Empire Rising: Spain

Chapter 122: Chapter 110: Military Industry Aid

An important aspect of bank restructuring is to integrate some of the existing small banks into a large joint bank controlled by the government.

Private capital can choose to continue joining the large joint bank, which, being government-controlled, will receive supportive policies and definitely won’t suffer losses in the future.

Alternatively, they can choose to exit in a timely manner. After the integration, the shares they hold will be bought by the government and the Royal Family, ensuring their costs are covered.

As for making a fortune from this banking restructuring, that’s basically impossible. The Royal Family and the government aren’t fools; they naturally won’t let private bank capital exploit any loopholes during this major overhaul.

While restructuring the banks, the government is also preparing to establish the Spanish National Bank. Since its establishment, the Royal United Bank has been welcomed by many Spaniards, and the government certainly won’t abandon this lucrative opportunity.

Moreover, a truly government-backed bank can not only serve as a benchmark for the financial industry, but also enable effective control over the banking sector. Therefore, the creation of an official bank is quite necessary.

After discussions with Carlo, the Spanish National Bank has entered the preparation stage. The Royal Family will invest 8.5 million Pesseta, holding 45% of the shares in the soon-to-be-established National Bank.

The Spanish Government will invest 10 million Pesseta, holding 55% of the shares in the National Bank. The operation of the National Bank will be supervised by the government, with no Royal Family involvement.

The Spanish National Bank and the Royal United Bank will join the Spanish Currency Issuing Committee, which will control the issuance of the Spanish Pesseta.

In other words, the National Bank and the Royal United Bank will function as two parallel official banks in Spain, with the authority to issue and control currency.

The government will not interfere in the operation of the Royal United Bank, nor will the Royal Family interfere in the operation of the National Bank. However, both parties can control the issuance of Spanish currency via the Currency Issuing Committee, aiming for cooperation and mutual benefit in the financial industry.

The purpose of this setup is to fully control the financial industry in Spain through the cooperation of the two official banks.

No matter how powerful future bank capital becomes, it cannot surpass the union of the two official banks. With control over these two large banks, Royal and state capital will become Spain’s largest capital, preventing capital infiltration into the country.

For Carlo, although the establishment of the National Bank will somewhat affect the business of the Royal United Bank, overall, it will not incur losses.

After all, he also owns 45% of the shares in the National Bank, meaning 45% of the National Bank’s revenue belongs to the Royal Family.

Furthermore, the banking industry needs competition. If the Royal United Bank held a monopoly, it would not necessarily benefit the development of Spain’s financial industry, as it could more easily foster corruption and embezzlement.

Of course, even with competition, corruption and embezzlement are inevitable. To prevent such phenomena from harming the two banks, the Currency Issuing Committee includes control measures from both the Royal Family and government departments to readily eliminate corrupt elements within banks.

It’s just that Carlo currently does not have significant influence over the government; otherwise, supervision of government officials would also be on the agenda.

Corruption exists in every national government and cannot be entirely prevented, even if the current government rose from a revolutionary base. Long-term tenure in high positions is sure to spawn different ideas.

Once Carlo gains certain power, he will formulate more stringent policies to enhance government oversight.

In addition to the development of the banking industry, Carlo is particularly focused on the development of the military industry.

With support from Austria-Hungary in the military industry, Spain will enter a period of golden development in military industry.

Military industry progress cannot rely solely on the Royal Military Factory; various government-backed and private military factories are also important contributors.

In the military industry, innovation and improvement are of utmost importance. Encouraging the development of several military factories to create a competitive scenario is still necessary to ensure continuous updates and iterations of Spanish weaponry under competitive conditions.

If the competition was not intense enough, the Royal Military Factory’s motivation for developing new weapons would diminish, as selling old weapons also yields profits, so why bother developing more costly new weapons?

Therefore, for national development, competition in the military industry must be present, and the intensity of competition should only increase, not decrease.

Carlo would rather see his Royal Military Factory at a disadvantage in competition than see it dominate alone, ultimately causing Spain’s weapon development to lag.

The assistance from Austria-Hungary in the military industry is divided into two parts.

The first part involves Austria-Hungary providing Spain with production lines for existing rifle and artillery technology. Austria-Hungary is willing to provide these because they see the current rifle and artillery technologies as outdated.

The Austro-Prussian War and Franco-Prussian War have proven that muzzleloaders are outdated products, and now is the era of breechloaders.

Austria-Hungary is also developing breechloader products domestically, so the existing muzzleloaders are essentially indifferent to them. Although Austria-Hungary is not lagging globally in artillery, it is at least behind Prussia.

Prussia’s massive use of steel cannons played a significant role in the Franco-Prussian War, inspiring Austria-Hungary’s interest in imitation.

This willingness to share technology is because, in a few years, these technologies will be entirely outdated.

Additionally, as previously agreed with the Spanish Government, Spain’s advancements in these weapons in the next decade should also be shared with Austria-Hungary, bookkeeping it as Austria-Hungary’s investment.

Of course, since it’s an investment, Austria-Hungary’s contributions are certainly more than this.

Aside from rifle and artillery production lines and related technology, Austria-Hungary will provide a hundred weapon technology experts stationed in Spain for five years.

This is Austria-Hungary’s true investment, helping Spain quickly master rifle and artillery technology while collaborating to develop new rifles and artillery pieces.

This cooperation is worthwhile for Austria-Hungary. Using outdated products and technology, plus some technical experts, they secure Spain’s military progress over the next decade in exchange.

Although Spain is not a major power and its military strength isn’t overwhelming, it has a certain foundation at least.

Furthermore, in the next decade, with Austria-Hungary’s assistance, Spain might achieve some breakthroughs in weapon technology.

Even if Spain doesn’t achieve significant breakthroughs in the military industry, Austria-Hungary won’t incur losses. These outdated products aren’t worth much, and the 100-plus technical experts only need to be stationed in Spain for five years.

In Carlo’s view, the military cooperation with Austria-Hungary allows both Spain and Austria-Hungary to achieve a win-win situation. First, the 100-plus technical experts provided by Austria-Hungary are crucial to the development of Spain’s military industry.

With these over a hundred technical experts, Carlo is confident in advancing the development of Spain’s bolt-action rifles.

Of course, these technical experts are definitely not allowed to be involved in Spain’s research on machine guns. The machine guns are being developed by the father of automatic weapons, Maxim, and his brother, which reassures Carlo.

This area doesn’t require Austria-Hungary’s assistance, and there’s no need for technology sharing with them.

In terms of rifle and artillery technology, it can be shared with Austria-Hungary, especially in artillery, where Austria-Hungary’s technical experts are needed to help Spain better grasp the current advanced artillery design concepts.

Carlo naturally intends not to let these 100 plus Austro-Hungarian experts slip away. Speaking of which, after five years, his plan is to retain at least half of them in Spain.

Although poaching talents in this manner may seem unethical, these 100+ people are all weapon design experts from Austria-Hungary and are extremely helpful to Spain.

Moreover, Austria-Hungary had already anticipated the potential poaching when dispatching these experts. Austria-Hungary is unlikely to turn against Spain over a hundred individuals, so those who should be retained need to be recruited.

Based on the information provided by Austria-Hungary, most of this batch of technical experts are involved in rifle and artillery design. If in the future they can be enticed to join Spain, a portion can be selected for research in machine gun development.

With the help of more talents, the development of the Maxim machine gun is expected to accelerate. It is anticipated that the world’s Maxim machine guns will emerge sooner, shining brightly before the onset of the First World War.

The bad news is that the Royal Military Factory is destined not to receive all the weapon technology experts. To foster the development of other military factories, a portion of the technical experts must be allocated to other factories.

With only these 100+ technical experts, their value must be maximized. They will visit several large Spanish military factories to help them master the rifle and artillery technology sources from Austria-Hungary.

Subsequently, these technical experts will be distributed according to each factory’s scale, to engage in the development of new rifle and artillery technologies.

Considering the scale of the Royal Military Factory, it will undoubtedly receive the most technical experts. In the future, the standard rifles adopted by the Spanish Army will be selected from the products of these factories, evaluating the best rifle through a stepwise selection.

The reason for involving several other military factories is precisely to develop a few military factories to mutually compete. Only through competition can this industry continuously generate innovative forces, ensuring continuous iteration and improvement in weapon technology.