The whole economy of capturing towns has never worked, and it's the reason I never bothered with it. But since I've now gone through the code and made a few new things I might be able to make it worthwhile. The biggest problem is that the militia you hire cost ~3000 eldos when you hire them directly, then they cost ~4 eldos each day, and at the end of the month you have to pay all the administrative costs an such which amonunts to alot of eldos. I haven't tried it, but I think one can cheat by lowering the funding a few days before the monthly pay is due and then raise it again after, you might lose a few militiamen but they'll come back once the funding is raised again.
Another problem is that all your militia in different cities shares the funding you give them, it means you can't set which town should have priority when recruiting men. You end up paying the ~3000 eldos hiring cost so that vulnerable towns get their militia as fast as you need them.
There is also the limit of troops you can can have loaded in a town, or send to other towns, and this also concerns the enemies. If you hire 35 militia men in a town the enemy needs several patrols to capture it, giving you time to call the Mayor and re-hire new men. The Merc Tab in the Journal updates whenever a town with militia is under attack, and the result of the attack, keep an eye on it and you'll be able to keep the towns without much problems.
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