King-Chapter 1412 - 268: Bankruptcy Strategies vs. Delaying Strategy
Chapter 1412: Chapter 268: Bankruptcy Strategies vs. Delaying Strategy
A highly efficient decision-making government also means that conflicts become more intense when problems arise. The discussions surrounding the fiscal crisis have turned into fierce debates among various factions.
Currently, the fiscal department has proposed three solutions:
"Government bankruptcy!"
"Issuance of paper money!"
"Tax hikes!"
The three controversial proposals, placed side by side, instantly became 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 department officials, ridiculing their proposed solutions as utterly worthless.
But this is of no significance; the vocal critics hold no sway within the Kingdom Government. As a pragmatic government, their stance is simple: if you want to oppose, come up with a better alternative.
Without a better option, the government 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 Government being dragged into outright bankruptcy. At least with proactive bankruptcy, they can handle the accounts in advance, transfer government-owned assets, and avoid actual bankruptcy liquidation. ƒrēenovelkiss.com
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 somewhat similar. Despite the severe fiscal deficit, the government still possesses considerable assets.
The Directly Managed major cities, various mines scattered across the land, and a number of government-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 immediate 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 mentioning these assets. Even when someone brought them up, it was merely to suggest selling the management rights of some 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 meet 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 commercial banks wouldn’t amount to even half of the government’s debt.
Local commercial banks managed to offer the government low-interest loans totaling 4000 Gold Coins, a gesture that significantly supported the Kingdom Government.
The thought of it brought tears to the eyes. As the Kingdom’s largest commercial bank, the Near East Development Bank was simultaneously the Kingdom Government’s largest creditor.
After the outbreak of war, the Near East Development Bank alone issued loans exceeding 20 million Gold Coins to the Kingdom Government.
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 government 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 Development Bank by the Kingdom Government.
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 Development Bank.
Neither the Kingdom Government nor Hudson, the bank’s proprietor, could accurately assess the value of these collaterals.
To outsiders, this kind of collateral arrangement primarily serves as reassurance for the bank’s shareholders. The investors in the Near East Development 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 merely Hudson’s sense of responsibility but a strategic necessity driven by mutual interests.
These investors, bold enough for international investments, 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 mechanism 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 handsomely 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 resentment!
They feared his reckless managerial style, worried that someday the Near East Development 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 Development Bank still appears to be a premium asset.
Other commercial banks suffer from chaotic management, lack risk control systems, and deal with massive amounts of bad debts, whereas the Near East Development Bank maintains an admirable low bad-debt rate.
...
"Duke, Count Francis, Minister of Finance, has come to visit!"
Receiving this news, Hudson’s brows furrowed. With the fiscal department 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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