Rise of Empires: Spain.

Chapter 397 The Colombian Civil War
On August 12, 1898, while Carlo was still basking in the joy of the economic development of Spain through economic alliances with South American countries, the head of the Royal Security Intelligence Service, Cádil, rushed over with some bad news: the outbreak of the Colombian Civil War.

Carlo already knew a general outline of the dispute between the Colombian Conservative Party and the Liberal Party through intelligence work by the Royal Security Intelligence Service.

The Colombian Civil War broke out in 1899, but that was because the United States was engaged in a war against Spain and did not intervene much in the Colombian Civil War.

Now that the United States is unlikely to wage war against Spain, it has more energy to focus on the chaotic situation in Colombia.

With the Colombian government unable to help them control the Panama Canal, the US government naturally wanted to incite a civil war in Colombia to gain independence for the Panama region and thus control its government.

In any case, the Panama Canal is located in the Panama region. As long as the government controls the region, it means that control of the canal will fall into the hands of the Americans.

That's what Americans think, and that's what they do.

In an effort to incite civil war in Colombia, the United States contacted Rafael Uribe, leader of the Colombian Liberal Party, offering its support to help the party overthrow the conservative-controlled, brutal dictatorship.

Colombia adopted a constitution in 1886, changing the former United States of Colombia to the Republic of Colombia.

It was also from 1886 that the conservative government, after taking office, began to persecute Liberal Party members and implemented a brutal dictatorship in Colombia.

Both the Conservative and Liberal parties possess powerful military forces, and prior to the outbreak of this civil war, they had already engaged in several small-scale clashes.

Now with the support of Americans, the Colombian Liberal Party has decided to no longer tolerate the situation and to fight the conservative-controlled authoritarian government to the death.

On August 11, 1898, the Liberty, led by Rafael Uribe, launched an armed uprising in the Magdalena diocese in an attempt to overthrow the local Catholic Church and the Conservative Party.

The Liberal Party and the Conservative Party's armies clashed fiercely in the area, instantly igniting the situation in Colombia.

When the head of the Royal Intelligence Service, Cádil, reported the news to Carlo, the Colombian civil war had been going on for a full day.

It's not fair to blame Cádil for his slow response. The main reason was that the Liberal Party's war was launched too suddenly, and the distance between Colombia and mainland Spain caused significant delays in the transmission of information.

Intelligence agents needed to transmit the collected intelligence to the Puerto Rican colony, and then send it back home via local telegraph.

This back-and-forth process took more than ten hours, and when you add the time for collecting, summarizing, and reporting the information, it took almost a whole day.

"What's the situation in the Colombian civil war now? Who do you think will win in the end, the Conservatives or the Liberals?" When he learned that a civil war had broken out in Colombia, Carlo wasn't too surprised, but asked the questions that concerned him more.

Although the Colombian Conservative Party is a brutal authoritarian party, since the United States has chosen to support the Liberal Party, Spain has no choice but to provide assistance to the Conservative Party.

If the Liberal Party wins, Panama might not even need to become independent. The Liberal Party would support US actions in the Panama Canal region, which would be a bad deal for Carlo.

If the United States were to gain complete control of the Panama Canal, it would be like a runaway horse, making it much more difficult to contain its development. Only a superpower war could break out and completely dismantle the United States.

“Your Majesty, according to the intelligence we have gathered, the Conservative Party still holds the advantage on the battlefield. However, the Liberal Party’s armed uprising has completely ignited the situation in Colombia. The Conservative Party has a chance to defeat the Liberal Party, but it is not certain that they can end this civil war in a short time.” The head of the Royal Intelligence Bureau, Cádil, answered Carlo’s question respectfully with a somewhat strange expression.

After careful investigation by Royal Security Intelligence Service agents, it was discovered that the situation in Colombia was not as simple as a civil war between the Conservative and Liberal parties.

In addition to the two broader political ideologies of the Conservative and Liberal parties, there is also a conflict within Colombia between historians and nationalists.

All of this can be attributed to the chaotic political structures of South American countries in the early days of their independence, which lacked clear and well-defined political development, leading to a complete political split.

Regarding national political systems, the debate over centralized federalism versus decentralized republicanism is raging. In terms of political ideology, the Conservative and Liberal parties frequently clash. Regarding class interests, there is a conflict between the established vested interests of large landowners and the church and the newly emerging factory owners and middle class.

These contradictions have collectively contributed to the chaos in Colombia, which is why Cádil said that the conservative party might be able to defeat the liberal party, but it would not be able to end the Colombian civil war in the short term.

Because the Liberal Party ignited not only a civil war with the Conservative Party, but also various conflicts and contradictions within Colombia at the same time.

This civil war will not end until these contradictions are fully resolved. Even if the Liberal Party falls, other opponents will launch armed marches and uprisings until the other side falls.

Upon hearing Cádil's reply, Carlo smiled. The first piece of good news was that the Colombian Liberal Party couldn't defeat the Conservatives; the second piece of good news was that Colombia remained embroiled in internal strife.

Because the United States supports the Colombian Liberal Party, Carlo naturally hopes that the Conservative Party can win the civil war.

The longer the Colombian civil war lasts, the more Colombia needs Spain's support, which is why the second piece of good news is that Colombia continues to be plagued by internal strife.

"Now that the Conservative Party in Colombia has gained the upper hand, we can temporarily disregard the civil war. Your task is to prioritize gathering evidence of US instigation of the Colombian civil war, and to focus on US cooperation with the Colombian Liberal Party, trying to figure out exactly what the Americans promised to the Colombian Liberal Party."

Once we've gathered all this information, we'll find a way to launch a propaganda offensive in Colombia and even other South American countries, spreading the "American threat" theory and making the United States a common enemy of all South American nations.

"You should understand the specific details of how to do it. Report back after you have achieved some results," Carlo instructed.

Now that it was confirmed that the United States was secretly supporting the Colombian Liberal Party, Carlo naturally wouldn't let this opportunity slip by.

The Spanish-speaking countries, led by Colombia, maintain relatively close relations. If evidence emerges proving US involvement in Colombia's civil war, or even that the US instigated it, America's prestige in South America will suffer a significant blow.

At that time, South America will no longer be America's backyard. The countries of the Americas will be increasingly wary of the United States, and they will certainly attract another major force to counterbalance the United States and protect their own security.

Who is this powerful nation? It goes without saying that Spain is clearly the most suitable candidate.

First, Spain maintains connections with all Spanish-speaking countries. Second, Spain has relinquished the vast majority of its American colonies and has virtually no chance of returning to the Americas.

In this context, Spain can not only act as an ally for South American countries, helping them effectively counter the threat from the United States.

This would also prevent Spain from returning to the Americas and bringing them back under its sphere of influence. This was something Carlo wanted to see. Carlo had no plans to return to South America. Although these South American countries were not powerful, they were still very confident in resisting colonial aggression.

Spain's return to South America will only create trouble similar to that of Cuba; it would be better to cultivate good economic relations with these South American countries.

Because these Spanish-speaking countries were once Spanish colonies, they currently use different versions of the peso in their respective countries.

What country's currency is the peso? It was the currency of Spain several decades ago, and it was also the common currency of Spain's various colonies.

This is why the Spanish peseta is also used in South American countries, because the peso they use is the predecessor of the Spanish peseta. The peso and the peseta are essentially the same. The former is the representative currency of the Spanish colonial era, while the latter is the representative currency of Spain during the Carlo era. The exchange rate between the two is 1 to 1.

Although each South American country has its own version of the peso exchange rate, they are all pegged to the Spanish peseta and all recognize the peseta's monetary value.

This led to the fact that the first thing the Spanish-speaking countries did after the establishment of the economic union was to establish a monetary union in South America.

To be precise, it was the Peso-Peseta Monetary Union. The main function of this monetary union was to regulate the value of the peseta in these Western Region countries, making the peseta one of the official currencies of these countries.

If a country feels that the other party's currency is not a good store of value, countries in an economic alliance can use the peseta for trade settlement.

The essence of a monetary union is to treat the peseta as a common currency among nations.

For South American countries, having a universally accepted currency like the peseta makes trade settlements much easier.

Although these Spanish-speaking countries all use the same currency called the peso, Colombia has the Colombian peso, Argentina has the Argentine peso, and Chile has the Chilean peso, and the exchange rates between these pesos are different.

When these South American countries conduct trade, they need to carefully calculate the exchange rate between the peso and the currency to avoid trade losses due to exchange rate fluctuations.

In the past, this was very troublesome, but with the peseta as a common currency, it is entirely possible to refer to the exchange rate between the peseta and the currency, or even use the peseta directly as a currency for settlement.

It's actually quite clear at a glance that the so-called monetary union was essentially a means to achieve Spanish economic hegemony, albeit only among a few Spanish-speaking countries in South America.

When the peseta became the common currency in South American countries, they would prioritize using the peseta for payment when conducting import and export trade with other Spanish-speaking countries, which would result in South American countries holding a large number of peseta.

The money in hand will definitely need to be spent, but the pesetas can only circulate in Spanish-speaking countries. Compared to importing from other South American countries, these Spanish-speaking countries will certainly prioritize importing goods from Spain.

After all, Spain has a more complete industrial system, especially in terms of importing a wide variety of industrial products, which are not only plentiful but also very cheap.

This will also lead to the fact that the pesetas held by South American countries will eventually return to Spain, without any loss of funds.

The higher the proportion of South American countries using pesetas for import and export trade payments, the greater Spain's economic influence over South American countries.

This approach wouldn't be a loss for Spain. Since Spain has complete control over how many pesetas are printed, and pesetas always have purchasing power in South American countries, this means Spain can use its money to buy goods from those countries.

Of course, Carlo wouldn't easily take over these South American countries unless he absolutely had to.

After all, Spain still needs these South American countries to guard against the United States. In terms of short-term economic benefits and long-term cooperative relationships, Carlo would definitely prefer the latter.

To make it easy for these South American countries to exchange enough pesetas, Royal Union Bank and Banco Nacional de Spain have opened branches in major South American countries.

Currently, tens of millions of peseta are circulating in South American countries, and as time goes on, the number of peseta circulating in South America will continue to increase.

The two official banks opened branches in South America to facilitate the circulation of the peseta in the region and to support Spanish capital, enabling it to penetrate South American countries more quickly.

Not to mention the meager private capital in South America, even the financial reserves of the governments of South American countries are far less than those of Spain's two major official banks.

Royal Union Bank, of course, needs no introduction. It is the representative enterprise of the Spanish royal family and earns a lot of revenue for the royal family every year.

The National Bank of Spain is similar in size to the Royal Union Bank and is also the official bank of Spain.

The currency issuance committee, comprised of these two banks and the government's monetary department, is the core institution for the issuance of the Spanish peseta.

The amount of pesetas issued each year, as well as the maximum and minimum interest rates set by banks across Spain, are all determined by the Currency Issuance Committee.

The Banking Regulatory Committee, under the Currency Issuance Committee, oversees hundreds of banks of all sizes in Spain.

Whether they are official or private banks, they are all subject to the supervision of the banking regulatory committee.

Once a bank is found to have violated regulations or laws, it will be blacklisted by the banking management committee, thus stripping it of its right to operate legally.

It is precisely because of the Banking Regulatory Commission's supervision of banks of all sizes and types in Spain that the safety of Spanish citizens' savings is ensured.

In the era of no regulation, banks could declare bankruptcy for a variety of reasons after accumulating large amounts of customer savings.

These collected user savings will also be transferred and eventually become the private property of the bank's owners.

This is absolutely forbidden in Spain. To protect the safety of Spanish citizens' savings, the Banking Regulatory Commission has established very strict standards and clearly stipulated the liquidation process after a bank declares bankruptcy.

Anyone trying to defraud savings by declaring bankruptcy should forget about it. Once a bank declares bankruptcy, either UCB or Banco Nacional will intervene, forcibly acquiring all of the bankrupt bank's assets and using them to pay out savings deposits first.

(End of this chapter)