Black Iron's Glory - Chapter 521
Prime Minister's Two Proposals
The emissary soon arrived. He looked like a strict old man in his fifties. His hair was split down the middle. Coupled with his begrudged expression, he looked like someone owed money by the entire world. He was Viscount Donbajlo Ey Davlid. He had some familial ties to Fredrey I, apparently. The king even called him 'Uncle'. He was the kingdom's vice chief justice and chief inspector.
He had come with a line of royal guards to transport the five million crowns of gold reserves from the national treasury to the capital. Claude and Bolonik held a welcome ceremony as was required, but Claude found it weird that the viscount was being quite aloof, as if he was hiding something. The viscount excused himself very early on, giving the excuse of exhaustion after severe alcohol ingestion.
Negotiations thus only began the next day. Claude provided the inventory and vouched for its accuracy. The treasury's reserves were worth about 1.8 million crowns, and, as per the established dividends ratio, the region would take three-tenths. Another twenty percent was to be used to administer the territory, and the other half would be handed over to the emissary.
The viscount, however, insisted on taking 1.5 million back with him. The kingdom was in desperate straits, you had to understand. The royal guards were already owed three months of backpay, and the rest of the administration was going on their sixth month without pay.
"Impossible! How did the court ruin itself so thoroughly?!" Claude gasped, nearly jumping out of his seat.
The viscount smiled meekly at him, waited for him to settle back into his seat, then explained. The Union had stripped the capital, and all the reserves, clean when they'd taken the city. They'd also ravaged the countryside, and, when they were forced to withdraw, had destroyed every significant piece of infrastructure they could afford to spend time on as they went.
The entire kingdom was in shambles. They'd thus far only been able to scrounge up enough tax money to keep the administration's staff and the guard fed. They had nothing with which to begin rebuilding. Just repairing the eastern mines would cost hundreds of thousands of crowns. It had taken the kingdom centuries of slow development to get where it had been before the war, and it would take many more if they couldn't get a large infusion of funds now.
They had briefly considered taking out another loan from the colonies, but they already had one that was due at the end of the decade. It had been absolutely necessary during the war, even excusable, but there was no war now.
The court itself was prepared to swallow its pride and ask for another loan, but the old nobility was being stubborn. They saw it as the region extending its influence into the court even further. The court could simply borrow money from the nobles instead, up to a few million, in fact, but the loans they offered came with ridiculous interest rates. The court would receive eight-tenths of the amount they borrowed and pay 1.3 times the borrowed amount back, not to mention compounding interest.
It had infuriated the king. The colonies' interest was already bad enough, though at least still swallowable, but this was ridiculous. They could pay back the colonies' loan in a couple years, perhaps a decade, but with the interest the old nobility was demanding, it would take them a century or more to repay the loan. The king was not stupid enough to make such a bargain. Since they weren't willing to help in earnest, then he would see who could hold out longer while the kingdom was in its current state.
The one counting the most on Viscount Davlid's mission as ambassador was none other than Prime Minister Marquis Blancarte. He hoped to have 1.5 million crowns shipped back to solve the most pressing issues of the court first. A third of that would be used to pay salaries for the officials and the royal guard to be reassured.
Another third would be invested in the royal capital to restore the trade routes and roads the Union's army destroyed so that traders would once more be incentivised to come to the capital. As long as trade grew, the national treasury would once more begin to fill up from taxes. It was a rather sound policy. The remaining 500 thousand would be used to restore the mining infrastructure the Union wrecked. As long as those two large mines were restored, the kingdom would be getting some hundreds of thousands of crowns on a monthly basis, freeing them up to do many more things.
Davlid was quite sincere in his request and clearly laid out the troubles the court was facing. Claude, however, felt a little regret at hearing that. Had he known, he would've sent his troops to harass the Union's army's camp. At the very least, he could have attempted to stop Pillag from leaving the capital so easily with the spoils the injured soldiers collected for themselves. It was a huge loss. The Union's army did make off with quite a lot.
It was no wonder someone was so generous to leave so many supplies and equipment in their camp instead of burning them before leaving. It was so that they would give up on pursuit when they reached the camp. It was apparent that Duke Pillag understood that if he burned those supplies, Thundercrash would never give up on pursuing his retreating troops, even if it meant busting through Mambamark's border.
He truly was a sly fellow. All Claude could do now was bemoan his loss.
"What are you thinking about?" Bolonik gave him a nudge and snapped him out of it. "I agreed to the ambassador's request to help the kingdom."
"Please be assured that the kingdom will not forget your loyal contribution. The Lord Prime Minister did ask me to pass on that the kingdom couldn't provide the rewards your troops deserve due to financial straits. So, he suggested giving you the rights to mine in Nasri for half a year. During that time, all you have to do is to hand the court a third of the profits. The rest can be used at your discretion.
"You should know that the kingdom usually goes for a three-seven split, with seven going into the national treasury and three being pocketed privately. Being given two-thirds for half a year is nothing short of breaking precedent," Davlid hurriedly recited.
There were seven intermediate to small-sized gold-and-silver mines in Nasri which were the source of their funding. As for copper, they were immediately minted into coins and released into circulation. Claude looked at the accounts and saw that they could produce up to 1.4 million crowns each year.
A third of that was around 400 thousand, which meant the region would have a million at least. Though, with the term being half a year, that amount wouldn't be more than 600 thousand.
"You have a really good plan. You don't even have to pay a fenny. We're the ones who'll be hiring miners, maintaining machines and building infrastructure to mine. We'd have to invest some 100 thousand crowns before we start," Claude said, shaking his head, "Also, why only half a year? It's far too short. We'd need one at least."
Viscount Davlid laughed awkwardly. "To be frank, I wanted to give you more time as well, but the prime minister and I have no idea how things might change over the next half a year. There's no saying who will own the seven mines. We might have to sign new deals with the ones in charge.
"As for the excavation rights, you should mine as much as you can for now. Once the time is reached, if you don't receive any notice from us, you can continue to mine. If the mineable resources here have a proper owner then, we'll only take it over in half a year."
Claude's curiosity was being piqued more and more.
"Are you saying you guys have some inside scoop on something happening in half a year? Pray do tell. Or are you saying the court is planning to sell the mines off?"
"Whatever, it's not like you are outsiders, being hereditary nobles and all. I'll tell you frankly." Davlid looked around and relaxed when he was sure nobody else was around.
"Don't worry. Nobody will eavesdrop," Bolonik assured.
"Well, Prime Minister Blancarte handed in a proposal to restore the kingdom, and it was unanimously passed by the Council of Dignitarians. Even the nobles think this can turn things around quickly. We'll become one of the strongest kingdoms on Freia again.
"The prime minister hopes to bring in railroad trains from the colonies and build railroads here to connect the entire Eastern Freia, thus speeding up movement times. We'll rebuild the waterways and irrigation routes as well to ensure agriculture stability. The construction of factories and companies that benefit the general populace will also be supported and encouraged so their products and services can compete with the colonies'.
"Another emphasis is the strengthening of the army. The three main corps' gear will be renewed and we'll receive training from the two corps from the colonies. We're hoping this'll return the people's trust in our forces. At the same time, we'll also need the most-advanced ironclad fleet for ourselves. We'll work together with the region to build new ironclad warships to defend our overseas interests and the safety of trade routes of Eastern Freia.
"Additionally, there are many finer adjustments to taxation, which I won't bring up for now. That plan has detailed our current predicament really clearly and offered targeted solutions for each one of them. One problem, however, that we aren't able to solve, is the empty national treasury. We have no funds with which to carry this out.
"This restoration plan will take at least 50 million crowns. Prime Minister Blancarte hopes that we can complete the plan within five years so that we won't miss out on the best window of opportunity, but there's nothing we can do without money. With the first year's investment quota being above ten million crowns, where would we get such a huge loan?
"Some parts of the proposal like the building of railroads will be the largest expenditure. Covering the entire area will cost at least 20 million crowns in funding, and the prime minister hopes to take a book out of the region by crowdsourcing investment from the general populace in the form of shares.
"Another huge expenditure in the proposal is the renewal of military gear and the formation of the ironclad fleet. The prime minister plans to issue national bonds with terms of three, five, eight and ten years respectively. Each successive term will see a dividend of five percent. For instance, if you buy a ten-year-term bond for 100 crowns, you'll get 120 crowns back in ten years.
"The prime minister hopes that military funds amounting to 15 million crowns can be collected from the bonds, but the bonds were mocked by many others. Many economists don't put much stock into it, saying that the returns are far too low. One noble even told the prime minister that if one used a hundred crowns to start a business and didn't get at least three to four hundred crowns back within ten years, the business would be considered a failure. That's why the bonds aren't attractive at all.
"Even if enough funds could be gathered from those bonds, we're still 15 million crowns short. Initially, it was hoped that we could use the growth in the next few years to gather the funding we still lack, but it seems impossible if you think about it. The economy of Eastern Freia is a complete wreck after the war. We won't be able to recover within a short timeframe.
"The proposal is perfect, but we lack the funding to make it a reality. That's why the prime minister was mocked by many nobles for being a daydreamer. The reason the proposal even got unanimous approval is nobody really believes in it in the first place. They didn't bother to argue against something that was doomed to fail.
"So, the dissatisfied prime minister privately gave his secret proposal to His Majesty, which only a small minority of people are aware of. The proposal suggests a return to the feudal system and the enfeoffment of hereditary fiefs to earn the funding and support of the old nobility..."
"Wait, it can't be. Returning to the feudal system is regressing, isn't it? Stellin XI wanted to reform it and only managed to win after six years! Isn't going back to the feudal system a regress?" Bolonik interrupted from sheer shock as he shot Claude a look.
"No, no, no, General Bolonik, don't misunderstand. The prime minister has his reasons for making the proposal, and it has received His Majesty's permission. Listen first." As Davlid calmed him down, Claude helped Bolonik back into his seat.
"Come to think of it, it's thanks to the brave fight the colonies' men put up that this proposal was even possible. With Nasri, Canas and the other enemies of the kingdom wiped out, the kingdom has finally united Eastern Freia. It's thanks to your efforts that the foundation of the kingdom's prosperity was laid. That's why the prime minister came up with that new solution."
Davlid pointed to the ground. "The new fiefs the prime minister is suggesting to enfeoff is not in the kingdom itself."
Claude looked at the floor and it clicked. "You're talking about the Nasrian region?"
Davlid nodded approvingly. "Nasri has always been a feudal nation. The citizens here are used to being subjects of nobles and relying on their lords to live. If we implement our Rights of the Four Castes here, we'll have to invest lots in educating the peasants. It'll take up to 30 years for any effect to be observed.
"But the kingdom doesn't have the funding for that, and the citizens here hold animosity towards the kingdom. Given all that, running this place like we run the kingdom isn't ideal. We might easily incite revolt or the like. The citizens reacted the same during the decade of annexation of the four Nasrian prefectures at the border. That's a lesson we've taken to heart.
"So, since the citizens here count on a dominion lord, we'll give them one. The peace and development will naturally be the lord's responsibility, so the kingdom's burdens will be lightened. The kingdom will receive an annual tribute from the lords of ten percent, and the payment will be collected once every ten years.
"Additionally, only hereditary nobles will be enfeoffed territory here, with the size of their fiefs proportional to their Titles. You can also pick your own territory here, but you'll have to pay a fee for that. Additionally, trigenerational and honorary nobles can also gain fiefs here as long as they pay the court to have their status elevated to hereditary.
"For instance, honorary barons who want to become hereditary barons have to pay 100 thousand crowns to become a trigenerational baron and another 200 thousand to become a hereditary baron. Only then will His Majesty grant him a barony. The two of you are already hereditary nobles, so you can already get fiefs, but it'll cost you if you want to pick your own."