Empire Rising: Spain

Chapter 199: Chapter 149: The Value of the Treasure and National Integration (Part 2)

With this new gold reserve, Spain’s Currency Issuing Committee can also prepare for issuing new currency.

This is yet another gain for the government and the Royal Family, as there are only two banks in Spain that can legally issue currency: the government-controlled National Bank and the Royal Family-controlled Royal United Bank.

In fact, considering this, Carlo is the one who profits more. After all, the government does not hold shares in the Royal United Bank, but Carlo does have shares in the National Bank.

To ensure the stability of Spain’s currency, the newly issued currency will not be quickly poured into the market, but gradually released in batches for use.

After a brief discussion by the Currency Issuing Committee, it was decided to issue an additional 500 million Pessetas over the next three years, with 100 million Pessetas in 1873, and 200 million Pessetas in 1874 and 1875.

If an economic crisis occurs this year, then the next three years will certainly be the most severely affected by the crisis.

The purpose of issuing more Pessetas in these three years is actually quite simple: to allow Spain to catch up as other world countries endure the effects of the economic crisis, trying to close the gap with the European Powers.

By the time the other European Powers gradually emerge from the impact of the economic crisis, they will be surprised to find that Spain’s industry and economy have grown significantly, even beginning to approach the level of the Powers.

While the government is planning the development strategy for the next three years, Carlo is also reviewing the assets obtained by the Royal Family from this treasure discovery plan, and together with Steward Loren, drafting a more detailed plan for the future development of royal enterprises.

Of the approximately 450 million Pessetas gained by the Royal Family, less than 300 million Pessetas can be easily liquidated. The remaining 150 million Pessetas worth of assets need to wait for a more suitable opportunity to be sold, perhaps remaining in their possession for the next few years.

But it’s of no concern. With up to 300 million Pessetas worth of assets that can be liquidated, it assures the future development of royal enterprises, completely eliminating any financial shortages.

Currently, the largest of all royal enterprises is the Royal United Bank, which has dozens of branches.

Royal United Bank currently has more than 30 branches, with total users exceeding 400,000. The total savings funds of Royal United Bank have officially surpassed one billion, bringing in at least ten million Pessetas in net income for the Royal Family each year.

Yes, banks earn money this way. Simply investing these billions of Pessetas into industry yields an income of over 10 million Pessetas every year.

Not to mention the bank also handles loans and other services, with total annual revenue approaching 20 million Pessetas. However, after deducting various expenses, net profits are reduced to around 10 million Pessetas.

Royal United Bank also has the highest annual profit among all enterprises in which Carlo holds shares. The Spanish National Bank follows, with annual revenue also exceeding tens of millions of Pessetas.

However, after deducting various expenses, the National Bank’s profits are only slightly above 3 million Pessetas. With Carlo’s 45% share, he can receive an income of 1.4 million Pessetas, which is a drop in the ocean compared to Royal United Bank.

This is something unavoidable. Compared to the Royal United Bank, founded by the Royal Family and nobility, the internal affairs of the National Bank are clearly more complex.

Fortunately, Carlo does not need to worry about the operation of the National Bank; he only needs to wait patiently for the dividends after the National Bank organizes their balance sheets each year.

Compared to the two major banks, the income from the various factories is somewhat lower. After all, factories don’t operate branches all over the country like banks, and each factory’s finances are essentially accounted for separately.

But when all factories are combined, their income is also a figure that cannot be ignored. The combined income of all factory enterprises controlled by the Royal Family is indeed higher than the income loaned by the National Bank to Carlo.

In 1872, the total income from all royal enterprises and factories was close to 20 million Pessetas, of which the Royal United Bank contributed more than 51%, the National Bank contributed 7%, and factory income accounted for nearly 32%. The remaining less than 10% was obtained from various newspaper agencies and the rental of royal lands.

The income proportion of royal enterprises also proves the eternal truth of this era, which is that the finance industry and industry are always the most lucrative.

Of course, there is another major reason: the Royal Family does not own much land. Even though they have purchased a lot of land from nobility and the Church, the land owned by the Royal Family still doesn’t rank among the top among the nobles.

But Carlo isn’t concerned about how much land the Royal Family holds. After all, farming is no longer lucrative in this era; the real money comes from running factories and banks.

Due to the tremendous gain from this treasure discovery, Carlo will not be stingy in the development of royal enterprises.

After discussions with Steward Loren, Carlo decided to allocate 100 million Pessetas to promote the development of royal enterprises.

Given the limited potential for future expansion of the Royal United Bank, Carlo has decided to focus on supporting industrial enterprises.

The supported enterprises mainly fall into three major categories: heavy industry, chemical industry, and military industry.

Military industry is naturally a focus. Currently, Carlo controls two major military enterprises: the Royal Military Factory and the Royal Guanizuo Shipyard.