The Rise Of Australasia-Chapter 1119 - 837: Spain’s Gold

Chapter 1119: Chapter 837: Spain’s Gold

From April 1935, the situation in Spain became even more chaotic.

Why more chaotic? Because aside from France, Russia also joined in, beginning its support for the Spanish Republic.

So, the question arises, why did Russia, which had been maintaining a low profile since the end of the civil war, decide to step forward and support the Spanish Republic?

This could not be discussed without mentioning the problems brought to Russia by its unique ideology.

In all of Europe, Russia had no allies. Other than the somewhat sympathetic Spanish Republican government, the other countries were either controlled by capital or were monarchies, which were far different from Russia’s political system.

Additionally, Russia’s support for Spain was also motivated by a desire to limit the expansion speed of Germany and Italy.

After all, Russia was also a neighbor of Germany, and a strong Germany was not good news for Russia.

As a shipment of weapons and equipment was transported from Russia to Spain, the Spanish Republican military regained a certain level of combat effectiveness and engaged in battle with the German and Italian armies.

Compared to Germany and Italy, the Russian government was not as reckless. To avoid offending Britain and France and not breach the non-expansion treaty previously agreed with them, Russia merely supplied the Spanish government with weapons and equipment and had no plans to dispatch its military to assist the Republican government in combat.

But it had to be acknowledged that the supplies from Russia played a crucial role for the Spanish government.

When the German and Italian armies were close to capturing Madrid, these supplies helped the Spanish Republican government to hold on for a while longer.

However, precisely because of this, relations between Russia and Germany and Italy had soured somewhat.

Still, the German government maintained the idea of dividing Poland with Russia and thus didn’t lodge any formal protests against Russia’s actions.

Regardless, with Russia’s involvement, the situation in Spain became more entangled, and the Spanish people faced greater suffering amidst the increasingly brutal civil war.

“What? The Spanish Republican government still has a large reserve of gold?” Arthur was somewhat surprised, turning his gaze toward the former King of Spain, Alfonso XIII, who was still staying in Australasia.

“Yes, Your Majesty,” nodded Alfonso XIII, showing no regret about betraying the Spanish government, “When the Spanish royal family fled Spain, over 200 tons of gold were left behind in the Madrid Royal Palace.

Plus, the long-term gold reserves of the Spanish government, the current Spanish government controls at least over 500 tons of gold, which is also why they have been able to continue fighting.”

“Over 500 tons of gold?” Arthur stroked his mustache, contemplating the Spanish government’s massive gold reserves.

“It seems I might have to get involved in this civil war after all,” Arthur nodded, his mind already making adjustments to his plans for Europe.

“Your Majesty Alfonso XIII, rest assured that after the end of the Spanish Civil War, I’ll consider helping restore the throne to the Spanish royal family. Unless something unexpected happens, you’ll be reinstated as King of Spain within five years,” Arthur said reassuringly, painting a picture of promise for Alfonso XIII.

Given the current European situation, an unexpected outbreak is bound to happen, and Spain will definitely not be an exception.

This also means that it is highly unlikely for Alfonso XIII to reclaim the throne as King of Spain within five years, unless World War II ends within that time frame.

But Arthur’s intention was to use the Second World War to severely weaken Britain and France, which meant that the war would not be short-lived and an end within five years would be extremely difficult.

The time that Alfonso XIII needed to wait to regain the Spanish throne would inevitably be more than five years.

Historically, Alfonso XIII died in 1941, the cause of death being illness. In this world, his stay in Australasia might allow him to avoid that fate and, perhaps, even reclaim the Spanish crown at the end of his life.

Since Arthur knew of the Spanish government’s reserve of over 500 tons of gold, he naturally would not let go of this gold.

Gold is very important to any country at any time. Since the beginning of the gold standard, gold has been key to a country’s currency stability and economic status, and the daily lives of people have been inseparable from gold.

Even though the gold standard has now been abolished, gold remains crucial.

The strength of each country’s currency is not only affected by internal economic factors but also by the amount of gold reserves they hold.

In other words, the more gold reserves a country has, the higher the value retention rate of the currency it issues.

As long as a sufficient reserve of gold can be stockpiled during World War II, the Australian Dollar could challenge the position of the world currency after the war and gradually replace the Pound.

Becoming the world currency would mean that Australasia had the capital to control the world economy.

What is the Australian Dollar? It is nothing but a piece of paper that the Australasian Government can print at will. The US dollar did just that in future.

The United States could print vast amounts of US dollars, making other countries that use the US dollar bear its debt.

If the US dollar collapses, it would impact the global economic order and be a major blow to countries that rely heavily on the US dollar.

This also led to, in later generations, the dollar-dominant world knowing full well that the United States would siphon income from other countries by printing dollars, yet these countries could only silently endure.

If the dollar were to collapse, the loss it would cause to themselves might not be much less than the income extracted by the United States.

If this were to trigger an economic crisis, then it would be an even greater loss.

How to get the gold from the Spanish government? The simplest and most effective method was to engage in a mutually beneficial exchange with the Spanish government.

What did the Spanish government need most at this time? Of course, it was a large amount of weapons and equipment, war supplies desperately needed for the conflict, as well as food, medicines, and so on that the military and the people greatly needed.

Conveniently, Australasia had stockpiled a large amount of strategic supplies, food, medicines, and medical equipment, which could be exported in exchange for Spain’s gold.

Why was Arthur so certain that the Spanish government would definitely use gold to exchange for these supplies?

Because, at that time, the Spanish government had reached its most critical moment. Although the Russian Nation had provided a batch of military support earlier, it was merely a drop in the bucket.

Germany and Italy’s weapons and equipment kept flowing continuously to Spain, and even their armies were being rotated regularly.

In such circumstances, it was simply impossible for Spain to outpace the supplies of the two great powers, Germany and Italy.

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For the Spanish government’s ultimate survival, Arthur believed that the Spanish government would make a wise choice to use gold to exchange for a greater chance of victory.

Without delay, the Australasian Government immediately contacted the Spanish government, expressing its willingness to support Spain.

This was like timely assistance for Spain. Under the pressure of Germany and Italy, very few European countries would support Spain.

Even France and Russia, their support was limited, and they also did not dare to risk offending Germany and Italy by helping Spain, one of Europe’s small and medium-sized countries.

Australasia quickly put forth its own conditions, which was to exchange a large amount of weapons and equipment for Spain’s gold reserves.

As a gesture of good faith, a large number of weapons and equipment from Australasia could be sold to Spain, including precious medicines such as penicillin.

For the Spanish government, this was a difficult choice. Agreeing to the requirements of the Australasian Government meant that the Spanish government would lose a large portion of its gold reserves, letting the gold flow to Australasia.

But if they did not agree to the demands of the Australasian Government, what could they do with that batch of gold?

If the Spanish government fell, wouldn’t that gold end up in the hands of the Nationalist forces of Spain and Germany and Italy?

Since they would eventually lose the gold anyway, it might as well be used to realize its full value and exchange it for more weapons and strategic resources for the Spanish government.

With this in mind, after hesitating for a few days, the Spanish government still agreed to the requirements of Australasia.

Of course, the Spanish government also made further demands.

Included within these was that the Australasian Government must send a military advisory team.

This team would assist the Spanish government in reforming the Spanish military and help the Spanish troops to master the weapons and equipment from Australasia more quickly.

Furthermore, when purchasing supplies with gold, the value of the gold should be equivalent to 1.2 times its actual value.

The current exchange rate between the Australian Dollar and gold has fallen to 1:1.03.

According to the Spanish government’s requirement, 500 tons of gold should originally be worth 515 million Australian dollars. At 1.2 times its value, the Spanish government then requested at least 618 million Australian dollars’ worth of supplies in exchange for the 500 tons of gold.

This request was actually quite normal, and Arthur agreed without even thinking about it.

Although currency could be exchanged for gold, this did not mean that their values were equal.

Currency can be printed at will, but gold can only be mined.

Exchanging 500 tons of gold for 618 million Australian dollars’ worth of supplies was definitely a good deal for Australasia.

After all, the cost of these 618 million Australian dollars’ worth of supplies would definitely not exceed the actual value of the 500 tons of gold.

Moreover, considering the importance of gold to a nation, under Arthur’s orders, the Australasian Government quickly signed the relevant agreements with the Spanish government and immediately commenced the trade of strategic supplies.

Half a month after the agreement was signed, the first batch of weapons and equipment, including 200,000 rifles, 500 machine guns, 1,200 artillery pieces, and the corresponding ammunition, along with food and medical supplies worth over 10 million Australian dollars, was shipped to Spain.

To ensure the absolute safety of supplies, this batch would be escorted by Australasian warships, traveling through the Mediterranean Sea, directly to the coast controlled by the Spanish Republic Government.