Chapter 24 Raising Funds
"Sir Ernst, if you have no objections, we can sign this agreement."
Ernst carefully checked the contents of the agreement for the last time and signed his name.
The visitor is a member of the Prussian royal family. There has been a lot of quarrel in Prussia recently over the privatization of the Cologne-Minden railway.
This shows that the Kingdom of Prussia is raising war funds by any means necessary, and Ernst, who is also a big fish, falls into the eyes of Prussia.
After all, the Hechingen Consortium is now a star enterprise in the whole of Germany. It owns a large bank, a world-class daily necessities company, Hechingen Tobacco...
The huge amount of wealth that Ernst quickly accumulated in a short period of time is naturally eye-catching. Fortunately, Ernst is indeed a second-generation rich man. He has no inspirational experience of grassroots rise. Compared with the self-made geniuses of his generation, he is indeed not very conspicuous. .
But wealth cannot fool anyone, especially the Prussian royal family, because they themselves were Ernst's clients.
Now the purpose of the representatives of the Prussian royal family coming to Ernst is self-evident. Rather than selling a strategic facility like the railway, it is better to think of other ways first.
The Cologne-Minden Railway was one of the earliest railway lines built in Prussia. It was designed in 1833 and completed in 1859, becoming the hub of the Prussian railway system.
The original intention of the railway project was to transport coal from the Ruhr region cheaply to Prussia's industrial production base.
In fact, the Cologne-Minden Railway was a large-scale public infrastructure project led by the Prussian government from the beginning. The Prussian government directly purchased 1/7 of the original shares and guaranteed the railway bonds with 14 million thalers at a coupon rate of 3.5%.
In return, the government can buy the company's outstanding shares in installments and eventually become the railway's sole shareholder, completing a gradual nationalization.
The nationalization of railways was a strategic decision of Prussia, because Prussia valued the railway's ability to transport troops and materials.
However, the contradiction between Prussia and Austria is now intensifying, and the top leaders of the Prussian government are actively preparing for war.
War cannot be separated from financial support, and the Cologne-Minden Railway was discussed in this context.
Bismarck's preparations for war against Austria required a total of approximately 60 million thalers. The burden of raising such an astronomical war cost fell on Breschroeder's shoulders.
In fact, as early as December 1862, after careful calculation and repeated consideration, Breschlauder had proposed a highly controversial plan to privatize the Cologne-Minden Railway.
The core part of its plan is that instead of the government spending huge sums of money to fully acquire the shares of the railway company in 1870, which would put a huge pressure on the finances, the Prussian government could immediately get a compensation from the railway company at the cost of giving up nationalization. deposit, and at the same time give up the guarantee of bond interest, which can immediately activate part of the 14 million thaler deposit.
The plan was opposed by many people as soon as it was introduced. These people believed that the Brayschroeder plan would achieve huge profits for railway company shareholders, including Brayschroeder himself, at the expense of the government's long-term losses. In this plan, the government will lose various rights and interests totaling up to 30 million thalers, in exchange for only 10 million thalers in compensation and 4 million thalers in usable security deposits.
The Cologne-Minden railway that has been developed is a very profitable project for government investment. The privatization plan can provide emergency funds to the government in the short term, but the price paid is to sell high-quality assets at a price of less than 50% off. At the same time, It also loses future long-term income rights, which is not a good deal for the government anyway.
Ernst also knew based on history that post-unification Germany eventually nationalized the railways, so the current railway privatization was just a sacrifice that had to be made.
But it is impossible to expect capitalists to do good things. They pursue higher profits, so there is no such thing as patriotism.
The Rothschild family was behind the privatization of the Prussian railways, and Breschroeder was their employee.
The Rothschild family is now based in Vienna, Austria. It is not an exaggeration to say that they have Austrian nationality, but they are doing things to prepare war funds for enemy countries.
It is true that he is not particular about what he does, but the benefits he gets are real. In the East, the Rothschild family would have been punished by the emperor.
That is to say, today's European social system has protected them. Of course, these have little to do with Ernst.
Ernst was more concerned about the agreement in front of him. This agreement was the result of bargaining between the Prussian royal family and Ernst.
Although Ernst is rich now, he still has a lot to do, especially the development of the East African colonies, population migration, food reserves, production tools, and colonial weapons and equipment, including the wages of staff, all of which need to be paid for by himself.
Therefore, after excluding the operating funds required by the entire consortium, the expenses of the East African colonies and the emergency emergency funds, the available Taylors are only a few million, but this is enough. The Prussian royal family did not expect too much. This was a huge sum of money in this era. You must know that the Prussian government could only get the first four million thalers from the privatization of the Cologne-Minden railway.
An important reason why the Prussian royal family came to Ernst for help was because they hoped that Ernst would be more conscientious than those banks and consortiums that only aimed at economic interests.
After all, Ernst was one of his own, a member of the Hohenzollern family. Ernst did not really need any railway debt. Now Ernst was interested in East Africa.
Therefore, Ernst also proposed the advantage, that is, Prussia must ensure the interests of the Hechingen royal family in East Africa in the future.
Now Prussia's top priority is to unify Germany, and the colonies are not very interested in it. Since Ernst hopes that Prussia will support all of Ernst's interests in East Africa after it unifies Germany in the future, then support it.
So the two parties signed an agreement, this time including the Prussian government, the Prussian royal family and the Hechingen Consortium represented by Ernst.
The specific content is that the Hechingen Consortium invested in the acquisition of 40% of the government's shares in the Cologne-Minden Railway. The Hechingen Consortium will not prevent Prussia from taking back the shares of the Cologne-Minden Railway held by Ernst at a price higher than the market price in the future. .
This was actually a left-hand trick. Ernst used the idle funds to give it to the Kingdom of Prussia to participate in the war. After the war, Prussia could take the railway back into national ownership as long as it paid back the accounts.
Of course, Ernst did not pay in vain. As a price, the unified German government must recognize the ownership of the East African colonies by the Hechingen royal family and support the expansion of the Hechingen consortium throughout Africa.
Although this kind of gentleman's agreement is not safe, it can avoid many troubles. The German East Africa in the previous life has completely lost its existence and legal basis. This time it is the royal territory of Hechingen.
As a supplement to the agreement, Ernst also took advantage of this opportunity to get the ticket he had long dreamed of.