard are also facing the problem of insufficient gold.

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