Recruitment was still ongoing, and the Papal States' import of weapons had already been finalized, with weapons from various countries already en route.
Even for a wealthy state like the Papal States, importing such a large quantity of weapons was an enormous expense, even if the special envoys had tried their best to lower the costs during negotiations. With so much real silver flowing out, Augustus's heart bled.
One such loss was enough; the Papal States had to establish its own complete industrial system. No, at this time, the concept of an industrial system probably didn't exist yet. Anyway, that was the idea: other things could be postponed, but military production must be self-sufficient.
At the same time, the domestic aristocratic capitalists were already stirring. Everyone saw the huge profits in military production, and no one wasn't covetous. However, those who dared to set their sights on this industry were not just wealthy or noble; they were basically both wealthy and noble, with power, money, status, identity, and connections. Most people could only dream of it.
In Rome, inside a luxurious mansion, at the dining table:
"Father, let's quickly invest in military production! The sooner, the better!" a slightly immature voice piped up.
"Nonsense, is military production something you can invest in just because you want to?" a stern elder reprimanded.
"Little brother, what strange ideas do you have now? Last month, four of the factories you invested in went bankrupt again."
At these words, the whole table burst into laughter.
The young man's face turned red, and he stubbornly said, "This time, it will definitely work!"
"Tell me your reasons." As an open-minded parent, although he couldn't bear to look at his youngest son's investment skills, he was still very willing to listen to his ideas.
"The Pope wants to expand the army on a large scale, but because there isn't enough domestic weaponry, he's forced to import large quantities from abroad at great expense. This is a huge loss for the Papal States. I guess the Pope will never want military production to rely on imports long-term, so he'll inevitably promote the development of domestic military industry.
If we invest in military production now, we'll surely receive strong support from the state, and they might even partner with us. As long as these tens of thousands of troops exist, we'll always have a market with almost no risk, and it's highly profitable. This is a very profitable business!" the young man said excitedly.
"But these are all just your guesses. What if the Pope just thinks buying is better than manufacturing and has no intention of supporting domestic military development? What if this expansion is just a momentary whim of the Pope, and he'll downsize the army in a blink? What if the Papal States changes hands again soon? Have you considered all these issues?" The speaker was the young man's elder brother, a mature and steady middle-aged man.
"I don't think so," the young man said confidently.
"There are too many things you 'don't think so' about, but we've all seen the results. What's more, even if you're right, if you can think of it, why wouldn't others be able to?"
"Military production isn't something just anyone can invest in. There aren't many families with our family's financial resources and connections. And precisely because our competitors might also have thought of it, we need to get in first!"
The elder shook his head and said helplessly, "Son, I want you to remember one saying: 'One step ahead allows you to seize the initiative; ten steps ahead will get you killed miserably.'"
"What does that mean?" the young man asked, puzzled.
"I ask you, if the Pope wants to encourage domestic military development, what will he do?"
"He will definitely give various preferential policies and issue relevant laws, do some preparatory work, and can also invest in, rectify, transform, and expand existing domestic military factories. There are many, many more things he could do; anything that benefits military development is possible. The Pope values the army so much, he can't ignore military production."
"Then what do you see now?"
"I..." The young man was speechless.
"The preferential policies and relevant laws you spoke of are nowhere to be seen right now. Why would you invest in military production at this point? Even if, as you say, the Pope will do many things to encourage military production later, entering so early without a clear direction means you'll miss out on all the preferential policies. Do you think that's a profit or a loss? Is this what you call seizing the initiative?"
After such a scolding, the young man hung his head and fell silent.
Having educated him, but also not wanting to dampen the child's enthusiasm, the elder continued, "However, your idea is very good, and your predictions are reasonable, but how to proceed specifically still requires further understanding. Let's prepare first.
I will also try to inquire about the developments regarding military production, the Pope's attitude, and the government's actions. If it's truly feasible and the time is right, we can enter the market immediately, and then, if we make a lot of money, it will be your credit."
His voice was still full of authority, yet it couldn't hide a father's love for his son. Hearing his father's words, the young man perked up again.
...
While outsiders speculated, the Papal States' high-ranking officials were indeed discussing measures to encourage military production.
Everyone was highly in agreement on this matter; no one wanted the Papal States' weaponry to depend on imports. A powerful Papal States was more in everyone's interest, and only by producing domestically could those present profit from it. For both public and private reasons, everyone strongly supported this matter.
During the meeting, everyone spared no effort in offering advice and suggestions, creating a rare scene of harmony. Augustus even felt for a moment that if it could always be like this, it wouldn't be bad.
After several days of discussion and preparatory work, the Papal States' policy to encourage military production was freshly released.
Originally, many with shallow pockets dared not consider military production, but the Papal States introduced a policy: military enterprises would be tax-exempt for the first three years and have their taxes halved for the next three years.
Of course, even so, military production was still not something everyone could afford, but it certainly gave more people an opportunity.
Augustus had originally considered having the government directly fund and establish some military factories, but everyone felt it was unnecessary. There was no way; at this time, state ownership would certainly not be well-received.
Moreover, even hundreds of years later, state ownership still suffered from a lack of innovation, rigid systems, and breeding corruption, and he himself didn't know how to deal with these issues, so he abandoned the idea.
The final decision was: if investors needed it, the government would provide funding, creating public-private partnerships.
This way, the state could control military enterprises to a certain extent and guide them in the right direction. Investors needed more capital input and also needed the state to back them up. It was a proper win-win cooperation.
In addition, military enterprises require huge initial investment and have long return cycles. Relying solely on investors' original capital accumulation, many small-time speculators might not be able to hold on and would go bankrupt prematurely.
Therefore, the Papal States government issued a notice to domestic banks, increasing the loan limits for military investors, and if necessary, even allowing investors to borrow from the state or have the government take over by selling shares.
A clever housewife cannot cook without rice; encouraging military production without raw materials is absolutely impossible. Thus, the Papal States increased the production, mining, and import of copper, iron, saltpeter, and timber, while restricting exports. It also improved the treatment of technical personnel related to metal smelting and iron forging to attract talent; military professions such as blacksmiths and cannon casters could be exempt from taxes and military service for 6 years.
As military production develops and expands, the demand for raw materials will outstrip supply, and military production will in turn promote the development of these raw material industries, forming a virtuous cycle.
...
There were many more preferential policies for military enterprises. Augustus was not at all afraid of overproduction; at worst, he could switch from domestic sales to export. He knew, even if others didn't, that at this time, weaponry was the least likely to lack a market.
Low risk, high reward. As soon as the policy was announced, wealthy aristocratic capitalists flocked to it, all wanting a piece of the pie, including relatives and friends of some of those present at the Papal States conference. Even more, David himself directly got involved.
With the injection of a large amount of fresh blood, the Papal States' military industry burst forth with vitality.