The Rise of Australasia

Chapter 848 -635: To Move the Capital or Not

Representatives from various countries stayed for about one week, and within that week, they also signed several cooperative agreements, leaving with smiles on their faces.

Naturally, the biggest winners were Arthur and Australasia. For Arthur, there were two pieces of good news, one was the deepening of immigration cooperation with the United Kingdom, and the other was getting the British to recognize his rule over the Philippines and the Sultanate of Kalimantan.

After all, the Sultanate of Kalimantan bordered the British Strait Colony, and it was essential to negotiate the distribution of interests with the British to prevent conflicts from erupting between these two regions, threatening the relationship between the United Kingdom and Australasia.

After sending off the representatives, Australasia convened a Cabinet Meeting, first, to summarize the government’s achievements in 1925, and second, to discuss when to relocate to Saint Arthur Castle, thus ending the lengthy journey of capital relocation.

No matter what the world situation, Australia’s development was still rather smooth. Even though they interfered with the Dutch Colonies in 1925, it did not incur significant military expenses or cause many casualties.

In the entire year of 1925, Australasia’s Gross National Product broke through to 18.072 billion Australian dollars, with a growth rate that set a new record at 15%.

The reason for such rapid economic growth, besides opening up two major markets, was the tangible improvement in people’s lives brought about by the previously planned constructions.

The second Four-Year Plan had also been in effect for a while, and the results were a significant reason for the economic growth.

Due to the influence of the Four-Year Plan, in the entire year of 1925, the total production of steel and iron in Australasia reached 4.152 million tons and 6.713 million tons respectively. The total production not only broke through ten million tons but was also very close to 11 million tons.

Although it still could not compare with the United States, it was not considered weak among the Powerful Nations. At least for the population of Australasia, this level of industry was already quite strong.

Although the 20th National Day celebration cost millions of Australian dollars, the expenditure was undoubtedly worth it compared to the enhancement in the international standing of Australasia that the parade ceremony brought.

Moreover, with the enormous total fiscal revenue of 227 million Australian dollars in 1925, the government would hardly care about the expenditure of the few millions.

While the total fiscal revenue reached a new high, the Total Fiscal Expenditure of 1925 also saw growth, reaching 199 million Australian dollars, which is almost no different from 200 million.

The good news is that, even with such a situation, the government still maintained a near-30 million fiscal surplus, indicating that Australasia’s financial conditions were excellent and various constructions could no longer impose a greater burden on the finances.

The income of the People was growing, and although it still maintained around 62 Australian Dollars, the Australian Dollar became more valuable under the premise of currency devaluation in other countries.

However, currency devaluation happening in various countries is something to be wary of. If Arthur remembered correctly, a few years after countries began devaluing their currencies, the Economic Depression that could change the World Order erupted.

The reason for countries to start devaluing their currencies? It was nothing more than the fact that the status quo of these countries could no longer support the gold standard, and needed currency devaluation to achieve a different kind of economic prosperity.

Among them, France suffered the most significant currency devaluation, with the value of the Franc now barely half of what it was five years ago, an extremely dramatic devaluation.

What can currency devaluation bring about?

The most significant change is the reduction in imports and the continuous growth in exports. In 1925, the export of French industrial products reached a new record, making France’s economy seem to have returned to its pre-war prosperity.

But in reality, such economic prosperity came at the price of currency devaluation, and the French economy was not that stable. Inflation led to an increase in Commodity Prices, making life for the Frenchmen not so pleasant.

It must be acknowledged that currency devaluation can sustain economic growth and prosperity for some time, which is the real reason why countries started devaluing their currencies during this historical period.

More importantly, currency devaluation can lead to economic prosperity, and if no adjustments are made, only oneself would suffer the consequences.

Arthur had already instructed people to closely monitor the currency devaluation in Europe, and as much as possible, maintain the 2-to-1 exchange rate between the Australian Dollar and the Pound.

At that time, the position of the Pound was quite firm, and with the influence of the British Empire being the foremost in the world, it was destined not to face significant devaluation.

Other currencies like the US Dollar and the Franc couldn’t yet threaten the Pound’s position, even if the United States had the world’s number one economy, it still could not push the US Dollar towards globalization.

The government’s report for 1925 ended quickly, and the topic at the Cabinet Meeting soon shifted to whether to relocate to Saint Arthur Castle.

Whether to relocate was a question that already had an answer, as Saint Arthur Castle, being the future Capital of Australasia, was destined for relocation.

But the issue was when to relocate and how long the relocation would take, all of which deserved deep thought and consideration.

"Your Majesty,” Prime Minister Roger stood up first, saying very decisively, “I believe it is time to relocate our Capital to Saint Arthur Castle. The construction of Saint Arthur Castle has been completed, and the successful execution of the National Day activities has made its name known internationally.

I believe this is our best opportunity to relocate the Capital and we should proceed with the relocation swiftly so that by the middle of this year, Saint Arthur Castle will truly become our new Capital City.”

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