plumnovel #602 - Sugar Factory and Industrial Vouchers
#602 - Sugar Factory and Industrial Vouchers
While Leonardo was shocked by the description in Lufiel's letter, Lufiel had not actually arrived at the Holy See of Machinery. The description of the Holy Machine of Revolution was all learned from Armand.
After the Constitutional Assembly, Lufiel and Abbas followed Catherine to Rapid Falls City.
His Majesty the Holy Grandson did not return but went to his old home, Upper River County, with Jeanne, Moriarty, and others to handle an important matter.
After a short stay in Rapid Falls City, Catherine stayed to deal with the industrial bond issues, and asked Armand to lead the three to visit Joan of Arc Fortress.
Armand's first stop was the industrial area on the outskirts of Joan of Arc Fortress.
In the industrial area located on the east bank of the Ibe River, wooden pulley cranes could be seen everywhere. In the rows of interconnected trench foundations, laborers wielding pickaxes were panting heavily.
A covered carriage moved forward on the muddy ground and soon stopped next to an old monastery estate.
Surrounding the square monastery building were five sugar mills under construction.
Because the new sugar workshops had a larger number of people and different natures and forms, Hornt specifically named them "workshops" to distinguish them from the previous small workshops.
These workshop buildings were based on the classical revival concept proposed by Vice Mayor Witt of the Holy See of Machinery, detailed in design by his grandfather Fante, and constructed under the supervision of Rockell, who almost followed Hornt to Daze Township.
Originally, it wasn't his turn, but in order to compensate him and cover up his nepotism in supporting his grandson, Fante still gave him the project.
It must be said that Rockell may not be good at design, but he does have a solid work ethic.
The sugar workshop in front of them was built with red bricks and mortar, with a wooden frame and sloping tiles for the roof, covering a total area of about 500 square meters and using 80,000 bricks.
"This workshop, including the copper pot for boiling sugar and the stone pot for stirring crystallization, plus the construction cost, is about 480-550 gold pounds," Halkin said, standing next to Armand, introducing the building in front of them. "Please look, this is the cooling crystallization area. The treated sugar water will crystallize here and turn into white sugar. Look at these ventilation windows, how spacious they are."
Following behind Lufiel, Abbas looked at the sugar workshop in front of him with melancholy.
This sugar workshop was different from their wooden shed. It used a monastery-style corridor design.
From the entrance to the exit were the raw material storage room, the boiling and refining room, the cooling crystallization room, and the finished product warehouse at the exit.
Whenever the laborers completed a process, it was directly sent to the next processing room, instead of the master-apprentice model common in small workshops where they completed everything themselves.
The five sugar workshops guarded the large monastery in the middle like a fortress group. According to Halkin's introduction, these white sugars would be packaged and distributed in the monastery, and then transported by carriage to the nearby transfer terminal.
This transfer terminal can handle 50-100 tons of goods per day.
For the current sugar and grain transportation, this throughput is quite generous, but Abbas saw a strong ambition behind it.
Holding a plate of finished white sugar, Halkin waved the bond prospectus in his hand:
"I won't lie to you. The first year is less efficient, and the profit may only be more than 200 gold pounds, but two years are definitely enough to recover the cost, three years can be profitable, and four years can double!"
"So our Megerd Industrial Bonds offer a super high interest rate of 10% for five-year industrial bonds, which is enough to offset the risk."
"I am also a businessman, and I know that business is difficult. It is easy to make 2 denarii in profit from a 1 denarius business, but it is difficult to make 10 gold pounds from 100 gold pounds, especially to make a profit for five consecutive years."
"Industrial bonds?" Abbas repeated the unfamiliar word. Obviously, this was a new term, seemingly using the prefix of craftsman and the suffix of debt note.
"Yes, it's an IOU. You lend me money, and I'll pay you back when I make a profit."
"Equity participation?" Abbas's eyes lit up instantly.
In the Empire, joint-stock partnership caravans were not new. Several merchants would pool money to hire ships to do business and then distribute profits according to the ratio.
The autonomous city of White Sand Land proposed the concept of shares and added annual dividends.
After that, the Megerd Chamber of Commerce's reform allowed the circulation of shares in the Rapid Falls City Exchange, which formed stocks.
The stock craze has been slowly promoted in the Kingdom of France and the Kingdom of Noen in recent years, so Abbas knows the concept of shares.
Since Hornt used alchemical technology, which was equivalent to openly engaging in high technology and the "black industry" as defined by the Empire.
The new nobles had neither policies allowing alchemy nor the technology to purify black sugar. Hornt also found the royal family as a bridge, and they could only watch anxiously.
But if they could participate in these industries, the lost profits might be recovered.
Halkin shook his head: "No, no, no, regardless of profit or loss, we will pay the principal and interest on industrial bonds. If we lose so much that we can't operate, there are generally three situations: debt-to-equity swap, auction, and debt restructuring."
"If the debt is converted into equity, it is equivalent to turning the money you used to buy industrial bonds into shares."
In order to make money to supply huge military expenditures, Hornt has played the financial instrument of bonds to the extreme. The evolution speed is too fast, causing Abbas to be unfamiliar with this concept.
But through Halkin's narration, Abbas gradually understood it.
Unlike stocks, bonds distribute dividends regardless of profit or loss, which means they have priority in repayment. Although they lose the income brought by capital appreciation, the risk is low.
Moreover, black sugar purification technology is policy and technology exclusive, and there is also the thigh of the French Royal Trading Company. They are even an independent force within the territory of the Kingdom of Leia, and the French new nobles cannot interfere.
This sugar and grain trade is 100% profitable, not only profitable, but also very large.
Although it is not as profitable as direct equity participation, it is better than earning nothing, and it is also stable.
"In fact, you can consider being our brokers in the Kingdom of France, and we can give you a commission of 0.5%," Armand said with a hint of coldness and cunning in his eyes. "I think those old nobles will like bonds."
Abbas, the head of the family doing the blue ocean market of sugar trade, has not yet reacted, but Venicé's stinky face twitched violently.
His family mainly makes money by overseas grain trade and futures, so he understands this too well.
Land nobles are all old money families. Now, with the large inflow of precious metals and cheap grain from the Flesh Court, prices are soaring, and the money in their hands is slowly depreciating.
Some nobles enclosed land to raise sheep, changed to growing cash crops, or invested in commerce, quickly transforming into the current French new nobles, also known as the robe nobles.
The rest either had no conditions, couldn't save face, or failed to transform, and were extremely anxious about the depreciation of their real estate and assets. These people are the sword-wielding nobles.
Although the bond yield is low, it has low risk and is stable, which best suits the conservative mentality of the sword-wielding nobles. If it can also be traded, it is simply a trump card.
If this business is done well, the income will not be smaller than the sugar trade. The only problem is national credit and long-term survival.
If the Kingdom of Leia pushes them over in the future, wouldn't this money be completely lost?
"Do you have three-year industrial bonds?"
"Three-year bonds? The interest rate is probably less than 7%."
"A lower interest rate doesn't matter. The question is whether the principal and interest can be paid on time?"
"You can rest assured about this. We will sign a multilateral net settlement agreement with the French Royal Trading Company."
"Is it possible not to go through the French Royal Trading Company?"
Looking at the two people communicating with Halkin, Armand smiled faintly: "You two may wish to write a letter to your family to see if you can form a chamber of commerce on your own. We can contract it to you by region, whether it is white sugar or bonds."
"What do you mean, you two?" Lufiel asked, pouting coldly.
"Ah? I didn't mean that..."
"If that's not what you meant, then what did you mean?"
Armand immediately felt a headache. He shouldn't have joked casually in the first place and let Lufiel go to the barn to take a look. Now, this little girl has opinions about him everywhere.
However, for the sake of the Holy Grandson's industrialization plan, he can only continue to smile for the time being.
They need these French new nobles, or rather, they need the money in the hands of the new nobles.
If industrialization is to be completed, a large amount of capital investment is required. Catherine once estimated at the Imperial Conference that the discounted metal currency of the entire Thousand River Valley was only about ten tons of gold.
With this per capita income level of less than 1 gold pound, it is difficult to support themselves, let alone have so much spare money to invest in industry.
With the capital of the Thousand River Valley itself, industrialization can never be completed. Either they have to squeeze the farmers to frantically suck blood, or they have to accept investment from foreign capital.
Hornt doesn't like making money from poor people. He makes money from whoever has money.
The French have money, and he wants to make money from the French nobles, especially those sword-wielding nobles.
If they can't pay it back, they can also launch a demon-exorcising holy war in accordance with the Holy Father's will and zero out foreign debt through debt restructuring.
This bond trick can not only be used on the French, but also on the nobles of the Thousand River Valley itself.
The Empire forcibly fixes the medieval relations of production, forcibly suppresses productivity, thereby forcibly holding down the profit-seeking and liquidity of capital.
Then don't blame Hornt for using the policy advantages of the Thousand River Valley to open a small opening on the sluice of this money dam.
Now it is just a trickle. When he is able to defeat the Kingdom of Leia in the future and achieve the true founding of the Thousand River Valley, the national credit established will be enough to guarantee his own stable payment ability.
At that time, the capital of the Empire, which has been suffocated, will come rolling in and completely wash away the economic dam erected by the Empire.
After appeasing Lufiel with "I'll play a few rounds of clockwork guns with you this afternoon," Armand wiped the sweat from his forehead with a handkerchief: "The sugar workshop is roughly like this. This area is full of workshop areas. Do you want to visit it?"
"We may have to..."
"It's not noon yet. It's too early to go back now. Take us around again."
Amidst the complex faces of Venicé and Abbas, mixed with jealousy, sadness, and despair, Lufiel snatched the conversation and said to Armand with a smile.