Chapter 748： Debt extension

At the Royal Palace of Berlin, Frederick III felt only great pressure. Affected by the war, after the outbreak of the economic crisis, the Kingdom of Prussia fell into the Great Depression early.

The Berlin government has been able to support it until now, by flipping the table and gaining a sum of money.

The overturning of the table was also costly. Despite Frederick III's decisive measures and the timely restoration of production, the government's fiscal revenue was still greatly affected.

If that's the case, that's fine, and it will always recover in a few days.

The rain in the house had been rained in a row, and the factories had just been allocated. When everyone was preparing to roll up their sleeves, the economic crisis that swept the globe came.

A large number of products are piled up, but they cannot be sold. The officers and men who got the factory must of course find the government to solve the problem.

There was not enough market, and Frederick III could not become a market. There is overcapacity throughout Europe, and the two big hooligans in Britain and Austria are playing with dumping.

As a result, the prices of industrial and commercial products are now lower than the production costs of Prussian enterprises. Not only is the price incomparable, but the quality of Prussian products is far worse.

The Berlin government and the British creditors have an agreement. In theory, they can use industrial and commercial products to settle the debt. Unfortunately, the pricing power is in the hands of the British.

For example, the British now make a 30% discount with reference to the wholesale price in the international market. After comprehensive quality assessment and deduction, it is the final pricing.

According to British pricing, the price of most goods is less than half of the production cost.

"Selling" is a blood loss. This loss cannot yet be borne by the producer. Otherwise, there will be one factory in the country and all of them will go bankrupt.

This is absolutely unacceptable to the Berlin government, and now these factory owners are the cornerstones of the Kingdom of Prussia.

It was difficult to buy it with economic benefits, and the Junker aristocracy accepted the disarmament. Now they smashed their rice bowl. That was the dead government.

The wave of the European revolution is so turbulent that the Kingdom of Prussia can remain stable because employment has been preserved.

The factories are all workers' own, and naturally there is no unemployment. In order to appease people, the Berlin government assures everyone that the cost is the lowest.

When the economy is operating normally, this commitment is naturally no problem. Businesses want to make money. No one will intentionally produce a bunch of slow-moving products and throw them to the government for trouble.

It's different now. The economic crisis has erupted. The market is terribly messed up. Enterprises can't make money at all.

According to the agreement, now that everyone's products cannot be sold, the Berlin government has an obligation to help them deal with them at cost.

Prussia has no colonies. To dump goods, it must compete with European countries.

From a purely economic perspective, British pricing is reasonable. Prussian industrial and commercial products are indeed not competitive, and they can only play price wars.

The European continent should not count on it. Due to the impact of the economic crisis, most Europeans are poor. Unless it is just a commodity, it is difficult to find a market.

For many people, the commodity that was just needed at this time was food. Unfortunately, the Prussian thing was not enough to eat, and exports did not exist.

These industrial and commercial products of poor quality can only be dumped overseas. There is no doubt that Prussia does not have the ability to carry out global dumping, and they cannot enter most overseas markets.

There are only a few countries with relatively complete commercial networks and the ability to dump in most parts of the world.

They are British, Austrian, French, Western, Dutch, and Portuguese. These six countries have a common feature-the colonial empire.

Among them, Spain, the Netherlands, and Portugal are all declining, commercial networks are still there, but there are not many colonies, and they cannot digest Prussia's industrial capacity.

There are many French colonies, but the market is not large, and domestic capitalists are not enough to divide up. Naturally, it is impossible to let Prussian goods enter.

Austria's colonies have developed well and the market is relatively complete. Unfortunately, Austria's own industrial capacity is huge and there are no excess markets.

Moreover, even if Prussian goods are put in, they will not be able to sell in the face of competition from Austrian goods.

The British have the most colonies, the market is relatively abundant, and internal competition is not so fierce. It can be said that it is the only choice for Prussia.

In this context, the British naturally have to lower prices. While exporting industrial raw materials to Prussia, and accepting Prussian industrial and commercial products to pay off debts, it seems that it is helping the Berlin government. It is Prussia that is working for them in vain.

It's not just working in vain. Now the British have gone one step further and want the Prussian kingdom to work at a loss.

Frederick III now feels like: Fortunately, after working hard for a year, he did not earn a penny at the end of the year, and owed a debt.

He just couldn't refuse, or else he lost his job, and the mortgage, credit card, and ～ 呗 are all coming together, that is just ...

Life is always going to pass, "blood loss" is always better than "blood loss". The price reduction can only be recognized, and the Berlin government had to bravely bear the loss.

Frederick III looked forward to asking: "What's the situation, did the British agree to a debt extension?"

There is no way. The Kingdom of Prussia lacks resources and must import industrial raw materials. Everyone does not recognize Mark. This requires the consumption of foreign exchange.

The in-kind agreement with the British is not to say that it is enough to throw the goods to creditors. The Berlin government is not so aggressive.

Most of the Prussian creditors are banks and financial institutions. These people are all financial and have no interest in international merchandise trade.

The truth is that Prussia sold industrial and commercial products to British capitalists in exchange for foreign exchange. After deducting costs, the rest of the money was used to repay debt.

The role of the "agreement" is that the British government also put Prussian goods in. Otherwise, under the free trade system, the sales scope of Prussian goods is limited to the British mainland. You don't need to know and know that it will not be sold at all.

Now that prices have plummeted, the sales prices of goods are not enough for the cost of industrial raw materials, and they have made a loss-making sale. Naturally, the Berlin government has not repaid its debt.

Foreign Minister Fredman's face suddenly sank: "We have tried everything and even received the support of the London government, and the negotiation failed.

The impact of the economic crisis on Britain is greater than we expected, and banks are now short of money.

One of our creditors, Garritt Bank, went bankrupt during the negotiations because of a broken funding chain. "

Creditors are also short of money, which is a big problem. Especially in the case of Garritt Bank, because of their broken capital chain, they are even less likely to agree to debt extension.

Frederick III sighed deeply and asked the Minister of Finance: "How much foreign currency do we have now and how long can we support it under normal debt payments?"

The Minister of Finance Owitz frowned and replied: "The situation is very bad. Now our total foreign exchange value is about 7.56 million pounds, including 3.54 million pounds, 5.86 million shields, 8 million francs ...

Theoretically, if no other expenses are incurred and only used to pay debts, it can support up to seven months.

In practice, this is impossible. We must import industrial raw materials, machinery, and agricultural products to meet domestic production and living needs. "

Foreign exchange is in and out. Normally, with the export of industrial and commercial products, the balance of payments is still achieved.

After all, domestic industrial raw materials and labor costs do not need to pay foreign exchange, and the problem can be solved with the mark.

7.656 million pounds equivalent to 56.04 tons of gold, is a well-deserved huge sum in this era, exceeding the total gold reserves of many countries.

If there is no foreign debt to be repaid, for a small country, so much foreign exchange reserves will be enough to make a small life very nourishing.

Unfortunately, if not, the Kingdom of Prussia has huge foreign debts to be repaid. This huge sum is only enough to pay seven months of debt.

In fact, it can't last that long. Due to the decline in export commodity prices, the Kingdom of Prussia has entered an era of trade deficit.

Unless the creditors are willing to accept Mark's payment, it is impossible for the Berlin government to pay its debts on time.

...

After receiving a call from the Berlin government for help, Franz's first reaction was to encourage the Prussians to settle accounts.

As soon as this idea came out, it seemed as if it had fallen into the magic barrier and could not linger.

"What would happen if the Berlin government defaulted?"

Foreign Minister Weissenberg's face changed slightly: "His Majesty, Prussia's economy is heavily affected by the British, and the Berlin government does not have the ability to default on its debts.

If the Berlin government defaults, the British will only need to trade sanctions against them, or Prussia will collapse in half a year. "

This is the fact that when the Royal Navy seals the coastline, the Kingdom of Prussia will fall into the dilemma of lack of industrial raw materials and lack of products.

Of course, they can also go by land and bypass from neighboring countries, but this cost is enough to bring any business into bankruptcy.

Felix retorted on the contrary: "Not necessarily! Ordinarily the British may do this to kill chickens and tamarins.

But now it is different, the wave of European revolution is intensifying.

The French Revolutionary Party has occupied Paris, and the situation in the Kingdom of Prussia is very bad. There is the possibility of a revolution at any time.

As long as the British are not prepared to collect debts from the Revolutionary Party, the Kingdom of Prussia cannot be finished.

Now the Berlin government is really insolvent, and debt default is a matter of time, and the London government should be prepared.

As long as the Berlin government does not directly announce the debt settlement and find a reasonable excuse for debt extension, the British government will not take extreme measures.

The Berlin government lends money to banks, financial institutions, and speculators. Although the influence of these interest groups in the United Kingdom is large, they have not reached the point of making decisions for the government.

It is impossible for the British Government to ignore the overall national strategy for their benefit. Without the support of the government, these people would have nothing to do with the Kingdom of Prussia.

If the situation in Europe deteriorates further, the Berlin government can also negotiate conditions with the British to seek some debt relief. "

It is not yet after World War II that the aristocratic group is in its heyday. The consortium wants to control the government is simply a dream.

The French revolution was already scary. If the Prussian revolution were to succeed again, the wave of European revolutions would no longer be controllable.

Although Britain is lonely overseas, the tide of revolution has not let them go.

Britain and France have exported each other for many years, and they cannot survive alone as the revolution spreads.

...

On May 1, 1882, a massive anti-hunger campaign broke out in the Kingdom of Prussia. Countless people took to the streets to ask the government to import more food to solve the domestic food shortage.

After the anti-hunger campaign broke out, the Berlin government responded very quickly and helped the international community in the shortest possible time.

At the same time, repaying foreign debts consumed a large amount of foreign exchange, and did not have the money to buy food, on the grounds that the debtors were requested to defer payment of debts.

No doubt, it's not like a "request", it's more like a notice.

At the time of the request, the Berlin government had suspended debt payments in May.

It was announced that the debt repayment funds in May were used to purchase food to solve the domestic food shortage.

Most of the Prussian creditors are concentrated in Britain and France, holding a total of 95.4% of the Berlin government's external debt.

Once the two major creditors of Britain and France are settled, it can be said that all creditors have been settled, and the British people can be said to be accurate.

The French are very busy right now, and the civil war has broken out. For a while, this trivial matter was ignored.

Is there a famine in the Kingdom of Prussia?

It depends on what the British think!

If the London government accepted this, then the kingdom of Prussia would "really" famine.

If the London government did not agree with this statement, there would be no famine in the Kingdom of Prussia.

Politics only needs to weigh the pros and cons, and the truth is not important.

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