Military is always the basis of diplomacy.

If Britain first recognizes the Chinese Empire and Song Biao as the Emperor of China, curbs Japan, avoids a Sino-Japanese war, and follows the talks between Song Biao and Zhu Erdian to initiate the establishment of friendly relations between China and Britain, then Britain will surely be able to

Gaining huge benefits from China's development, Song Biao will also give the UK more benefits.

However, Britain insisted on supporting Japan to go to war, trying to push China back into a situation of ignorance, backwardness and division, and continued to maintain the policy of using Japan to contain China. As China bravely and quickly defeated the Japanese army, the relationship between China and Britain really

Very embarrassing.

What should Britain do?

This question is really difficult to answer. It is no longer possible to maintain various privileges in the past. China has proven that it has stood up. Although China is not strong enough to at least defend its own navy, but if China and Britain are at odds,

Does Britain still have the guts to send its army to fight China?

Which British Prime Minister would dare to take such a risk.

…

Back in Tongzhou, Song Biao took a temporary vacation and was not in a hurry to deal with official duties. Besides, as the emperor of the empire, there were not many official duties that he really needed to handle personally.

In the past few days, he has been staying in the Xihai Pagoda Garden to accompany his family and spend his time at home. He only occasionally summoned the imperialists to discuss the specific time for his accession to the throne, which was roughly in mid-July, after the Sino-Japanese Armistice Treaty.

, before the first anniversary of the founding of the empire.

After a few days of short rest, in the afternoon, Song Biao summoned Zhang Kangren and Rong Xingqiao to his mansion to pay the bills. The battle was won, but the compensation would definitely not be earned. Japan is a very cunning country.

and the nation, not recognizing the defeat means that there is no provision for war compensation. The so-called not irritating the people is just their cover-up.

South Korea's financial base is not enough to support a huge compensation payment.

It doesn't matter, Song Biao also has to think in the long term. He knows very well that there will be a real larger-scale war between China and Japan. Reparations are definitely something that cannot be avoided. Sooner or later, he will make Japan, a rogue nation,

Pay a real heavy price.

Without appropriate reparations, huge military expenditures will have to be swallowed by themselves.

Zhang Kangren and Rong Xingqiao came together. When they came, Song Biao was reading the recent editorials of "Central Daily News" and "Northeast Daily News". He has been supervising the war in Korea and has limited time and limited energy every day.

I haven't read a newspaper for a long time, and a lot of domestic information is condensed before being presented to him.

After finally having some free time, Song Biao regarded reading newspapers as a way to familiarize himself with domestic affairs, especially the editorials of the "Central Daily News", which he had not paid attention to for a long time.

After Zhang Kangren and Rong Xingqiao entered the study and bowed and saluted, Song Biao continued to read the newspaper, briefly browsing the editorials and major news on May 3, before he asked the two to sit down and talk to them.

He smiled and said: "Both of you are the gods of wealth. The great victory in the Korean War was due to both of you."

Zhang Kangren was overjoyed and replied: "Your Majesty is very complimentary. I just fulfilled my duty."

Rong Xingqiao was also very happy.

Since the First Opium War, the Sino-Japanese War of 1911 was the first great victory for the Chinese people over foreign enemies. It was a great achievement celebrated by the whole country. If I can have even the slightest credit for this, it will all be left in my name.

What a great achievement in history.

Without waiting for Song Biao to ask about military expenditures and government financial expenditures, Zhang Kangren respectfully handed over the latest financial reports from the Ministry of Finance and the Central Imperial Bank.

Song Biao took the report and asked Zhang Kangren directly before opening it, "What is the general military expenditure? Have you calculated it?"

Zhang Kangren replied: "From the beginning of preparations for war with Japan in August last year until this month, the total expenditure dedicated to this war was 143 million silver dollars. This does not include ammunition consumption, because most of the ammunition is in stock.

Materials, the part produced in the past six months only accounts for 14.”

Song Biao nodded slightly, then opened the report and took a rough look. While reading, he emphasized to Zhang Kangren: "Ammunition consumption is another account. Before I returned to China, I asked the frontline headquarters to count the total ammunition consumed in ten days.

The amount of ammunition was 7.85 million rounds, and a total of 450,000 rounds were used including mortars.

Artillery shells, if we keep fighting like this, the Northeastern Army will run out of ammunition and food after two more months of fighting. But our victory is very fast. When we arrived in Pyongyang, we counted the captured Japanese military supplies. In total, we didn't eat a lot of food.

Damn, the Japanese army’s more than 600 artillery pieces and more than 2,000 heavy machine guns are worth a lot of money.”

After saying this, he continued to read the report carefully. The actual total expenditure of the entire civil war in Sichuan was only 40 million silver dollars, which was only a fraction of the Sino-Japanese War of 1911. One of the most important problems was the number of people mobilized.

difference.

After ten days of fighting at the front, more than two million migrant workers were recruited from the rear. The monthly expenses were not a small amount.

The Provisional Cabinet Government will definitely not be able to spend so much money. It basically relies on the issuance of government bonds. The main purchaser of government bonds is the Central Imperial Bank. The central bank borrows money from the Far East Bank and foreign banks to purchase silver and issues silver dollar bonds based on the silver.

, and then used 120 million silver yuan bonds to purchase national bonds specially used for the war.

This is a formal national government fiscal operation rule. While it is institutionalized and formalized, the government's fiscal deficit is also very alarming.

Having said that, isn’t Little Japan like this?

Both sides borrowed money to fight the war.

As a constitutional monarch, the easiest thing about Song Biao was that he didn't have to worry about the government's fiscal deficit. That was Tang Shaoyi's responsibility. He only focused on how to spend money to ensure victory in the war.

After roughly reading the report, Song Biao continued to ask Zhang Kangren: "What is the current situation of the central bank?"

Zhang Kangren said: "The situation at the Central Bank is not bad. Branches in all major provinces have been established. The main task now is to recycle the old coins in each province. Now the direct use of silver has been banned nationwide, and the currency in circulation can only be the central currency. Kanto

will continue to allow the passage of silver yuan and silver yuan coupons, which will further promote the work of silver yuan and silver yuan coupons across the country.

It is very advantageous. The previous dynasty was a mixed standard system of silver and copper. The main currency in circulation in the country was actually copper coins and newly minted copper rounds, and the quantity was amazing. After the unified change to the silver standard, the pressure on silver borne by the central bank was very high. If it continues

According to the current scale, silver will continue to be purchased from the international market. According to China's economic aggregate, the price of silver will at least increase.

20%. If international capital intervenes in the speculation, it may be higher. Therefore, after discussing with the Prime Minister, I considered adopting a gold and silver mixed standard as soon as possible to share the pressure on silver. The new issuance of Imperial Bank Gold Yuan Notes will use gold and foreign exchange as reserves.

The gold content per round is 0.7535 grams, and the silver round bonds are purchased according to the gold and silver exchange rate in the international market.

Calculated using a floating exchange rate, but on the whole, the market values ​​of gold yuan bonds and silver yuan are basically equal in circulation. Every 100 copper yuan continues to be exchanged for one silver dollar, and a fixed exchange rate is implemented. Gold yuan bonds are mainly used in foreign trade and economic transactions, and silver yuan is used for domestic settlement.

Domestic large-scale transactions can also be settled using gold yuan bonds, thereby reducing domestic currency demand for silver."

There are no minor issues with currency.

After Song Biao thought about it carefully, he said to Zhang Kangren: "The confrontation between Britain and Germany is becoming more and more intense, and the military expenditures of both sides are increasing extremely fast. I estimate that it will be as short as five or six years and as long as seven or eight years. Most of Britain and Germany will be

There is a high probability of a war. Once a war breaks out, it will be a worldwide European war. If there is a war, how do you think the international and domestic financial markets will fluctuate?"

Zhang Kangren thought carefully for a moment and replied: "The international gold price will increase, and silver will soar accordingly, because international gold assets are limited, while silver assets are relatively abundant. When it is difficult to purchase gold,

International capital will inevitably flow to silver on a large scale. Once the price of silver soars, the domestic currency exchange rate will fluctuate significantly, causing domestic prices to skyrocket.

If this is really the case, it is best for the country to speed up the transition to the gold standard, try every means to increase gold reserves, and issue a large number of gold yuan bonds. Once the exchange rates of gold yuan bonds and silver yuan bonds fluctuate significantly, then directly abandon the silver standard and implement the gold standard system.

In order to avoid shocks. If this is done, the international silver price will fall, forcing the exchange prices of gold yuan bonds and silver yuan bonds to temporarily stabilize."

Song Biao is not an expert in this field. He relies more on Zhang Kangren's judgment to decide his own countermeasures.

Just as Song Biao was thinking further, Rong Xingqiao said: "Your Majesty, I believe that the central government should introduce policies to forcibly control gold and silver precious metals, purchase precious metals with gold and silver certificates, and centrally hold gold and most of the silver reserves.

If the price of silver is high, sell it; if the price of silver is low, buy it, and the price of silver dollar bonds will continue to be stable for a long period of time."

Song Biao nodded slightly.

Although such a policy is too tough, it is actually the only way to protect the stability of the value of the country and national assets. Otherwise, no matter whether the silver price rises or falls too much, it will cause severe damage to the Chinese economy.

In the long run, the only solution to address the symptoms and root causes is to switch to a gold-limited exchange standard as soon as possible.

The so-called limited exchange gold standard is based on the gold standard, restricting the exchange of gold yuan notes and gold. Private individuals cannot hold gold. Only foreign businessmen and foreign governments can use gold yuan notes to exchange for gold from the Central Bank of China, and there is an amount limit. This greatly reduces the national

The loss of gold reserves, which are mainly used in the field of foreign trade settlement.

It's just that China's economy is too large and it lacks sufficient gold reserves even if it implements a gold standard system.

Song Biao thought about it for a long time. At this time, he had to start to deal with the impact of World War I from all aspects. Not only to ensure that the country took advantage of the opportunity to benefit from World War I, but also to ensure the development of national assets and national economy.

Stablize.

Only in this way can China take advantage of the First World War to develop.

Because of his lack of professionalism in the financial field, Song Biao thought for a while and said to Zhang Kangren: "The possibility of a full-scale European war between Britain and Germany in the next five years is at least 50%. Therefore, the central bank and the Ministry of Finance

We must formulate absolutely reliable countermeasures and prepare in advance. As the saying goes, you are not afraid of ten thousand.

Just in case. As for the control of precious metals, gold must be controlled nationwide and can only be held by the state, while silver should be concentrated in government reserves as much as possible. If we want the whole country to accept banknotes in a short time,

That's impossible. The circulation volume of silver coins must not be small, so we need to think of more ways to do this."

Zhang Kangren nodded and said: "Your Majesty, please rest assured that I will do my best and find ways to deal with these matters."

Song Biao nodded slightly, and continued to ask Rong Xingqiao: "How is the situation in the Far East?"

Rong Xingqiao said: "Report to the Emperor. The situation on our side is not bad. The cost of this war is less than expected. The time is also much shorter, and it has almost no significant impact on the domestic economy and the import and export trade of the Far East Commercial Bank.

The government's raw silk tax has been greatly reduced this year. Domestic tussah silk exports have reached a new high. According to the current trend, it is expected to exceed 4,000 tons throughout the year. Mulberry silk exports are also stronger than in previous years.

It can roughly return to the scale of 3,000 tons. Next year, the recovery rate of mulberry silk exports will be even greater. Last year’s exports of soybeans, sugar and coal were also very smooth. So far, the Far East Bank has nearly six

Fifteen million pounds of foreign exchange reserves are just a lot to talk about, but once the 175 industrial plans of the central government’s first and second five-year plans are launched, this amount of money will be far from enough.”

Song Biao snorted and encouraged: "The 175 plan is related to the great rejuvenation of the entire nation. It is normal for the investment scale to be relatively large. The Far East must fully support it, and it will not be easy for the cabinet government. If the country does not

If they don’t support it, it will be even more difficult for them to go abroad to find assistance.”

Rong Xingqiao said: "Your Majesty, the cabinet government is indeed not easy."

The 175 industrial plans they are talking about are an important part of the first and second five-year plans of the cabinet government. Although they have not been officially announced yet, they have actually started to process them since the end of last year. The so-called "175 industrial plans" were originally proposed by Song Biao in Northeast China.

The 150 large-scale industrial plan proposed during the New Deal period is to build 150 large-scale factories, industrial mines and

The new enterprise has completely established China's chemical industry, fertilizer, energy, steel, shipbuilding, metallurgy, electricity, communications, automobiles, textiles, machinery, machine tools, power, hardware, food, glass, cement, ceramics and other industrial systems, with 150

50 large enterprises drive the development of the entire industry, 50 focus on the supply of basic raw materials, 50 are light industry, and 50 are heavy industry.

The Northeast had a weak foundation at that time. It didn't even have a match factory at first, so it certainly couldn't create so many new industries.
To be continued...