Rise of Empires: Spain

With the development of industrialization in various countries, the economic ties between countries in the world will become closer and closer.

And this has also led to a quite serious problem, that is, the outbreak of the economic crisis will not affect a single country, but will expand its impact to the whole world.

Although the economic crisis did not have a serious positive impact on Spain, it still affected Spain's import and export trade.

On May 14, 1873, Prime Minister Primo convened a cabinet meeting to deal with the possible impact of the economic crisis on Spain.

Carlo was also very concerned about the economic crisis. He listened to the whole meeting and put forward some suggestions of his own to prevent the impact of the economic crisis.

At the meeting, Finance Minister Ewald Bartel frowned and said with a frown: "Your Majesty, Your Excellency Prime Minister. After the economic crisis broke out in Vienna, it had a serious impact on our import and export trade.

As the economic crisis gradually affects other European countries, it may have a serious blow to our import and export trade.

Since the outbreak of the economic crisis, our daily import and export volume of goods has continued to decrease. If the economic crisis continues, the total import and export trade volume is expected to drop by at least 30% this year. "

Why does the economic crisis affect Spain's import and export trade?

The actual reason is that the economic crisis has affected the economic environment of European countries, causing a large number of factories and enterprises to be on the verge of bankruptcy or even directly bankrupt.

People have also lost their jobs and naturally will not have such strong purchasing power.

With the economies of other countries in chaos, even if Spain's industrial production is not greatly affected, goods will definitely not be sold.

In the same way, when the economies of other countries are in chaos and a large number of factories and companies are bankrupt, even if Spain wants to import a large amount, it depends on whether other countries have the ability to produce it.

The shrinkage of imports and exports during the economic crisis is inevitable. Unless the economic conditions of other countries gradually improve, they will have to silently bear the impact of the massive reduction in imports and exports on the economy.

"Doesn't it mean that our economy is likely to experience negative growth this year?" Carlo asked aloud.

Since Spain's reform, the economy has been growing positively every year. Moreover, the growth rate is extremely fast, which is why the Spanish government is confident that it will spend a large amount of its fiscal budget on various infrastructure construction every year.

As long as the economy maintains a good growth rate, not only will the government's investment not suffer losses, but it will turn into more tax revenue and return it to the government.

If the economic crisis leads to negative economic growth, the government's tax revenue will also decrease. However, those projects that have already started cannot be stopped easily, which also means that the government's finances may face a large deficit this year.

"Yes, Your Majesty." Ewald Bartel nodded and replied: "With import and export trade being affected, it is difficult for our economic crisis to continue to maintain positive growth."

Carlo nodded expressionlessly, but felt relaxed inside.

The negative economic growth caused by the reduction in import and export trade can be saved, and the way to save it is very simple, that is, to increase the intensity of infrastructure construction to expand the demand for domestic products.

At the same time, extensive infrastructure construction can also provide more jobs and give a good boost to Spain's economy.

The only disadvantage of this is that the government needs to use a lot of funds, and the current Spanish government is not short of funds.

Although the treasure was worth just over 900 million pesetas, the value of gold was not calculated that way. If gold is used to issue currency, it can issue currency worth several times its own value.

In other words, the Spanish government can use these more than 80 tons of gold to issue currency equivalent to the value of several hundred tons of gold.

At this time, Prime Minister Primo also stood up at a very appropriate time and introduced to Carlo the plan that the cabinet government had already prepared: "Your Majesty, in order to deal with this economic crisis, the government is expected to increase the number of plans again in the next two years. Large investments in public infrastructure will create more jobs and stimulate the Spanish economy.

In infrastructure construction, our investment mainly focuses on three aspects: road transportation improvement, small water conservancy project facilities in villages and towns, and slum renovation projects.

In order to protect some of our affected companies, the government will introduce short-term tax exemption policies for certain companies and encourage Spaniards to purchase Spanish products in large quantities to expand our domestic demand and reduce the impact of reduced exports. "

Previous slum renovations were also subject to financial constraints, and were always small in scale and concentrated in Madrid.

Since the government is no longer short of money and has enough time to carry out infrastructure construction during the economic crisis, it is natural to vigorously promote the reconstruction of slums.

Transforming all dilapidated slum houses into high-rise buildings will not only effectively improve the urban appearance of Spain, but also provide these poor people with a better living environment.

In fact, this economic crisis is not all bad for Spain, and the benefits can be seen everywhere.

For example, during the economic crisis, the scale of industrial and agricultural production in various countries continued to decline, and the prices of various industrial products continued to fall.

Spain can purchase a large amount of machinery and equipment at extremely low prices in various European countries, and can even purchase corresponding production materials and technology.

Some small and medium-sized factories are already facing bankruptcy crisis. It is better to sell technology and equipment for some funds than to let the whole factory and enterprise go bankrupt.

As for the harm of selling technology and equipment to factories and enterprises, they are no longer considered. After all, if the enterprise goes bankrupt, they will also have nothing. It is better to exchange equipment and means of production for some funds to make the enterprise's finances turn around.

After determining Spain's domestic policy to prevent this economic crisis, the next topic of discussion soon became what products should be purchased at such a good opportunity.

What the cabinet officials discussed most was actually the production equipment and technical information of factories in various countries, including advanced steel smelting technology, production materials and production lines of military weapons, Spain's relatively weak chemical technology and some mechanical equipment, etc.

These are extremely important for Spain's industry and are what Spain lacked the most before.

Although there is assistance from Italy and Austria-Hungary, some more advanced technologies and means of production are not so easy to buy.

Either the price is too high, or some companies are wrong, and the confidential technology disclosed to the outside world cannot be bought even if you want to.

The current economic crisis is a good opportunity. The production equipment and technical data that used to be expensive are now basically dirt cheap.

The money that could only buy one piece of information before can now buy several pieces of information, and even a piece of machinery can be given as a gift.

Those confidential technologies that were originally not allowed to be passed on by small and medium-sized enterprises are now products that can be taken away at a price. It is precisely because of this that Spain cannot miss this good opportunity for a big purchase.

This economic crisis is bound to affect European and American countries, which also means that Spain can use funds to unscrupulously select production equipment and technical data in these countries.

According to later data, during this economic crisis, nearly 10,000 companies in various countries around the world went bankrupt and closed down each year, and more than 50,000 companies went bankrupt during the entire economic crisis (1873-1879).

Although many of these 50,000 companies are relatively ordinary factories, there are no more advanced production equipment and technical data.

But there are also a small number of factories with strong scientific research capabilities, and the equipment and data they have are currently the most lacking in Spain.

However, the large-scale purchases in European and American countries still need to be disguised. If the Spanish government buys a large number of bankrupt companies and factories in various countries in the name of the Spanish government, it will inevitably attract the attention of these countries.

Even if it angers the public, it will not be worth the loss for Spain.     The buyers who go to various European countries will disguise themselves as various identities, but their goal is the same, that is, to select bankrupt companies worth acquiring, or to purchase production equipment and technical data from those companies on the verge of bankruptcy.

In the economic crisis, there is a country that plays the role of the unlucky one.

Which country is it? Of course, it is the United States, which relies heavily on foreign investment.

European countries are suffering from the economic crisis. The first reaction is of course to withdraw investment in the United States, or even terminate investment immediately.

Americans themselves need a large amount of foreign investment to maintain their crazy construction. After foreign capital began to withdraw, the economic environment of the United States collapsed instantly.

What's more, the economic environment of the United States itself has big problems.

It was mentioned before that the United States has built more railways in recent times than the United Kingdom and Germany combined.

And this also gave rise to a problem, that is, a large number of railway companies were born in the United States, and these railway companies are constantly seeking loans to build railways.

Among many bankers in the United States, the Cook family is definitely one of the more famous private bankers.

Perhaps Cook himself did not know that his investment directly led to the beginning of the US economic crisis and also caused the US industrial production to face a devastating blow.

For Cook himself, this investment was very common.

His partner was the Northern Pacific Railway Company, which was also well-known in the United States. It had built many sections of railways and achieved relatively good results.

Perhaps it was precisely because of the good reputation of the Northern Pacific Railway Company before that Cook agreed to help the railway company underwrite bonds without much thought and agreed to underwrite 100 million US dollars of railway bonds.

The value of the US dollar is not low, much higher than the franc and the pesetas.

The value of 100 million franc bonds is equivalent to more than 500 million pesetas, which is the annual fiscal revenue of the Spanish government.

Such a large-scale bond sales is not so easy, not to mention that the bonds were sold at the time facing the war between Prussia and France.

During the war, not many people were willing to use real money to buy bonds that were just a piece of paper. The result was also obvious. The sales of bonds were not satisfactory, and the construction of the railway was difficult to maintain.

If the railway could not be built, it would be a huge blow to the Northern Pacific Railway Company and Cook's bank.

In order to save the railway company, Cook could only issue him a short-term loan.

Although the interest rate of the short-term loan was high, it at least ensured that the Northern Pacific Railway Company's railway continued to be built. As long as the railway was built, the railway company could at least recover part of the funds and rely on the operation of the railway to obtain a steady stream of income.

But things are often not as wonderful as expected. After the outbreak of the Vienna economic crisis, European capital quickly withdrew its investment in the United States.

Cook's bank was also seriously affected, and the pressure on funds doubled.

Coincidentally, the Northern Pacific Railroad also encountered trouble at this time. Not only could the railway company not repay the principal and interest of short-term loans on time, but it also needed Cook to invest more funds to continue to maintain it.

Obviously, Cook had no money at this time.

The railway company, which lacked capital investment, also declared bankruptcy.

With the successive bankruptcies of the Northern Pacific Railroad and Cook Bank, coupled with the panic caused by the European economic crisis to Americans, the US stock market soon fluctuated.

The bankruptcy of Cook Bank caused panic among Americans. People rushed to the bank, just wanting to withdraw their money from the bank account as soon as possible.

But how could there be so much money in the bank account?

The previous prosperous era was not only the prosperity of construction companies and railway companies, but also the prosperity of the banking industry.

These banks obtained high incomes through large-scale loans, and there are still a lot of bank funds that have not been recovered.

Without sufficient funds for exchange, banks naturally faced a serious bankruptcy crisis. This wave quickly affected a large number of banks, and many investment companies and railway companies were also affected.

It took only two and a half weeks from the bankruptcy of Cook Bank and Northern Pacific Railway Company in early June to the official closure of the New York Stock Exchange, but these two and a half weeks were a devastating blow to the US economy.

During these two and a half weeks, at least hundreds of banks went bankrupt one after another, including relatively large chain banks.

Investment companies were even more tragic, with at least hundreds of investment companies declaring bankruptcy due to the collapse of the capital chain.

The bankruptcy of banks and investment companies quickly affected railway companies. Many railway companies that rely on loans and bonds to survive cannot continue in such an economic environment, and the wave of bankruptcy rises again.

For the United States, this is just the beginning of the disaster.

Like other European countries, the United States did not establish a supreme bank to control finance and bonds at this time, and even the issuance of bonds was authorized to private banks.

Because there is no supreme bank, the US government cannot save American companies by providing money supply and rescuing companies on the verge of bankruptcy. In the end, it can only helplessly watch the economic crisis intensify in the United States.

It is also because the bonds are handled by private banks, and the bankruptcy of these private banks in large numbers is not a good thing for Americans.

Not only did their deposits disappear with the bankruptcy of the bank, but even the bonds they originally purchased also disappeared.

After all, the bank is gone, where can they redeem the bonds they bought?

For the United States, a country that is developing wildly, the impact of the economic crisis is more serious than that of European countries.

The industrial and economic growth rate of the United States during this period is indeed far higher than that of European countries, which also proves that the comprehensive potential of the United States is higher than that of European countries.

But it is obvious that the development speed of the United States is relatively wild and lacks government control.

In two and a half weeks, the United States has faced the bankruptcy of nearly a thousand companies, including medium and large-scale companies and factories.

This also means that in a short period of time, more than 100,000 Americans have suddenly lost their jobs and the income of 100,000 families has dropped sharply.