Empire Rising: Spain

Those who wanted to cut in line or force their way in, once discovered by the police, had virtually no chance of entering the stock exchange.

Seeing the policemen lined up at the entrance, those who were anxious by nature became sensible and stopped worrying.

Under such circumstances, people lined up into a long queue and then entered the stock exchange in turn.

Inside the stock exchange, there were giant blackboards set up. These blackboards displayed some data from the stock exchange, and shareholders needed to clearly check the stock market data on the boards before finding a trader to register a transaction.

Unlike later generations, all trades at this time relied solely on manual operations. This made stock trading very cumbersome and took much longer than it would in later eras.

But in the absence of electronic technology, manual labor was indeed the only solution. Fortunately, the Barcelona Stock Exchange had long anticipated today’s bustling scene and had dispatched additional personnel in advance, which effectively sped up the pace of stock purchases.

Inside the stock exchange, the management was registering stocks issued by companies one by one. Today, the most popular were railway companies, followed by some factories and enterprises related to railways.

In particular, railway companies were incredibly popular. It could even be said that as many stocks as the railway companies put out, shareholders would buy them all.

A small railway company under the Spanish Royal Family also went public today, issuing a total of 2 million shares, accounting for 30% of the stock.

The issue price per share was 5 Pessetas, with plans to raise 10 million Pessetas externally.

The management registered this information while announcing it loudly. Besides the blackboards that could publish announcements, the management’s loud shouts were also the main way to convey information.

After all, without any loudspeakers, whether the shareholders could hear some key information depended on the volume of the management’s voice.

This railway company going public today was indeed a small enterprise, with Carlo investing less than 5 million Pessetas in it.

It’s undeniable that the enterprises of this era did make money. After contracting a few small railway projects, this railway company, which had investments of less than 5 million Pessetas, could go public successfully and raise over 10 million Pessetas.

The stocks issued by the railway company accounted for only 30%, which also meant that if all the shares could be sold, the total market value of this railway company, initially invested with only 5 million Pessetas, would exceed 33 million Pessetas, increasing by 6.6 times.

And this is just the beginning. As long as the railway company’s subsequent operations proceed smoothly, as it secures more projects, the stocks issued by the company will become increasingly valuable.

With the rise in stocks, the market value of the railway company could even surpass the 50 million Pessetas mark, instantly becoming a large enterprise in Spain.

Achieving this step requires only a few contracted railway projects and listing on the stock exchange, a very simple move for capitalists and nobles, which is also why the Spanish stock exchange tightened its audits.

If the audits are not tightened, the number of companies going public on Spain’s two major stock exchanges could reach thousands or even more each day.

Does Spain need so many enterprises? Of course not.

Only premium enterprises can be listed on Spain’s stock exchange, while those empty shell companies will be weeded out by a stringent reviewing system, importantly avoiding an economic crisis in Spain.

Such empty shell companies have no resistance when facing an economic crisis. The bankruptcy of a large number of companies would seriously affect the stock exchange, and if the stock exchange collapses directly, it would impact the entire country’s economic operations.

Spaniards clearly know that companies listed on the stock exchange are vetted, so every announcement is accompanied by a scramble from large numbers of shareholders, and the stocks of these newly listed companies are continually rising.

Although the Royal Family’s railway company issued 2 million shares, only just over 1 million are actually in circulation on the stock exchange.

Even before the stocks entered circulation, those truly with power—namely, Spain’s two major official banks and some securities companies established by nobility—always subscribed to a portion in advance.

They surely understand that this is a Royal Family’s enterprise, and naturally, they understand that the Royal Family’s enterprises are not empty shell companies.

Investing in railway companies is a sure win because Spain won’t abandon its railway development policy in a short time.

Though the Third Five-Year Development Plan’s requirements for railway mileage are not as aggressive, the railway maintenance and transformation projects are still substantial, keeping Spanish railway companies busy for the next five years.

Pre-subscribing to stocks is also a strategy for stock market operations. If the stock circulation is too large, the market will become saturated.

Once the market is saturated, even if the stocks and enterprises themselves are of high quality, the stock price will collapse.

After all, if the market is saturated, the stocks in the shareholders’ hands won’t sell. If the stocks don’t sell, the stock price will naturally fall.

As a newly listed railway company, appropriately maintaining stock prices is still necessary. Only by ensuring the market isn’t saturated can the stock price maintain positive growth.

The two major official banks and some noble’s securities companies pre-subscribing to the railway company’s stocks also means that the stock price of this railway company concerns everyone’s interests.