Chapter 411: Naval Construction Government Bonds

Because Gao Da did not participate in this cabinet meeting, the final decision still rested with the Prime Minister, Baron Orcajo.

Although Prime Minister Angelo Orcajo did not come from a military background, he was a true confidant of Gao Da and naturally understood Gao Da's thoughts.

Although it was not explicitly stated, many high-ranking officials within Spain knew that a war between Spain and the United Kingdom was sooner or later inevitable.

This was because His Majesty the great King of Spain had mentioned the matter of recovering Gibraltar many times, and the current Gibraltar was in the hands of the British.

To retake Gibraltar from the hands of the British, war was inevitable. The strength of the British lay in their navy, which was one of the reasons why the naval department proposed this ten-year shipbuilding plan: specifically to counter the threat from the United Kingdom in terms of maritime power.

Since Prime Minister Angelo Orcajo understood Gao Da's ambition, he naturally understood that the shipbuilding plan proposed by the military had the support of His Majesty the King.

In any case, this naval shipbuilding plan would not have a major impact on Spain's industrial development, and for Prime Minister Orcajo, there was no reason to block the navy's warship construction plan.

It could be seen that the Ministry of Defense had made quite sufficient preparations for this naval construction plan. They not only formulated a seemingly reasonable warship construction plan but also found sufficient reasons for Spain's warship construction.

When the inquiries from the cabinet ministers of other departments were all answered by the Minister of Defense, Qiaodi, the cabinet meeting entered a brief discussion phase.

The group spent a long time without reaching a result, and Prime Minister Orcajo understood that it was time for him to express his stance.

The Prime Minister did not need to express his stance at the very beginning of the meeting, as this would only destroy the atmosphere of the cabinet meeting and force the cabinet ministers to cater to his views.

Prime Minister Orcajo had been promoted step by step; although becoming Prime Minister was somewhat sudden, he was now in his second term, and he was quite clear about certain political maneuvers.

Only when the cabinet meeting reached a stalemate was it time for the Prime Minister to express his stance. After all, as the initiator and moderator of the meeting, all final discussions of the meeting had to be decided by the Prime Minister.

"Gentlemen, I believe that vigorously developing the navy at this time is very necessary." Prime Minister Orcajo first expressed his stance, and then provided a detailed explanation:

"We possess colonies across the globe, and a powerful navy can ensure the security of our homeland and our colonies. Although our navy currently ranks third in the world, we still have a certain gap with the British and French navies, and Germany, Russia, and even Italy are starting to catch up to us.

If we do not attach importance to naval development, perhaps we will soon become the sixth-ranked naval power in the world.

The annual warship construction cost of 150 million pesetas is not an overly large expenditure for the government's finances, and it is completely acceptable to us.

In view of our good financial situation, I believe there is no need to compress the financial budgets of various departments; we can fully issue naval construction government bonds to the public and strive for the support of the Spanish people.

If we can successfully complete this naval construction plan without affecting the financial budgets of various departments, this will be great news for us.

Our goal is not to be third in the world; our goal is to surpass the United Kingdom, develop our navy into the world's number one, and wash away the shame of having been defeated by the British in the past."

Mentioning the conflicts between the United Kingdom and other countries, the first to be mentioned were the long-standing Anglo-French conflict and the currently intense Anglo-Russian conflict.

But what many people did not know was that there was also a long-standing hatred between Spain and the United Kingdom.

The symbolic event of the decline of Spanish maritime power was precisely the British Royal Fleet defeating the Spanish Armada.

And the British took advantage of the War of the Spanish Succession to occupy Gibraltar, which also led to hundreds of years of grievances and disputes between the two countries surrounding Gibraltar.

In the four years from 1779 to 1783, Spain launched the Great Siege of Gibraltar. Unfortunately, Spain tried every possible way at the time but failed to retake Gibraltar, yet this only intensified the hatred between Spain and the United Kingdom.

After this, the United Kingdom vigorously supported Portugal against Spain and prevented Spain from colonizing Morocco in the 19th century.

Although the hatred between the United Kingdom and Spain was not as intense as the Anglo-French hatred, for most Spaniards, retaking Gibraltar and washing away the shame of the Armada being defeated by the British Navy had always been their long-cherished wish and goal.

All private interests must give way to national interests. For Spain, recovering Gibraltar and defeating the British in a naval battle was certainly more important than the financial budgets of various departments.

Not to mention that Prime Minister Orcajo's plan did not sacrifice the financial budgets of any department, which could be considered a win-win for both the various departments of Spain and the naval department.

Although issuing government bonds would require the Spanish government to shoulder a debt of hundreds of millions or even over a billion pesetas, for the financial situation of the Spanish government, this debt could be paid off in just a few years.

After all, last year the Spanish government's total annual fiscal revenue reached a new high of 1. 678 billion pesetas; the total cost of building warships over the next ten years was actually equivalent to only one year of Spain's total fiscal revenue.

Moreover, Spain's total annual fiscal revenue was constantly growing, and for the government, carrying a certain amount of debt was not a bad thing.

After all, having sufficient debt also meant that the government had sufficient funds for national development; as long as the economy developed, repaying these debts would be very easy.

Thirty years ago, Spain only carried a debt of several hundred million pesetas, yet it left Gao Da and the Spanish government of that time gasping for air.

But for the current Spanish government, these debts could be paid off in even a single year if they were slightly frugal.

It was precisely because the Spanish government of that time raised sufficient funds for development that it effectively promoted reforms in various industries in Spain, allowing Spain's industry and economy to have a golden period of development.

If the Spanish government of that time had not obtained sufficient funds through borrowing, I am afraid that Spain's reforms and development would not have been so smooth.

With Prime Minister Angelo Orcajo's statement, the discussion of the cabinet meeting basically ended.

The Minister of Finance, Aoer Acosta, had no objections to this, because for Spain's finances, coming up with 1. billion pesetas for warship construction over ten years was indeed not a difficult task.

The cabinet government acted quite quickly.

Do not look at how fiercely they argued during the meeting; once the cabinet government issued a decision, the relevant decrees would be quickly issued to all levels of government and implemented throughout Spain in a short period of time.

In order not to squeeze the financial budgets of various departments, the cabinet government could only choose to issue naval construction government bonds to the public. The good news was that after more than thirty years of development, the per capita annual income of the Spanish people had achieved a huge increase.

Although it did not make everyone live a wealthy life, many families still had some savings.

Under these circumstances, the government issuing naval construction government bonds to the public could effectively raise a portion of private funds.

After all, government bonds were backed by national credibility; as long as the ministers of the cabinet government did not want their reputations to stink, they had to do everything possible to maintain the government's credibility and repay the government bonds purchased by the public in full within the specified time.

Come to think of it, this was the first time since Gao Da became the King of Spain that government bonds had been issued to the public.

This issuance of government bonds was quite lively; as soon as the government announced the news of issuing naval construction government bonds, it immediately attracted the attention of many people.

For most Spanish people, they were still willing to buy government bonds issued by the government. Although the interest rates on these government bonds were not as high as those offered by private banks, fortunately, they were backed by the government's credibility, and the public did not have to worry about bad debts.

Purchasing bonds issued by those private banks, some bonds did indeed have high interest rates. But these private banks had the risk of bankruptcy; unless they were bonds issued by Spain's two major official banks, the Spanish public was not very willing to buy bonds issued by private banks.