BXBX NOVEL Chapter 227 Steel And Bonds
Alan raises his hand to grab Kant's attention like a schoolboy wanting to ask his teacher a question. Kant stops speaking and points to the minister, to allow him to stand up and speak his mind.
"What is it, Minister Alan?" Kant asked.
"Sir, the plan that you have proposed is a rather bold one. How will you be able to secure enough funds to build this vast network? I do not think we should purely use our nation's funds," Alan questioned.
"That is a good question, Minister Alan. Yes, it will be an expensive endeavor considering the project will be covering a large and wide area, across half the continent.
However, due to our previous efforts, we should be able to alleviate the burden of building the railroads, thanks to a few key technologies that I had invented and implemented.
First of all, we already have the ability to mass-produce steel, thanks to the Bessemer process, and the steel mill be had built a few months back.
What I am thinking, is we start to rapidly increase our scale of production, to make them as cheaply as possible, by building more steel mills, as well as hiring more workers. Do you understand so far?"
"Yes sir, but what about the iron? Correct me if I am wrong, but don't we need iron to convert them into steel?" Richard Armstrong spoke out.
"Yes, and that is what I will get to, Defense Minister Armstrong." Kant then hands out a bunch of files, with the title 'Iron Survey Report' written on the front of it. The ministers all open the file and find a report held inside.
"Good. Because you all will need it for the next part..." Kant starts to hand out more documents to the minister. It detailed a report, related to the iron mines of the kingdom.
"What you have on your hands, gentlemen is a report from all the iron mining firms within the kingdom, estimating how much iron they have in their deposits.
As you can see, we have a significant amount of iron deposits within our kingdom. In fact, we have one of the largest deposits on the continent, in the mining town of Keliath and Hexford, which we suspect to be connected to a region full of iron," Kant explained.
"Although it may not be necessary, I do believe that it is in our kingdom's best interest to gather these materials in one way or another, to fuel our expanding industrial base. This is where Director Carl and Minister Alan's roles will come into play."
Carl and Alan exchanged a quick glance before turning their attention back to Kant, who continued his explanation.
"Minister Alan, one of the jobs will l need done is for you, or someone else on behalf of the kingdom, to communicate with the other kingdoms to secure contracts with our firms. Are you up to the task?"
"Yes, sir. That could be done. In fact, I know a few people that could do the job for me. I will get on it right away," Alan answers, giving Kant a smile.
"Excellent. Now, as for Director Carl, I will need you to obtain as much information as possible about the iron mines in the cities listed on the documents, as well as gather any intelligence that would help tip the negotiations in our favor."
"Consider it done, sir," Carl replied with a nod.
"Good. Now, that I have established how we can decrease the cost of building the gigantic railroad network, I will now explain the way in which we will fund this expensive endeavor."
Kant drank the glass of water on the table, before moving on.
"Now, there are three main ways of funding this project. The first method is to issue government bonds to the public, allowing them to indirectly invest in the project and receive interest payments in return.
Any further details you may have on the bonds will be answered in the files I will present to you all now."
Kant hands the ministers the file. The files details of how the bonds work, and how they will be issued to the public.
The bonds work about the same as a U.S. Treasury bond works; an individual lends out money to the government by purchasing a bond at a predetermined interest rate. In return, the government, in this case, Kant's government, will pay back the individual a fixed interest rate until the bond expires.
For an individual to be able to purchase said bond, they would have to go through a bank to buy one. Once they buy one, the money will be sent to the treasury, which they can use on building up the railroads.
Once the ministers have finished reading up the documents, they had a few questions to ask their king. Though they all raised their hands at the same time, Kant close Alan first.
"Sir, what about the other two methods of funding that you mentioned earlier?" Alan asked.
"The second method will utilize the power of the private sector, as well as the deep pockets of very wealthy individuals who had immigrated to the city to exploit the technology and tools that have propped up."
Kant then hands out another set of documents, titled 'Railroad Investment Proposal,' which detailed the terms of the investment, the expected returns, and the risks involved.
"We will be creating a company to oversee the construction and operation of the railroads, and investors can buy shares in this company, providing us with the necessary capital to fund the project.
The returns on investment will be paid out through dividends, based on the profits made by the company," Kant explained.
The ministers all looked through the documents carefully, nodding as they read. They knew that this method would appeal to wealthy individuals in the city who were always looking for new investment opportunities.
"And the third method?" Richard Armstrong asked.
"The third method is to use funds from the treasury directly. However, I consider this to be the last resort, to only use them to fill up any remaining money that is needed for the project to continue." Kant takes a deep breath and another gulp of water from his glass cup.
"Now, are there any more questions?" The ministers raise their hands. Looks like they were not finished yet.