Holy Roman Empire - Chapter 132

Chapter 132: Chapter 19, Making a Fortune? Starting with Embezzlement**

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Franz was imbued with a sense of national responsibility, and to raise war funds for the Kingdom of Prussia, he, the Emperor himself, took the lead by donating one million shields and deposited it into the Austrian Royal Bank.

(1 shield ≈ 11.69 grams of silver)

Soon, nobility, businesspeople, and students from across Austria raced to make donations, except these funds were not handed directly to the Prussian Government but deposited into the Austrian Royal Bank.

Indeed, this Austrian Royal Bank was a recent concoction of Franz, and its primary business now was to collect donations from the public, while also overseeing the allocation of this money to the defense campaign in the Schleswig-Holstein dukedom.

The Prussian Army now moved unimpeded across the Jutland Peninsula, having crossed over the line that justified the use of the donations.

It mattered not what the Prussians thought to Franz, who was extremely pleased at present. The Royal Bank, with an initial capital of merely one million shields, had attracted nearly thirty million in deposits—no, in donations—in just one short month.

It was simply that the bank had issued receipts to those who donated, with the stipulation that all donations be used proportionally, and any unused amounts would be refunded afterwards.

To display his patriotic integrity, the Royal Bank even waived the most basic transaction fees, completely offering its services for free.

Since these were donations, naturally, there was no interest. Before this substantial sum was put to use, Franz had already acquired a significant amount of liquid funds on hand.

Holding a large amount of cash without employing it was criminal, so Franz quickly took out a loan for himself to invest in the construction of a comprehensive food enterprise and incidentally, to also acquire a considerable number of high-quality mines.

In those days, gold and silver could serve directly as currency, and gold and silver mines were naturally very valuable. Even for Franz, the Emperor, it was not easy to come by such assets.

In contrast, minerals like iron, coal, lead, zinc, manganese, and rare earths were much cheaper. The industrial revolution was ongoing, and even the most fundamental consumptions of coal and iron remained very limited. Many of the rarer minerals currently had no industrial use.

Franz had no desire to fight tooth and nail for these resources; seizing the moment while they were undervalued, he preemptively secured the future valuable minerals for himself.

Regrettably, the Austrian Empire lacked large mines, otherwise, this move could have set him up for a lifetime.

In any case, with money in hand now, it was time to buy, buy, buy everywhere. Others investing in mining had to first consider the problem of transportation.

Franz didn’t bother with such concerns. As long as the mine’s products were of good quality and the reserves plentiful, that was sufficient. Why worry about transportation?

Others might not know, but how could he, himself, be unaware? It wouldn’t take long for the Austrian Government to heavily invest in the country’s infrastructure development.

What now seemed like mines without development value, would soon surge in worth as soon as roads were built. Coupled with the advancement of industrialization, the demand for mineral resources would increase, making it difficult not to profit.

In just over a month, Franz had spent more than 5.8 million shields, which startled him into prudence. Even when misappropriating funds, there must be limits, right?

If he spent this entire large sum in one go and it was discovered, how would he manage the aftermath?

The Habsburg Family had assets, but not so much cash at hand. Even for Franz as Emperor, it would be challenging to borrow such a large sum in cash within a short period.

If only a part was misappropriated, Franz still had means to balance the books, after all, he was running a bank. Had there not been a shortage of manpower, the Royal Bank would have already started its expansion.

A bank holding thirty million in funds was a behemoth in that era, its cash flow ranking first among all banks in Austria and among the foremost in the world.

Currently, the Austrian Royal Bank had only around thirty branches, which on the scale of things made it a medium-sized bank, with all business outlets concentrated in a few major Austrian cities.

John-Steva, formerly a senior executive at Austria’s First Savings Bank, was poached by Raul and became the first-ever manager of the Royal Bank.

It was only at this time that Franz discovered that the Habsburg Family held shares in many banks—he couldn’t be bothered about how they came to be.

After all, behind every bank, there are supporters; otherwise, it would not be easy to survive in this era, or even in earlier times.

“Your Majesty, the Royal Bank is ready and can now start accepting deposits,” John Steward said somewhat nervously.

“As for banking matters, you are the expert, so it’s up to the management to discuss and decide. The Royal Bank will not offer loan services to the public for the time being,” said Franz, expressionless.

Such a huge amount of money had been misappropriated, but it needed to be paid back. Heaven knows how long the Prussians will hold out; once the Prussian Government makes a compromise, all that money has to be returned.

“Yes, Your Majesty,” answered John Steward.

“Estimate for me how much of these donations can be converted into our depositors? How much money is likely to remain?” Franz asked with concern.

“Your Majesty, our bank’s interest rates are set according to the average level, but the Royal Bank’s credibility far surpasses any competitor.

Approximately twenty percent of the donors are likely to become our customers. Since one third of these donations are from the government, the final amount of funds remaining could be around three million shields,” John Steward estimated after a moment’s thought.

Do not think that three million shields is a small sum. In this era, people do not yet have the habit of depositing money in banks; most of the nobility prefer to pile gold coins in their cellars.

Even opening a bank account comes with a threshold, for instance, the Royal Bank has set it at 150 shields. If you have less than this number, sorry, this place isn’t for you.

In the entire Austrian Empire, the total savings in 1848 didn’t amount to 100 million shields. Having three million shields would account for more than three percent of Austria’s total savings.

Franz had considered lowering this account opening requirement, but thinking of the need for a large number of tellers and the increased difficulty in management and operational costs, he decisively abandoned the idea.

Banks, too, have a certain prestige to uphold. In this era, those who visit banks are the upper-mid-tier of society. Once the restrictions are lifted, and a large number of lower-class citizens flood in, it’ll be too late to regret losing those high-quality customers.

The Austrian public is too poor; saving a dozen or so shields a year is considered having a decent income. Under these circumstances, rashly conducting this business has too high a risk of loss.

“Understood, you should go back and start the deposit-taking business as soon as possible. All salespeople must be strictly trained, and everyone is required to receive each customer politely,” Franz instructed.

“Yes, Your Majesty,” John Steward answered.

During this period, the attitude of bank service personnel was actually not bad because, due to the limit on the deposit amount, those able to make deposits at the bank were essentially middle-class or of an even higher status.

In terms of social hierarchy, bank employees did not have an air of superiority and, naturally, there was no so-called discrimination.

Moreover, being private banks where everyone’s competing for performance, those who perform well get promoted, while the underperformers can just dream on!

Franz was worried and confused; he still had a hole to fill, didn’t he?

The Habsburg Family did not have the luxury to produce several million shields in cash at any time. The Royal Bank was still his personal property, and Franz did not wish others to get involved.

The Royal Bank’s current policy of not issuing loans was not because he did not want to engage in that business, but because he dared not. If the Prussians caved in tomorrow, he would have to face an immediate withdrawal peak.

The donations received by the Royal Bank had been promised for specified uses. If the money couldn’t be produced on demand and the misuse of donations became public, the damage to the credibility would be enormous.

Secrecy was impossible; the reason no one had pierced the window paper yet was that Franz was the Emperor, and no one dared to be that outspoken whistleblower.

Also, they did not know how much money Franz had diverted; if the amount was small, filling the hole would not be difficult. When the time came, one could be charged with spreading rumors and tarnishing the Emperor’s reputation, a crime punishable by death.