African Entrepreneurship Records 2

Chapter 24 Raising Funds
"Sir Ernst, if you have no objection, we can sign this agreement."

Ernst carefully checked the content of the agreement for the last time and signed his name on it.

The visitor was a member of the Prussian royal family. Recently, there was a lot of quarrel in Prussia over the privatization of the Cologne-Minden Railway.

This shows that the Kingdom of Prussia is raising war funds by all means, and Ernst, who is also a big fish, has fallen into the eyes of Prussia.

After all, the Heixingen Consortium is now a star enterprise in the whole of Germany. It has a large-scale bank, a world-class daily necessities company, and Hexingen Tobacco...

Ernst's rapid accumulation of huge wealth in a short period of time is naturally eye-catching. Fortunately, Ernst is indeed a second generation of nobles. He has no inspirational experience of rising from the grassroots. Compared with the self-made geniuses of the same generation, he is indeed not very conspicuous. .

But wealth can't deceive people, especially the Prussian royal family knows best, because they are Ernst's customers themselves.

Now the purpose of the representative of the Prussian royal family coming to Ernst is self-evident. Compared with selling such a strategic facility as the railway, it is better to think of other ways first.

The Cologne-Minden Railway was one of the earliest railway lines built in Prussia. It was designed in 1833 and completed in 1859, becoming the hub of the Prussian railway system.

The original intention of the railway project was to transport coal from the Ruhr area cheaply to the industrial production base in Prussia.

In fact, the Cologne-Minden Railway was a large-scale public infrastructure project led by the Prussian government from the very beginning.The Prussian government directly purchased 1/7 of the original shares and used 1400 million thalers to guarantee the issuance of the railway bonds at a coupon rate of 3.5%.

In return, the government can buy the company's tradable shares in installments, and eventually become the sole shareholder of the railway, completing gradual nationalization.

The nationalization of railways was a strategic decision of Prussia, because Prussia valued the ability of railways to transport troops and transport materials.

But right now the conflict between Prussia and Austria is intensifying, and the top leaders of the Prussian government are actively preparing for war.

And war is inseparable from financial support, and the Cologne-Minden Railway was brought up for discussion under such a background.

Bismarck's preparations for war against Austria required a total of about 6000 million thalers.The burden of raising such an astronomical sum of war expenses fell on the shoulders of Breischroder.

In fact, as early as December 1862, after careful calculation and repeated consideration, Breischroder proposed the extremely controversial plan to privatize the Cologne-Minden Railway.

The core part of the plan is that instead of the government paying a huge sum of money to fully acquire the shares of the railway company in 1870, which put a huge pressure on finances, it is better for the Prussian government to give up nationalization at the cost of immediately getting a sum of compensation from the railway company At the same time, he gave up the guarantee for the bond interest, so he could immediately revitalize part of the 1400 million Taylor deposit.

As soon as the plan was introduced, it was opposed by many people. These people believed that the Bray Schroeder plan was at the expense of the government's long-term losses, so that shareholders of the railway company, including Bray Schroder himself, realized huge profits.In this plan, the government will lose a total of 3000 million thalers of various rights and interests, in exchange for only 1000 million thalers in compensation and 400 million thalers in available security deposits.

The Cologne-Minden Railway, which has already been developed, is a very profitable project in government investment. The privatization plan can provide the government with emergency funds in the short term, but the price paid is to sell high-quality assets at a price of less than 5%. It also lost long-term future income rights, which is not a good deal for the government anyway.

According to history, Ernst also knew that after the reunification of Germany, the railways were finally nationalized, so the current railway privatization is just a sacrifice that has to be made.

But it is impossible to expect capitalists to do good deeds. They pursue higher profits, so there is no such thing as patriotism.

Behind the privatization of the Prussian railways is the shadow of the Rothschild family, and Breschroder is their employee.

The Rothschild family is now headquartered in Vienna, Austria. It is not an exaggeration to say that they have Austrian nationality, but they are preparing war funds for the enemy country.

It's true that you don't pay attention to things, but the benefits you get are real. In the East, the Rothschild family has long been punished by the emperor.

That is to say, the social system in Europe protects them today. Of course, these have little to do with Ernst.

Ernst is more concerned about the agreement in front of him, which is the result of bargaining between the Prussian royal family and Ernst.

Although Ernst is very rich now, he has a lot to do, especially the development of the East African colony, population migration, food reserves, production tools, and colonial weapons and equipment, including staff salaries, all need to be paid by himself.

Therefore, after excluding the operating funds needed by the entire consortium, the expenses of the East African colonies and the emergency funds, the available Taylor is only a few million, but this is enough. The Prussian royal family did not expect much. This era is also considered a huge sum of money. You must know that the Cologne-Minden Railway was privatized, and the Prussian government could only get the first 400 million Taylor.

An important reason why the Prussian royal family sought Ernst for help was to hope that Ernst would be more conscientious than those banks and consortia that only aimed at economic interests.

Anyway, Ernst is also a member of the Hohenzollern family. Ernst really doesn't need any railway debts. Now Ernst is looking at East Africa.

So the benefit Ernst also brought up, that is, in the future, Prussia will guarantee the interests of the Hechingen royal family in East Africa.

Now Prussia's top priority is to unify Germany, and the colonies are not very fancy. Since Ernst hopes that after Prussia unifies Germany in the future, he will support Ernst's entire interests in East Africa, then support it.

So the two parties signed an agreement, this time including the Prussian government, the Prussian royal family and the Hechingen consortium represented by Ernst.

The specific content is that the Hechingen consortium invested in the acquisition of 40.00% of the government shares in the Cologne-Minden Railway, and the Hechingen Consortium will not prevent Prussia from recovering Ernst's shares in the Cologne-Minden Railway at a price higher than the market in the future.

This is actually a left-handed and right-handed trick. Ernst used the idle funds to give the Kingdom of Prussia to participate in the war. After the war, Prussia can take back the railway as long as it pays back the account.

Of course, Ernst did not pay in vain. As a price, the unified German government must recognize the ownership of the Hechingen royal family to the East African colonies and support the expansion of the Hexingen consortium throughout Africa.

Although this kind of gentleman's agreement is not safe, it can avoid many troubles. The German East Africa in the previous life has no basis for existence and legal principles. This time it is the territory of the royal family of Hexingen.

As a supplement to the agreement, Ernst also took advantage of this opportunity to get the long-awaited admission ticket.

(End of this chapter)