Too Many Clever People
While others were struggling to stay afloat, the Mountain Territory was no exception. Faced with plummeting prices, Hudson was powerless to do anything except reduce production.
Even if it means losing money, we have to do the business, otherwise, once we lose market share, it will be difficult to get it back.
This crisis came so fiercely not only because of industry overcapacity, but also because industry giants took the opportunity to reshuffle the industry and eliminate competitors.
The order defaults that triggered this crisis may not be solely the intention of various chambers of commerce; there may also be the involvement of certain mining giants behind the scenes.
It's not uncommon for a prominent nobleman to be both a shareholder in a chamber of commerce and a steel tycoon.
Unfortunately, Hudson's rise to power was too short-lived, and his relationship with the major chambers of commerce on the continent was limited to a single collaboration during the war.
It's a fair transaction where everyone gets what they need, and no one owes anyone anything. They certainly wouldn't send someone to deliberately inform him of these private matters.
Just be envious. With the current network of connections, the Coslo Family simply can't manage to form a chamber of commerce.
When interests are involved, mere personal connections are simply not enough. Those chambers of commerce scattered across the mainland all have a large group of partners behind them.
Even heavily guarded immigrant groups are attacked. If they were to set up a chamber of commerce, wouldn't they be robbed every day?
In fact, it wasn't just the steel industry that was affected by the crisis. After the war, all industries that revolved around the war were impacted to varying degrees.
The current collapse in steel product prices has also affected other industries, such as the Coal Mine industry and the related industrial chains of horse-drawn carriage manufacturing, all of which are now facing a harsh winter.
Fortunately, the Alpha Kingdom's industry and commerce were underdeveloped and did not account for a large proportion of the kingdom's economy. Most of the workers were serfs dependent on the nobles, so even during an economic crisis, there was no such thing as layoffs or pay cuts.
The crisis had virtually no impact on the lives of the lower classes. However, the chill continued to spread, and Caesar III was among the first to feel it.
The nobles, who had suffered heavy losses in the crisis, used bonds issued by the kingdom to offset their taxes. What was originally a loss only for the noble lords...
"For the autumn tax alone, war bonds worth a staggering 4.5 million gold coins have appeared. Have they gone mad?"
The behind-the-scenes story of Caesar III's almost hysterical devotion.
He has been unwell lately and has handed over many government affairs to his son, so he hasn't paid much attention to the behind-the-scenes maneuvering of the nobles.
He had only just taken a nap when his subordinates made a huge mess of things for him.
Using war bonds issued by the kingdom to offset taxes is theoretically entirely feasible. After all, with such early redemption, the kingdom only pays the principal, and the interest on the bonds is completely lost.
Generally speaking, only lesser nobles with limited financial resources would do this. As long as it's not a mass rush, early redemption of some war bonds is a relief for the kingdom.
In order to ensure the orderly operation of the kingdom's finances and to earn bond interest, the high-ranking nobles who held a large number of kingdom bonds had long ago reached a tacit agreement to hold onto their war bonds for the long term.
Under normal circumstances, as long as the kingdom's credit does not collapse, the number of nobles who use bonds to offset taxes will be extremely small.
It's at most a few hundred thousand gold coins, not exceeding ten percent of the total tax revenue. The Treasury Department can grit its teeth and weather the storm by paying off this small amount of debt ahead of schedule.
But the situation is clearly different now. Due to the war, the Alpha Kingdom only received seven million gold coins in autumn tax this year, of which more than four and a half million were war bonds.
It is clear that several high-ranking nobles broke their tacit agreement and dumped their war bonds in large quantities; otherwise, the total amount of tax revenue contributed by the lower-ranking nobles would not have been so much.
"Your Majesty, this may be related to the economic turmoil that has broken out in the country. After entering the second half of the year, problems arose in the iron products market, and in November, prices collapsed."
As a result of the chain reaction, by December, the crisis had spread to the upstream and downstream industrial chains, and consequently affected multiple industries.
Many nobles suffered heavy losses in this crisis. Driven by panic, everyone wanted to hold onto as much cash as possible, which led to this situation.
Marquis Delgado explained, forcing himself to be brave.
As Finance Minister, he was a tragic figure. He had only been in office for a short time when the Beastfolk invaded.
It's true that he holds a high position of power, but he has to worry about money every day, and it's hard for him to get a good night's sleep.
"Why didn't you report this to me beforehand?"
Caesar III questioned him.
If he had been informed of such important information in advance, he would have taken countermeasures long ago and would never have allowed the situation to develop to this point.
There's room for change until the taxes are collected. Now, looking at the pile of bonds in the national treasury, he's extremely worried.
After the New Year, loan interest payments will begin. Creditors only accept gold coins and won't accept a bunch of bonds as interest.
If interest payments cannot be made normally, and the reputation of the Alpha Kingdom is ruined, then there will be big trouble.
No one answered, but judging from the constant glances that swept over Crown Prince Caesar, it was likely related to his beloved son.
"Little Caesar, as regent, shouldn't you give me an explanation?"
"I am quite disappointed," Caesar III said.
Whatever the reason, making a mess of things is a political stain.
If a reasonable explanation cannot be provided, Crown Prince Caesar's future path will become increasingly difficult.
"Father, you were unconscious at the time, and I didn't dare to bother you with these troublesome matters while you were recovering, so... so I took it upon myself to handle it."
In order to ensure that everyone prioritizes the overall situation, I wrote personal letters to all the high-ranking nobles in the kingdom, explaining the pros and cons in detail.
I thought they would give me some face, but I didn't expect them to go so far as to clearly disregard my royal family!
"I am indignant," said Crown Prince Caesar.
They all privately promised him that everything would be fine and that the bigger picture would be taken into consideration. Unexpectedly, in the blink of an eye, a pile of bonds was presented to offset his taxes.
The feeling of being fooled by his subordinates was infuriating. If he weren't still in power, he would definitely take revenge on them one by one!
"That's enough!"
"No matter how wronged you feel, this situation is a dereliction of duty on your part as regent."
Little Caesar, you're not a child anymore. How can you believe what others say so easily?
Go back and carefully examine their replies. Who in the letter assured you that they wouldn't use war bonds to offset taxes?
"They'll prioritize the big picture"—that's just a platitude. What you really need to see is what they do, not what they say!
"Forget it, there's no point in saying all this now. Your wedding day is just around the corner, so let's use the wedding as an excuse to invite them to the Royal Capital to discuss things."
"After a sigh, Caesar III said..."
His son was indeed filial, but he clearly lacked political experience. If his health hadn't deteriorated, and his son could have been trained for another ten or eight years, he would definitely have surpassed the average level of a monarch.
Unfortunately, his health is not what it used to be, and he simply doesn't have that much time to allow Crown Prince Caesar to gradually learn the art of [the art/method]. Things may not be so easily resolved. This incident happened too suddenly, with very few warning signs beforehand.
If you're not careful, it will be overlooked. The signs of manipulation behind the scenes are far too obvious.
A sudden attack at this time is most likely well-prepared. Even if you gather your people, they might not listen.
After all, according to the kingdom's laws, once the taxes were successfully transported to the Royal Capital and deposited into the national treasury, their obligations were fulfilled.
The Prime Minister Grand Duke Newfoundland, offered a cautious reminder.
No matter how powerful Caesar III was, when facing the kingdom's nobles, it was still a relationship between major shareholders and minor shareholders.
Everything must be done within the rules. Anyone who crosses the line will have to bear the consequences of violating the rules.
Now that they have fulfilled their obligations for the year, even if the kingdom's nobles don't accept it, Caesar III can't do anything about it.
"Don't worry, Prime Minister. I know what they want!"
No noble family wants to see the kingdom collapse. The monster legion's plan has only just begun, yet they've already made such a big fuss. Their intentions are obvious.
"Do the math. The war bonds they're using to offset taxes this time are exactly the same as our annual military budget. Do you think such a coincidence is possible?"
Caesar III scoffed dismissively.
If you can't even see through such a blatant hint, then you shouldn't be playing politics.
However, being able to see something doesn't mean you can say it.
It's one thing for King Caesar III to make a few sarcastic remarks, but if someone else were to spout such nonsense here, they would immediately feel the iron fist of the great nobility once the news got out.
"Your Majesty, if they are truly after the monster cubs, should we compromise?"
"I am not willing to give up, "Duke Affierro asked.
Everyone wants to increase their own power. As previously agreed, the magical beast cubs bred by the Alpha Kingdom will be split 50/50 between the kingdom's military and the participating nobles.
It is clear that with the pie becoming increasingly difficult to expand, the nobles are no longer content with the current distribution ratio and want to obtain a larger share.
After all, the Beastfolk threat was gone, and in the eyes of the noble lords, the kingdom had no need to maintain a powerful Standing Army.
Although the military has always been indirectly controlled by the great nobles, a considerable portion of these monster cubs that the military obtains will still be returned to their clansmen serving in the military.
Indirect control is ultimately no match for direct control. With numerous nobles huddled together, and everyone checking and balancing each other, the army remained firmly in Caesar III's grasp.
Even though this war weakened the King's control over the army, Caesar III still held the most significant influence.
"That depends on their resolve. If they're determined to weaken the military and strengthen their own, no one can stop them!"
As he spoke, a hint of melancholy appeared between Caesar III's brows. It wasn't that he didn't want to maintain his powerful position, but his health wouldn't allow it.
Most importantly, he could be powerful while in power because of his great contributions to the kingdom and his high prestige within the country.
If Crown Prince Caesar were to ascend the throne, the situation would fundamentally change, and another conflict would be inevitable.
Perhaps in ten or twenty years, when Crown Prince Caesar has matured in his political skills, he will be able to challenge the powerful nobles of the country, but right now he is clearly far from that level.
For a long time afterward, the political landscape of "declining Royal Authority and rising aristocracy" was almost set in stone, and Caesar III was powerless to change it.
However, with the solid foundation he left behind, the royal family's power is growing rapidly, and even if the Royal Authority declines, it will not decline too drastically.
Once Crown Prince Caesar's political acumen matures, he can gradually regain the influence he lost in the early stages.
This kind of power struggle happens with every change of dynasty; Caesar III had seen too many of these ups and downs.
He thought he could face it calmly, but when it actually happened to him, he was still unwilling to accept it.
When the city gate catches fire, the fish in the moat suffer as a result.
While both kingdoms faced economic crises, the situation in the Moxi Duchy was significantly more severe. It wasn't that the nobles of the Moxi Duchy were more prone to internal strife; rather, it was because they had lost far too much in the war.
Vast swathes of land north of the Royal Capital were almost completely ravaged. Very few noble fortresses survived.
The provinces south of the Royal Capital were also severely weakened. It was almost as if every family was in mourning and everyone was weeping.
The war not only bankrupted the duchy's government, but also left the noble lords penniless.
The already fragile economy collapsed incredibly quickly after such a shock. People didn't even have the courage to fight on; they just surrendered.
Looking at the collected taxes, which were almost entirely war bonds, George felt a mix of emotions.
"Destroy all the war bonds that have been collected. Everyone is struggling right now; let's work together to get through this difficult time!"
Such a considerate King is truly rare, yet it's almost impossible for George not to be considerate. Gold coins accounted for less than 20% of the tax revenue in the first half of the year.
Once you've compromised once, compromising a second time is much easier. If you're destined to borrow new money to pay off old debts, then just borrow more.
"Your Majesty, the situation seems rather dire. Although the construction bonds we issued this time have been sold, it has taken several times longer than usual."
The high-ranking nobles who were originally keen on buying bonds have stopped this time, and the buyers are mostly middle and lower-ranking nobles.
According to the intelligence we have gathered, the amount of bonds traded privately has been increasing recently, as if someone is quietly unloading their holdings.
Not only our bonds, but also war bonds issued by the Alpha Kingdom are frequently appearing at major auctions.
The only good news is that transaction prices remain firm, and there are no signs of a collapse yet.
Perhaps they have already sensed the risks, but the amount of bonds they hold is too large to extricate themselves from the situation immediately. Therefore, they have chosen to continue cooperating with us in issuing bonds, thus postponing the collapse.
Count Renato said with a worried expression.
It's quite bizarre that someone who is the Foreign Minister is also the Finance Minister.
However, raising funds through issuing bonds requires coordinating relationships with various parties, and the Foreign Affairs Department is the main force behind this task.
As a frontline administrator, he was so worried about the ever-expanding debt of the principality that he could hardly sleep at night.
The idea of borrowing new money to repay old debts is not wrong, but the prerequisite for this ingenious idea to be realized is that there are enough funds available outside that are willing to lend them money continuously.
Once the funding chain breaks and the scheme can no longer be sustained, it's time for a collapse.
"We have no way out. If they find out about the problem, we should borrow as much as possible before they finish shipping."
If they wait until they have completed the transfer of risk, someone will probably be unable to resist popping this bubble.
After all, they had already reaped enough benefits from it. Exiting at this point was undoubtedly the best option.
George said coldly.
Before choosing to "borrow new money to pay off old debts," he was prepared for the bubble to burst.
The nobles weren't fools; they knew to send people to gather intelligence on the Moxi Duchy in order to estimate their financial situation.
Even if this figure contains some error, government operations still have costs. When fiscal revenue is lower than interest payments, anyone can easily conclude that the government is on the verge of bankruptcy.
Those who owe a lot of money are treated like royalty. Even though they realized that the Moxi Duchy was in financial trouble, the creditors dared not come to collect the debts in advance, for fear of accidentally detonating this huge debt bomb.
In order to protect their own interests, they had to simultaneously promote the new bonds of the Moxi Duchy, luring unsuspecting investors to take over and delaying the debt crisis, while secretly selling off their own bonds to transfer the crisis to others.
"Your Majesty, if we continue to borrow like this, our debt burden will only become heavier and heavier, and the consequences when we collapse will be even more terrifying."
"Why not take advantage of the fact that our debts haven't yet defaulted and communicate with our creditors in advance, trying to persuade them to lower bond interest rates to ensure we can make timely payments?"
"I'm worried," said Chancellor Herczeg.
He was genuinely terrified. Just thinking about being chased and pursued by creditors after the debt crisis made his scalp tingle.
Who told him to be the prime minister of the Moxi Duchy?
When it comes to using force to collect debts, if the creditors don't kill him, who else can they kill?
We can't exactly go after King George!
King regicide is the greatest taboo on the Aslant Continent. Even if George stood before his creditors, no one would dare to lay a hand on him.
"No, we can't do that until they dump their bonds!"
While both involve debt default, owing money to a group of high-ranking nobles and owing money to a group of lower-ranking nobles are two completely different concepts.
Do as I say, increase the number of bonds issued, and try to get as much cash back as possible.
"Once the major powers have extricated themselves from the debt crisis, we'll decide whether to have a showdown!"
George said with a serious expression.
In order to extricate himself smoothly, he had no choice but to make this silent deal. If he didn't first appease the various forces involved, armed debt collection would be a piece of cake later.