Rise of Empires: Spain.

Chapter 480 Labor Agreement
Carlo was certainly aware of the shortage of military supplies in Russia. And it wasn't just a shortage of military supplies; Russia was also experiencing a food shortage.

As the competition between the two military blocs intensifies, the struggle for European resources has become a concern for European powers such as Germany and France.

Russia possesses the East European Plain and the black soil of Ukraine, resulting in substantial grain production. However, the problem lies in its population, which is also the largest in Europe, significantly increasing internal food consumption.

In years with good harvests, Russia is still able to export grain, and agricultural income is one of Russia's main sources of income.

However, in the event of natural disasters or man-made calamities, Russia not only ceases to be a grain exporter but also becomes a major grain importer.

Compared to other European countries, Russia's grain yield per acre is relatively low. This is partly because most of Russia is cold and not suitable for grain cultivation.

On the other hand, Russian farmers rarely use chemical fertilizers, for a simple reason: they simply cannot afford them.

Russia's own chemical industry is limited, and most of the fertilizers on the market are imported from abroad. With the original price plus tariffs, the price of fertilizers is naturally not low.

Russian farmers have always relied on the weather for their livelihood. Although chemical fertilizers can increase grain yield per acre to some extent, that is only if God is on their side and no natural disasters or man-made calamities occur.

If an accident occurs, not only will the grain not be harvested, but all the fertilizer purchased will also be sold at a loss, which is unacceptable to many Russian farmers.

With limited annual income, they naturally cannot afford the additional cost of fertilizer.

After all, the fertilizers at that time were not the more mature fertilizers of later generations, and their effects were limited. Moreover, due to the lower yield, the price was higher.

Carlo knew very well that if he did not find a way to help Russia now, Russia's future fate would inevitably be the same as in history: a revolution would break out due to the defeat in the World War, and in the end, not only would the Romanov family be overthrown, but Russia would also be forced to withdraw from the World War.

Once Russia withdraws from the world war, the situation in Europe will change dramatically. Carlo does not want Russia to withdraw from the war prematurely; he wants it to persist at least until the later stages of the war.

Helping Russia is quite simple; it mainly involves providing material support, such as weapons, equipment, and food, which Russia currently lacks.

Of course, even if it's to help Russia, it certainly won't be given to the Russian government for free.

Russia currently lacks many things, but it doesn't lack people. Furthermore, Russia has relatively abundant mineral and energy resources, which can be used as collateral to pay Spain for weapons, equipment, food, and other supplies.

Although Spain signed a treaty on neutrality, normal trade can still continue, since Spain has not excluded trade with its allies.

Spain could sell weapons and food to Russia, and of course, it could also sell them to Germany. However, Germany's industrial production capacity was more than sufficient, and as a major food producer itself, it naturally did not need these supplies.

Needless to say, Italy and Austria-Hungary, although the southern region of Italy was industrially backward, still had a fairly good grain output.

The Austro-Hungarian Empire, with its vast plains, not only had no shortage of food but was also one of Europe's major food exporters.

On June 12, 1911, the Spanish and Russian governments formally signed a labor agreement, stipulating that laborers, along with some mineral resources and energy materials as collateral, would be used to purchase Spanish weapons, equipment, food supplies, and some industrial products of equal value.

These laborers are of little use to Russia, and some of them are even quite dissatisfied with the current Russian government; keeping them around would only be a nuisance.

Of course, for Spain, these cheap laborers from Russia actually proved to be more valuable than ordinary Spaniards.

Spain needs a large workforce. In addition to the labor required for daily industry and infrastructure construction, the country also needs to build a large number of water conservancy facilities to combat drought, which also requires a large amount of manpower.

This is not the era of advanced machinery that will come later. Nowadays, the construction of infrastructure and water conservancy facilities relies almost entirely on human labor.

Although Spain can provide enough labor, using Spaniards as laborers is not a wise choice for the Spanish government.

Firstly, after so many years of development, Spain's per capita annual income has now reached the upper-middle level in Europe.

Spain's per capita annual income has exceeded 500 pesetas, and most workers earn more than 600 pesetas.

In such a situation, if tens of thousands or even hundreds of thousands of workers are mobilized, the labor costs alone would be a huge financial burden.

On the contrary, the wages paid to these laborers transported from Russia were very low, based on the average annual income in Russia, and much lower than the average annual income in Spain.

More importantly, the Spanish government wouldn't hesitate to let these Russian laborers fill positions with high casualty rates.

As long as there is no mass death, even if some Russian laborers die, it will not affect Spain's reputation or its relationship with Russia.

The Russian government was largely aware of the destinations and roles of these Russian laborers. This trade was essentially a human trafficking operation, though not explicitly stated, but there was a tacit understanding among European countries.

On June 28, with the arrival of the first batch of supplies at a Russian port, labor cooperation between Russia and Spain officially began.

On July 2, the first batch of 100,000 Russian laborers also arrived safely at a port in Spain.

Spain warmly welcomed the Russian laborers who had traveled from afar, and even provided them with plenty of food and resettlement allowances free of charge on the day they arrived at the port.

Such measures did indeed soothe the somewhat worried Russian laborers, calming them down and at least making them less resistant to life in Spain.

The following day, Spain began classifying these Russian laborers.

Back when the Spanish and Russian governments signed the labor agreement, the Spanish government specifically requested that the Russian government classify these workers according to different ethnicities and regions, so that the Spanish government could further subdivide them.

To incentivize the Russian government to classify these laborers, Spain promised that the value of each laborer could increase by 10% if they were roughly classified.

This was the best motivation for the Russian government, which did indeed classify these laborers in a simple way to facilitate further allocation by the Spanish government.

Firstly, Russian laborers from the same city or region would not be assigned to the same work area.

This is also to prevent them from banding together and forming a force capable of confronting the Spanish government by sticking together for warmth in a foreign land.

Dispersing and reorganizing these Russian laborers would minimize the chances of them rioting. Of course, Spain wasn't particularly afraid of them rioting.

After all, once these laborers were separated, the number of Russian laborers working in each region would only be a few thousand at most. What kind of trouble could a few thousand people cause?

Spain takes certain precautions against these laborers, stationing an army of thousands near their work areas.

If these Russian laborers were to riot, the Spanish army would suppress it swiftly and ensure that the news was not leaked.

Even if thousands or tens of thousands of Russian laborers died, it wouldn't be a big deal. After all, in those days, deaths were commonplace when building infrastructure and water conservancy facilities. With these 10 Russian laborers involved in the construction of water conservancy facilities in Spain, the construction process in Spain became much smoother.

Although Spain has successfully annexed Morocco and Portugal, increasing its mainland area to over one million square kilometers, this does not mean that Spain can rest easy.

Let's first look at the problems of the three parts that make up present-day Spain: Spain, Morocco, and Portugal.

Spain's mainland area exceeds 500,000 square kilometers, making it a large country in Europe. However, the problem is that the vast majority of this land is mountainous and plateau, with the Meseta Plateau covering more than 60% of the area. This has led to extreme drought in central and southern Spain.

Plains account for only 11% of Spain's total area. The population and agriculture are mainly concentrated in the surrounding coastal areas, while the inland areas are mostly sparsely populated, except for Madrid, which has a slightly better environment.

Morocco faces a similar problem to Spain: plains are mainly concentrated along the northwest coast, while the central and southern regions are either mountainous or desert.

Portugal's problem is slightly less severe, as it still possesses relatively large plains. However, these plains are fragmented by mountains, preventing the formation of vast, undeveloped plains, which limits Portugal's agricultural development.

In conclusion, it can be seen that of the millions of square kilometers of mainland Spain currently occupies, the truly valuable portion is only the less than 20 square kilometers of plains.

The remaining more than 80 square kilometers of mountainous, desert, and hilly areas are not very suitable for agriculture. In particular, the hundreds of thousands of square kilometers of highland areas in the interior of Spain are inherently unsuitable for agriculture, and due to extreme drought, they have formed a large area of ​​almost uninhabited no-man's-land.

The water infrastructure currently being built extensively in Spain can only alleviate the drought problem to a certain extent.

It is impossible to completely solve the drought in our region with current technology, and it may not be possible even in future generations.

The good news is that even with only 20 square kilometers of plains, Spain can support a population of tens of millions or even hundreds of millions.

With the continuous construction of water conservancy facilities, the current land area of ​​over one million square kilometers is more than enough to support 1.5 million people.

While the vast mountainous and plateau regions of Spain pose a limitation to economic development, they also make the Spanish mainland militarily formidable.

It is no exaggeration to say that even if Germany had defeated France, it would not have been able to defeat Spain by invading it.

Every mountain in Spain is a large fortress, and Germany would have to expend enormous human resources to dismantle them piece by piece.

This is why mountainous countries have stronger defensive capabilities and can prolong wars. A prime example is Afghanistan, whose reputation as the graveyard of empires is well-deserved, thanks to the natural fortifications formed by its endless mountain ranges.

The labor agreement between Spain and Russia proceeded quite smoothly, with no opposition even from the allied powers of Germany, Austria-Hungary, and Italy.

After all, Spain's actions did not violate the Neutrality Treaty. The Spanish government neither refused to cooperate with its allies nor supported any country at war.

Being a neutral country does not mean completely severing trade relations with other countries; it only means temporarily suspending trade with warring countries.

Since there is no war breaking out in Europe at present, Spain naturally has the right to do business with any country, which is why Germany has no objections.

In August, September, and October, Spain received another batch of Russian laborers, bringing the total number of Russian laborers in Spain to over 500,000.

Although Russian laborers are continuously pouring into Spain, the Spanish people have little objection to it. After all, these Russian laborers won't take their jobs; the jobs they do are mostly undesirable to most Spaniards. In fact, they would love for as many Russian laborers as possible, since only by building more irrigation facilities can the drought problem in Spain's inland regions be better alleviated.

In return, Spain also shipped a large amount of weapons, equipment, and food supplies to Russia, as well as a range of industrial products, which effectively alleviated Russia's problems of insufficient weapons and food shortages.

Spain's domestic industry and economy also benefited from the export of large quantities of goods to Russia, which effectively stimulated and boosted growth.

In particular, Spain's military industry had entered a state of full-scale production with two shifts. The production speed of the military factories had reached its limit, with a large number of weapons and equipment being assembled and entering the warehouses every minute.

To date, Spain has stockpiled a large amount of weaponry in preparation for the upcoming European war.

They had stockpiled 150 million rifles alone, along with 1250 machine guns, 1500 artillery pieces of various calibers, 3.4 million rounds of ammunition, and millions of shells.

Carlo's ultimate goal was to stockpile more than 200 million rifles and 5 million rounds of ammunition, and also to increase the number of machine guns and artillery pieces to more than 3000 each.

Only by stockpiling enough weapons and equipment can Spain earn sufficient revenue through the arms trade when a future war breaks out.

Selling weapons now makes money, but in the future, selling weapons will not only make more money, but also allow access to more important things such as gold reserves, ores, and other strategic materials from European countries.

The importance of gold reserves goes without saying. They not only determine the strength of a currency, but can also be used to issue large amounts of currency, increasing the government's available fiscal budget.

Currently, there are four most popular currencies in the world: the British pound (with the highest value), the French franc (with the most users), the peseta (with the most countries using it), and the mark (with the most major powers using it).

The French franc's success stemmed from France's past glory and its extensive practice of usury. Before the 20th century, French was the common language of Europe, precisely because of France's former power.

Like the French language, the franc gained popularity among many smaller European countries due to France's past glory. Furthermore, France's vast colonial empire also contributed to the franc's popularity.

As the de facto global superpower, the status of English and the pound sterling is gradually replacing that of French and the franc. Furthermore, the pound sterling has the highest value of all European currencies, making it one of the most popular currencies.

While Spain has a glorious past, that history is too distant to add any value to the Spanish peseta.

Fortunately, Spain currently possesses vast colonies, and with the support of South American countries that were once Spanish colonies, the peseta has become one of the most popular currencies.

The most distinctive example is the German mark. The reason the German mark became the most popular currency is simple: Germany's two allies, Austria-Hungary and Italy, both relied on German support.

They needed to import large quantities of industrial products and weapons from Germany, and trade settlements between the Allied powers would certainly have to be conducted using the German mark, the official currency of the most powerful nation, Germany.

It was thanks to the support of the Allied powers that the German mark became one of the most popular currencies, rivaling the pound sterling, the franc, and the peseta.

In the labor agreement cooperation between Spain and Russia, the currency settlement is based on the peseta.

In addition, due to economic cooperation between Spain and other European countries, the peseta is also circulated among European countries and is welcomed by many Europeans.

Besides these four popular global currencies, the currencies of other European powers, whether it was the Austro-Hungarian crown, the Italian lira, or even the American dollar, had little credibility at this time.

There are no problems using them on their own soil, but their actual value is greatly reduced when they go to other countries.

In particular, the US dollar has the lowest value among all major currencies in Europe. The reason is simple: the US is too far away to provide the same level of financial credibility as other European countries.

(End of this chapter)