Empire Rise: Spain

Chapter 153: The Economic Crisis Arrives

What surprised Carlo the most was that after the promulgation of such seemingly tough legislation, the impact in Catalonia and the Basque Country was not too great.

However, it was easy to understand upon reflection, as the troublemakers in these two regions who had firmly demanded regional autonomy or even national independence had long since disappeared from Spanish history along with the Carlist faction.

It was impossible to say there were no nationalists in these two regions, but it was highly unlikely that these people would dare to stand up and firmly oppose the legislation promulgated by the government, or even incite parades and rebellion.

Although they supported regional autonomy and national independence, that did not mean they were fools. They could still see the current situation in Spain clearly, and Prime Minister Primó was just waiting for them to jump out on their own so he could wipe them all out in one fell swoop.

Although there were no large-scale unrests, there were still some small parades and disturbances.

However, these small-scale chaos were completely insignificant to the Spanish Government, and could even be dealt with simply by deploying the public security department.

To ensure stability in Catalonia and the Basque Country, Prime Minister Primó specifically ordered the public security department to transfer some police from other regions to Catalonia and the Basque Country to maintain order, and by the way, to urge the governments of the two regions to quickly implement the requirements of the newly promulgated legislation.

For those who neither dared to stand up and oppose the legislation promulgated by the government nor were willing to accept it, Prime Minister Primó also gave them a new choice: immigrate abroad.

Prime Minister Primó deeply detested those who vigorously promoted nationalism and regional autonomy ideas. Because they would have a tremendous impact on Spain’s existing stability, and would turn Catalonia and the Basque Country into Spain’s eternal wounds.

Precisely because he understood this point, Prime Minister Primó, as a Catalan, still firmly chose comprehensive unification of ethnicity, religion, and language. If the nationalism problem in Spain’s two regions could be resolved in a more peaceful way, that would naturally be even better.

For the public in Catalonia and the Basque Country who were unwilling to accept Spain’s new policies, the Spanish Government encouraged them to immigrate to other places, and could even actively organize immigrant groups to provide help for those who wanted to immigrate but lacked travel expenses.

On this basis, if there were still radical democrats in Spain who had different opinions on this legislation, do not blame Prime Minister Primó for being cold-blooded and ruthless.

Encouraging them to immigrate was giving them their last chance: either choose to immigrate and escape Spanish law, or stay in Spain and obediently comply with the legislation promulgated by Spain, with no other choices for them to pick.

In fact, to put it bluntly, this legislation had little impact on most Spanish commoners. Whether Catalans or Basque people, they all believed in Christianity, which was also the religion officially permitted by Spain.

The only real conflict was the large-scale promotion of the Spanish language and the concept of the Spanish ethnic group, but these were not unacceptable to commoners.

Although this legislation could effectively advance Spain’s ethnic integration and more effectively solve the national independence problem in Catalonia and the Basque Country.

But doing so was not without drawbacks. As long as they immigrated to Spain, they naturally had to comply with the legislation promulgated by Spain.

This was not so friendly for certain immigrants, after all, it was not that easy to make them quickly use the Spanish language and acknowledge themselves as Spaniards.

To this end, Carlo and Prime Minister Primó held multiple discussions and finally decided to entrust the task of spreading the Spanish language to Pedro, who had been promoted to Archbishop of Spain, and have him responsible for teaching the Spanish language to immigrants.

In fact, such a task was not unfamiliar to the Spanish Church, because the Spanish Church had previously controlled a large number of church schools, thereby controlling education in Spain.

However, the Church’s task was not just to spread the Spanish language, but also to spread religion.

In fact, for Carlo and Prime Minister Primó, whether believing in Catholicism, Orthodox Christianity, or Protestantism was not a big deal.

As long as they believed in religions under the Christian system and recognized God, that was fine. The missionary task was obviously not aimed at European immigrants, but more at the indigenous people and mixed-race residents in the Spanish colonies.

Considering Spain’s future strategic plans, when meeting with Archbishop Pedro of Spain, Carlo specifically required the Spanish Church to prioritize missionary work among the Moroccans in the South Morocco Colony, and indicated that it could use certain tough means to accelerate the progress of missionary work.

Although Christianity was now universally believed in Europe, in fact, hundreds of years ago, large swathes of land still believed in various local derivative religions.

The reason Catholicism and Orthodox Christianity could spread across the whole of Europe was not due to the mild missionary work of those missionaries, but due to the rather cruel high-pressure missionary work by the Catholic Church and the governments of various countries.

Among them, the most famous was the Inquisition of the medieval period, which laid an extremely important role in the widespread dissemination of Christianity in Europe.

The Inquisition of this period was not a real court in the true sense, but wielded immense power, and could wantonly impose various punishments on heretics（ including but not limited to confiscation of all property, flogging, imprisonment, life imprisonment, etc.）.

If the heretics still refused to repent, the Inquisition also had the power to impose the death penalty, and in rather cruel ways, with the main form of execution being burning at the stake.

Although the Spanish Government could not now openly establish an institution like the Inquisition to eliminate heretics in the colonies, using similar methods was still possible.

Anyway, the rule of various countries over the colonies during this period was not very glorious, and after achieving certain results in the future, repackaging it in a more civilized way would not have much impact on Spain.

Facts proved that using strong legal means to unify Spain’s ethnicity, religion, and language was the better way.

Just two and a half months after the promulgation of the legislation, it had effectively rectified the chaotic language situation in Catalonia and the Basque Country.

As time reached May 1873, on the streets of Barcelona and Bilbao, only signs and text written in Spanish could be seen, and the local languages and texts had vanished without a trace.

For such changes, there were certainly some radical nationalists who expressed their dissatisfaction.

But these minorities were obviously insignificant in the face of the interests of the Spanish Nation, and they were easily suppressed by the police.

Even the two infantry divisions that had been prepared in advance had no role to play, as most people had no strong opposition to this legislation, and the more radical ones fell under the guns of the police under the government’s strong suppression.

Time froze at May 9, 1873, and the world crisis finally erupted.

The perspective shifted to Vienna, the capital of the Austro-Hungarian Empire, one of the most prosperous cities in Europe and once a world-renowned international metropolis.

But since the arrival of May 9, the situation in Vienna fell into extreme chaos. The chaos first erupted from the Vienna Stock Exchange, then directly spread to the entire city.

How terrible is an economic crisis? In just 24 hours, the total value of all enterprises on the Vienna Stock Exchange depreciated by billions of crowns（ Austro-Hungarian krone, also called florin, 1 pound sterling ≈ 7 krone）, sending many enterprises already worth over a million back to square one overnight.

According to the current more official exchange rate, one million krone was equivalent to 85,470 pounds sterling, or 223 million pesetas.

No matter in which country, enterprises worth over 80,000 pounds sterling were large enterprises. And in this rapidly arriving economic crisis, a large number of enterprises in Vienna worth over or close to 80,000 pounds sterling were on the verge of bankruptcy, which was enough to prove how deadly an economic crisis was.

Slightly larger enterprises were still okay, with the situation merely on the verge of bankruptcy. Those small and medium-sized enterprises with not so high value rapidly went bankrupt amid the impact of the economic crisis.

The day before, these enterprises were even thriving in development, and the next day they faced a very serious bankruptcy crisis, forced to publicly announce the bankruptcy of their factories and enterprises.

Such a stark contrast in just one day also plunged a large number of Vienna’s public into panic. The public rushed to exchange their money from banks, fearing that their money would disappear along with the airport economic crisis.

But this severe run crisis instead intensified the pressure on the banks. More fatally, banks in this period were often not well regulated by the government, and were mostly private small and medium-sized banks.

Banks of this scale simply could not withstand a run crisis, so on the second day of the economic crisis, Vienna’s residents were horrified to discover a situation even worse than enterprise bankruptcy: a large number of banks also began to announce bankruptcy.

Enterprise bankruptcy meant that a large number of Viennese lost their jobs, while bank bankruptcy meant that Viennese lost even their meager deposits.

Unfortunately, due to the suddenness of this economic crisis and the huge impact it caused, most Viennese suffered both losses.

In other words, more than half of Vienna’s citizens consecutively lost their jobs and deposits in two days, becoming penniless.

Although they still had houses, houses in this era were not valuable. Large cities were just slowly forming during this period, Vienna’s population was only approaching one million, and housing prices naturally had not reached high levels.

Moreover, now that the economic crisis had arrived, even if housing prices were high, no one would use their money to buy houses.

This also caused a fatal problem for a large number of Viennese: they would have no source of income, and even basic daily necessities became a huge problem.

Although this economic crisis first started at the Vienna Stock Exchange, it was fundamentally impossible for other countries in Europe to escape disaster.

In less than a week, the economic crisis quickly swept through stock exchanges in other countries headed by London and Paris, and even Spain’s two small and medium-sized stock exchanges were somewhat affected.

“Carlo, is this the impact of the economic crisis?” Queen Sophie sat uncomfortably on the stool, holding the latest newspaper released by a local Vienna newspaper office in her hand.

Although she had married far away to Spain, Queen Sophie was still very concerned about the Austro-Hungarian Empire. To ensure his queen could know about major and minor events in the Austro-Hungarian Empire every day, Carlo even had people collect all kinds of news and newspapers from the Austro-Hungarian Empire daily and transport them to Spain at the fastest speed.

For Carlo, whose assets had long exceeded hundreds of millions, this small expense was negligible, far less important than making his queen Sophie smile.

And precisely because Sophie paid attention to major events in the Austro-Hungarian Empire almost every day, the economic crisis that erupted in Vienna not long ago naturally could not escape her ears.

“This is the law of capital development, inevitable, Sophie.” Carlo could only nod and explain to Sophie: “However, given the economic volume of the Austro-Hungarian Empire, although this economic crisis is serious, the impact will not be too severe.

If the government can react in time, the impact on the Austrians should be limited to an acceptable range.”

“Spain shouldn’t be affected, right? Do we need to prepare in advance?” Hearing that the economic crisis would not cause too serious an impact on the Austro-Hungarian Empire, Queen Sophie finally breathed a sigh of relief, then began to care about Spain’s response in this economic crisis.

“Don’t worry, the impact of this economic crisis on Spain is minimal. Spain’s economy and industrial volume are not large, so it won’t cause an economic crisis on its own.

Even if affected by the economic crisis, it is within an acceptable range, no need to worry at all.” Carlo said with a smile.

Originally, the economic crisis had little impact on Spain, not to mention that the Spanish Government and royal family had prepared for this economic crisis for a long time.

Just the dozens of tons of gold reserves contributed by the Padmanabhaswamy Temple alone could ensure that Spain would not be greatly affected in this economic crisis.

Moreover, Spain’s economic and industrial development was still quite healthy, and the reason Vienna suffered such severe impact was largely due to the lack of management of the stock exchange and control over the banking industry.

Those banks and construction companies opened purely for speculation were the most vulnerable in this economic crisis.

It was precisely because these enterprises, like castles in the air, quickly went bankrupt that the economic crisis rapidly swept through the entire Vienna.

If there were fewer such shell subsidiaries, the impact on Vienna would not have been so severe. It was precisely because the bankruptcy of a large number of companies intensified the panic in the hearts of Vienna’s public, leading to uncontrollable run behavior, which ultimately caused banks that could have maintained order to also go bankrupt in the runs.

This kind of problem did not only appear in this era, but would also appear in posterity.

The finance industry was quite profitable, but also quite fragile. Bankruptcy or not could even be affected by a single rumor; as long as enough public believed the bank bankruptcy rhetoric and caused a run crisis, the bank really had the possibility of bankruptcy.

Conversely, even if a bank faced cash flow problems, as long as no run crisis occurred, it would not face bankruptcy.

To guard against such unpredictable run crises, there were really only two ways. One was for the government to play a regulatory role over banks, ensuring that banks’ funds were not overused and always reserving some funds for accidents.

Precisely because of the previous economic boom, a large number of banks used the vast majority of their funds for speculation to earn profits.

When the economic crisis erupted, they simply could not obtain funds from elsewhere for turnover; what could a bank without money do besides bankruptcy?

In fact, just as Carlo said, as long as the Austro-Hungarian Imperial Government reacted in time, the impact of this so-called economic crisis was actually not that serious.

At least for the Austro-Hungarian Empire, it was not a devastating blow; the countries with the fastest industrial expansion speed suffered the greatest impact.

Although the Austro-Hungarian Empire had good industry and economy, its development speed in the recent ten years could not even rank in the global top five.

The countries with the fastest development in recent years were always Britain, America, and Germany, and the Austro-Hungarian Empire’s development speed even ranked after the French, which was also the reason why the Austro-Hungarian Empire would not suffer too severe an impact.

As expected, just as Carlo had foreseen. The impact of the economic crisis on the Austro-Hungarian Empire was indeed serious, but only for the week before the economic crisis erupted.

After those banks and construction companies that only speculated for profit went bankrupt one after another, what remained were mostly factories and enterprises focused on real industry.

These factories and enterprises also faced relatively serious bankruptcy crises, but they at least had some foundation and could persist longer.

They also awaited aid from the Austro-Hungarian Empire. On the second day of the economic crisis outbreak, the Austro-Hungarian Imperial Government announced the use of 300 million krone for market rescue, prioritizing help for some relatively important and large factories and enterprises.

As long as these large factories and enterprises could survive, the losses in various industries due to this economic crisis would always have a chance of revival.

But if these large factories and enterprises also went bankrupt in the economic crisis, reconstruction in the future would not be so easy.

After Vienna’s economic crisis was temporarily stabilized, the ones to suffer next turned out to be Germany and France.

Among them, Germany was relatively more serious, after all, Germany’s development speed in recent years was one of the fastest in Europe.

After obtaining 5 billion francs of friendly aid from France, Germany’s industrial expansion speed and railway construction speed were incredibly fast.

5 billion francs was 200 million pounds sterling, which was an extremely huge sum even for the British Empire. It was precisely with this fund that the Germans quickly propelled the German Empire toward industrialization.

Coupled with the integration of resources and industry across the entire German region, the German Empire leaped to become Europe’s industrial powerhouse and economic great power.

But such an identity brought no bonuses in the economic crisis; instead, due to the recent rapid expansion of economy and industry, Germany suffered an even more severe economic crisis.

About ten days after the outbreak of Vienna’s economic crisis, the impact had already spread to Berlin’s stock exchange.

On the day it was affected, many enterprises faced serious bankruptcy crises. Fortunately, the German Government had prepared in these ten days, and on the day Germany was affected, it announced a plan to save the stock exchange market.

Moreover, Germany’s major construction had only started a few years ago, not yet reaching the situation in the United States where production far exceeded demand.

Under the effective control of the German Government, the impact of the economic crisis on Germany was not too severe.

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