Empire Rising: Spain

Chapter 208: Chapter 52: Cook Bank (2)

Spain could completely purchase a large amount of machinery and equipment from European countries at extremely low prices, and even acquire corresponding production materials and technology.

Some small and medium-sized factories were already facing bankruptcy crises, and being able to sell technology and equipment to obtain some funds was naturally better than having the entire factory and enterprise go bankrupt.

As for the harm that selling technology and equipment might do to the factories and enterprises, it was no longer something they could consider. After all, if the enterprise went bankrupt, they would have nothing left anyway, so it was better to exchange equipment and production materials for some funds to keep the financial operations going.

After determining the Spanish domestic policy for preventing this economic crisis, the next topic of discussion quickly became what products should be purchased taking advantage of such a good opportunity.

The cabinet officials mostly discussed purchasing production equipment and technical data from various countries’ factories, including advanced steel smelting technology, production materials and production lines for military weapons, Spain’s relatively weak chemical technology, and some machinery and equipment, etc.

These were extremely important for Spain’s industry and were things that Spain had been lacking previously.

Although there was aid from Italy and Austria-Hungary, some relatively advanced technologies and production materials were not so easily available for purchase.

Either the prices were too high, or certain enterprises had confidential technologies that were not publicly available, making them impossible to purchase even if one wanted.

The current economic crisis, however, was a great opportunity. Previously expensive production equipment and technical data were now basically sold at dirt-cheap prices.

The money that previously could only purchase one piece of data could now buy several, and even included a piece of machinery as an extra.

The confidential technologies that were once off-limits to small and medium enterprises were now products that could be taken away just by naming a price. For this reason, Spain could not afford to miss out on this golden opportunity for a mass buying spree.

This economic crisis was bound to affect countries in Europe and America, which would allow Spain to recklessly select production equipment and technical data in these countries with funds.

According to later data, during this economic crisis, nearly ten thousand enterprises went bankrupt each year worldwide, with more than fifty thousand enterprises collapsing during the entire crisis period (1873-1879).

Although many of these fifty thousand enterprises were relatively ordinary factories without advanced production equipment or technical data,

There were also a few factories with strong research capabilities, possessing equipment and information that Spain urgently needed.

However, when buying loads of goods in Europe and America, some disguise was necessary. If purchases of bankrupt enterprises and factories were made under the Spanish government’s name in various countries, it would likely draw attention from these nations.

Furthermore, if it provoked public anger, it would be a loss rather than gain for Spain.

The purchasing personnel going to European countries would be disguised under various identities, but their goal was the same: to select valuable bankrupt enterprises for acquisition or to purchase production equipment and technical information from enterprises on the brink of bankruptcy.

In the economic crisis, one country played the role of the unfortunate.

Which country was that? Of course, it was the United States, which heavily depended on foreign investment.

European countries were plagued by the economic crisis, and their first reaction was to withdraw investments in the United States, or at least immediately halt further investments.

And Americans themselves needed a large amount of foreign investment to maintain their frenzied construction projects. When foreign capital began to withdraw, the U.S. economic environment collapsed instantly.

Moreover, the economic environment in the United States had significant underlying issues.

It was previously mentioned that the railways built in the United States in recent times exceeded the total built in the United Kingdom and Germany combined.

However, this also gave rise to a problem: a large number of railway companies emerged in the United States, constantly seeking loans to construct railways.

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

Even Cook himself might not have known that one of his investments directly triggered the onset of the U.S. economic crisis, leading to a devastating blow to American industrial production.

For Cook himself, this investment was quite ordinary.

His partner was the Northern Pacific Railway Company, a well-known railway company in the United States, which had constructed multiple railway segments and achieved fairly good results.

Perhaps it was because of the Northern Pacific Railway Company’s previous good reputation that Cook agreed to help the railway company underwrite bonds without much thought, agreeing to underwrite one hundred million US dollars in railway bonds.

The value of the US Dollar was not low, much higher than that of the franc and the peseta.

The value of one hundred million francs in bonds equated to over five hundred million pesetas, which was equivalent to the Spanish government’s annual fiscal revenue.

Such a large-scale bond sale was not easy, especially as it was faced with the war between Prussia and France at the time of selling the bonds.

There were few willing to invest real money in a mere piece of paper during wartime. The results were evident: the bond sales did not go as desired, and the railway construction became unsustainable.

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