Vol 4 Chapter 124: , Ready to save the market

War is a continuation of politics, and there is no doubt that this world war is no exception!
The capitalist economy has developed to a certain extent, and all countries have accumulated a large number of social contradictions. In order to transfer internal contradictions, this world war was finally induced!
In contrast, the contradiction between Germany and France, the contradiction between Britain and Germany, the contradiction between Austria and Russia, and the contradiction between Russia and Austria are just a cause of the explosion of the world war. It only determines who fights with whom!
As for whether to fight or not, when will it start? These are not determined by these contradictions, but depend on the internal contradictions of the major powers. When the internal contradictions cannot be suppressed, the war will explode!
And the older the empire, the more serious the internal contradictions. Some countries have even reached the point where they cannot be reconciled. If there is no war, just wait for the revolution!
A series of social problems such as inflation, unequal distribution of social wealth, polarization between the rich and the poor, solidification of social class, unscrupulous exploitation of the working class by capitalists, overproduction, and rising unemployment have plagued governments of all countries.
In this context, everyone acquiesced in the transfer of domestic conflicts, and the world war broke out.
Bulgaria is no exception. As a rising star, the domestic contradictions are naturally not solidified by class. Even the distribution of wealth and the gap between the rich and the poor are not very serious. The capitalists do not have the courage to exploit workers unscrupulously, except for overproduction. One is already very serious!
Since Ferdinand took the throne, in order to increase domestic industrial strength, three five-year plans have been formulated. As the so-called upward and downward effects, the central government tries its best to increase the country’s industrial strength, and local governments have naturally followed suit.
Of course, in order to strengthen the overall national strength, Ferdinand is naturally happy to see the result of the local government's vigorous development of industry and commerce. Instead of stopping the local government's behavior, he encouraged it!
When the domestic crisis of overcapacity was about to explode, the world war also broke out. During the war, all industries were serving the war. Naturally, there would be no overcapacity!
However, once the war is over and the economy returns to normalization, these troubles will come. Of course, as long as the war is won, these crises can be overcome by war dividends!
However, pre-preparation work is still indispensable. On January 6, 1917, the Bulgarian government held an economic seminar at the Parliament Building. The purpose was to study the problems of post-war economic transformation and avoid the Great Depression after the war as much as possible. !
...
On January 15, Ferdinand also convened a cabinet meeting in the palace to discuss new problems that Bulgaria will face after the war, including the issue of economic transformation.
Ferdinand directly raised the following questions:
1. Dealing with the problems of the Allies after the war?
2. How to manage new territories after the war?
3. Bulgaria's diplomatic strategy after the war?
4. What are the ethnic issues in the country after the war?
5. How did the domestic economy transform after the war?
6. The placement of restored soldiers after the war? There is also the placement of "mercenaries"?
...
Of course, there are so many problems, and naturally they cannot be solved in a short while!
Ferdinand also just threw it out in advance to let everyone have a mental preparation, really have to come up with a specific solution, and wait for the end of the world war to make a decision based on the actual situation!
The current economic situation in Bulgaria can no longer be described as good or bad. Due to the war, many companies have been transferred from civilians to the army, even Ferdinand’s own industries are no exception.
Under this background, the production of civilian materials is naturally greatly reduced. For ordinary people, in addition to the most basic necessities of life, other materials have risen or fallen to varying degrees!
For example, the price of luxury goods has plummeted, and the Rose Industrial Park, one of Bulgaria's pillar industries, has a great impact, and sales of many of its brands have fallen sharply.
During the war, everyone's spending power was reduced, and sales of popular perfumes, skin care products, health care products, and beverages were greatly reduced.
Of course, it is not because of the increase in output. Unfortunately, these increased products are strategic materials purchased by the military, and they can only be charged at cost prices, and there is no profit at all.
This is determined by Bulgaria’s special mobilization mechanism. In order to eliminate the possibility of capitalists’ financial difficulties, Ferdinand specially issued the "Strategic Material Procurement Law in War Period." According to the law, once the national mobilization has entered the country, the government will purchase domestically All strategic materials are purchased at cost prices and are mandatory!
Therefore, since the outbreak of the World War, capitalists in many countries around the world have gained wealth, but Bulgarian capitalists are doing voluntary labor.
Of course, there is nothing imbalanced between them, and many people still have a great time!
Anyway, all companies are treated equally, no matter how large or small, all enterprises in the country are treated the same regardless of the size of the back office. Even the royal enterprises have been expropriated for free. What else is there to say?
Even the loan that the bank gave them before was directly extended, and they didn't have to pay interest during the war!
Therefore, the interests of many companies have been seriously affected and even threatened the survival of the companies. However, the capitalists are not worried. They believe that the government is definitely impossible to ignore.
This is also the result of the Bulgarian government’s frequent intervention in the economy. Every economic crisis is made by the government to clean up the mess. Everyone is used to it and feels safe!
Faced with this situation, Ferdinand certainly cannot let the government sit back and ignore it. If these companies go bankrupt due to the war, it will inevitably cause very serious social adverse effects!
Simply put, it will make the capitalists die in grief, and then become a firm anti-war party, and even resist the government's free requisition of their factories!
And there will be extreme anti-war factions. After all, if a company goes bankrupt, some people will inevitably lose their jobs. Some of these people will have a strong sense of fear of war in the coming days and will be instinctive because of personal interests being damaged. Want to avoid war!
These are obviously not what Ferdinand wanted. Wasn't the France of World War II a living example? As the people feared the war, they let the Soviet Union rise first, and then Germany let it rise. In the end they could only escape by pretending to be dead!
...
Ferdinand asked with concern: "Mr. Kennedy, how many companies in the country are on the verge of bankruptcy due to the effects of war according to your financial crisis? How many are caused by our government's wartime procurement law?"
Kennedy thought for a while and said: "Your Majesty, there are now more than 18oo companies in the country that are on the verge of bankruptcy due to the impact of the war, and there are 765 companies caused by the Government Procurement Act!
Among them, there are 8 large enterprises, including the Bulgarian Machinery Group, the Bulgarian Automobile Group, the Bulgarian Steel Group, and the Bulgarian Railway Group. The total assets of these eight enterprises before the war totaled 5.86 billion levs and 1.76 million supporting industrial workers. Great social influence!
In addition, the total assets of more than 1,800 small and medium-sized enterprises add up to 2.56 billion levs, with nearly one million employees! "
Ferdinand's brows were frowned, but fortunately, if these companies really went bankrupt, the Bulgarian economy would explode. This can be regarded as a sequelae of this deep mobilization.
But all of this is worthwhile. The Bulgarian government now spends less than one-third of John Bull's expenditure on purchasing the same strategic materials because of the advantages of this extreme mobilization mechanism!
After all, this started from the production of raw materials, all at the cost price, without adding a penny of profit!
Of course, the materials purchased from overseas naturally have no such benefits.
If there is no cost advantage, why would Ferdinand dare to raise so many troops?
If you buy at market prices, even if the UK and France provide a loan of more than three billion pounds, plus the more than four billion dollars borrowed from the Americans, it will not be enough for a year of war expenses!
Ferdinand pretended to be surprised and asked: "These companies are the leading industries in Bulgaria? How could they be on the verge of bankruptcy?"
Kennedy quickly explained: "Your Majesty, these companies are engaged in heavy industrial production, and basically all production lines have been requisitioned by the government.
In order to be suitable for military production, we have carried out a large number of modifications to a large number of production lines and workshops inside. To produce civilian products after the war, these must be changed back, and the cost is definitely indispensable.
There is also the wear and tear of the machinery. In many cases, in order to catch up with the construction period, we did not take into account the maintenance of the machinery. Therefore, after the war is over, their machinery and equipment will basically be replaced.
As a result, in the first few months after the end of the war, they were unable to resume production. In addition to the wastage of these equipment, the money required was already beyond the enterprise's own capacity.
Although our law also formulated a compensation plan, because this war lasted too long and was different from the previous two short-term wars, the losses caused to the enterprise this time were too great, and these compensations were simply a drop in the bucket! "
Ferdinand nodded. How could he not know these things? You must know that the companies here are basically his industries. Does he still not understand what the situation is?
Heavy losses are inevitable. Although they have not yet reached the point of bankruptcy, they will be fast. If the war continues, bankruptcy will not be far away!
Especially for the Bulgarian Railway Group, the transportation of military materials is free. This loss is even greater. The annual loss in freight costs is at least 500 million levs.
Of course, they are state-owned enterprises, and no one will complain, but it is inevitable to reach out to the government if there is no money!
Since the government-enterprise division has been completed, they are now holding bank loans to maintain operations, plus the previous loans for railway repairs.
They have now owed a huge loan of 3.19 billion levs to the three major domestic banks. They are already insolvent. If the government does not allocate funds in the future, they will go bankrupt!
And the loans provided to them by the banks were coordinated by the Bulgarian government. Otherwise, who would dare to lend them? Now the government can't let them go bankrupt!
Not only the railway group, but also several other companies are the same. They are all giants in the industry. Each company has a large number of affiliated companies, which affects the whole body. If a giant falls, it will also bring a large number of subsidiaries. Bang’s affiliated companies are over!
Ferdinand pondered for a while and said: "This is indeed a serious problem. We must increase support for heavy industry. This is related to our national defense cause!
Even these companies that are on the brink of bankruptcy, we cannot let them go bankrupt, at least not because our government requisitioned their factories or purchased their goods at a cost price to cause the company to go bankrupt!
Does the Ministry of Finance have a corresponding salvation plan? "
Kennedy said with some embarrassment: "The Ministry of Finance does have a rescue plan, but because there are too many companies involved, the amount of funds required is too large for the finances to pay.
Therefore, we revised the plan again, giving priority to saving these eight large enterprises, and then working hard to save small and medium-sized enterprises within the scope of our ability! "
Ferdinand's face became embarrassed. If he does this, will Bulgaria not become a monopoly in the future?
Ferdinand used to set up a monopoly because the Bulgarian plate was too small. In order to avoid wasting resources, he had to concentrate his efforts to support a few giants.
But now it is different. After the end of the World War, Bulgaria's plate has become larger. In order to maintain the vitality of the market, this monopoly mechanism must be broken!
Ferdinand did not rush to object, but continued to ask: "How much money is needed to rescue the market, and how much money is needed to rescue the eight major companies?"
Kennedy thought for a while and said: "Your Majesty, since the war is still going on, the number of companies that may face crises in the future will continue to increase.
Our Ministry of Finance initially estimated that if we want to rescue the market, we need at least 300 million levs of funds, and at least 200 million levs will be needed to save the eight major enterprises, of which the railway group accounts for two thirds! "
Ferdinand sighed and said: "Prepare to save the market. It is estimated that life in European countries will not be easy in the future, but we still have to keep these companies, otherwise the social impact will be too bad!
After this war is over, our domestic market will expand by at least one-third, coupled with the market within our sphere of influence, it should be able to digest our production capacity!
As for the funding gap, we can find ways to solve it, and we can abandon the gold standard when necessary! "
Well, Ferdinand intends to print banknotes to tide over the crisis. There is no other way. He knows that after the First World War in history, all countries have abandoned the gold standard. The big deal is that Bulgaria will take the lead this time!
Kennedy's face changed drastically, and he asked in horror: "Your Majesty, why do you have such an idea? Once you give up the gold standard, Lev will become worthless and the consequences will be very serious!"
Ferdinand smiled and said: "Go and find out. After the world war broke out, the flow of gold in European countries is converging in one place. After the war, can everyone keep the gold standard a question?"
Kennedy blurted out: "It's America! Your Majesty, even if there is a large outflow of gold now, should Britain and France still be able to hold on?"
Ferdinand shook his head and said, "Don't worry about them, let's take a look at us first! Since the outbreak of the World War, more than a hundred tons of gold has flowed from us alone!
However, due to the trade with the Russians, we made up for this loss and added more than one hundred tons of gold. However, the fact that a large amount of our gold flows to the United States cannot be changed!
Of course, I did not count the gold seized by the military. This is abnormal income and cannot be counted in trade! "
Kennedy thought for a while and said: "Your Majesty, I think we should be able to hold the gold standard~EbookFREE.me~ The military harvested nearly two hundred tons of gold in Italy and more than one hundred tons of gold in the Ottoman Empire. Once Ankara is captured There should be an income, plus our original gold reserves, it should be enough!
If you are lucky, if our army can reap another gain in the Austro-Hungarian Empire, it will be more certain! "
Ferdinand shook his head, why should he stick to the gold standard? There is a price to be paid for reversing the trend. Why should it be done if there is no benefit? Does Bulgaria still want to become a financial hegemon?
"You think so well. For the sake of our gains in Italy, the British and French ambassadors are still wrangling with the Ministry of Foreign Affairs, and they will not be able to show them in the short term.
And gold is not so easy to get. Our army is almost three feet tall in the Ottoman Empire. Isn't it still only a little harvest?
Don't you think that we can do this in the Austro-Hungarian Empire?
Besides, gold is not a big object, as long as they want to hide it, just dig a hole in this place and bury it. Can you find it? "
Kennedy nodded reluctantly. It was a fact that he had to agree, but he still did not change his original idea.
In his opinion, although of course the gold standard can gain certain benefits in the short term, it does too much damage to the value of Lev.
Moreover, after the government abandons the gold standard, the massive devaluation of Lev will cause violent inflation. Many Bulgarians will shrink their lifetime wealth in an instant, which will cause a very serious social crisis.
Does Ferdinand not know all this? Of course not. The problem is that he can't help it? The European countries can't give up the gold standard, just the Bulgarian family stick to it! Do you still want to export?
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