452 Bankruptcy

Running out of money is always the most painful thing, especially since there are still a lot of people pointing to food, and solving the financial crisis is imminent.

St. Petersburg Hermitage

"Your Majesty, this is the last month's spending report, and if we don't do something about it, we'll be bankrupt in at most three months," Yevgenkis, the new chancellor of the exchequer, said in a grief-stricken report.

Financial bankruptcy, the Tsarist government is not the first time. If it is normal times, bankruptcy is good, and the big deal is to declare default.

The problem now is that the wasteland reclamation movement that has just been organized cannot be stopped, otherwise the tens of millions of people will go hungry. At that time, not only will the reforms be destroyed, but even the Tsarist Empire may collapse because of this.

After taking a glance at the report, Alexander II left it aside, got up and wandered around the room.

The plan never changes quickly, and the actual number of people involved in land reclamation is far greater than the tsarist government expected. The more people, the greater the power, and the greater the cost.

After hesitating for a long time, Alexander II asked: "If we suspend international debt payments from now on, can we survive this crisis?"

Default is not an option, but the problem is that the tsarist government is really out of money. Whether it was continuing international loans or issuing bonds, the tsarist government tried.

No one wants to lend money to the poor, and even if the Russians can come up with collateral, everyone is worried that they won't be able to keep their promises.

Because of the war, part of the fertile soil in Eastern Europe was lost, and the fiscal revenue of the tsarist government was also greatly reduced.

If it hadn't been made in the home raid, the tsarist government would have gone bankrupt long ago. The war cost a lot, and the reform was also a beast of gold, leaving little room for Alexander II to choose.

Finance Minister Yevgenkis thought for a while and replied: "If we suspend some projects and make every effort to ensure the land reclamation movement, it should not be a problem."

Time for multiple-choice questions, and after suffering a traffic inconvenience, Alexander II made an ambitious plan for the Russian railway.

The entire line is as high as 150,000 kilometers. Once this plan is completed, Russian Eastern Europe will be connected in series, and it can almost declare that Prussia and Poland are finished.

Alexander II made a decisive decision: "Okay, so do it!"

The problem of development lags behind first, and it is more important to solve the current problem. On the surface, it seems that the large-scale land reclamation has increased the amount of land and allowed farmers to have land, which is a good thing.

In fact, there is a big hidden danger here. The biggest problem is that there will inevitably be too much grain production in the future, and everyone understands the truth that low grains hurt farmers.

Perhaps for a capitalist economy, increased food production is a good thing, reducing the cost of feeding workers.

Then, for peasants and nobles, it was a disaster. Many nobles are holding back, mainly because they are worried that their interests will be damaged in the future.

The Russian Empire was originally a big exporter of grain. If it continued to increase its production capacity, it would definitely not be able to consume it internally, and exporting became the only option.

From the very beginning, the tsarist government was ready to bring down European food prices. Countries can dump industrial products on them, and they can reverse dump agricultural products.

It would be great if there could be a monopoly on the food supply of the European continent. To do this, we must first allow the grain of the Russian Empire to be shipped out.

The railway is an essential part. If the traffic problem cannot be solved, the plan will always stay on paper.

No one objected to Alexander II's plan, and it was more important to get through the problems at hand than the great plan.

As long as the first year is passed, and the output on the land can ensure the basic living of the people, then it will be easy to solve later.

In this day and age, Russian peasants were easy to feed and had just turned from serfs to freemen. As long as they could fill their stomachs, they did not dare to have other requirements.

As long as the most critical moment is passed, the later problems will be easier to handle.

On July 7, 1869, the tsarist government issued a note to major creditors, announcing that the Russian Empire was financially bankrupt and could not continue to pay its debts.

The European world is in an uproar. In recent years, no European country has defaulted on its debts, which has given the public an illusion that the integrity of the governments of various countries has improved.

The Russians have now shattered everyone's illusions. If there is no default, then everyone's financial situation is good, and there is no time to default.

If you really run out of money, then you have to default on your debts. Anyway, if you want money or not, if you don't give it your life, let's figure out the rest!

In addition to the creditors, the European people have turned into melon eaters, turning their attention to Vienna, and their expressions of schadenfreude are beyond words.

Some of the recent developments in Austria are very good, which naturally makes many people jealous. As the biggest creditor of the Russians, many people are now watching the Austrian joke.

You know, now the Russians have to pay 3.0684 million Aegis of principal and interest every month, which is 36.8208 million Aegis each year.

This astronomical figure was enough to destroy the Russian-Austrian alliance. No matter how good a relationship is, it cannot withstand the destruction of interests.

Franz was not as terrified as the outside world imagined. As early as when he refused to provide loans to the tsarist government, he was prepared for the Russians to default on their debts.

No, it should be said that this thought was prepared earlier. After all, the financial situation of the tsarist government has always been poor, and it is not easy to support it until now.

No matter how well prepared, the aftermath must be done. Most of these loans are guaranteed by the Vienna government, otherwise few banks would dare to take orders.

In addition to the problem, the Vienna government also needs to take responsibility. Fortunately, most of the loans are secured, and now the job of the Vienna government is to urge the Russians to implement the collateral.

Prime Minister Felix frowned and reported: "Your Majesty, for the contract we signed, we made a preliminary estimate that even if the Russians fulfilled the mortgage, we would have to bear the compensation of 38 million Aegis within the scope of the guarantee.

This money cannot be directly borne by us, the Russians must be held responsible for it. Now that the finances are out of money, let them postpone the repayment, and the tsarist government cannot go bankrupt forever. "

Franz nodded, he can ignore other people's debts, his own account will always be recovered. Even if there is no money, the tsarist government must accept the account first, otherwise the Vienna government will be difficult to explain to the people.

"The Ministry of Foreign Affairs communicated with the Russians to urge them to fulfill the contract. If they are unable to repay the debt, the payment can be postponed."

It is the uncle who owes money, and the current tsarist government is this uncle.

It is impossible to collect debts by force, and this amount of money is simply not enough for military expenses. Unlike Mexico, which is so easy to bully, Mao Xiong still has strength.

The fact that the tsarist government has no money does not mean that the tsarist nobles have no money. The accumulation of hundreds of years can still support a war no matter what.

The aristocracy and the tsarist government both lost and prospered, and when foreign enemies invaded, they soon became as close as one family.

The Russians have many creditors. Based on the principle of bullying the soft and fearing the hard, it is estimated that the debts of small countries will be paid off, and the debts of large countries will generally be deferred.

Deferred payment debts are also divided into three, six, and nine grades. Those guaranteed by governments of various countries must be repaid first. For private commercial loans without government guarantees, most of them will be relinquished if they can be relinquished, and if they cannot, they will be delayed.

After picking and choosing, the Russians have reduced their foreign debts by at least 400 million Aegis in this default activity. If the tsarist government is tough enough, there may be more.

To Franz's relief, the Russians had already paid back the foreign debts during the Near Eastern War. Not to mention the interest income, at least the principal was recovered.

The debts incurred in the Russian-Prussian War are, of course, not recovered. The bank with the strongest business ability can recover at most 30% to 40% of the cost.

The Austrian government has no losses, and most of the loans have attached conditions. Through the trade between the two countries over the years, economic development has been driven, and the increased tax revenue is enough to make up for the losses.

Financial institutions are different. If there is a guarantee provided by the Vienna government, then it is easy to handle. Even if the Russians default on their debts, the Vienna government is responsible for ensuring the safety of the principal.

Without a secured business loan, you're in trouble. Financial institutions are responsible for such loans.

Philip Potter is such a hapless man, he is not a banker, just the boss of a securities firm.

Because of the high rebates given by the Russians, he sold a batch of bonds for the tsarist government. Now the Russians have declared financial bankruptcy. According to Austrian law, his securities company will be jointly and severally liable.

A middle-aged fat man hurriedly said: "Mr. Philippot, the news that the Russians declared bankruptcy must have spread, and now the people outside are asking us to pay the bonds in advance."

In this era, the Austrian securities management system was rude. Securities companies issued bonds on their behalf and had to be responsible for the people who bought the bonds.

Simply put, the right to review bonds is in the hands of securities companies. This is not just a good thing. Now that you have the right to review, you must also bear the corresponding responsibilities.

For example: to ensure that the bonds can be dealt with normally, to explain the risks to the public who bought the bonds in advance, and if there is a default situation, the securities company needs to bear certain compensation responsibilities.

This compensation standard is jointly determined by the securities company and the government. The standard set by the government is not less than 50% of the principal, and securities companies often set a high standard in order to attract business.

Austria's so-called capital-guaranteed securities companies are not one or two, and Philip Potter's securities company happens to be one of them.

According to the promise, now that the Russians default on their debts and cannot pay the bonds normally, Philip Potter's securities company will repay the principal on its behalf.

The promises you made must be fulfilled. Philippe now regrets it. The Russians gave a commission of up to 15%, which was not normal at first. Unfortunately, he did not resist the temptation at the beginning.

Philippe asked with concern: "Berger, how much money do we have in our accounts?"

It is impossible to run away, and the police have already targeted him. If they run away, it is estimated that they will be arrested if they can't get out of Austria.

Finding a way to deal with the aftermath is king, and losing money is a must. Now these bonds are obviously impossible to sell at par, but after the discount, there may be people who dare to take it.

After all, this is the national debt issued by the tsarist government. Even if it is bankrupt and unable to pay, the Russians may still repurchase if they want to rebuild their credibility in the future.

Ordinary people can't see that far, or wait that long.

Berg thought for a while and said, "There are a total of 3.8946 million Aegis in the account, but after deducting the operating expenses of the securities company, only 3.56 million Aegis can be used.

Mr. Philippot, there are a lot of people out there who demand payment in advance, and this amount may not be enough to pay. "

Philippe sighed and said, "I know, first send someone out to appease the people and tell them that we agree to pay in advance according to the contract.

I remember that there was an agreement in the original sales contract. We are indeed responsible for the failure of the bonds to be dealt with due to force majeure.

However, this responsible time is after the bond matures

. Now they require early payment, which is a breach of contract, and they need to bear 20% of the liquidated damages. We only need to pay 80% of the principal.

Release the news that after three days, we will start redemption of bonds in advance, only one window will be opened, the review steps will be increased, and the time will be delayed as much as possible.

I'm still going to inquire about the news to see if things turn around. With such a big thing happening, it is impossible for the Vienna government to fail to respond.

Don't worry, this thing won't hit us. The Russian bonds we issued are only more than 8 million. It is impossible for all the people to ask for payment in advance, right?

You also inquire to see if there is anyone in the market buying Russian bonds, we may accept even a 50% discount. "

The profits of securities companies have always been very rich. When he founded the company ten years ago, Philippe invested less than 300,000 Aegis, and now the light liquidity is more than ten times that number.

Over the years, the profit and dividends he has taken from the securities company have also reached millions of Aegis. This crisis has brought him a lot of losses, but as long as he handles it properly, there is still hope to get through this crisis.

Philippot had to be thankful that the Russians themselves were unreputable, and their bonds were unpopular in the market. Otherwise, if tens of millions of Aegis were sold at one time, he could only go to the rooftop.

Of course, if he could really sell tens of millions of Aegis, he wouldn't be able to do this business.

Austrian law is no child's play. The government will interfere with the issuance of bonds that exceed its own carrying capacity.

Otherwise, if you register a leather bag securities company, issue bonds in the market to make money, donate money and run away after selling it, and declare bankruptcy, wouldn’t you be able to get rich quickly?

Obviously, this way of getting rich overnight has been clearly written in legal astronomy.

Unlike other companies, securities companies are the most severely punished for bankruptcy. Management and shareholders are subject to strict scrutiny. Unless all of them operate in strict accordance with regulations, basically no one can escape.

Strictly speaking, the bonds that Philippe issued for the Russians were a marginal hit.

If there is no accident, there is no problem. Now that something happened, if the aftermath is not done as soon as possible, when the police intervene, he will most likely be in jail.