Rise of Empires: Spain.

Chapter 443 The Lisbon Peace Talks

"Your Majesty, according to our statistics, a total of 16532 soldiers died in this war. In accordance with the rules for a one-time payment of compensation, we need to pay these fallen soldiers 3306.4 million pesetas in compensation."

A total of 35142 soldiers were injured, including 4521 disabled soldiers, 12768 seriously wounded soldiers, and 17853 slightly wounded soldiers. According to the rules for a one-time payment of compensation, we need to pay 723.3 million pesetas to all disabled soldiers, 1532.1 million pesetas to all seriously wounded soldiers, and 714.1 million pesetas to all slightly wounded soldiers.

Calculations show that the government will need to pay a total of 6275.9 million peseta in pensions this year.

In addition, regarding the annual distribution of relief funds, based on the current estimated per capita annual income in our country, next year we will need to distribute 495.9 million pesetas in relief funds to all fallen soldiers, 135.6 million pesetas to all wounded soldiers, 255.4 million pesetas to all seriously wounded soldiers, and 142.8 million pesetas to all lightly wounded soldiers.

The total amount of relief funds distributed was 1030.7 million pesetas, which will not have a significant impact on our country's finances.

At a cabinet meeting convened by the Spanish government, Finance Minister Orl Acosta reported respectfully to Carlo.

The Spanish government attaches great importance to the distribution of postwar pensions and relief funds. Carlos specifically demanded that the distribution of pensions be accurate to every wounded or killed soldier, and that no underpayment or omission be tolerated.

Even if it's just a fraction of a copper coin, every single one must be distributed to every soldier or their family.

Because of Carlo's strict requirements, the statistics on dead and wounded soldiers are taken very seriously and meticulously by the cabinet government, state governments at all levels, and the defense department.

The relief funds distributed annually are not a significant burden for the Spanish government. Even with over 5 casualties, the annual relief funds required by the Spanish government are only 1000 million pesetas.

Compared to the tens of millions in compensation, this relief fund is just a drop in the bucket.

The total amount of pension payments reached 6275.9 million pesetas, which is a significant expenditure for the government.

Although the war did not have a significant impact on Spain itself, the outbreak of the war inevitably led to a substantial increase in Spain's military spending.

According to government statistics, in 1904, Spain's total fiscal revenue remained at around 16 billion pesetas, while total fiscal expenditure surged from less than 16 billion pesetas to nearly 18 billion pesetas, a net increase of more than 2 million pesetas.

The vast majority of these increased expenditures went to the war with Britain, which has led to a record government deficit of 1.755 million pesetas this year.

This does not include the upcoming payment of 6275.9 million pesetas in compensation. If these are included, the Spanish government's fiscal deficit this year will reach nearly 2.5 million pesetas.

The good news is that peace talks between Spain and Britain are about to begin. Because Spain still holds more than 10 British prisoners, it is possible to squeeze some money out of the British government to make up for Spain's fiscal deficit for the whole year.

For this reason, Carlo was not stingy with the pensions and relief funds. After listening to the report from Finance Minister Orr Acosta, he nodded without hesitation and instructed: "Now that all the pensions and relief funds have been tallied, let's work hard for a while longer and try to distribute all the pensions to the soldiers and their families before Christmas."

The annual relief funds should also be distributed at the beginning of the year to ensure that the living standards of wounded and fallen soldiers and their families are improved throughout the year.

These soldiers fought for Spain; they stood up to defend their homeland, and we certainly cannot let these heroes down.

Prime Minister Orcajo, regarding the distribution of pensions and relief funds, I hope you and Acosta will work together to ensure that no underpayment or omissions are made.

I will also have the Senate's performance evaluation bureau and anti-corruption department oversee the process. The distribution of pensions and aid is crucial to Spain's stability, and I will not allow any problems to arise.

Upon hearing Carlo's order, Prime Minister Angelo Orcajo and Finance Minister Orr Acosta immediately nodded in response, indicating that they understood.

"Minister William, has the British side agreed to our request?" Carlo turned to Foreign Secretary William and asked.

After Britain requested peace talks from Spain, Spain also made its own demands: that the talks be held in Lisbon or Madrid, and that either France or Russia act as a neutral mediator in the peace negotiations.

While France or Russia did not have particularly friendly relations with Spain, their relationship with Britain was extremely poor.

Both countries were willing to stand behind Spain in peace negotiations simply to cause some trouble for the British. After all, peace negotiations wouldn't harm British territory, and under these circumstances, they didn't need to worry that peace negotiations would cause Britain to fall from its pedestal.

"The British government has indicated that it needs more time to consider this matter, and they have not yet given any response," Foreign Secretary William replied.

“It seems these British aren’t in a hurry yet, so let’s put some more pressure on them,” Carlo said with a smile.

"Secretary Jyoti, how is the naval repair work progressing? Have our damaged battleships been restored to combat readiness?"

"The battleships have been largely repaired and are ready for combat at any time," Defense Minister Jyoti replied respectfully.

“Very good.” Carlo smiled and nodded, then instructed, “Since the British are not in a hurry for peace talks, it means that this war is not over yet.”

In that case, we should plan our next offensive. If the British government does not respond within three days, our army and navy should immediately move in and occupy the British island of Malta first.

The strategic value of Malta is self-evident. Located in the central Mediterranean, it is Britain's most important naval base in the region.

If the British thought that Spain could no longer threaten them after the Portuguese Civil War, they would be sorely mistaken. Although attacking the British mainland was unrealistic, they could still cause trouble for the British by continuing eastward in the Mediterranean, in Malta and Egypt.

Unless the British are willing to completely relinquish control of the Mediterranean, it is Britain that should be worried.

Moreover, the prisoners in Spain's hands were no pushovers. With each day of delay, the families of these prisoners grew increasingly anxious, and naturally, the British government became even more anxious.

After all, these prisoners wouldn't pressure the Spanish government; they would only try to force the British government to back down in order to rescue their families.

Spain only needed to treat these British prisoners to good food and drink, and then negotiate with the British government to pay several times or even dozens of times more.

After all, Spain's food supply didn't come easily. It wasn't unreasonable for Spain to ask for some compensation for providing enough food to the British prisoners.

In reality, the British government did want to influence the location of the peace talks. If the talks were held in Lisbon or Madrid, Britain would be completely at a disadvantage, or rather, become a fish on a chopping block, at the mercy of Spain.

If peace talks were to take place in London or other areas under British control, Britain would at least have some leverage, which is entirely different from peace negotiations.

Unfortunately, Spain will not budge on the location of the peace talks. It has to be either Lisbon or Madrid; there are no other options.

After the Spanish fleet made two trips to Malta, the British government finally relented and agreed to hold peace talks in Lisbon on Christmas Eve, inviting Germany and France as neutral countries to ensure the smooth progress of the talks.

The British government also specifically requested that Spain cease any hostile acts against the British mainland and its colonies during the peace negotiations.

Carlo agreed to the British government's request, as Christmas was approaching and the soldiers who had fought in the war needed to return to their families to celebrate and relax. As December 24, 1904 arrived, peace negotiations between Spain and Britain successfully began in Lisbon.

The main parties to the peace negotiations were Britain and Spain, with Portugal also involved. After all, the main battlefield for the British and Spanish land war was in Portugal, so Portugal could not be ignored in the peace negotiations.

As neutral countries, Germany and France will only ensure the smooth progress of peace negotiations and discuss the rationality of the peace conditions proposed by each side, without taking any other actions.

At 8 a.m. on December 24, diplomatic representatives from five countries met formally in a building in Lisbon, marking the official start of discussions on peace negotiations between Britain and Spain.

As the party with the upper hand in the current war, Spain was naturally the first to propose terms.

Spain showed no courtesy whatsoever to the wealthy and powerful British. As Spain's diplomatic representative, Foreign Minister William was the first to raise Spain's demands for peace.

First, the war broke out because the British task force launched an attack on the Spanish navy, which means that Spain was not at fault in the war.

As the party at fault, Britain should bear all the losses suffered by Spain and Portugal in this war. As war reparations, Britain should pay Spain and Portugal a total of £1.4 million, of which Spain should receive £1.2 million and Portugal £2000 million.

Secondly, as compensation for the families of soldiers and civilians harmed by the war, Britain should pay a total of £5600 million in postwar relief to Portugal and Spain, of which Portugal should receive £4200 million and Spain £1200 million.

Then there is the territorial dispute between the two countries. Gibraltar has been an integral part of Spain since ancient times, and Britain should recognize Spain's sovereignty over Gibraltar and renounce any subsequent territorial claims to Gibraltar.

Because of Britain's support for the Portuguese Republican Party, which led to the outbreak of the Portuguese Civil War, Britain also had to pay an additional £400 million in compensation to all Portuguese people to help them improve their lives in the coming years and reduce the impact of the war on the Portuguese economy and industry.

The total amount of all the aforementioned compensation and damages is £2 million, which means that, in accordance with the demands of the Spanish diplomatic representatives, the British government needs to completely relinquish Gibraltar and pay £2 million in reparations to Spain and Portugal.

Needless to say, the mere thought of Gibraltar, with its £2 million indemnity, was enough to make the British government rise from their chairs in anger, their eyes fixed on the Spanish diplomatic representative.

That's £2 million! At the current exchange rate between the pound and the peseta, £2 million is equivalent to 50 billion pesetas, which is more than three years' worth of the Spanish government's total fiscal revenue.

The franc and the pesetas are equivalent. During the Franco-Prussian War, the Germans only demanded 50 billion francs in reparations. How dare Spain demand 2 million pounds in reparations from the British government when they suffered no losses on British soil? Isn't this treating the British like the French?
"Impossible, absolutely impossible! Mr. William, I acknowledge that Spain was the victor in the war, but the British Empire absolutely cannot accept a reparations payment of £2 million."

Good heavens, do you know what £200 million represents? At a cost of £2 million per battleship, this indemnity represents 100 battleships, enough to arm a super navy that can crush all the countries in the world.

Good heavens, I can't believe this number. If I remember correctly, Spain only deployed 20 troops in this war, right?
"The total casualties were only 5. On what grounds do you demand £200 million in reparations? Forget £2 million, we don't even have £2000 million. The British Empire is only willing to pay £2 million, nothing more." The British diplomat retorted in shock, finding it hard to believe that the Spanish diplomat could cite such a massive sum as £2 million.

For the wealthy British Empire, £2 million was equivalent to two years' worth of fiscal revenue. For countries with slightly weaker economies like Germany, France, Russia, and Spain, £2 million was roughly equivalent to three years' worth of fiscal revenue, or even more.

Although Britain could afford the reparations, it would absolutely not accept paying Spain such a large sum. The current relationship between Britain and Spain demonstrates that giving Spain such a large sum would be tantamount to aiding an enemy.

Unlike the French, the British would not pay huge reparations to their enemy and then nurture that enemy into a superpower far surpassing themselves.

"Your Excellency British Representative, please calm down. The above is only the share of reparations I mentioned; we have not yet discussed the return of the more than 100,000 British prisoners of war in Spain."

In accordance with the principles of civilized European nations, we provided your prisoners with sufficient food and living conditions, which also resulted in a huge expenditure on our national treasury.

According to discussions within our government, and considering the enormous reparations your country would have to pay, your country would only need to pay a ransom of £500 per ordinary soldier.

According to our statistics, we captured a total of 135726 prisoners, including 8672 lieutenant-level officers, 786 field-level officers, and 7 general-level officers.

Depending on the different levels of supplies provided to officers, we will charge each lieutenant-level officer an additional £500, each field-level officer an additional £1500, and each general-level officer an additional £5500.

Therefore, if your country wants to redeem a total of 135726 prisoners, it will need to pay our country a ransom of £7491.65.

Of course, if your country is unwilling to pay the ransom, these prisoners will be safely repatriated to Britain once they have earned enough money through labor in designated locations.

During their employment, they will enjoy the same treatment as Spanish workers and be protected by Spanish labor law.

"I just don't know if the families of these soldiers are willing to let them stay in Spain. Of course, that depends on your government's opinion." Minister William, as the Spanish diplomatic representative, was not in a hurry at all. Instead, he smiled and raised a topic that made the British shudder: the ransom of more than 100,000 prisoners of war.

Since Spain had captured over 100,000 prisoners, it was impossible for them to be easily sent back to England. The British government naturally understood this as well, and they knew that they would have to pay a heavy price for the prisoners.

But to the surprise of the British diplomatic representatives, Spain's appetite was far greater. Not only did they demand £2 million in war reparations, but they also wanted nearly £7500 million in ransom for prisoners of war.

Leaving aside whether the British government could come up with that much money all at once, even if it could, the British government would absolutely not tolerate such extortion from Spain.

The British diplomatic representative took a deep breath, suppressing his dissatisfaction, and looked at the Spanish diplomatic representative William. He then said, "Mr. William, your country has no right to force our soldiers to do any labor. You should send these soldiers back to Britain in a timely manner after the war ends."

They are citizens of the British Empire, and the British government will never accept its citizens being forced to work in exchange for ransom through violence perpetrated by another government.

If your country insists on not returning these soldiers, the angry British public will not be willing to let this war end like this.

Minister William paid no heed to the British government's threats: "Mr. British Ambassador, we certainly do not wish to force these British soldiers to work in exchange for their ransom, but all of this is contingent on your country being willing to pay the ransom for these soldiers."

During their captivity, the Spanish government provided them with sufficient food as usual and did not force them to work in exchange for income.

This is a huge expense for Spain, which is why we are demanding a ransom. As for the anger of the British people you mentioned, I believe what angers them even more is the inaction of the British government in failing to ransom the prisoners.”

Because Spain had gained a decisive advantage at this point, Minister William would not show any courtesy to the British diplomatic representatives.

This negotiation is the best time for Spain to assert its interests, and Minister Willem will not back down in any way, after all, this involves a huge amount of money.

If Britain had agreed to the £2 million war reparations and £7500 million ransom, the Spanish government would have had no financial burden, its future national development would have been faster, and it would have been able to accumulate more national strength before the outbreak of World War I.

Even if these reparations and ransoms are reduced to half or even a third, it would still be a huge profit for Spain.

After all, the war did not last long, and Spain spent only about 2 million pesetas on it, which is less than 1000 million pounds.

(End of this chapter)