The Sun Never Sets In Spain

Alfonso has had enough of a lack of domestic currency.

Spain currently implements the silver standard, and in previous years, because the gold diggers in California and Australia scooped up a lot of gold, the price of silver has risen relatively, which has caused difficulties for the government to purchase silver.

Fortunately, the silver production in Nevada in the United States is increasing year by year, and with the advancement of silver refining technology, the situation will gradually improve in the future.

Spain is mainly short of silver, but not very short of gold. At present, the country's total gold reserves are over 400 tons. This is because the civil war has just been experienced and the liberal government has squandered a lot.

But the embarrassing thing is that this number is quite a bit too low. For the silver standard, it is too much, and for the gold standard, it is too little.

France has more gold reserves than Spain, with a level of nearly 700 tons, but they also only implement a double standard of gold and silver.

This is a deeply flawed transitional system that Alfonso does not want to emulate.

The reserve of gold will take some time, but the development of the economy cannot be delayed.

Therefore, Alfonso wants to carry out a currency reform first. All private individuals are not allowed to exchange banknotes for precious metals in banks. Only when conducting foreign exchange transactions, banknotes will be supported by precious metals.

As a result, Spain's precious metal reserves are too rich, and the currency can be issued as it wants.

Of course, this matter cannot be decided by Alfonso alone. As soon as he told his thoughts to Finance Minister Enrique, the other party immediately understood what he meant.

Because there is a precedent for currency inconvertibility, countries have adopted similar measures in the face of economic crisis.

Not to mention that the Austro-Hungarian Empire stopped exchanging banknotes more than 20 years ago.

"But you don't know, Your Majesty, the Austro-Hungarian Empire is now like us, with gold and silver coins and paper money running side by side, and because they prohibit the exchange of paper money for precious metals, the actual value of the paper money has not been able to keep up with the amount.

This time they overissued, which will hit the credit of the banknotes more seriously. I am afraid that the actual value will only be 20% of the denomination.

It’s fine for us to issue hundreds of millions of pesetas, and we must not stop the exchange of precious metals. "

Enrique said with a worried look, for fear that Spain would follow the old path of the Austro-Hungarian Empire.

At present, Spain is relatively short of silver, but it is okay to have a little excess.

Judging from the current economic situation, there should be no run-off.

On the contrary, stopping the exchange of banknotes is really a dangerous move, and it may cause serious trouble.

As soon as Alfonso heard it, he understood the crux of the problem. In addition to the low value of the Austrian-Hungarian banknotes, in addition to the random over-issue, another reason was that the metal coins were still in circulation.

The value preservation of metal coins is obviously stronger than that of paper money, at least not only linked to the country, so people prefer to use gold and silver coins, which objectively contributes to the devaluation of paper money.

If only we could ensure that only banknotes circulate...

But if you think about it a little, you know that this is impossible. Spain is not so strong now. Forcing the use of paper money to buy gold and silver in the hands of the people will definitely cause a large-scale panic, and maybe it will destroy this rare stable situation. .

Alfonso is not a man of his own accord. This monetary system, which is linked to the stock of precious metals and national credit at the same time, may be too early for Spain, which has only been stable for two years.

But even so, he was unwilling.

Others don't know, but he knows that in two years there will be an economic crisis sweeping the world, the worst since the birth of capitalism.

If you ignore the massive excess of precious metal reserves, it will definitely be severely hit in two years.

This is not determined by Spain's economic situation. As long as it is still a part of international trade, it must be prepared for the arrival of the crisis in advance.

"Can you do a pilot test in the Papal State?" Alfonso hesitated for a moment, then said:

"It's up to us to control the currency issuance of the Papal State and see if they can adapt to this monetary system in a short period of time."

Enrique looked happy, and immediately said: "I think it is feasible, with our endorsement, even if it fails, the consequences are within control."

As for whether the Pope will be the guinea pig for Spain, it is not his concern. Cruz should worry about it, and he will explain at the most.

Alfonso nodded, the Papal State should agree, after all, they have already joined the Spanish economic system, and now they all use pesetas.

The Ministry of Finance personally designed a new currency for them, and the impact would not be too great.

Now that money is being talked about, another thing comes to Alfonso's mind: "What about Tuscany and Marche? Would you like to use Spanish currency?"

After the disintegration of Italy, these small countries were all using the original metal coins, but Italy itself did not have much gold and silver, and it wasted a lot of money in the war to destroy the country, leaving them with very little left.

Cooperation without paper money is not a long-term solution after all.

Hearing this, Enrique said proudly: "Tuscany and Marche are basically finalized, but there are still some differences on the distribution of benefits."

"That's good..." Alfonso breathed a sigh of relief. With these guys as buffers, the room for turning around in the future will be much larger.

The main reason why Spain was able to win the currency rights of the small Italian country was not because of its own strength, but because of its bad opponents.

The Austro-Hungarian currency has not been sorted out by itself, the war in France, the UK is too far away...

Among them, the United Kingdom was too high and did not want to sell too many benefits so that Spain grabbed the hand.

In these years, many international trades are settled in sterling, and even many small countries do not have precious metal reserves, so they simply use sterling as a reserve.

The British pound rules half of the world, and it is not uncommon for this small Italian state with a population of only a few million.

Since there is another batch of peseta users to be accepted, it is impossible not to issue additional currency. Alfonso agreed to Enrique's previous proposal:

"Issue another peseta banknote, and the specific amount will be between 200 and 300 million according to the Ministry of Finance's proposal."

...

In general, Genoa, Tuscany, the Papal States, and Marche belonged to Spain, while the Kingdom of Piedmont issued its own currency and joined France's Latin currency union.

Apart from them, the only remaining Italian state was Naples.

At this time, the long-running Naples war is finally coming to an end. After all, it is only a small place, and the blood will be drained after fighting for so long.

March 25, in Naples,

Garibaldi, the nominal leader of the republic, attended in person and signed an agreement with Francesco II.

The agreement stipulates that the new kingdom of Naples will be a free constitutional monarchy, and the king only retains limited powers such as the right to declare war, the right to make peace, the right not to pay taxes, and the royal annuity.

Francesco became one of the least powerful kings in Europe.

But there is no way, the power of the left is not much weaker than that of the right. If you want to forcibly retain too much power, you may have to face the future of two Naples.

And the division of the country is obviously not what the king wants to see, and even no one under him agrees.