Every massive loan was never something that could be settled with a few words. Beyond the exchange of political interests, it always came with a string of risk assessments and detailed negotiations. A commercial loan was entirely different from a purely policy-driven one. For a policy loan, the government guaranteed everything. The banks were merely the agents handing out the money, with no need to worry about risks or profits. But a commercial loan was another story. Even if the government offered a guarantee, it usually only covered the principal amount. As for the actual profits and risks involved, the commercial banks still had to send their own people to conduct a proper assessment. In theory, if the banks judged that the risks outweighed the returns, the deal would be off the table. From that perspective, even if the Austrian government agreed to issue the loan, whether the Spanish government could actually receive it was still uncertain. Of course, everything was negotiable. Capital always chased profit. If the potential returns were high enough, risk would no longer be a problem. Still, without the full backing of the Austrian government, and now forced to bargain with bankers directly, Júnior felt a deep sense of disappointment. From past experience dealing with financiers, he knew that this time, there was no way out without bleeding for it. Thinking of Spain’s current financial situation made his heart sink. “Borrowing is hard, but paying it back is even harder…” If nothing unexpected happened, once this loan went through, the Kingdom of Spain would surpass the Confederate States of America to become the world’s third-largest debtor nation, right behind the United States. And naturally, the number one spot still belonged to the Russians. In this era, owing a colossal debt was practically a badge of honor. Who but the Russian government could carry such a distinction? The Austrian government also carried an enormous debt load, but the Holy Roman Empire was still a creditor nation. It was much like a business. It might owe payments to its upstream suppliers for raw materials, yet also have large sums in accounts receivable from downstream distributors. The money owed to others counted as costs; the money others owed to them counted as profit. If profits outweighed costs, the result was a net gain. Otherwise, it was a loss. Although the Austrian government owed plenty, the number of countries indebted to them was even greater. Taken together, their total assets still exceeded their liabilities. One only had to look at the Russian government next door to understand. Most of Russia’s loans came directly from Austria. And apart from them, a handful of smaller nations also ranked high among Austria’s debtors. It could not be helped. Banks always had to assess risk carefully. As for the European countries that had already declared bankruptcy, no commercial bank dared lend them a single coin, not even with a guarantor. Collecting debts took time, and when the default rate hovered near one hundred percent, no sane banker would willingly take that gamble. In the end, they had no choice but to take a compromise approach. The banks would lend money to the Austrian government, and the Austrian government would then lend it to them. As a result, even though Austria had been trying to gradually reduce its national debt, its own liabilities didn’t shrink at all. In fact, they increased significantly. Júnior had originally hoped to secure one of these special loans himself. After all, when the Austrian government assumed the financial risk, banks usually offered loans at very low interest rates. Unfortunately, that was just wishful thinking. Without putting enough on the table in return, there was no way Austria would agree to shoulder such a burden. Besides, Spain wasn’t exactly destitute. Compared to the poorer nations, the Spanish government still had plenty of valuable assets it could offer as collateral. Whether it was the right to issue currency, colonial territories, customs revenue, or even parcels of land itself, Spain had things worth pledging. The Austrian government’s lack of interest didn’t mean no one else wanted them. In fact, to many investors, those were prime assets. Sold to the right buyers, they could fetch a very generous return. And when it came to squeezing profits, no one did it better than the professionals. In that field, bankers were in a league of their own. As for the risk of default, who ever got rich without taking a few risks? As long as the Austrian government was willing to guarantee the loan, everything stayed within acceptable limits. … “Have you found out anything yet?” Júnior asked. Although he had already reached a preliminary understanding with the Austrian government regarding the loan, he hadn’t given up on pursuing Jewish capital as an additional source. Money was something one could never have too much of. If possible, Júnior intended to secure as many loans as he could. War was unpredictable, and until it was over, no one could ever be sure what the final costs would be. If there had been any other way, the Ministry of War would never have proposed hiring French mercenaries to fight. When even the generals had lost faith in their own soldiers, how could Júnior feel confident? Just look at the war in the Philippines. Spain’s elite troops, equipped with superior firepower, still couldn’t defeat what were essentially bands of Japanese-trained locals. Although the official casualty ratio favored Spain, the moment French mercenaries entered the field, the difference in effectiveness became painfully obvious. In truth, the Spanish Army’s lack of fighting strength had been a known problem for decades, perhaps even centuries. Now, however, the issue has become far more urgent. Everyone understood that the Spanish Army desperately needed reform, but with the country already deep in war, no one in the government knew where to even begin. Since their own forces couldn’t be relied on, money had become the only answer. If they couldn’t win with skill, they would win by paying for it. Without enough funds on hand, Júnior feared that Spain might soon face yet another disaster caused by an empty treasury. Ambassador Brad said, “We didn’t have much time, so we only managed to uncover their public identities. Whether they have any secret connections with other powers, we still can’t confirm. You might not believe it, but their story could fill an entire novel. If I had to give it a title, I’d call it The Struggle of Jewish Capitalists or The Resilience of Jewish Financiers. According to what we found, their ancestors once led the largest financial consortium in the German region. But their greed drove them too far. They tried to extend their influence into politics, secretly supporting the revolutionaries during the 1848 Vienna Uprising. After the rebellion, the Austrian government retaliated against them. Fortunately, these people reacted quickly and fled before the situation got worse. They escaped, but their fortunes did not. Their family businesses were destroyed—some by the rebels, others confiscated by the government. After 1848, Jewish financial power in Austria suffered a devastating blow. When the storm finally passed, a few lucky survivors managed to rebuild their fortunes using the wealth they had transferred abroad. But their second rise came at the worst possible time. They ran straight into the Austrian government’s massive anti-corruption campaign. Dozens of Jewish financiers were executed, and thousands were exiled overseas. By the time it was over, Jewish influence in Austrian finance had been nearly wiped out. The great Jewish consortiums were gone, though a few survivors remained. The ones we’re dealing with now are the descendants of those survivors, pushed into the spotlight as new figureheads. For now, all we know is that they are tied to Jewish capital in the German region. Historically, they had close ties with the Austrian Jewish financiers, and the Austrian government’s actions back then damaged their interests as well. Driven by those same interests, these people were once the strongest opponents of rebuilding the Holy Roman Empire. But in the end, they had no choice but to accept reality. After the empire was reestablished, they became far more cautious. They kept a low profile while trying to build connections and win the favor of those in power. No one really knows why they suddenly approached us.” Even knowing how strict the Austrian government’s financial controls are, they still chose to stay within the empire instead of leaving. That decision alone says a lot. To outsiders, Jewish capital might seem like one unified force, but in truth, they compete fiercely among themselves. Today you cheat me, tomorrow I’ll cheat you—that’s the true nature of capital. As for brotherhood or shared faith, that only exists among ordinary people. In the world of capital, everyone lives by the same rule: profit above all. The market wasn’t infinite, and no one welcomed new competitors. Leaving the Holy Roman Empire might sound easy, but moving elsewhere didn’t guarantee a better life. Anti-Jewish movements were no joke. Strangers without connections were nothing more than fat sheep waiting to be slaughtered. And testing a wolf’s restraint with a flock of fat sheep was simply asking for disaster. Compared to the outside world, the situation within the Holy Roman Empire was still relatively good. The Austrian government might be strict, but at least it played by the rules. Within those rules, making huge profits was hard, but at least life was safe. No one had to worry about waking up one morning and finding everything gone. For ordinary Jewish citizens, the impact was even smaller. Apart from strict education regulations, with no Jewish schools and only public ones allowed, the stable and peaceful environment made the empire one of their favorite places to live. Compared to a life of constant displacement and uncertainty, those small inconveniences were easy to overlook. Most Jews were too busy worrying about daily survival to care about such things. Under these circumstances, even though Jewish immigration into the Holy Roman Empire had increased in recent years, the concept of a distinct Jewish nation was slowly fading away. The empire’s grand project of national integration benefited common people, but it hurt the interests of Jewish financiers. Without ordinary Jews as their cover, the capitalists stood out like lanterns in the dark, impossible to hide no matter where they went. Forced by circumstance, many Jewish financiers in Austria stopped identifying themselves as Jews and went underground. On the surface, it looked like Jewish capital in Austria had truly declined, surviving now only under the protection of Jewish banking groups from northern Germany. The information gathered wasn’t much, but even what was visible on the surface was enough to give Júnior a headache. Politics was cruel. From experience, he knew that the simpler something appeared, the bigger the problem hiding behind it. If those Jewish bankers had already been crushed by society before, what gave them the courage to take on such a high-risk loan deal unless someone powerful was backing them? Júnior asked quietly, “If we accept their conditions, how soon can they release the funds?” He didn’t care who was behind them. Money was money, and real gold couldn’t lie. As long as he could secure the loan, he didn’t care who was pulling the strings. Schemes only mattered if you had the strength to back them up. If the people behind this were just a few nobles throwing their weight around, Júnior didn’t mind showing them how harsh the world could be. Ambassador Brad replied, “They’ve promised to begin disbursing funds within a month after the contract is signed and made public. They also set a condition: they want to send representatives to oversee how the money is used. To make sure no funds are diverted, they’ll release payments weekly. The first installment will be one million guilders, and afterward the amount will depend on the situation.” “That’s a problem!” Júnior said immediately. Staggered payments were standard practice in international finance, but releasing them weekly was far too frequent. He paced the room a few times before finally saying, “Agree to their terms, but the first installment cannot be just one million guilders. According to international convention, the initial disbursement should not be less than ten percent of the total loan. And as for the release date, it can’t take a month. It must happen within a week.”
*** https://postimg.cc/gallery/PwXsBkC (Maps of the current territories of the countries in this novel made by ScH)
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