AYKRR Chapter 4
The Money That I Lend You
7th June 1942,
As expected, the Albish had indeed sent in a strongly worded letter for agreeing to the plebiscites. I gave it a glance to get the general gist of it before burning it with a simple flame spell and throwing the ash into the bin. I had already arranged a meeting with the Albish ambassador Archibald Lloyd anyways, the letter was simply a preview of our upcoming meeting.
On a more important matter, Elya's reports on the spread of communism had arrived. Taking a sip of my coffee, I started perusing the reports.
The Rus Federation was still fractured and caught up in their civil war. The only place with a semblance of stability was Moskva, where the NKVD, whose leader was unknown, had managed to subdue all other dissenting forces and taken control of the city.
I then flipped to a report on China, or Qin as they were called in this world. Elya's report, whose main source had been from the Akitsushiman ambassador, had painted a picture of a country still embroiled in a civil war between the Qin Nationalist Party and the Qin Communist Party.
In my world, when Japan had invaded China, both the nationalists and the communists had teamed up to fight Japan. However, the nationalists had been far worse off for it, as they had accrued heavy losses by engaging with the Japanese army while the CCP hid in the mountains and engaging in guerilla warfare during the early part of the war.
Once the Japanese had been driven off by the Soviets, the CCP had then taken advantage of the weakened nationalists and driven them off mainland China.
However, in this world, Akitsushima had been driven off of Manchuria by the Rus much earlier, and thus never did stage a full invasion of Qin. Furthermore, the communists in Qin never did receive much support from the Rus communists due to the Second Great War. As such, the civil war between the communists and the nationalists in Qin were still in full swing.
The nationalists controlled the coastal provinces from Fujian up to Liaoning and also had full control of Beijing, plus the eastern halves of Anhui and Guangdong. The communists held the rest of the country. While I would love to help the nationalists fight back against the communists, I simply didn't have enough information. I didn't know many resources each side had and neither did I know either side's specific politics. For all I knew, the nationalists could be advocating for genocide. Writing a memo for Zettour to arrange for me a meeting with experts in Qin geopolitics, I shelved my ideas for the Qin for later.
The next communist faction was in Vietnam, or Annam as they were called in this world. The Annam People's Revolutionary Army had taken advantage of Germania's humiliation of the Francois military to push out the Francois from the northern half of Annam, declaring the existence of the Annamese Socialist Republic, with the main goal of liberating the whole of Annam from foreign grips.
Elya's girls had done good work reporting on the Francois' response. The Franks weren't willing to just stand still and watch their most valuable colony slip from their grasp and had decided to send their military down to reinforce southern Annam, where they would then try to fight their way up north to take Hanoi.
The ASR was easily the weakest major communist state, so I'll leave the frogs to deal with them. I didn't want to step on the molehill that was Annam either. The Francois going there will likely be learning that trees could speak Annamese soon. Perhaps if they come begging to me afterwards, I might be willing to extend a helping hand.
Last in the order of business was Bharat, where the Albish advance had slowly grinded to a halt after initial success. The Albish had a better trained military alongside more advanced weaponry, as well as the support of most of the Bharatian independence movements, which had allowed them to rapidly push back the communists. Furthermore, after the Russy Federation collapsed, the NKVD mages equipped with dual-core orbs that were beating Albish mages black and blue had all been recalled, leaving the North Bharatians to fend for themselves.
However, after nearly a year of war in Bharat, they were now running into logistical and financial problems.
The Albish Empire might be great, but even they would have trouble sending troops and supplies halfway across the world, then having to transport it inland. The further the Albish and South Bharatian pushed north inland, the further their supply lines had to be extended, which weren't helped by the fact that North Bharatian communists had been blowing up railways leading north.
The fact that the brand new Albish semi-automatic guns didn't work properly was no help either. The RK-42, designed just this year and heavily inspired by the Stg-40, had a longer accurate range and the same rate of fire. However, its reliability couldn't hold a candle to the Stg-40. The RK-42 was infamous for malfunctioning when wet or when its barrel had dirt or grime in it. Considering that they were fighting in the Bharatian jungles, this meant that the RK-42 had a coin flip chance of working when you needed it to.
Additionally, the Albish were having issues with financing the Bharatian front due to declining public support. Unlike the war with the Rus where the enemy was a palpable, relatively close threat, Bharat was not half a world away.
This had led to a sharp decrease in war bond purchases due to Increasing war weariness and citizens no longer feeling under threat. Albish citizens were also unwilling to throw the lives of their young men away to fight for a colony that they likely will have to grant independence to anyways. There was also increasing dissatisfaction at the government for continuing with a war economy. If the Albish fail to close out the war soon, they will need to start borrowing money from other countries.
Furthermore, the North Bharatians were now engaging in guerilla warfare, even employing tactics like digging underground bases and designing boobytraps. Albish troops were also falling ill left and right to diseases and plagues. It seemed the Albish immune system was no match for Bharatian pathogens. It was looking more and more like a bigger version of the Vietnam war. There were already rumours of the Albish potentially calling for a ceasefire and drawing a border for the two Bharatian states along the 22nd Northern parallel.
This would give the communists the majority of the Bharatian subcontinent and a population of over 150 million, which was an outcome I absolutely could not accept. I would need to support or incentivise the Albish in some way so that they could finish off North Bharat decisively.
Obviously, I couldn't send men down there, especially when Germania was undergoing demobilisation, but I didn't need to. When demobilisation is complete, the military will have an excess of Stg-40s and Lmg-40s. Instead of letting them rot in warehouses or scrapping them, we could just sell them to the Allied Kingdom for a tidy sum. The high reliability and sturdiness of our guns would surely give them a greater edge in Bharat, especially since their own guns were so shoddy.
Selling them ammunition and supplying them with rations and medicine were all within Germania's capabilities too. We could even consider financing them by lending them money for the war effort at a low interest rate. I should consult my Minister of Finance for the exact amount I should offer and the attached interest rate.
Also, to avoid having them defer their payments or refuse to pay back, I should put a couple of conditions on it. Perhaps a provision that if Albion wants to exercise a deferment of payments, it will have to allow for the convertibility of the international pound sterling balances into Germanian marks for as long as payments were deferred, effective immediately.
If they do choose to postpone payments, many countries that held sterling reserves will likely start buying marks with their sterling. This would likely cause the pound sterling to rapidly devalue while increasing the value of the Germanian mark and cause Albion's post-war economy to struggle.
But it's not like the Albish were known for being so financially irresponsible anyways. The convertibility provision that I was putting was simply a warning for their past perfidy, not something that I was actually hoping to capitalise on. Furthermore, the Albish in this world had a strong international credit regarding paying back loans on time. It would take a major incident or two to break that credibility.
The next morning, I flew over to the Albish embassy, where ambassador Lloyd was awaiting. In classic Albish fashion, he had indicated his government's petty attitude by only serving tea; despite knowing I preferred coffee.
Ignoring the little byplay, I sat down to begin our talk.
"Chancellor-President Degurechaff, His Majesty's government is most displeased with the recent news of the plebiscites being announced in Pullska, Czechoslovakia and Hungary." What an understatement, in the Albish newspapers I had obtained, there were parliamentary members saying that I was aiming to restore the Empire or even planning to annex all of OZEV.
Let's play coy for now. "And the issue being?"
"The issue is that if all three plebiscites were to succeed, and all indications suggests that they will, then the Empire will nearly be fully restored. All that it lacks would be Daneland and Lothiern. And the Allied Kingdom has a defensive agreement with Lothiern, similar to the one we established with the Legadonia Entente Alliance." Lloyd expounded.
"Are you afraid of Lothiern reuniting with Germania? You can rest assured, Mr. Lloyd, Lothiern was the last state to be integrated by the old Kingdom of Preussia, they have the least desire for reunification with Germania." I assured him.
"Furthermore, there are also fears that if the Empire were to be revived, so too would its monarchy." Lloyd said, his eyes glancing away nervously for some reason.
"The Kaiser? He's highly popular among the Junkers, yes, but not the common people. I hardly think the people will place him back on the throne." I scoffed. Why are there so many people talking about monarchies these days? Although maybe I should have expected it from the Albish, they were still a constitutional monarchy after all.
"It's not him whom we fear will be on the throne." His tone held a sense of unease, and then I noticed the way he was looking at me.
"Me? You can't be serious. Being an Empress is the last thing I want. And it's not like a reversion from democracy will ever happen either. The people will never stand for it." Throwing my hand up in incredulity, I exclaimed.
"That's not what His Majesty's government thinks." Mr. Lloyd nervously adjusted his tie. Does the Albish seriously think that I could just walk outside, declare myself Kaiserin, and the people will gladly put a crown on my head?
I leaned back on my chair and rubbed my nose in frustration. These paranoid Albish jumping at shadows. Can't they see that I'm just a humble democratic leader looking for an easy retirement?
Still, at the end of the day, the Albish were all bark and no bite, so let's call them out on it. "Fine, what is the Allied Kingdom going to do about it?". Now that the Rus were gone, Germania could play tough with the Albish.
"We could send ships to perform an embargo and guard Lothiern's seas if Lothiern's sovereignty is challenged or if Germanian democracy is threatened."
"And risk angering the Americans. They would surely be appreciative of you preventing them from doing business with their biggest trade partner when the Unified States are still recovering from the Great Depression. And wouldn't tying that many ships to Europa prevent you from using them for Bharat?"
"The situation in Bharat is going well."
"The situation in Bharat is a slog and we both know it. For every mile you advance, you are losing half a thousand men to enemy fire and another half a thousand to diseases. Your guns don't work in the Bharatian jungles, and your logistics are overstretched." If the ambassador was surprised by my knowledge of the Bharatian front, his face didn't show it. Eventually, he sighed in defeat.
"Alright, what are you proposing?" Ambassador Lloyd asked.
"We will sell you our stockpile of Stg-40s and Lmg-40s. You've surely heard of their vaunted reliability. They will serve you well in the humid Bharatian jungles. We will also sell you shipments of munitions and medical supplies. All of them will be sold at market price, of course, we have no intention of price-gouging you."
"I'm afraid that the Secretary of the Treasury will not agree to such a substantial purchase." Double-speak for the Albish being broke and unable to afford it.
"We can lend you the money to buy them." I took out the document with the specifics of the loan and put it on the table.
Llyod was quiet for a moment, as if to process what I just said. "You want us to buy your weapons and supplies with money… that you lend to us?"
"Yes, we're willing to extend you a loan of 9 billion marks at a 2% annual interest. Payable monthly over 40 years once your oversea conflicts have been quelled. There's also a special provision here that will be activated if you choose to exercise a payment deferral." I said, pointing to the specific clause. Converted to US dollars, the loan was roughly 3 billion USD. At a mere 2% interest, it was an insanely good deal.
I wasn't even worried about the Albish being unable to pay back their loan. The money would be going back to Germania when they buy our weapons and supplies. But if they were unable to pay back the loan in the future, then that would hurt their currency and post-war economy.
"That's quite the generous offer. And what is it you want out of us? Surely, you're not being so considerate out of the kindness of your heart." Llyod picked up the document and read it, his eyebrow raising at the provision I had included.
I was already satisfied with making some money from the Albish while they go and fight my battle against communists for me, but since they were offering, I might as well get something out of it. First, let's ask for something so outrageous that they would surely refuse, then counteroffer with what I actually want.
"I want a revision of the Treaty of Londinium to remove all restrictions on our navy." The response came immediately.
"I'm afraid that will be impossible." I knew that the Albish wouldn't tolerate a navy that could threaten theirs, especially since they had been spooked by our ultra-fast submarines.
"The removal of restrictions on our Airforce, then. Along with staying quiet about the plebiscites." Air dominance will only become more crucial in the future. I would have to shake off this shackle on our air force as soon as possible.
The ambassador took a moment to ponder over it, before responding. "I will take it up to my superiors, you shall have our answer by tomorrow."
That went better than I expected, I thought Mr. Llyod would try to haggle the offer a little, perhaps only increasing the limit on our bombers. If they were willing to go this far to finish up the war in Bharat, then the Albish must be facing some other issues that I was not aware of.
Same day afternoon,
10 Downing Street,
Winston Churbull couldn't help but think it a bad omen that he was holding this meeting with his war cabinet in the late afternoon, when the sun was setting over the Albish home islands.
"Gentlemen, do we take her offer?" Churbull asked.
Arledge Greenwood, the deputy of the opposition party, scoffed. "And let the Devil snooker us again? She's always achieving some other political goals with deals like this. I wager that she'll extend another deal like this when she goes to annex Daneland or even Lothiern. It's hush money, that's what it is." Greenwood was stern in his opinion that an eventual conflict between the Allied Kingdom and Germania was a matter of when, not if. And he was dead set on making sure the Allied Kingdom would be the victor.
Henry Watson, the leader of the opposition, had a much more optimistic outlook concerning relations with Germania. "The price on those guns is too good for us to pass on. We're already having trouble arming Albish troops with reliable weapons, let alone arming the South Bharatians as well. And with this deal, we can use it as a foundation to improve relations with Germania."
John Payne, the Minister of Defence, said. "I concur. I've seen some of my boys test those Germanian guns. They told me they trust those guns more than their own limbs. The supplies she is offering would not go unappreciated either. We're going to be losing more men to diseases than bullets soon." Despite what he said, his grumpy mood told everyone that he was annoyed by the fact that the Allied Kingdom's best gun, designed just three months ago, was considered inferior to its Germanian cousin.
"You do realise that we are taking on a substantial loan, right? We're already in debt to the Americans. Even with the low interest rate, we're still paying over 27 million marks a month for the next 40 years. It's like the Treaty of Triano has been flipped on our head. This provision that allows for the convertibility of the pound sterling should we ever postpone payments even once is also troubling." Greenwood spoke again.
The Chancellor of the Exchequer, Kingsley Tree, spoke for the first time at that meeting. "Our country's finances are not so tight as to be forced to defer payments. As long as we can keep extracting raw materials from our Afrikan colonies and refine them in the home islands, we'll easily be able to keep up with the payments. It is a subtle threat, nothing more."
"We don't have much of a choice. It would be prudent for us to take Degurechaff up on that offer. Despite initial denunciation of the loan, the House of Lords and the House of Commons think so too." Churbull mumbled, before turning to his foreign secretary, Viscount Guysborough. "Guysborough, what news from Hong Kong?"
"We had numerous eyewitness accounts that the soldiers spotted this morning bombing the harbour in Hong Kong were wearing uniforms of the communist faction. The nationalists blame the communists for launching an unprovoked attack on a neutral party. The communists accuse the nationalists of launching a false-flag operation. Both sides are imploring us to fight alongside them and secure Shenzhen for the legitimate government of Qin."
And thus was the crux of the matter. They needed to finish up the fighting on the Bharatian subcontinent quickly due to the rising tension in Qin. The nationalists had been sieging the communist-controlled city of Shenzhen, which had ended in a deadlock. It seemed whoever had decided on bombing the port had wanted to drag the Albish in to break the stalemate or at least provide a distraction. It was imperative that a task force was diverted to secure Hong Kong, should the fighting ever spill over to the Albish colonial city.
They couldn't be sure whether the men at the harbour were actually communists or not. The political beliefs of either Qinese factions could motivate them to attack Hong Kong. The communists were obviously vehemently against any capitalist country. However, the nationalists were also hostile to foreigners. They uphold the belief that Qin must be free of foreign intervention and influence if it wishes to raise its global status.
The nationalist party was also especially hostile to the countries Akitsushima, the Allied Kingdom, Ispagnia and the Russy Federation. They resented Akitsushima, the Allied Kingdom and Ispagnia for occupying Taiwan, Hong Kong and Macau respectively. These were all lands that they view as rightfully belonging to Qin. Most of their ire was concentrated towards Akitsushima, who had once occupied the entirety of Manchuria. As for hatred towards the Russy Federation, it was simply due to them being communist.
Yet despite both sides having qualms towards the Allied Kingdom, they both knew that an enemy of an enemy was a friend. So, either side will try to put down their differences with Albion, if it will help them unite Qin.
It was a good thing that this development in Hong Kong was so recent that the Devil of the Rhine could not possibly have known about it. Not when the bombing of the harbour occurred half an hour before she brought her proposition to ambassador Archibald Lloyd. Who knows what other concessions she would have pried out of them otherwise.
"Prime Minister, if we don't take Degurechaff up on her offer and fail to close out the war in Bharat in time before the Hong Kong situation further escalates, we will have to split our forces and be confronted with fighting two undermanned wars. In the worst-case scenario, Bharat becomes fully communist, and we lose Hong Kong." Payne said.
Kingsley Tree added. "And the sooner we can quell oversea hostilities, the sooner we can transition to a peacetime economy and recover."
"It is decided then." Churbull announced after taking a drag from his cigar. "We'll amend the Treaty of Londinium in exchange for buying Degurechaff's arms and supplies with the money that she'll lend us. And we'll also keep a stiff upper lip on the tri-plebiscite situation as well." This decision, Churbull hoped, will keep the sun over the Albish Empire for just a little longer.
As he escorted his war cabinet out and bid them farewell, Churbull noticed that the sun had already set.