Chapter 70: A Guaranteed Profitable Steel Mill

Although Gramme had been brought in, electrification could not rely on Gramme alone by any means.

Spain must possess sufficient mid-level talent reserves in electrification and internal combustion engines to drive the development of the Second Industrial Revolution in Spain.

Currently, Spain's most critical problem is the scarcity of mid-to-low-level talent, with illiterates accounting for the majority of the population.

Before cultivating Spain's own talent, the best approach is to continuously poach from various European countries.

However, before that, ensuring one's wallet has sufficient funds is the most important thing.

Time arrived at August 1870, four months having passed since the establishment of the Royal Union Bank.

Carlos finally turned his attention to his own purse, asking Steward Luo Lun about the bank's development.

Steward Luo Lun knew the bank's development by heart; upon hearing Carlos's inquiry, he hurriedly replied: "Your Majesty, after four months of development, our bank has currently become one of the largest banks in Spain.

We have already built branches in Toledo and Valladolid, and the bank in Madrid has also expanded to two locations.

Currently, our total number of depositors has exceeded 57, 00, with total savings of approximately 46. 2 million pesetas, and an average deposit of 809 pesetas per person.

The bank's next expansion plan is to build at least one branch in each regional capital such as Seville and Barcelona, becoming the largest bank in Spain."

Carlos nodded.

With the help of the nobles, the development of the Royal Union Bank was indeed very rapid.

There were already 57, 00 depositors; who would have thought this was a bank founded just four months ago?

Once the Royal Bank's branches open in the capital of every region, the number of depositors will see another major expansion.

However, the average deposit will certainly get lower and lower; after all, the income of most people in Spain is still relatively low.

The reason the current average deposit is still over 800 pesetas is that there are too many nobles and middle-class people depositing, which has raised the average deposit figure.

Once a large number of commoners begin to deposit in the Royal Bank, the income level of ordinary people will become clearly visible.

One point that makes the Royal Union Bank more attractive to Spaniards compared to other banks is the word "Royal" and the fact that it unites the entire noble class.

It concerns Carlos's own reputation, which is more convincing than those private banks.

Carlos himself also joined with several great nobles to give a promise of redemption at any time, and stated that as long as the royal family exists, the Royal Union Bank will not go bankrupt.

Bank bankruptcy has always been a topic that makes people turn pale at the mention of it. The public worries that the bank will go bankrupt, so they scramble to withdraw their deposits from the bank.

But such a run on the bank will instead cause a bank that had no problems to break out into a crisis, and conversely, it will have the possibility of bankruptcy.

After all, the way a bank operates is by collecting a large amount of deposits from depositors to form a large sum of capital, and then investing it in exchange for income.

This income will be used to pay the depositors' interest and the bank's operating costs, and what remains is the bank's profit.

This means that it is impossible for a bank to pay all depositors' deposits at the same time; when the deposits that need to be redeemed exceed the bank's existing funds, the bank will break out into a crisis.

How do the capitalists solve this?

By declaring bankruptcy.

This era does not have as many safeguards as later generations; after capitalists declare a bank bankrupt, most depositors basically cannot get their deposits back.

Only a small number of powerful nobles and politicians can get their funds back, and even get a larger share; this is the privilege of the upper class.

This is also the reason why it is said that the life of European commoners in this era was very miserable, because they could not escape the exploitation of capitalists at all, working like cattle and horses for a lifetime, only to end up dying young at thirty or forty.

"How is our steel mill doing currently?" Carlos continued to ask.

Currently, the two most profitable enterprises for Carlos are, first, the Royal Union Bank, and second, the integrated steel mill.

Finance and industry are absolutely the most profitable businesses in this era, and Carlos certainly would not ignore the income brought by industry.

"After integration, we have become the largest steel mill in Madrid, currently having 1, 53 workers, with an average weekly wage of about 3 pesetas," Luo Lun continued to answer.

Spain was not strong in industry to begin with, so after several small and medium-sized steel mills were integrated, it was not surprising that it became the largest steel mill in Madrid.

After all, the region where Spain focuses on developing industry is not Madrid; the real industrial base is in Seville.

"Average weekly wage of about 3 pesetas?" Carlos calculated silently in his heart.

A weekly wage of 3 pesetas, a monthly income of about 12 pesetas, and an annual income of over 144 pesetas.

Although there is still a distance compared to the wages of workers in other European countries, it is at least much higher than Spain's average annual income of 87 pesetas.

Moreover, Carlos's factory does not have to worry about wage deductions or anything; the daily working hours are only 12 hours, and there can be one day of vacation per month; this treatment is much better than in other countries.

"How is the policy of agricultural tax reduction being implemented? When will we be able to see results?" The average income being at the lowest level in Europe made Carlos very troubled, and he looked forward to some changes.

"It is expected that next year's average income will be able to increase to about 100 pesetas," Steward Luo Lun hurriedly replied: "Your Majesty, please rest assured, the agricultural tax reduction and the abolition of the tithe are effective, and the farmers' income will definitely increase.

This is the long-term exploitation of Spain by the Bourbon family, and it has nothing to do with Your Majesty. Your Majesty is the chosen one of destiny for Spain, and Spain will regain its former glory under Your Majesty's leadership."

Carlos smiled, not caring much about Steward Luo Lun's flattery.

Being the chosen one was a bit exaggerated, but Carlos was at least not one of those muddled monarchs; he knew that only by treating the people as human beings would the people support him.

"While increasing the average annual income, we must also increase the income of our employees," Carlos instructed: "Royal enterprises are the benchmark for all enterprises in Spain, and there must be no problems in this regard."

"I understand, Your Majesty." Steward Luo Lun nodded, signaling that he understood.

"How are the profits of our steel mill? How is the construction of the steel mill in Seville going?" Carlos asked.

"Your Majesty, our steel mill is expected to have an income of about 2 million pesetas this year, and maintaining a balance of payments is absolutely no problem.

Currently, about 1. million pesetas have been invested in the industrial base in Seville to build a new steel mill, which is expected to be put into production in the second half of next year. By then, our number of workers will exceed 2, 00, and the annual income will also increase to over 3 million pesetas," Steward Luo Lun replied.

In the end, Carlos had underestimated the power of industry to make money in this era.

Coupled with the fact that the income of Spanish workers was not high to begin with, and that Spain's infrastructure required a large amount of steel, the steel mill was absolutely a guaranteed profit in Spain in this era.

First update, asking for support!

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(End of chapter)