Chapter 343: Military Expansion and Loans
On March 27, 1913, under Arthur's witness, Minister Grey and Prime Minister Kent signed the Entente agreement, officially marking the conclusion of over a month of negotiations, and the formal signing and execution of the Anglo-Australasian Treaty. This treaty was a comprehensive cooperation agreement covering diplomacy, economy, military affairs, and more. Australasia officially became an ally of Britain, joining the Entente Powers.
The signing of the Anglo-Australasian Treaty caused quite a stir within both Australasia and Europe. This marked the official inclusion of Australasia in the Entente Powers, bringing the total number of great powers within the Entente to four, surpassing the three in the Central Powers. Although Australasia's status as a great power had only been recognized by European governments and media in recent years, with competitors like the Island Nations, no one could deny its place. Even as the eighth great power, Australasia was much stronger than non-great power nations.
Based on the current military strength on paper, the Entente Powers had a considerable advantage. Italy and Australasia were both considered lower-tier great powers, though Australasia's military strength was arguably stronger than Italy's, particularly in the army, while both nations had balanced navies. Russia was also stronger than Austria-Hungary. The combined strength of Britain, France, and Russia surpassed Germany, and the Entente had significant advantages in territory size, population, and overall military capabilities, making the balance of power seem to tilt toward the Entente.
On the same day that Australasia announced its treaty with Britain, Emperor Wilhelm II sent a telegram to Arthur, inquiring about the situation. During the reign of Edward VII, Arthur's relationship with Wilhelm II had been significantly better. However, international relations were not maintained solely through personal relationships. For Australasia, joining the Entente meant gaining more benefits and a position among the top five great powers. On the other hand, joining the Central Powers would have required exhausting all resources, leaving no hope of victory. For Arthur and Australasia, this was unacceptable.
Therefore, joining the Entente was the best result for both Arthur and Australasia. While this decision was somewhat immoral in terms of his relationship with Wilhelm II, national development often takes precedence over personal bonds. In response to Wilhelm II's inquiry, Arthur could only explain the decision through the lens of the majority of Australasia's British-descended population.
Arthur also assured Wilhelm II that Australasia would not use any prohibited weapons in the war. World War I saw the use of numerous illegal weapons. Aside from the Maxim machine guns, which caused immense casualties, chemical weapons, flamethrowers, and other terrifying weapons also became infamous. Chemical weapons, in particular, caused blindness, suffocation, infections, and even death. Flamethrowers, while not appearing to be very deadly, caused cruel injuries by emitting extremely high temperatures that could burn enemies within close range, and even ignite ammunition within fortifications.
While the relationship between Arthur and Wilhelm II didn't drastically change after Australasia joined the Entente, the two were still able to converse amicably through telegrams. However, Wilhelm II, with the pride of a top-tier monarch, did not try to persuade Arthur to reconsider. In his view, the battlefield would prove that the Entente was nothing more than a shell, easily crushed by the mighty German Empire.
The news of Australasia's joining the Entente caused a great reaction within the country. The supporters of the move mostly came from the British and Russian immigrants. With British immigrants making up the majority of Australasia's population, the people's sentiment was overwhelmingly in favor of joining the Entente. As for the less than 10% of the population who were of German descent, they were not as vocal in their opposition. Most of these German immigrants had assimilated into the larger British and Russian communities, and the few who still felt strong ties to their homeland were unlikely to cause much disruption.
Arthur, aware of the potential unrest from the German immigrants, made sure to maintain strict surveillance on domestic affairs through the Royal Security Intelligence Agency. This agency was critical for monitoring internal stability, and Arthur had strongly supported its expansion. By now, the agency employed over 10,000 personnel, with more than 5,000 stationed throughout Australasia's cities and towns. The agency also had a network of agents abroad, particularly in Europe, the U.S., and East Asia, with more than 4,000 operatives in Europe alone.
One immediate benefit of Australasia's entry into the Entente was the establishment of alliances with Britain, France, and Russia. Since Australasia had committed to sending a large number of combat troops to the European war, Arthur saw an opportunity to request more benefits and assistance from Britain, France, and Russia. Of course, most of the aid would come from Britain and France, with Russia also receiving its share.
On the very day the government announced the joining of the Entente, Arthur instructed the government to establish strong diplomatic relations with France. The French were particularly welcoming to Australasia's participation, as the troops sent by Australasia would ease the burden on the French army. Taking advantage of this, Arthur also requested to purchase submarine technology from France. Although Australasia had already acquired advanced submarine technology from Germany, it was still behind Britain and France. Gaining more submarine technology would only benefit Australasia's naval development.
Additionally, Arthur instructed the Australasia government to seek low-interest and interest-free loans from both the British and French governments and private sectors. The justification was to invest in military expansion, ensuring that Australasia had enough funds for the necessary military buildup. Given that currencies would depreciate after the war, low-interest loans or interest-free loans would be a safe investment for the country, and repayment could easily be covered by the vast mineral resources and food supplies that Australasia would provide to Britain and France during the war.
The French, keen to maintain their new alliance, readily agreed to Australasia's request for submarine technology. They also had no objections to providing loans, as France had been a major lender for decades. Through diplomatic channels, a loan agreement was quickly signed, with Australasia borrowing 500 million francs (about 20 million pounds or 40 million Australian dollars). Of this, 150 million francs came from the French government as an interest-free loan, and 350 million francs came from French private sectors at low interest.
The loan would be repaid over 10 years, with a total repayment of 535 million francs. The 150 million francs from the French government would be paid in two installments, one in mid-year and the other at the end of the year. The private sector loan would depend on further negotiations between the Australasia government and French banks. It was expected that about 150 million francs would be received in the first half of the year, 250 million francs in the second half, with the remaining 100 million francs possibly coming the following year.
With these funds, Australasia's government would be able to expand its military considerably. By 1914, Australasia planned to begin a five-year naval shipbuilding program. This would include at least one aircraft carrier, seven super-dreadnought battleships, four battlecruisers, and numerous destroyers and armored cruisers, ensuring that Australasia's navy would become one of the top naval forces in the world.
As of the signing of the loan agreement, both France and Britain were actively preparing to send the first batch of aid, including industrial equipment, resources, and the experts Arthur had requested. These materials would be sent on British transport ships, under the protection of a fleet, heading to Australasia.
The exchange of experts would involve not just military personnel, but also specialists in various fields who would live in Australasia for several years, bringing their families and belongings with them. While they were meant to return to Britain after their stay, after years of living in Australasia, it would be unlikely that many would choose to return to Britain.
(End of Chapter)
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