King
Chapter 1257 - 1257 218 Deep in Debt_2

1257: Chapter 218, Deep in Debt_2 1257: Chapter 218, Deep in Debt_2 Both plans have their pros and cons, and given the current state of the territory, choosing either would be better than staying in New Moon Port.

In order to divert shipping traffic, the Government Affairs Department is considering selecting suitable locations along the coastal area to plan for the construction of three mid-sized cargo ports.

…”

Upon hearing Jacob’s report, Hudson was slightly startled.

The unique geographical position of New Moon Port was definitely first-rate for developing the economy, but it was quite lacking as the administrative center of the territory.

Back when we chose this place to establish our base, it was primarily due to strategic safety considerations.

Its convenience of having the sea at our back meant that we could evacuate via the ocean at any sign of danger.

However, times are changing.

No one could have anticipated that the defensive and offensive dynamics between the Kingdom and the Orcs would reverse in just a few short years.

The strategic safety that was once our greatest concern has now become the least important.

At least for the next ten years, the Orcs will not have the power to launch a full-scale invasion.

“Let’s go with the first plan!

Under the current situation, it’s not suitable to continue provoking the Orcs.

Cornered beasts tend to fight fiercely, and if we appear too aggressive, it could easily lead to unnecessary trouble.”

Hudson pondered for a moment before speaking.

By gradually encroaching territory, Snow Moon Territory has taken quite a lot of advantages.

Looking at the map, one can see that the Near East of today is entirely different from what it once was.

Naturally, the fastest expansion belonged to Hudson’s Snow Moon Territory; the Orcs voluntarily relinquished a vast area of land neighboring it.

Other Lords of the border regions also took action, but their titles weren’t prestigious enough to intimidate the nearby Orc tribes.

With Snow Moon Lake in between, Hudson had no intention of getting involved in the petty conflicts over territory to the north.

In this regard, Alpha Kingdom also followed continental traditions.

Regarding the territorial expansions initiated by Noble Lords, the Kingdom neither supports nor opposes them.

If a Noble Lord were to initiate an expansion privately and wins the battle, securing the territory, the Kingdom would recognize its legitimacy.

If, on the other hand, the expansion failed due to incompetence and they suffer a severe counterattack, then the initiating Lord would have to bear the consequences themselves.

Thus, the struggle for control over the northern region of Snow Moon Lake is ongoing, with none of the involved parties able to claim a decisive victory.

Those who didn’t achieve victory on the battlefield naturally couldn’t expand as quickly as Hudson, who was planting his flags all along the way.

He who gains advantage must know when to stop.

The direct withdrawal of the Orc tribes seems to be out of fear, but there are deeper political reasons behind it.

Even though the Orcs might earnestly wish to dismember Hudson, out of reverence for a Strongman, the neighboring major Orc tribes still have to swallow their grievances and show goodwill towards Hudson.

They have no choice; the Plains War genuinely terrified the Orc High Levels.

Especially afterwards, playing close to the line so openly truly made the Orc High Levels fearful.

Should a conflict arise and Hudson plays close to the line once more, these neighboring tribes could be in for a disaster.

When in doubt, better avoid the trouble.

Just because the Orc tribes avoided Hudson doesn’t mean they are afraid of other Nobles from the Kingdom.

The mere Viscounts of the border regions certainly can’t scare them.

“Duke, if we rebuild a new large city, then I’m afraid this year’s deficit in the territory’s finances will reach a new level,”

Jacob hinted subtly.

As a Government Officer of Snow Moon Territory, he was very clear about the financial situation of the territory.

It was beyond poor; it was downright disastrous.

Developing a swath of unclaimed land is bound to cost money, especially as the size of Snow Moon Territory continues to grow.

To avoid arousing concern from all sides, they dared not tally up exactly how much land was added, but it’s certainly hundreds of thousands of square kilometers.

The cost of expansion is a heavy toll on the finances of the territory.

Running a deficit of several million Gold Coins each year, to date, the Snow Moon Territory has accumulated a debt of nearly thirty million Gold Coins owed to the Near East Development Bank.

Some of this money was spent on military expenses, with the rest poured into territory development and infrastructure construction.

Magicians are useful, but also incredibly expensive.

The Magic Potions distributed to everyone are also purchased at market prices from Hudson by the financial department of the territory.

Reflected on the financial statements, the deficit of the Snow Moon Territory continued to balloon like a snowball.

If not for the loan from the Near East Development Bank, using the false credit limit of eighty million created by Hudson, just the interest on the capital would crush the Snow Moon Territory.

Of course, Hudson did not embezzle the funds recovered through Magic Potions; he deposited all of it in the Near East Development Bank in the name of savings.

What seems like a pointless transfer from the left hand to the right is actually a very normal economic cycle.

With increased deposits in the bank’s accounts, the funds that can be leveraged have also risen correspondingly.

The money flowing out for territory development has spurred a series of industry developments; though none are substantial in scale, it at least heralds the beginnings of a market economy.

The most direct feedback is the tax revenue of the Snow Moon Territory, which has sharply increased in recent years.

However, the high investments in construction have exhausted the increased tax revenue.

Mainly, the expansion of the territory’s size has made the Government Affairs Department’s proposal to keep the fiscal deficit below one million and five hundred thousand Gold Coins a joke.

Of course, after witnessing the rapid development of the territory, everything changed; one can only say that a fiscal deficit truly suits economic development.

The only problem is that the high levels of the territory are terrified by the massive territorial debt, completely unaware that the money being spent in the territory is essentially freebies from Hudson.

An interest-free bill of eighty million, of which only thirty million has been used, Master Hudson is not at all flustered.

As long as the Near East Development Bank is kept stable, if the territory development is short on funds later on, it can continue to borrow from the bank.

Using someone else’s money to develop one’s own territory, with not even a cent paid in interest, and the ability to pay the principal back over a few decades – how is it any different from a giveaway?

“Don’t worry about money.

The Government Affairs Department will borrow another two million from the Near East Development Bank for the construction of the new city and subsequent development.

However, efficiency must be increased.

Take advantage of the high enthusiasm of the Magicians right now, and get the project underway as soon as possible.

The planning and construction of the new port also need to be expedited.

As the territory develops, the future cargo throughput is bound to keep rising.

We must have foresight in the planning and construction.

For financial shortfalls, coordinate with Jacob yourselves.

Don’t worry excessively about the debt; these are short-term issues.

Stretch the timeline; as long as the Snow Moon Territory develops to the level of the Mountain Domain, any amount of debt can be filled!”

Hudson reassured.

These are all aftereffects of the bankruptcy of the Moxi Duchy.

The national credit could not bear the debt crisis, triggering widespread concern.

The Snow Moon Territory is also heavily in debt, and apart from Lord Hudson, not one of the subordinates in the territory is without concern.

As an already developed domain, the Mountain Domain can provide Hudson with nearly one million Gold Coins in revenue each year, while the Snow Moon Territory is over ten times the size of the Mountain Domain.

If developed to the Mountain Domain’s level, then the annual fiscal surplus could reach tens of millions of Gold Coins, making the current debt truly not an issue.

(Note: Fiscal surplus = Fiscal revenue – Expenditures)

Regrettably, this pie is not so easy to enjoy.

The Mountain Domain, with a population of over one and a half million, can maintain its current economic level.

For the Snow Moon Territory to develop to this extent, it would be impossible without a population of ten or twenty million.

The reality is the population of the domain people in the Snow Moon Territory is less than one million, and even with the addition of a floating population from outside, it barely exceeds one million.

Even if slaves are brought in to bulk up the numbers, it still does not reach two million.

The gap between this and twenty million people is not something that individual willpower can overcome.