When the Saintess Arrives, No King Exist-Chapter 637 - 598: Sugar Refining Workshop and Industrial Bonds

When Leonardo was shocked by the description in Lupher's letter, Lupher had not yet arrived at the Royal Court Barracks, and the description of the Rotating Holy Machine was heard from Armand.

After the Constitutional Conference ended, Lupher and Abazi's group followed Catherine to Rapids City.

His Majesty Saint Sun did not return; instead, he went with Jeanne, Moliat, and others to his hometown in Shangruifo County to handle an important matter.

After a brief stay in Rapids City, Catherine stayed behind to deal with industrial bonds issues, asking Armand to lead the three to visit Joan of Arc Castle.

The first stop for Armand and his group was the industrial zone on the outskirts of Joan of Arc Castle.

In the industrial zone on the east bank of the Ibe River, wooden pulley cranes could be seen everywhere, with laborers wielding pickaxes, gasping for breath in the extensive trench foundations.

The carriage with a canopy navigated the mud, stopping soon beside an old monastery estate.

Surrounding the square monastery buildings were five sugar plants under construction.

Due to the larger number and different nature and design of the new sugar plants, Horn specially named them "workshops" to distinguish them from previous small factories.

These workshop buildings were based on the classical revival concept proposed by the Deputy Mayor of Saint's Town, Vite, designed in detail by his grandfather Fante, and constructed under Rocker, who almost followed Horn to Daze Village.

Initially, it wasn't supposed to be his responsibility, but to compensate him and cover up his abuse of power to promote his grandson, Fante handed the project over to him.

It must be said, Rocker might not be good at design, but he indeed has a reliable working attitude.

The sugar plant in sight was built with red bricks and mortar, with wooden beams and sloping tiles on the roof, covering an area of about 500 square meters and using 80,000 bricks.

"This workshop, including the copper pots for sugar boiling and stone pots for stirring crystallization, plus construction costs, approximately cost 480-550 gold pounds." Harbin stood beside Armand, introducing the building unceasingly, "Please see, here is the cooling crystallization area; the processed sugar water will crystallize here and turn into white sugar. Look at these ventilation windows, how spacious they are."

Following Lupher, Abazi gazed despondently at the sugar plant before him.

This sugar plant was different from their family's wooden shed, using a monastery-style gallery design.

From the entrance to the exit were the raw material storage room, refining purification room, cooling crystallization room, and a finished product warehouse at the exit.

Whenever the laborers completed a process, the products were directly sent to the next processing room, unlike the small factories where masters and apprentices completed everything.

Five sugar plants were like a fortress group guarding the large monastery in the center; according to Harbin's introduction, these white sugars would be packed and sorted in the monastery, then transported by carriage to the nearby transshipment dock.

This transshipment dock could handle 50-100 tons of goods daily.

For current sugar and grain transport, this throughput was quite adequate, but Abazi saw strong ambition from behind.

Harbin, carrying debt bond introduction documents, presented white sugar on porcelain plates:

"I'm not deceiving anyone; the efficiency in the first year is relatively low, possibly yielding only 200-plus gold pounds in revenue, but two years should be enough to break even, three years to earn profit, and four years to double it!

So, our Meigedi industrial bonds offer a super high interest rate of 10% for five years, enough to offset the risk.

I'm also a businessman; I know business is difficult to run. A 1 Dinar business to profit 2 Dinars is easy, but profiting 10 gold pounds out of 100 gold pounds is challenging, especially consistently over five years.

"Industrial bonds?" Abazi repeated the unfamiliar term, clearly new and seemingly incorporating the artisan prefix and bond suffix.

"Yes, it's like IOUs; you lend us money, and I will repay you when we earn profit."

"Shares?" Abazi's eyes instantly lit up.

In the empire, the idea of joint-stock caravans was not new: several merchants pooled money to hire ships for business and divided profits according to proportions.

The autonomous city of White Sandy proposed the concept of shares, adding annual dividends.

Thereafter, Meigedi Commerce Association's reform allowed shares to circulate in the Rapids City exchange, forming stocks.

The stock trend had gradually spread in the Falan Kingdom and Norn Kingdom in recent years, so Abazi knew about the concept of shares.

Horn used alchemy technology, equating to publicly engaging in high-tech with the empire's definition of "black industry."

The new nobility neither permitted alchemical policies nor possessed black sugar purification technology, and Horn found the royal family to act as a bridge, leaving them anxious but helpless.

However, if opportunity for shares in these industries emerged, perhaps the lost profits could be recovered.

Harbin shook his head: "No, no, no, for industrial bonds, regardless of profits or losses, we pay both principal and interest; if it's too unprofitable to operate, usually there are three scenarios: debt-to-equity exchange, auction, or debt restructuring.

If debts convert to equity, it means turning the money you spent on purchasing industrial bonds into shares."

To finance the enormous military expenditure, Horn played with the financial tool of bonds ingeniously, progressing so swiftly that Abazi was still unfamiliar with the concept.

Yet through Harbin's explanation, Abazi gradually comprehended.

Unlike shares, bonds distribute dividends irrespective of profits or losses, meaning they have priority for repayment. Although it loses the benefits from capital gains, it carries a lower risk.

Moreover, the technology for refining brown sugar is exclusive to both policy and technology, with the Royal Falan Trading Company as a strong backing. They are an independent force within the Leia Kingdom, untouched by the new Falan nobility.

This sugar trade is 100% profitable, not only profitable but significantly so.

Although it doesn't have the high returns of direct equity, it's better than earning nothing, and it's stable.

"In fact, you might consider becoming our brokerage in the Falan Kingdom, we can offer you a 0.5% commission," Armand flashed a hint of coldness and cunning in his eyes. "I believe those old nobles will certainly love bonds."

Patriarch Abazi's Blue Ocean Market for sugar trade hadn't yet reacted, but Venice's face twitched sharply.

His family mainly profits from overseas grain trade and futures, he understands it too well.

The landed nobility are old money families. Now, with the massive influx of precious metals and cheap grain from the Blood and Flesh Royal Court, prices are soaring, and their money is slowly devaluing.

Some nobility have enclosed land to raise sheep, shifted to grow cash crops, or invested in commerce, quickly transforming into today's new Falan nobility, the robed nobles.

The rest, either lacking conditions, unable to lower their dignity, or having failed to transform, are extremely anxious about the devaluation of their land and assets. These people are the sword-holding nobles.

Despite bonds having low returns, they are low-risk and stable, perfectly aligning with the conservative mindset of the sword-holding nobles. If they can be traded, they would be an ace.

If this business is done well, its profits are no less than sugar trade; the only issue is national credit and long-term continuity.

What if the Leia Kingdom pushes them out in the future, wouldn't that money be lost?

"Do you have three-year industrial bonds?"

"Three-year ones, huh, the interest rate might not even reach 7%."

"A lower interest rate is fine, the question is whether the principal and interest can be paid on time?"

"You can rest assured about that; we will sign a multilateral net settlement agreement with the Royal Falan Trading Company."

"Is it possible not to go through the Royal Falan Trading Company?"

Watching the two engage in conversation with Harbin, Armand smiled lightly and said, "You might write a letter home, see if you can form a commerce association yourselves. We can contract to you by region, whether it's white sugar or bonds."

"What are you implying?" Lupher unexpectedly asked, pouting.

"Ah? I didn't mean that..."

"If not that, then what do you mean?"

Armand suddenly felt a headache; initially, he shouldn't have casually joked about letting Lupher go see the granary. Now, this young girl is at odds with him everywhere.

However, for the sake of the Saint's Grandson's grand plan for industrialization, he could only continue to greet with a smile.

They need these new Falan nobility, or rather, they need the money in the hands of the new nobility.

To achieve industrialization requires large capital investment, Catherine estimated at the court meeting that all the metal currency in the Thousand River Valley adds up to no more than ten tons of gold.

With an income level of less than 1 gold pound per capita, it's difficult to sustain oneself; where is the extra money for industrial investment?

With the capital of Thousand River Valley alone, industrialization is absolutely impossible to complete; either they have to exploit the farmers to the extreme or accept foreign capital investment.

Horn doesn't like earning the money of the poor; whoever has money, he'll earn theirs.

The Falan people have money, he wants to earn from the Falan prominent families, especially those sword-holding nobles.

If they can't pay back, they can still follow the Holy Father's will to launch the Holy War of Exorcism, zeroing out foreign debts through debt restructuring.

This bond strategy not only applies to the Falan people but also to the nobility within Thousand River Valley itself.

The Empire forcibly fixated medieval production relations, repressing productivity, thereby forcibly inhibiting the flow and pursuit of profit by capital.

Then don't blame Horn for exploiting the policy advantages of Thousand River Valley to open a small breach in this monetary dam.

Right now, it's just a trickle, but in the future, once he can defeat the Leia Kingdom and truly establish a nation in the Thousand River Valley, the national credibility built will be enough to ensure stable payment ability.

By then, the stifled imperial capital will come rolling in and completely break down the economic dam erected by the Empire.

After placating Lupher with "I'll play a few rounds of spring gun with you in the afternoon," Armand wiped the sweat from his forehead with a handkerchief: "The sugar factory is generally like this; all around are workshop districts. Would you like to take a tour?"

"We might have to..."

"It's not even noon yet; going back now is too early. Why don't you accompany us for a look around?"

Amid Venice and Abazi's faces mixed with jealousy, sorrow, and despair, Lupher grabbed the conversation and said with a grin to Armand.