Chapter 106: The Debts of the Big Shot
Vienna.
Prime Minister Felix said with a worried expression, “Your Highness, the Hungarian rebellion has now ended. However, there is a portion of the nobility who did not participate in the rebellion but lost their land during the conflict.
If we follow the previously enacted ‘Land Redemption Act,’ the Austrian government would be required to pay a total of 2.37 billion shields.”
(1 shield = 11.69 grams of silver)
“Why is it so much?” Franz asked in surprise.
You see, after this rebellion, nearly seven tiers of nobility in Hungary have been affected, including those who had already settled for a modest lifestyle and those who were stripped of their titles due to their involvement in the rebellion.
Felix explained, “Your Highness, several major noble families in Hungary did not participate in the rebellion, and nearly half of this redemption payment is meant for them.
In addition, there are some progressive nobles within the country who are willing to give up their land, and they also require us to pay redemption money.
Furthermore, in the Italian Region, there are some nobles loyal to us who have lost their land during the turmoil.
When you add up all these various factors, our preliminary estimate for the land redemption payment is approximately 2.37 billion shields. If more people continue to relinquish their land, this number could increase.”
Franz rubbed his forehead. To encourage the nobility to relinquish their land, this redemption payment had been assessed at market value, equivalent to 550 million taels of silver.
This sum of money was clearly not something the Austrian Government can produce in one go, despite the assets they have amassed through confiscations.
Since these non-liquid assets cannot be easily converted into cash in the short term, the Austrian government was financially constrained.
According to the ‘Land Redemption Act’, the land redemption fees paid by farmers are collected by the government, and the government is responsible for directly compensating the nobles who relinquish their land.
This enormous debt has become the responsibility of the Austrian Government. Franz cannot pay off this massive debt all at once, nor can he default on it, as it would damage the government’s credibility.
Franz asked with concern, “How much land redemption fees can we collect annually?”
Prime Minister Felix pondered and replied, “Approximately 180 million shields.”
This 180 million shields doesn’t come solely from these lands, but also includes a substantial amount of land seized by the government and the lands of extinct noble families.
If it were only these lands, with a redemption fee rate of 30 percent of the output, the maximum would be around 45 million shields.
After calculating, Franz reluctantly realized that farming was not such a good venture. Even if he didn’t consider the cost of capital and time, it would still take over ten or twenty years to break even.
The land redemption money collected by the government was likely insufficient to cover the interest costs of the capital.
Franz thought for a moment and said, “Let's do it in installments. Explain to the nobles, let them understand our difficulties. For the enlightened nobles who voluntarily give up their land within the country, pay them half of the redemption money upfront, and the remaining amount can be paid in installments over twenty years.
For the major noble families in Hungary, inform them that the minor infractions during this rebellion will not be pursued by the government, but as a punishment, their land redemption payment will be extended to be paid off over forty years.
For the others with minor issues, just give them a warning and extend their redemption payment period. For those who fully cooperate by voluntarily giving up their land, we can stick to the original plan!”
Franz finally experienced what it feels like to be a big shot who owed money.
After the revolution, the interest groups in Austria have also undergone a reshuffle. These nobles who were forcibly bought out of their land naturally belong to the losers.
The money was in the hands of the Austrian government, while land was in the hands of the farmers. They basically have no choice.
Before this, the Austrian government feared them because every large aristocratic family had a large amount of land, serfs, and a large number of small and medium-sized aristocrats dependent on them and could arm themselves with several thousand or even tens of thousands of troops at any time.
Now, this situation has changed, the serfs have gained their freedom and are no longer under their control, and the middle and small nobles who were dependent on them have suffered heavy losses.
A tiger without teeth only has its fierceness left. The reason why they were not completely eliminated was because Franz was also part of the established interests and was unwilling to disrupt the established norms.
“Yes, Your Highness,” Prime Minister Felix replied.
On the issue of cracking down on local powerful factions, the Austrian government and Franz were on the same page.
The so-called installment payment did not include any interest at all, and was divided into forty years of payment which, in fact, was not even enough for the interest.
Even though it was installment payments, when exactly they would receive the money remained uncertain. As long as the payments were completed within the promised timeframe, it wouldn't be considered a breach of contract.
The specific situation would depend on whether these nobles were wise or not. If they were willing to cooperate with the government’s actions, then everything would proceed smoothly, and the Austrian government would repay them as soon as possible.
However, if they continued to resist the government, it was doubtful whether they would ever see that money in their lifetime.
Not everyone was as optimistic. Metternich, with a furrowed brow, hesitated for a while before saying, “Your Highness, so many nobles suddenly losing their land and source of income, it won’t be easy for them to transition. If we can't find a way out for them, it might become a social problem in the future.”
This was a practical issue. It’s not possible to turn all these nobles into capitalists, and even in business, they might incur losses. Blindly transitioning them won’t work; most of them would likely suffer significant financial setbacks.
Don’t expect these bankrupt nobles to quietly become workers and work in factories.
A more likely scenario is that after bankruptcy, they might join the revolutionary forces, attempting to disrupt the social order and advocate for a redistribution of wealth.
Minister of Education Count Leo considered and said, “Our education department can hire some nobles as language teachers. The vast majority of them are qualified, but this will require an increase in salary and benefits!”
It was not unusual for the same position to have different salaries and benefits for nobles and non-nobles. This was a common practice on the European continent.
“This is just a drop in the bucket. Nobles without ambitions might accept teaching positions, but the majority of them wouldn’t give up their pride to become rural teachers,” Felix shook his head.
Archduke Louis proposed, “How about we establish colonies and let them colonize overseas, so they don't cause trouble domestically?”
During the Metternich era, Austria hadn’t ventured into overseas colonialism, not because it lacked the capacity. As one of the top four nations globally, Austria could easily acquire a colony abroad if the government unleashed its potential.
Seeing Britain and France expanding their empires overseas, even smaller nations like the Netherlands and Portugal had colonies. How could the nobility within Austria not envy this prospect?
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