There are many small countries in Europe that not only survive but thrive. Each of them naturally have their own unique ways of doing so. Now that Prussia has fallen from the ranks of the great powers, if it wants to live comfortably, it must abandon its old ways and learn the survival strategies of a small nation. Frederick III was very clear-headed. The idea of a “Prussian-Hanoverian merger to form North Germany, uniting the many German states and steering this newborn nation back into the league of great powers” was nothing more than a fabricated lie meant to dupe delusional youngsters. In this age of survival of the fittest, without strength, you don’t matter. Having lost its core Prussian territories, the Kingdom of Prussia’s power has been greatly diminished. If it wants to turn the tables and seize the initiative, the first step is to ask whether Hanover is willing to agree. After acquiring additional territory, the Kingdom of Hanover’s overt strength has already surpassed that of Prussia with its economic advantage being particularly pronounced. Solve it by force? Don’t even think about it! Starting a civil war is a dead end. Besides the question of whether Hanover could be subdued, even if Prussia were to win, it would lose its legal justification. Hanover is part of the German Federal Empire, whereas the Kingdom of Prussia is not. As long as George I isn’t foolish, he won’t allow them to take seats in the Imperial Parliament. Political infiltration might seem appealing, but Frederick III knew that if it were carried out, it would no longer concern him. The Junker aristocracy has regained control of the state and, in pursuit of their own interests, will push for the complete integration of Prussia and Hanover. Because of the war, Prussia has severely offended the Russians. House Hohenzollern wants to take charge, but the Russian government will undoubtedly object. Both Prussia and Hanover are small nations. Only by merging can they form a medium-sized state and only a stronger nation can enable the military to flourish. Without control of the center, they would simply be abolished. In this regard, the military Junkers are truly the foundation of a strong nation, their interests are too closely intertwined with the state. To avoid the worst possible outcome, Frederick III had no choice but to initiate a political reshuffle immediately upon his accession, seizing the opportunity created by the war’s defeat to rebalance the various factions. Berlin Palace Minister of War von Roschwalde handed over a document and said, “Your Majesty, this is the military reorganization plan drafted by the Ministry of War. According to the plan, once the reorganization is complete, we will retain the formations of three infantry divisions, one guard division, two cavalry regiments, and two artillery regiments. In peacetime, these units will only maintain half their full strength, with a total force of 23,000 men.” After the reorganization, the total military strength would be less than one-tenth of its pre-war level. If this plan were to be leaked, it would undoubtedly cause a huge uproar. There’s no helping it as this is the price of defeat. With the government’s finances in dire straits, and in order to cut costs, they have no choice but to slash the military budget. Although von Roschwalde, who is overseeing this disarmament, is also a member of the Junker aristocracy, he is somewhat of an oddity in the military—a staunch pacifist. Before the war, the anti-war faction was weak and had little political clout. But after the war, the situation was completely reversed. Pacifism spread throughout Europe, and Prussia was no exception. Against this backdrop, Frederick III seized the opportunity to promote a large number of pacifists and began to suppress the military’s influence. Taking the document, Frederick III casually flipped through a few pages and asked, “The plan looks good, but can it really be implemented?” No matter how good a plan is, it only counts if it can be carried out. Otherwise, it remains just a plan. The Prussian military is too powerful. Even if they seize the opportunity provided by the war to completely replace its top leadership, it still won’t change the fact that the military holds too much influence. Minister of War von Roschwalde said, “It shouldn’t be a problem. With the current strong anti-war sentiment at home, we can use public opinion to pressure the military into concessions. To ensure the plan is implemented smoothly, Your Majesty will need to step in and persuade those highly respected generals to come forward and soothe the military’s morale.” Frederick III nodded helplessly. He knew that persuading the military bigwigs to agree to disarmament would not be an easy task. But no matter how difficult it is, it must be done. If they don’t cut military spending, bankruptcy is only a matter of time. Frederick III couldn’t help but want to ask the Russians: why don’t they use treaties to limit the size of the Prussian army? If such stipulations were included in the treaties, they wouldn’t have to go through all this trouble. After all, it’s the military that fought the war. If they lose, they bear the responsibility, and everyone will have to accept that. Chancellor Leo von Caprivi said, “Your Majesty, when it comes to disarmament, it’s better to take a gradual approach rather than rushing into it. It would be best to first grant the troops a leave. Let them experience anti-war sentiments firsthand. I believe that most of them will understand. This war has inflicted tremendous damage. The domestic economy has suffered severe blows, and unemployment is extremely high. Recently, many people have emigrated. As of now, the nation’s total population has fallen to 7.368 million, and that number continues to decline. Sociologists estimate that even if no one were to emigrate, we would still face a period of negative population growth within the next five years. To revive the economy and prevent a massive population loss, the government plans to cut taxes for some domestic enterprises and citizens, thereby alleviating the burden on everyone’s daily lives.” Tax cuts are naturally a good thing, but the problem is that their finances are in a poor state. Although the war is over, the enormous debts remain. In order to maintain a continental army, the Kingdom of Prussia has always imposed high taxes, leaving the living standards of its people at the bottom throughout the German region. When the economy was stable, it was manageable. However, with the economic downturn, ordinary citizens are struggling to make ends meet. Fortunately, there is always the option of emigration. If not, everyone would have revolted. So, it’s impossible to stop people from leaving. If they want to keep their citizens, their only option is to revive the economy, create more jobs, and ease the financial burdens on ordinary people. After a moment’s thought, Frederick III remarked, “Tax cuts alone probably won’t be enough. If people don’t have jobs, they won’t survive. Our top priority must be to solve the employment issue. And if that fails, we’ll have to resort to distributing relief food. The scars of war run too deep. Once the economy recovers, our domestic labor force will undoubtedly be insufficient. We must do everything we can to retain our people. If the government runs out of money, then we must go beg. We’ll appeal to the German states like Austria, Hanover, Baden, and Saxony. Don’t be ashamed. We’re not asking for free money. Whether it comes as a loan or through bond issuance, either will do. By the way, how are domestic bond sales coming along?” The war made the Prussian government realize the importance of population. If not for the lack of manpower, the outcome of this Russo-Prussian War would still be uncertain. Minister of Finance Fedor August replied, “The situation is far from ideal. So far, we have only sold 6.18 million marks in total. Ordinary citizens have no money, and bankers doubt the government’s ability to repay, refusing to cooperate at all. Especially those Jewish capitalists. Not only did they refuse to support the government’s bond issuance, but they also shorted the mark in the market, causing a significant depreciation of our currency.” It was not just Jewish financiers shorting the mark. Both domestic and foreign capital were involved. However, Jewish capitalists were the most aggressive, and since they had no real backing, they were naturally pushed forward as scapegoats. Frederick III slammed the table. Refusing to cooperate was one thing since that was their right. In Europe, private property was sacred and inviolable, and people could not be forced to buy bonds. But shorting the mark was going too far as it was shaking the very foundation of the Kingdom of Prussia. If confidence in the mark collapsed, the Prussian government would be finished. Having just suffered a defeat in war, the people could not tolerate another blow that would turn their wealth into worthless paper. Frederick III said harshly, “Investigate! No matter who is behind this, we must root out these hidden hands!” Everyone exchanged glances, as if they understood each other instinctively. They immediately knew what needed to be done next. “Anti-Semitism” had long been a fundamental lesson for European monarchs, tracing back over a thousand years. When monarchs ran out of money, they borrowed from Jewish financiers, and when they couldn’t repay, they turned against them. Now, the Prussian government’s finances were clearly on the verge of collapse. Without finding a way to increase revenue or cut costs, bankruptcy was only a matter of time. Cutting costs meant reducing the military, but generating new revenue was far more difficult. In the short term, if they wanted to make a quick profit, they had to exploit the people. And just at this moment, someone was shorting the mark, giving the Prussian government the perfect excuse to take action.
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