Chapter 1412: Chapter 268: Bankruptcy Strategies vs. Delaying Strategy
A highly efficient decision-making governnt also ans that conflicts beco more intense when problems arise. The discussions surrounding the fiscal crisis have turned into fierce debates among various factions.
Currently, the fiscal departnt has proposed three solutions:
“Governnt bankruptcy!”
“Issuance of paper money!”
“Tax hikes!”
The three controversial proposals, placed side by side, instantly beca the center of attention for all parties concerned. Even the previously suggested idea to expand the Kingdom’s Direct Prefectures was pushed aside.
The loudmouth faction has already thoroughly condemned the fiscal departnt officials, ridiculing their proposed solutions as utterly worthless.
But this is of no significance; the vocal critics hold no sway within the Kingdom Governnt. As a pragmatic governnt, their stance is simple: if you want to oppose, co up with a better alternative.
Without a better option, the governnt has no choice but to pick one of the three. Even knowing that each plan has its pitfalls, they must grit their teeth and proceed.
Taking planned action is still better than the Kingdom Governnt being dragged into outright bankruptcy. At least with proactive bankruptcy, they can handle the accounts in advance, transfer governnt-owned assets, and avoid actual bankruptcy liquidation.
The Moxi Duchy serves as an example—one fraudulent loan resulted in their Direct Prefectures, real estate, and land being completely mortgaged away, leaving nothing but empty accounts after bankruptcy liquidation.
The situation of the Alpha Kingdom is sowhat similar. Despite the severe fiscal deficit, the governnt still possesses considerable assets.
The Directly Managed major cities, various mines scattered across the land, and a number of governnt-monopolized industries together are worth a significant sum.
If all these were packaged and sold, it might not be enough to cover the fiscal gap, but it could resolve the imdiate crisis.
However, this kind of squandering behavior is so taboo that no one dares to propose it—not while the dynasty is far from its end!
During these debates, everyone tacitly avoided ntioning these assets. Even when soone brought them up, it was rely to suggest selling the managent rights of so loss-making industries to private individuals.
As one of the Kingdom’s decision-makers, the draft proposal soon landed on Hudson’s desk, only to et his characteristic response:
“Neither support nor oppose.”
That was his stance.
Any country that engages in consecutive years of warfare will face fiscal problems. If the private sector has money, there’s still the possibility of fundraising from the financial markets.
But the Alpha Kingdom is impoverished from top to bottom!
To raise funds from the private sector, people need to have money in their pockets first. As Hudson knew, combining the deposits of all the Kingdom’s comrcial banks wouldn’t amount to even half of the governnt’s debt.
Local comrcial banks managed to offer the governnt low-interest loans totaling 4000 Gold Coins, a gesture that significantly supported the Kingdom Governnt.
The thought of it brought tears to the eyes. As the Kingdom’s largest comrcial bank, the Near East Developnt Bank was simultaneously the Kingdom Governnt’s largest creditor.
After the outbreak of war, the Near East Developnt Bank alone issued loans exceeding 20 million Gold Coins to the Kingdom Governnt.
Originally it was supposed to fleece others for its own gain, but, to set an example and demonstrate solidarity with the Kingdom, the bank had to let the governnt share in benefiting from this opportunity.
Of course, these loans were collateralized.
Recently discovered Magic Crystal Mines and Gold Mines in the Near East, along with newly acquired district resources, were entirely mortgaged off to the Near East Developnt Bank by the Kingdom Governnt.
It was essentially a form of creative asset manipulation, as the collateral only holds value if the war is decisively won.
Local regional banks also received various collateral items when issuing loans, albeit not comparable to the scale of the Near East Developnt Bank.
Neither the Kingdom Governnt nor Hudson, the bank’s proprietor, could accurately assess the value of these collaterals.
To outsiders, this kind of collateral arrangent primarily serves as reassurance for the bank’s shareholders. The investors in the Near East Developnt Bank expressed strong dissatisfaction regarding these matters.
Thankfully, with the war won, it avoided a round of vicious power struggles over control of the bank.
Maintaining shareholder relationships isn’t rely Hudson’s sense of responsibility but a strategic necessity driven by mutual interests.
These investors, bold enough for international investnts, are far from pushovers—there isn’t a single “soft target” among them.
Their willingness to invest was driven not only by the bank’s business model but also by the guaranteed capital retreating chanism agreed upon.
When cash ran out, Magic Potions were used as collateral. Bearing the reputation of the Continent’s foremost Magic Potioner, all of Ha’s Magic Potions serve as hard currency.
Over the past few years, while shareholders have only gained paper wealth through increased valuations, in private, they’ve profited handsoly in both Gold Coins and social connections through reselling Magic Potions.
This dynamic caused the investors’ relationship with Hudson to be equal parts love and resentnt!
They feared his reckless managerial style, worried that soday the Near East Developnt Bank might suffer operational issues, forcing them to add more capital injections.
Ultimately, there was no escape for the trapped investors—this was just their unfortunate reality.
They’ve sunk so many chips into the venture that abandoning sunk costs now is too expensive.
After all, the Near East Developnt Bank still appears to be a premium asset.
Other comrcial banks suffer from chaotic managent, lack risk control systems, and deal with massive amounts of bad debts, whereas the Near East Developnt Bank maintains an admirable low bad-debt rate.
…
“Duke, Count Francis, Minister of Finance, has co to visit!”
Receiving this news, Hudson’s brows furrowed. With the fiscal departnt in deep trouble, an unannounced visit from him certainly couldn’t bode well.
“Let him in!”
The guest is still a guest, and among the decision-makers of the Kingdom’s fate, no matter how often they cross paths, courtesy must be observed.
After speaking, Hudson directly stood up and headed to the back residence to change into official attire.
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