Holy Roman Empire

Chapter 285: Chapter 34, Shift the Crisis

After the economic crisis erupted, the landmines Franz had buried exploded, leading to a multitude of unfinished projects across the region, while the Vienna Government scrambled to clean up the mess.

There was no escaping it—the destructive power of the economic crisis was far too strong. As the first global economic downturn, its severity far exceeded that of any previous crises.

In 1857 alone, over five thousand businesses in the United States went bankrupt, with the stock market slashed in half. Certain industries suffering severe overcapacity saw stock prices plummet by ninety percent.

European nations didn’t fare much better, though they were affected by the economic crisis somewhat later, giving them time to respond.

Unfortunately, in this era, there was no concept of government intervention in the economy. Everyone just waited for the crisis to hit, inevitably incurring losses.

As a result of the economic crisis, numerous capitalists experienced a rupture in their capital chains. With empty pockets, they had no choice but to painfully cut their losses, regardless of their reluctance.

The investments made earlier might as well have been donations, as earnest money was simply washed away.

Government projects stalling was only a minor issue; after all, none of these projects were life-or-death, and delayed construction by a few years wouldn’t harm anyone.

Besides, the more capable capitalists still clenched their teeth and persevered. The more they’d invested, the harder it was for them to let go, especially considering these projects were fundamentally sound investments.

This determination was crucial for the storm-tossed Austrian economy. It directly enabled many businesses within relevant industrial chains to survive, averting further economic deterioration.

Prime Minister Felix said gravely, “Your Majesty, as of now, up to one thousand eight hundred businesses have filed for bankruptcy domestically, with another two thousand on the brink. This includes five major railway companies.

The overall stock market has fallen by forty-two percent, with railway stocks hit hardest. Influenced by the American railway bubble, a great number of investors lost confidence in railways, leading to a seventy-two percent evaporation of their market value.

Textile, manufacturing, finance, and steel industries all suffered heavy losses. Impacted by the economic crisis, even agricultural exports shrunk by a quarter.

Industrial output has dropped nearly thirty percent compared to the same period last year, and the situation is still on the decline.

The number of unemployed in the country has already surpassed nine hundred eighty thousand. Exceeding a million is only a matter of time. If the economic situation doesn’t improve, this deterioration will continue.”

With the economic crisis impacting every sector and widespread bankruptcies, Franz was not at all concerned—this was all within his expectations.

The unrestrained economic growth model, how could it not have its repercussions? If it weren’t for the Near East conflict that let Austria seize the markets of England and France in the Russian Empire, the economic crisis would have erupted much earlier.

The crises in Austria began to unfold during the post-war economic transition.

Had it not been for the opening of overseas colonies, gold standard reform, the influx of gold from colonies bringing substantial currency, and the government’s increased investment in infrastructure development, the economic crisis would have originated in Austria instead of the United States.

Other issues could be dealt with slowly, but the unemployment issue was urgent and had to be solved immediately; otherwise, it could lead to severe social problems.

Franz thought and said, “According to the original plan, the government will take over the unfinished construction projects, getting the workers back to work first.

At the same time, the government will negotiate with the railway companies that have stopped construction. They either find a way to solve the funding issues and resume construction immediately, or they accept government investment to restart their projects as soon as possible.

The Colonial Department also needs to act quickly. The economic crisis is the best opportunity to organize emigration. Not just Austria, but the entire Germany Region falls under your jurisdiction.

You must find a way to encourage bankrupt citizens to emigrate to the colonies. Right now, the Americans are also in the middle of the economic crisis, so you won’t have any competition for immigrants.

Command the colonial government to expedite expansion into Nigeria and the Congo Region. I authorize them to organize civilian forces to participate in combat, to rapidly extend our sphere of influence.”

As long as these projects resume normal construction, related enterprises upstream and downstream will also survive, and the domestic unemployment issue will be largely resolved.

In this era, industry was actually relatively simple, and the peripheral industries of these projects already comprised the majority of the nation’s industry.

Franz took over the unfinished infrastructure projects because they could find no buyers, leaving the government to continue construction.

Not acquiring the railway companies outright was not only because of their high market value and the significant cost of acquisition but more importantly because investing in railway companies was a loss-making endeavor.

Ever since the Vienna Government packaged a series of routes and authorized them all to railway companies, the “financial prospects” of the railway companies have not been so bright.

Shrewd consortia withdrew at the first sign of the economic crisis in the United States, leaving the slower speculators trapped in the market.

Franz naturally couldn’t help them escape their plight; after all, for the coming decade, the railway companies could not hope to see any profit. Without someone to underwrite these long-term projects, the financial pressure would be too immense if the Vienna Government were to invest alone.

If possible, he would prefer for private capital to complete the entirety of the railroads in the New Holy Roman Empire rather than the current mixed public-private partnership.

Through a series of capital operations, Austria added more than 14,800 kilometers of railroad in less than a decade, bringing the total mileage of the New Holy Roman Empire’s railroads to over 20,000 kilometers.

If the government were to invest, the Vienna Government likely wouldn’t even be able to complete half of the projects. This is the power of money; the poor Vienna Government cannot afford such massive projects.

Even now, the Vienna Government is unable to undertake such colossal investments. The current infrastructure construction is all being carried out through borrowing.

This has made Austria the world’s fourth-largest debtor nation after England, France, and the United States, and for the next several decades, the Vienna Government will have to strive to pay off its debts.

War is the best means to shift the focus away from a crisis, but alas, the African Continent is a bit too far. Otherwise, Franz wouldn’t mind conquering a few Native Kingdoms to get through this economic crisis.

However, expansion still needs to happen, not to mention the plundering of wealth; at the very least, the land for resettlement needs to be secured first.

The population surplus in the Germany Region is not a new issue, and Austria is actually doing relatively well, having sent several hundred thousand migrants to the Balkan Peninsula and having convinced tens of thousands to migrate to the colonies. The population pressure isn’t too great.

Other areas in Teuton Germany, however, are different; every time an economic crisis leads to a wave of unemployment, it’s time for mass emigration.

This time it just so happens that the United States is also facing an economic crisis, so they probably wouldn’t welcome migrants even if people wanted to move there.

József Jellacic responded, “Your Majesty, our Colonial Department has already devised a migration plan. To attract migrants from the Germany Region, we have proposed two modes of migration:

The first is to accept government employment, migrate to the colonies to open farms, with the government arranging specific locations and covering all migration costs. They won’t need to worry about finding jobs.

Of course, this entails signing a five-year labor contract. I have offered wages twenty percent higher than that on the mainland, with the government providing one free opportunity for home leave during this period.

The second is free migration; for those who choose to settle in any of our colonial outposts, the government will subsidize half the cost of the boat ticket.”

Franz nodded; these were the best conditions the Vienna Government could offer. Opening up these farms and plantations was mainly intended as rewards for meritorious officials.

After all, there is limited land on the mainland, and even when ennobling the Nobility, it is mostly just a nominal title as much of the land has owners and cannot simply be given away as reward.

Therefore, it is inevitable to use colonial land as enfeoffed territory. Not everyone has the backing of a family heritage that could allow them to develop any given piece of land at will.

For the meritorious officials of common or declining noble origin, who have limited family wealth and lack the capacity to develop enfeoffed lands, receiving developed farms or plantations as their territory is also a good option.

By developing it themselves, they might obtain hundreds or even thousands of square kilometers of enfeoffed land, whereas receiving ready-made farms may only grant them several hectares or a few hundred hectares of land.

There is no question of being hard done by or gaining advantage; clearing land also requires investment. In this matter, Franz wouldn’t force anyone’s hand.

The earliest plantations opened up in Guinea Colonies are now starting to yield returns. After all, crops like grains, cotton, and peanuts—annuals—show quick effects.

With yields available, the Vienna Government has engaged in extensive publicity, claiming to be opening up the Second Home Of The New Holy Roman Empire, and emphasizing the fertility of African land.

The perception that many people have of the African Colonies has changed; the notion of it being a Continent of Poisonous Insects has faded, and notions of its richness have taken root in people’s minds.

This isn’t lying; the African Continent truly does have many fertile lands, and the colonies opened up by Austria are among the richer ones, with climatic conditions that suit human habitation.

Now, mobilizing the public for migration not only develops overseas colonies but also addresses domestic unemployment and shifts the focus of the economic crisis—a multitude of benefits from a single action.