Holy Roman Empire

Time is a butcher’s knife, and before its passage, both Prussia and Russia had to bow their heads, no matter how resolute they stood.

After negotiations lasting more than two months, on July 18, 1881, Prussia and Russia finally reached a reluctant agreement through the mediation of various parties.

It really was reluctant, for both the Tsarist Government and the Berlin Government were dissatisfied with the treaty.

It was only because their reserves were running low and in order to avoid starvation that they had to compromise.

The war had ended, but that did not mean there was no more money to be spent. Pensions for the dead and disabled soldiers, resettlement for veterans, and post-war economic reconstruction all required significant funds.

Neither Prussia nor Russia dared to deplete their coffers completely—government without emergency funds is not as simple as bankruptcy.

Not settling the soldiers could lead to serious trouble. Mutinies were the least of it; the real fear was someone raising the cry of "Revolution."

England, France, and Austria made it clear that only with the signing of a ceasefire treaty would the international community consider assistance.

In those days, England, France, and Austria were the international community. With a unified stance amongst the three, the position of the rest of the countries combined meant little.

Post-war reconstruction could be delayed, but disarmament and resettlement were imperative. Without financial support from the international community, even the victorious Russian Empire could not withstand the pressure.

Both Prussia and Russia made concessions, or rather, the three countries helped them make concessions. The treaty included:

1. The Kingdom of Prussia recognized its defeat and took responsibility for the war;

2. It ceded the East Prussia region, the West Prussia region, and the Poznan region to the Russian Empire;

3. The Kingdom of Prussia agreed to pay 360 million Divine Shields to the Russian Empire as war indemnity, to be paid over 30 years at an annual interest rate of 6%;

(Note: The first payment was 60 million Divine Shields, followed by a monthly payment of the principal and interest totaling 17,986,52 Divine Shields, amounting to 707.51 million Divine Shields in total)

4. After the Berlin Government made the initial payment, the Russian Army must withdraw from Prussian territory within one month;

5. Both parties would complete the exchange of prisoners within a month without any ransom;

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The formal apologetic gestures that followed were not the main issue. The real crux was the territory and indemnity clauses.

The land was already occupied by the Russians, no handover was needed; now only money was left to settle. This is when Hanover came into the picture.

To everyone’s surprise, on July 19, 1881, the Hanover Government and the Berlin Government jointly announced the Prussia and Hanover Kingdom Land Trade Agreement. The treaty stipulated:

The Kingdom of Prussia sold the Schleswig-Holstein Duchies and the territories west of the River Elbe to the Kingdom of Hanover for the high price of 210 million pounds.

Before anyone could recover from this shocking news, on July 20, 1881, the Hanover Government signed a 150 million pound loan agreement with the British financial sector. (equivalent to 300 million Divine Shields)

With the borrowed 150 million, adding their own 60 million, at the end of July 1881, the Hanover Government completed the most expensive territorial transaction in history with the Berlin Government.

Much to their relief, the money was in hand. Regrettably, this sum only passed through the Berlin Government briefly.

The 150 million pounds provided by the British was to be used first to repay the debts owed by the Berlin Government to them, which was obviously insufficient, so it vanished immediately.

It was a clearly usurious clause, but there was no place for complaint. The Berlin Government simply had to accept it.

After receiving the remaining 60 million pounds and paying the first installment of the war indemnity to the Russians, that figure quickly halved.

The final 30 million pounds could not be kept by the Berlin Government; they were almost entirely spent on demobilization, resettlement, and pensions for the casualties. Funding for post-war reconstruction remained an open question.

With one sale and two loans, the British managed to reduce financial risk and earn interest twice, showcasing a masterful operation in finance.

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In the Vienna Palace, observing the British’s masterful operation, Franz couldn’t help but want to emulate it, but ultimately, he found no opportunity to do so.

Putting down the documents in his hand, Franz sighed, "The Hanover Government being able to raise 60 million pounds shows we have always underestimated their financial strength. The smaller states in the Germany Region might be much wealthier than we thought."

Prime Minister Felix replied, "The performance of the Hanover Government is indeed unexpected, but it is within reason.

After entering the modern era, the economy of Northern Germany quickly developed, especially after gaining the Rhineland region, the overall economy of the German Federation Empire took a leap forward.

Encumbered with leading the Central Government and failing to politically control the smaller states within the country, Hanover still influenced economic matters significantly.

That the Hanover Government raised 60 million pounds can also be regarded as the German Federal Government raising 60 million pounds.

This is still a result of Central Government’s insufficient control over local authorities. Otherwise, given the economic condition of the German Federation Empire, it wouldn’t have been a problem to double that amount.

However, the price of this territorial transaction was too high—it significantly exceeded its actual value. Recouping the investment through the added territories was unlikely to happen even in a hundred years.

For a long time to come, the Hanover Government will bear substantial debts, which will greatly impact their economy."

The German Federation Empire occupied the most essential areas of the Germany Region with excellent natural conditions. Over seventy percent of the industries of the original time-space German Second Empire were here.

With such a foundation, as long as the ruling class did not act foolishly, the economy would not falter significantly.

It is precisely because of its developed economy that so many people yearn for Austria.

If it were a poor and remote area, given Europe’s cultural traditions, it is likely that everyone would have long since forgotten this place.

The most typical example is Switzerland, which is the ancestral homeland of the Habsburg Family; however, due to the poverty of the mountainous region, people chose to ignore it.

Foreign Minister Weisenberg said, "Although the price was a bit high and it carried a huge debt, the Kingdom of Hanover didn’t lose out. n/ô/vel/b//jn dot c//om

Having paid such a high economic price, the Berlin Government must have made concessions elsewhere.

If nothing unexpected happens, Hanover and Prussia have most likely already reached an agreement in secret, with only a suitable time needed to announce it publicly.

In theory, after the merger of Hanover and Prussia, they will have the opportunity to truly control the German Federation Empire and establish the envisioned North German Empire.

Once Northern Germany is integrated, these debts will seem insignificant."

Everyone said it was expensive, and Franz felt embarrassed to call it cheap. Reality taught him that when your opinion differs from that of most people, it is usually best to keep silent unless absolutely necessary.

Everyone has different experiences and perspectives, leading to different conclusions, which is completely normal.

Franz waved his hand dismissively, "Well now, whether Hanover has lost or gained is not important.

Their so-called great plan will take a long time to implement; we have plenty of time to consider it.

Let’s discuss the loan application for 50 million Divine Shield from the Tsarist Government."

War is truly terrifying; even after receiving war reparations, the Russians are still in a cash crunch.

It’s not that the Tsarist Government squandered money, but the amount of reparation paid by Prussia, though not small, was only 60 million Divine Shield to start with.

This amount looks substantial at first glance, but when compared to the millions of soldiers mobilized by the Tsarist Government and the number of wartime casualties and disabled, it seems trivial.

The pay for most Russian Army soldiers is very low, almost negligible, with just a small subsidy during war times.

Now that the war has been won and it’s time for the soldiers to return to civilian life, a dismissal fee is inevitable.

With a reduction in forces to 3 million, paying each person 20 Divine Shield, the initial 60 million would be gone instantly. Even if cut in half, it would still require 30 million Divine Shield.

In reality, 30 million Divine Shield would definitely not be enough; officers’ benefits cannot be compared with ordinary soldiers’, and their dismissal standards would naturally be different.

Reduce the standards?

This is already a significant underestimate—in Austria, this is just two months’ salary for an ordinary worker. These men sold their lives on the battlefield, and this price is extremely low.

Those who survived are settled, but we can’t be so casual about the dead and injured, or else no one will risk their lives for the Tsarist Government.

With 1.433 million dead and 671,000 disabled, it’s impossible to cope without several hundred million Divine Shield. Fortunately, the payments can be made in installments, otherwise the Tsarist Government would go bankrupt trying to gather the full sum.

Finance Minister Karl suggested, "Your Majesty, the Russians’ financial situation is very bad. Even with the war reparations from Prussia, they still can’t escape the crisis.

Providing a loan to them now still poses a huge risk. Unless the Tsarist Government can offer us irresistible terms, I advise against taking on the Russian loan."

It’s more than a huge risk; it’s a tremendous pitfall. With the war over, it doesn’t mean the crisis is over as well.

Without the orders brought by the war to absorb the excess capacity in the market, companies’ stock levels are climbing, and an economic crisis is brewing.

Once the crisis breaks out, the recovering Kingdom of Prussia will certainly not be able to withstand it. If the Berlin Government declares bankruptcy, the reparations from the Russians will be uncollectible.

Without this income, whether the Tsarist Government can hold on is anybody’s guess.

Foreign Minister Weisenberg objected, "Purely from an economic point of view, lending money to the Russians right now is indeed very unwise.

However, looking at it from another angle, this is also an opportunity. We can demand higher terms to secure greater benefits.

If the Tsarist is willing to fully support our annexation of the Ottoman Empire, I think the loan is still feasible."

The phrase "taking advantage of someone’s misfortune" appeared in Franz’s mind and lingered there.

The Ottoman Empire is Austria’s next strategic target; defeating the Ottomans is easy, but annexing them is difficult.

England, France, and Russia are the biggest obstacles, and due to geopolitical reasons, the Russians have more to say on this issue than England and France.

Before this, Franz’s plan was to divide the Ottoman Empire with the Russians, but how can division compare with sole annexation?

Annexing the Ottoman Empire not only connects the homeland with the Middle East, but also extends Austria’s influence into Central Asia, which is of great strategic significance.

Soon, Franz came back to his senses. Such great benefits would certainly not be easy to secure.

The Russians are not fools; facing the British as an adversary is already challenging for them. Letting Austria in would make retaking Central Asia even more difficult.

Franz shook his head, "We can probe the Russians, but let’s not hold our breath. The situation of the Tsarist Government is not yet dire."

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