Chapter 249: Foreign Capital (Happy New Year!)

8: 0 AM, March 27, 1879, Barcelona Stock Exchange, Spain.

This was originally just an ordinary day, but at this moment, the Barcelona Stock Exchange was already packed with people.

The reason these investors arrived at the stock exchange early in the morning was naturally because the Spanish government had announced its brand-new Third Five-Year Development Plan yesterday.

Although the development plan announced by the government was not detailed, it did mention construction in the areas of industry and railways. The investors had long anticipated this; the reason they arrived at the stock exchange early in the morning was precisely to purchase shares in Spanish railway companies.

Unlike other European countries, Spain had not suffered from a particularly severe economic crisis, which also gave Spanish investors great confidence in the stock market.

With the emphasis placed on railway construction by Spain's two previous Five-Year Development Plans, several large-scale railway companies were born in Spain, the most famous of which were the Spanish National Railway Company and the Spanish Royal Railway Company.

These two railway companies with official backing became the main force of Spanish railway construction, and beneath them were a large number of privately-backed railway companies that also contributed their efforts to Spain's railway development.

Among these queuing crowds, many were those who had already tasted the sweetness in the previous Five-Year Development Plan. After the last Five-Year Development Plan was promulgated, the stock of Spanish railway companies rose with the tide, and those who bought the stocks also made a fortune.

Yet, the background of the last Five-Year Development Plan's promulgation was an economic crisis ravaging Europe, which caused many people to refrain from buying stocks out of fear of the economic crisis.

Now that the economic crisis had basically ended, accompanied by the Spanish government once again promulgating a Five-Year Development Plan, the investors could no longer sit still; they scrambled to buy railway company stocks, or at the very least, stocks in related industries, so that they could get a piece of the pie in the wave of the stock market.

Most of those queuing were ordinary people, but there were also many nobles and capitalists dressed in luxurious clothing.

Unfortunately, because the crowd had completely blocked the gates of the stock exchange, these nobles and capitalists were also forced to queue, as they could not get in at all.

"Damn it, why are there so many people today?" Amidst the massive, crowded throng, a middle-aged man in luxurious clothing stuck his head out of a carriage and cursed.

He was a noble and could arrive by carriage. But the problem was that the road at the entrance of the stock exchange was completely congested, and the carriage was instead trapped at this moment.

The noble master was unwilling to stay with the commoners, so after cursing to himself a few times, he shrank back into the carriage.

"There's no help for it. Yesterday the government promulgated the Five-Year Development Plan; these people are all like cats that have smelled fish, all thinking of eating a few bites of meat. It's just hard to say how many people here are the real fish," another man in luxurious clothing inside the carriage said with a smile. Although the crowd was dense, he was not anxious at this moment, and his mood seemed quite pleasant.

"Hmph! Only we nobles can make money in the stock market. These damn commoners cannot withstand even the slightest ripple; sooner or later, they will drown in the ocean of the stock market." The cursing noble also nodded and stopped complaining.

There were quite a few carriages trapped in the crowd, and those nobles or capitalists wearing luxurious clothing were not rare.

In fact, this was indeed the case. Most of those who could be trapped on the road were nobles with little status or power, perhaps even just a pathetic baron.

These people had no special privileges and, no matter how dissatisfied they were, they had to obediently queue with the commoners.

Those true power-holders, or rather those with some influence, had already entered the stock exchange before it opened and had been respectfully invited to the VIP trading rooms on the second floor.

Because the crowd was too dense, the Barcelona municipal government even deployed a large number of police to maintain order. As the second-largest city in Spain, Barcelona's security forces were still quite sufficient.

Having these police patrolling back and forth among the crowd could also prevent some violent incidents and crimes from occurring.

After all, the more people there were, the more chaotic the order would be. In this era without surveillance cameras, it was not strange to have theft and robbery during such crowded times.

Some people would even take advantage of the situation to grope others; as long as they weren't caught, there was basically no trouble.

With the deployment of a large number of police, it was indeed effective in avoiding the occurrence of the above events. Gao Da attached great importance to Spain's public security and order, which also led to the security departments imposing heavy penalties for illegal and criminal acts.

Even for relatively ordinary disturbances of public order in public places, one would be subject to fines of varying amounts, and sometimes even forced detention for a period of time.

Such laws might be a bit harsh, but they effectively reduced Spain's crime rate. In Madrid and Barcelona, the crime rate had been reduced to a range that the public could fully accept.

After about a few minutes, the gates of the stock exchange officially opened.

People did not swarm into the stock exchange because there were still many police at the entrance maintaining order. The scale of the stock exchange was not large, which resulted in only a portion of people being able to enter at a time, and they had to queue to enter in sequence.

Those who wanted to cut in line or force their way in had basically no possibility of entering the stock exchange once discovered by the police.

Looking at the line of police at the entrance, the people who were originally very anxious were still sensible and one after another stopped being anxious.

Under such circumstances, people consciously formed a long, queue-like line and then entered the stock exchange in turn.

Inside the stock exchange, giant blackboards were placed. These blackboards had some data from the stock exchange written on them; investors needed to clearly check the stock market data on the blackboards and then find a trader to register the transaction.

Unlike later generations, all transactions at the stock exchange at this time were done manually. This also resulted in stock trading being very troublesome and requiring more time than in later generations.

But in an era without electronic technology, manual labor was indeed the only solution. Fortunately, the Barcelona Stock Exchange had long anticipated today's grand occasion and had added extra personnel in advance, which effectively accelerated the speed at which people could buy stocks.

Inside the stock exchange, management personnel were registering the stocks issued by enterprises one by one. The most popular today were railway companies, followed by some factories and enterprises related to railways.

Especially railway companies, the degree of popularity was quite exaggerated. It could even be said that however many stocks the railway companies released, the investors could buy that many.

A small railway company under the Spanish royal family also went public today, issuing a total of 2 million shares, accounting for 30% of the total shares.

The issue price per share was 5 pesetas, and it planned to raise 10 million pesetas from the public.

While registering this news, the management personnel read it out loud. Besides the blackboards being able to announce news, the shouting of the management personnel was also the main way to convey information.

After all, there were no loudspeakers, and whether investors could hear key information depended on the volume of the management personnel's voices.

This listed railway company was indeed a small enterprise; the capital Gao Da invested in it was less than 5 million pesetas.

It must be admitted that industry in this era was indeed profitable. After contracting a few small railway projects, this railway company with an investment of no more than 5 million pesetas could successfully go public and raise over 10 million pesetas.

And the shares issued by the railway company only accounted for 30%, which also meant that as long as the stocks could be sold out, the total market value of this railway company, which originally only had an investment of 5 million pesetas, would exceed 33 million pesetas, a full 6. -fold increase.

And this was just the beginning. As long as the railway company's subsequent operations proceeded smoothly, accompanied by the railway company contracting more projects, the stocks issued by the company would also become increasingly valuable.

With the rise of the stock, the market value of the railway company could even cross the 50 million peseta threshold, instantly becoming a large-scale enterprise in Spain.

Completing this step only required contracting a few railway projects and going public on the stock exchange; this step was very simple for those capitalists and nobles, which was also the reason why the Spanish Stock Exchange strengthened its audits.

There was no help for it; if the audits were not strengthened, I am afraid the number of enterprises going public every day on Spain's two major stock exchanges would reach thousands or even tens of thousands.

Did Spain need so many enterprises? Of course, it did not.

Only those high-quality enterprises could be listed on the Spanish stock exchange; those shell companies would be weeded out by the strict audit system, which was also an important means to avoid Spain suffering from an economic crisis.

These shell companies had absolutely no resistance when facing an economic crisis. And the bankruptcy of a large number of companies would seriously affect the stock exchange; if the stock exchange collapsed directly, it would affect the entire country's economic operation.

The Spanish people clearly also knew that the enterprises listed on the stock exchange had been audited, so the announcement of each piece of news was accompanied by a rush of buying by a large number of investors, and the stocks of these newly listed enterprises were also constantly rising.

Although the royal family's listed railway company issued 2 million shares, in reality, only a little over 1 million were circulating on the stock exchange.

Long before the stocks were in circulation, those with real influence—that is, Spain's two major official banks and some securities companies established by power-holders—had already subscribed to a portion in advance.

They, of course, understood that this was the royal family's industry, and naturally understood that the royal family's industries did not have shell companies.

Investing in railway companies was a sure-win business because Spain would not abandon the policy of developing railways in the short term.

Although the Third Five-Year Development Plan did not have such aggressive requirements for railway mileage, the projects for railway maintenance and renovation were also not small, and Spanish railway companies would still be busy for the next five years.

Subscribing to stocks in advance was also a means of managing the stock price. If the circulation of stocks was too large, the market would become saturated.

Once the market was saturated, even if the stocks and the enterprise itself were of high quality, the stock price would collapse.

After all, if the market was saturated, the stocks in the hands of investors would not be able to be sold. If stocks could not be sold, the stock price would naturally fall.

As a newly listed railway company, appropriate maintenance of the stock price was very necessary. Only by ensuring that the stock market would not be saturated could the stock price maintain positive growth.

The two major official banks and some nobles' securities companies had all subscribed to the railway company's stocks in advance, which also meant that this railway company's stock price concerned everyone's earnings.

This money was, of course, not much to Gao Da, but it was still a lot for the nobles. Participating in this transaction were also those new-style nobles; because new-style nobles did not have much land in their hands, their income relied entirely on industry and finance.

This also made Gao Da attach great importance to this listing. If the stock of this railway company could rise with the tide, it also meant that these new-style nobles could follow along to eat some meat and make their family fortunes wealthy.

New-style nobles and old-style nobles were both Spanish nobles, but because the new-style nobles were personally granted by Gao Da, Gao Da was clearly closer to the new-style nobles.

Of course, this might also be because the new-style nobles posed no threat to Gao Da at all, and were instead a great help to Gao Da.

The old-style nobles had too deep a foundation in Spain, and sometimes they would not listen to Gao Da's orders. Compared to the less obedient old-style nobles, Gao Da trusted the obedient new-style nobles more, even if the power in their hands was not much.

The prerequisite for being a good ruler was to let those who followed him share a certain amount of benefits. Even if he ate the meat and others drank the soup, he had to let them be able to drink it.

This listing of the railway company was actually a gift Gao Da gave to a portion of the new-style nobles. These new-style nobles received the news in advance; as long as they bought the stocks of this railway company, they basically would not lose money.

Of course, even if they couldn't buy them, because some securities companies had already subscribed to the stocks in advance, the new-style nobles would eventually be able to get a share of the stocks.

For the old-style nobles, it might not be much, but for the new-style nobles, it would be a quite considerable income, which could make their lives more affluent and allow them to pursue more luxurious consumption methods.

After all, they were nobles; Gao Da did not want to let them live lives no different from commoners. The Spanish public had more ways to become new-style nobles, and new-style nobles were also a major means for Gao Da to attract Spaniards to pledge their loyalty to him.

If the lives of the new-style nobles were not very good, then the Spaniards would naturally not have much interest in becoming new-style nobles.

This also represented one thing, which was that the lives of the new-style nobles must be good, at least far widening the gap between them and the commoners.

After all, new-style nobles were also nobles; if nobles couldn't even afford some luxury goods, then could these people still be considered nobles?

This listing was also very important for the railway company itself. Going public could raise at least 10 million pesetas in capital, which could also ensure that the railway company would not lack project funds for a long time in the future.

As long as it could be ensured that railway companies with real strength obtained financing, Spain's railway development would not fall behind.

Even if a railway company went bankrupt due to poor management, the royal family and the Spanish government could both take over and provide a bottom line; in short, it would not affect Spain's railway plan.

Railway companies might still need to worry about the earnings brought by building railways, but for Gao Da and the Spanish government, the direct earnings brought by railways were instead not that important.

Even if building railways was a loss-making venture, Gao Da was willing to do it. Because railways would drive the development of other industries, and the tax revenue increased by the development of these industries also belonged to the potential benefits of railways.

Still the same saying: if you want to be rich, build roads first. Railways were, of course, a type of road, and they were quite important in this era.

Railway construction could also facilitate the Spanish army's arrival in major regions, which was also quite important for strengthening the country's stability.

Of course, there were also political benefits. This region had more developed railways, while that region had no railway coverage; wouldn't this make the public who could not enjoy the convenience of railways angry because of this?

Although it was impossible to treat everyone equally, at least it had to be ensured that some important cities could have railway access, which was also the reason why Spain was still continuously building railways.

If one only considered the demand for railways in Spain's large cities, in reality, the existing scale of railways was already completely sufficient for the use of the Spanish public.

The capitals of all major regions had already been connected by railways, and some relatively important cities were also within the coverage of railways. Such railway construction, if not the best, was definitely quite perfect.

It was precisely because the potential benefits brought by railway construction were too great that even if building and operating railways was a loss-making venture, many countries were willing to do it.

Even if operating a section of railway was constantly losing money, there would be countries willing to continuously allocate funds to keep the railway running.

Because Gao Da attached great importance to the development of the stock market, at about 4: 0 PM, the stock exchange submitted the development situation of the stock market to the Wang Gong.

Butler Luo Lun found Gao Da with a smile on his face, holding the stock market data of the two major stock exchanges, and reported the good news to Gao Da: "Your Majesty, the two railway companies we listed in Madrid and Barcelona have currently both achieved a growth of at least 30% or more in stock price.

Among them, the stock price of the railway company on the Madrid Stock Exchange rose by 36. %, and by the close of trading, the stock price per share had reached 13. 7 pesetas.

The stock price of the railway company listed on the Barcelona Stock Exchange rose by as much as 41. %, and before the close of trading, the stock price per share had reached 7. 6 pesetas."

Gao Da was stunned, feeling a bit surprised by the rise in stock prices.

The rise in the price of these newly issued stocks was inevitable, but the magnitude of the rise shouldn't have been this exaggerated.

After all, the issuance volume of the stocks was large; the small railway company in Barcelona alone issued 2 million shares with a total value of 10 million pesetas.

Although the actual circulating stocks were only about half, it was clearly impossible to be completely wiped out in such a short time.

Before the issued stocks were sold out, the stock price, logically speaking, should not have such an exaggerated increase. This also meant that it was very likely that the stocks issued by the railway company had already been sold out; did the investors in Barcelona really have such powerful purchasing power? Or was there the participation of other capital?

Spaniards could see the development potential of Spanish railway companies, and capital could certainly see it too.

Investing in railway companies was a business with ten thousand times the profit, and it was not strange to attract the participation of some foreign capital.

Judging by the ratio of the stock price increases for the two railway companies, there is a high probability of intervention by foreign capital.

"According to news from the Barcelona Jiaoyisuo, unidentified Frenchmen have purchased a large amount of stock," Steward Luo Lun said with a smile. "The entry of the French has caused our stock to sell out in a short period of time, and some investors are even paying a premium to buy shares, which has led to a significant increase in our stock price in a short time."

Hearing that there was French involvement, Yu Kaluo's doubts completely dissipated.

French capital is still very powerful, and with the economic cooperation between Spain and France, it is not strange that some French capital would be attracted to flow into Spain.

Coupled with the fact that Spain's third five-year development plan is a hot topic, it is not surprising that French capital is paying attention to Spanish railway companies.

Of course, this is a good thing for Yu Kaluo. The higher the stock price of the railway companies, the more profit Yu Kaluo can obtain. The new-style nobles and other enterprises that follow along to eat meat and drink soup will naturally be able to share in more of the benefits.

5400-word two-in-one chapter, please support!

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(End of this chapter)