Debt Extension

Chapter 748

In Berlin Palace, Friedrich III felt nothing but crushing pressure. Affected by the war, the Kingdom of Prussia had fallen into the Great Depression early on after the economic crisis erupted.

The Berlin Government had only managed to hold out until now by flipping the table and confiscating property to obtain a sum of money.

Flipping the table came at a price as well. Although Friedrich III had taken decisive measures and promptly restored production, government fiscal revenue had still been hit hard.

If that were all, it would not have mattered much; things could always recover after some time.

But a leaking roof met a night-long downpour. They had just distributed the factories, and everyone was preparing to roll up their sleeves and get to work when the global economic crisis arrived.

Massive quantities of products were piling up like mountains, yet could not be sold. Naturally, the officers and soldiers who had received factories demanded that the government solve the problem.

Without a sufficient market, Friedrich III could not conjure one out of thin air. All of Europe had excess capacity, while the two great rogues, the United Kingdom and Austria, were dumping goods with utter abandon.

As a result, international prices for industrial and commercial goods were now lower than the production costs of Prussian enterprises. Not only could Prussia not compete on price, its products lagged far behind in quality as well.

The Berlin Government had an agreement with its British creditors. In theory, it could use industrial and commercial goods to pay off its debts, but unfortunately, pricing power rested in British hands.

For instance, the British would take wholesale prices from the international market, slash them by thirty percent, then deduct more after a comprehensive quality assessment before arriving at the final