Chapter 278: Chapter 27, Retreat
Franz has been very busy lately, as an economic crisis is looming, and he must liquidate most of his assets. Any enterprise that can be taken public to raise funds needs to be listed and go through the process.

Investments in stocks and bonds need to be completely sold off as well. Without enough money, how can one buy at the bottom?

Franz personally oversaw any matter that involved a significant amount of capital. It’s his own money after all, and who could rest assured leaving it entirely in the hands of subordinates without any oversight?

Especially at the critical moment before the outbreak of an economic crisis, any misstep in decision-making could lead to astronomical losses.

It’s not just personal assets that need to be dealt with but also those of the Habsburg Family. With so many intertwined industries, Franz sometimes felt overwhelmed by it all.

This could be considered a ‘happy trouble’ to have. In the years of leading the Habsburg dynasty, the family’s industries rapidly expanded and invested in numerous fields.

Under normal circumstances, this was beneficial, but during an economic crisis, it was uncertain. A wrong decision could dissipate all the hard work of the past few years into thin air.

The butterfly effect is powerful. Historically, this economic crisis started in the second half of 1857 from the United States. Now with a rapidly industrializing Austria added to the mix, who knew what the outcome would be?

Recently, the Vienna Government continuously launched municipal engineering projects to attract capitalists to invest. At its core, this was also a means to delay the outbreak of an economic crisis.

With these infrastructure projects initiated, naturally, a portion of industrial capacity was consumed, easing the crisis of overcapacity.

Using this opportunity, the Vienna Government also sold off many industries with slim profits. To put it more darkly, Franz was buying time for his own retreat, albeit one that was also beneficial for the country.

This retreat had to be carried out slowly, finding enough buyers to take over. Otherwise, withdrawing so much capital from the market at once would lead to an immediate collapse, wouldn’t it?

Unsure of when the economic crisis would erupt, Franz had been slowly liquidating his assets since early 1856, which had continued up until now.

John Steward reported, “Your Majesty, the last batch of railway stocks has been completely sold off, cashing out a total of 1.8 million Divine Shield. This month, we sold off five cement factories, cashing out a total of 780,000 Divine Shield…

We estimate that within the next two months, all the assets we are prepared to sell off will be liquidated, raising a total of approximately 66.8 million Divine Shield.”

Franz nodded, satisfied with John Steward’s work. Since the beginning of 1856, he had been averaging a cash-out of four to five million Divine Shield each month from the market.

Without causing market turmoil, John Steward’s contribution was indeed significant. About one-tenth of this money was Franz’s personal property, and the rest belonged to the family’s industries.

This was sufficient to show that the European Royal Family was still very wealthy in this era, as centuries of accumulation were no joke.

And these funds were only a part of the royal assets, with even more consisting of real estate. Vienna itself was part of the Royal family’s direct territories, so how could the Habsburg Family possibly be poor?

Before Franz came to power, the Habsburg Family mainly lived off the income from land and real estate, therefore lacking liquid capital.

Since the Vienna Government implemented the land redemption policy, the Royal family naturally took the lead. Franz released 700,000 hectares of remote land in one breath, obtaining a large sum of cash in return.

Most of this money was invested in real estate and manufacturing. The currently liquidated portion comes from manufacturing, which has become a non-performing asset amid a context of overproduction.

By comparison, real estate is much more stable. Building houses on one’s own land saves the cost of acquiring the land. In major cities like Vienna, they only rent, never sell.

After all, there are no property taxes, so hoarding real estate comes with no pressure. When the price hits the ceiling and a buyer is found, that’s about the time property tax is likely to be introduced.

It seems unrelated, but the taxes collected by the royal estates belong to the royal family; otherwise, how could Franz afford a private army?

Including the City Defense Army of Vienna, they first belonged to the royal private army and only secondly to the Austrian Army. Otherwise, Franz wouldn’t have been able to take control of the military so easily without causing a backlash.

Reform is reform, but when it comes to aspects beneficial to his rule, Franz certainly won’t touch them. If all these powers were given to the government, who knows if the bureaucrats beneath him would one day sideline him?

No matter how powerful a person is, they can’t fight against an entire bureaucratic group; the best method is to restrict their powers from the beginning.

“From now on, tighten credit, conduct stringent assessments of loan customers, and no longer accept stocks and bonds as collateral!”

Franz hadn’t forgotten about his Royal Bank, which had become one of the top banks in Austria; he knew an economic crisis would result in countless bad debts.

He was raising funds to bottom-fish, not to fill the holes in the Royal Bank. Reducing one loan now meant lowering one portion of the risk.

John Steward explained, “Your Majesty, this may easily cause market turbulence and could even result in a domino effect.

Currently, our loan assessment standards have always been the strictest among our peers, so the likelihood of facing bad debts isn’t high.

Starting two years ago, we have been focusing on developing colonial loan services, lending to those lucky fellows. Up to this point, the Royal Bank has gradually extended Eighty Million Divine Shield in loans.

Most of these loan customers repay with gold; coupled with gold acquired from the colonies, the Royal Bank’s gold reserves currently stand at fifty-eight tons, sufficient to cope with any crisis.”

After hearing John Steward’s explanation, Franz suddenly understood why the financial groups didn’t tighten credit before an economic crisis to minimize their losses.

These losses are necessary; by tightening credit in advance, it would be like telling everyone that a crisis was about to burst—run for it.

The world is never short of clever people; once the news leaks prematurely, retreating wouldn’t be so easy.

In time-travel novels, protagonists warn ahead of a stock market crash, under the guise of reducing the losses for the people. Franz chuckled at the thought; if everyone runs, who will take over?

If no one takes over, then the market will plummet to the bottom, and ultimately the wealth vaporized will be more, not less.

To confuse the situation, almost every day experts predict a stock market crash; after hearing it enough times, everyone becomes desensitized, who can tell what’s true?

After thinking it over, Franz said, “Since we’re ready, proceed with your plan. Quickly transport the gold from the colonies back home. Once the economic crisis erupts, the world is going to become troubled again.”

“Yes, Your Majesty!” John Steward replied.