Chapter 240 Big Loan

Chapter 240 Big Loan

Prussia has obviously become more friendly to Ernst recently. Before returning to Hohenzollern Castle, Ernst learned that the Prussian royal family invited him to Berlin as a guest.

Ernst had long anticipated Prussia's plan, so he diverted in Bavaria towards Berlin.

Kingdom of Prussia.

"Ernst, how have you been lately!" William I said with a smile.

"Your Majesty, I am living a good life. I have been busy with business recently, so I am quite busy." Ernst said.

"Just call me uncle. Your father is also the king now, and you are the crown prince, and you are both a member of the Hohenzollern family. You don't need to be born like this." William I said.

"I'm afraid this is not good!"

"What's wrong? We are all a family. In this case, from now on, you can call me uncle in private and your Majesty in formal occasions."

Then William II has become my eldest nephew! Ernst felt secretly happy, but he still said calmly: "Yes, I'm sorry, Uncle William."

"now it's right!"

"I've called you here today because I'm actually asking for something from you. I'm not afraid of your jokes. Although I, the king, have fought a lot of wars in my life, Prussia's finances have been unsustainable and I owe a lot of debts. But for Prussia cannot stop the cause of German unification." William I sighed.

"Of course I understand this. Prussia has indeed made great contributions to the cause of German unification over the years." Ernst complimented.

"Well, now I can tell you the news. The French can't hold it anymore, but Prussia already owed a lot of debt in the last war. It's really hard to raise the military expenses this time!"

The picture shows the poor dagger.

"Well, Uncle William, although Hechingen has developed well in recent years, the investment this year has been relatively large, so the funds may not be too abundant. I also know the difficulties of the government. In this way, I subscribed for 500,000 thalers of war bonds to express my gratitude to the kingdom. The support is good.”

500,000 thalers is not a small amount, but it is really not enough for a big capitalist like Ernst.

Although Prussia is now preparing for war, France has not declared war on Prussia, and the North German federal government is unlikely to agree to allocate funds to the kingdom.

Historically, it was only on July 21, 1870, that the Prussian-dominated Parliament of the North German Confederation approved a war credit of 120 million thalers.

So now, the Kingdom of Prussia can only think of more ways to raise some funds on its own. Ernst estimates that Prussia can only raise a few million at most.

Even at the beginning of the war in the original history, the Berlin stock market situation was almost panic, and even high-quality stocks such as the Cologne-Minden Railway fell by 30%. The Prussian government urgently sold 100 million thalers of the first phase of war bonds in an attempt to get rid of the underwriting channels monopolized by bankers and sell them directly to the market. The conditions were 5% interest and a 18% discount, while the bankers' suggestion was a 15% discount. , was rejected by the government. Oppenheimer stressed in a letter to Breschroeder that "this is a ridiculous condition given the current market conditions."

The sale was a huge failure, with only 60 million thalers of bonds sold. In fact, the root of the problem is that if the government sells directly, bankers cannot earn underwriting fees, so they adopt a collective boycott. This once again demonstrates the power of “channel is king” in the financial market. At the end of October 1870, the Prussian government learned from the previous lesson and appointed Hansmann to form an underwriting team to sell the second phase of the 20 million Taylor loan in London and Berlin. With the success of the Prussian army, the prices of these loan contracts increased, and the government was soon able to cancel some of the mortgaged lines of credit. Finally, the interest rate on the war bonds was settled at 5% for a period of 5 years.

On November 30, bankers continued their efforts and successfully issued another 34 million thalers in the UK at a 92% discount, with the option of issuing a further 17 million thalers. At the same time, although the British began to sympathize with the hapless France, French bonds were almost unsaleable in the UK. On the invisible front of finance, France failed again.

But until the end of the Franco-Prussian War, Prussia's total war expenditure for the entire war was only 22 million thalers.

Ernst is not greedy either. He has already started saving money to prepare for the Franco-Prussian War. At present, the entire Hechingen consortium has about 30 million thalers at its disposal. Ernst is prepared to bet at least 20 million on Prussia's victory. , the bet won, and the French paid the bill in the end.

"500,000? This..." William I was a little melancholy. 500,000 was not a small amount, but it was a drop in the bucket for the war.

"Ernst, the Hechingen Bank alone should have developed very well over the years. I heard that you have launched business in the Far East... Don't worry, Prussia is sure of winning this war. We will invest boldly. At the same time, We will also set a slightly higher market price for the interest. Not only that, the East African Kingdom may also lack a lot of things when it is founded, and Prussia can cooperate with us in these things in the future..."

William I said casually about the certainty of victory. In fact, Prussia was still worried before fighting France.

But William I knew that the wealth of the Hechingen royal family was absolutely astronomical. Now the Hechingen consortium has taken shape, and its business covers the entire Europe and has businesses all over the world. Therefore, it was right to ask Ernst to borrow money, so William I boldly promised.

At the same time, everyone is the Hohenzollern family, so they can play the emotional card. If they can borrow more from the Hechingen royal family, they can be a little tougher in negotiations with other big capitalists later.

Ernst pretended to be embarrassed and said: "Actually, Hechingen has many industries, but there are also many workers. The workers' wages alone are not a small amount..."

"Tell the truth and tell the truth. Prussia can give you a 7% interest in whatever amount you can give. At the same time, the military will give priority to purchasing Hechingen Company's products."

"Uncle William, actually this is not a matter of money. However, you helped me a lot when I started my business. It would be too much for me to be so stingy. I won't hide it from you. This year, the company can mobilize only 1,500 yuan. Around 10,000 thalers, including workers' wages, but for the sake of the unification of Germany, I will order a share of 15 million thalers first! If Prussia cannot win from now on, the Hechingen Company will also collapse due to a broken capital chain. , so please be sure to win!" Ernst said somewhat "heavily".

1500 dollars! King William I was a little confused when he heard this number. According to his expectation, or the goal this time, it was three to four million thalers. After all, I haven’t decided yet whether I want to fight or not!

Large-scale borrowing requires France to actually declare war on Prussia. That is to say, Prussia's finances are too tight now. After all, the last Prussian-Austrian war did not require war reparations from Austria, and there are too many debts owed, so I will try to borrow some money. Should be emergency.

Ernst's initial investment was 15 million, which was enough to fund a major battle. At the same time, it could greatly ease Prussia's current financial pressure. This also meant that the army could prepare in advance!

William I was very moved. Sure enough, his family was still reliable. Ernst was really trying to support Prussia this time! After all, few people are optimistic about Prussia's victory. If this war fails, the Hechingen royal family may really go bankrupt.

In fact, William I completely overthought it. It was impossible for a cautious man like Ernst to gamble all his wealth.

Not only that, Ernst planned to continue to buy shares worth 10 million thalers after Prussia issued its first war bond. At the same time, he planned to use the Hechingen Bank to help Prussia issue bonds to earn additional handling fees, plus the previous promise of William I. Privilege, it will be really profitable then.

The two parties, both of whom thought they had made a lot of money, quickly signed the agreement. Professionals from the Prussian government and the Hechingen Consortium carefully checked all the terms dozens of times and signed their names only after confirming that they were correct.