Holy Roman Empire - Chapter 521

Chapter 521: Chapter 94, Scoffing It Off

Please continue reading on ΒOXΝʘVEL.ϹΟM .

The Berlin Government’s top echelons were mostly military figures, who always acted swiftly and decisively. Having decided to undermine the Polish, they certainly would not show mercy.

Because of the dispute over the Polish throne, complications had similarly been planted between Prussia and Poland. The newly independent Polish, who had just attained their freedom, were not willing to be swallowed up by Prussia.

With international forces interfering and constantly magnifying the Prusso-Polish conflict, if it were not for the presence of the formidable Russians, the two would have parted ways long ago.

Even so, the radicals within the Polish Government did not want to see the Prussians dictating terms and sought to kick Prussia aside and go it alone.

The Berlin Government was acutely aware and anxious about these issues. The radical faction was not easy to deal with; a misstep could lead to a severe backlash.

The Berlin Government had long harbored the intention to use others to eliminate their rivals, but the risks involved in such maneuvers were considerable; a mishap could spell disaster.

To confront the Russian Empire, the Kingdom of Prussia needed Polish cannon fodder and could not allow Poland to be crippled.

If it were not for the breakdown in relations between Russia and Austria, Maoqi would never have dared to make such a suggestion. Otherwise, the Russians could take the opportunity to get involved and forcefully drag Austria into the fray, and Prusso-Poland would be no match for Russia and Austria.

Now, problems had arisen in the Russian-Austrian Alliance. Austria also needed to use Prusso-Poland to weaken the Russians, so under these circumstances, the Vienna Government would at most discipline the Polish, but not truly cripple them.

As for how much the Polish would have to pay for this, the Berlin Government couldn’t care less. Even though it saw Poland as a guaranteed possession, there was a reality that it could not ignore.

For the Kingdom of Prussia, Poland was simply too large a morsel to swallow in one go; trying to do so would most likely result in choking.

The Poles suffered heavy losses in the first Prusso-Russian war largely due to Prussian machinations, which were carried out covertly and unknown to the outside world.

Stirring up impressionable youths is really very simple; swaying public opinion is enough, and newspapers are the most effective weapon. Overnight, the old issue of the partition of Poland by the three nations of Prusso-Russian-Austria was dug up again.

(vitag.Init = window.vitag.Init || []).push(function(){viAPItag.display(“vi_765923973”)})

Of course, the Kingdom of Prussia was omitted from this narrative, and the newspapers had transformed it into a partition of the Kingdom of Poland between Russia and Austria, artificially magnifying Austria’s role.

…

In St. Petersburg, ever since Austria initiated the dumping spree that led to a bloodbath in international grain prices, Alexander II had been greatly troubled.

After struggling for so many years and finally resolving the land problem of the Russian Empire, before he could even reap the fruits of victory, he was struck by a crushing blow.

Austria’s retaliation was just too ruthless. If the Russian Empire could not weather this agricultural crisis, it would soon face great calamity.

The main issue was still the financial one; Russia was no industrial nation, and agricultural taxes were still the government’s primary source of revenue, accounting for over half of all fiscal income.

The collapse of grain prices meant that the finances of the Tsarist Government were going to freeze up. The loans taken from the British were meant to be spent on railway construction and industrial development, not to maintain the government’s daily expenses.

This was still based on the assumption that the British would honor their commitments. If John Bull renegaded, then the Tsarist Government would truly be bankrupt, despite having gone bankrupt just a few years prior.

Despite the two nations signing a contract, the loan was not delivered in one installment. The British were releasing the funds in phases, and so far, the Tsarist Government had only received a little over five million British Pounds.

For an individual, this was a huge amount of money; for the Russian Empire, it was merely the issue of a few hundred kilometers of railway construction.

Don’t think it was too expensive. The complex terrain and harsh climate, along with the need to import rails from the United Kingdom, meant that high final costs were inevitable.

John Bull’s loans were not easy to obtain. Fifty percent of them had to be used to purchase British goods, and the construction of railways was mandatorily required to use rails imported from Britain.

Foreign Minister Chris-Basham took out a document and handed it to Alexander II.

“Your Majesty, the Austrians once again issued the ‘Initiative for Reducing Grain Production Capacity’ to the world’s major grain-exporting countries yesterday. They propose that each country cuts grain production by 8% in 1873 to cope with the agricultural crisis,” he said.

The 8% cut in grain capacity was not meant for the international trade market but represented an 8% reduction of each country’s total grain production, which translated into tens of millions of tons of reduced global grain output.

If this reduction could be achieved, then more than half of the agricultural crisis would be resolved. The 21% overcapacity announced by Austria was a theoretical figure calculated through formulas.

It merely estimated the demand for food consumption, alcoholic brewing, industrial use, and production as feed.

In real life, the wastage of grain was inevitable. For example, loss during transportation, spoilage due to weather, and wastefulness in daily life…

If several grain-exporting countries were to simultaneously cut their production by 8%, the grain that would flow into the international market would essentially return to the level of 1870.

Since the population was continuously growing, it would take at most two to three years for the excess grain currently on the market to be consumed, and grain prices would normalize.

On the surface, Austria’s proposal had no issues. All major grain-exporting countries would reduce production proportionally to maintain stable market prices, effectively welcoming the Russian Empire as one of them, and Austria was even ceding a substantial market share.

In reality, however, this was extremely problematic for the Tsarist Government. Decreasing production sounded easy, but was hard to execute. If Russia’s grain output needed to increase by 8% next year, it would simply be a matter of expanding the cultivated area.

Russian farmers’ enthusiasm for grain growing was high, and production was on the rise. Solving the transportation problem and replacing Austria as the world’s largest grain-exporting country would be effortless.

But reducing production was another matter. The government couldn’t just forbid people from farming, could it? Russia had tens of millions of peasants who were independently increasing their sowing areas, and no one could stop them.

Even if Russia copied Austria’s Fallow Law, it would be useless; Russia had plenty of land. As for Austria’s land-reclamation laws, the Tsarist Government didn’t dare to follow suit, as that would invite disaster.

After pondering for a while, Alexander II turned his gaze to the others.

“What do you think? Is the Austrian proposal feasible?” he asked.

A portly middle-aged man, filled with righteous indignation, stood up and said, “Your Majesty, this is an Austrian conspiracy. How can we possibly reduce our grain production capacity by 8% within a year?

Even with the current slump in international grain prices, it would be a lengthy process for farmers to adjust their planting habits on their own.

The government cannot directly regulate what crops farmers should grow. Overcapacity in agriculture is much like that in industry; after a crisis, the market will make choices and weed out the inferior.

If we forcibly cut our production capacity, it would lead to nothing but chaos and hold no value whatsoever.

“The Austrians are demonstrating against us; they want to use the depressed grain prices to force us into a compromise,” he said.

Manilov was anything but foolish. As the Minister of Agriculture, he was very aware of the enthusiasm with which the Russian peasants planted grain. Asking them to reduce production at such a time would be an unpopular and thankless task.

Russia and Austria were completely different; the national conditions of the two countries varied greatly. After the enactment of laws, the Vienna Government succeeded in curbing the expansion of land used for growing food crops.

As long as the high-ranking nobility took the lead in planting cash crops on their own lands, many would follow. But it was different for the Russian aristocracy; switching to cash crops might seem easy, but to whom would they sell?

This was the gap between an agricultural country and an industrialized one. Austria had a variety of industries, better transportation and communication infrastructures, and relatively transparent information.

For these nobles at the top of society, understanding market trends and knowing what to grow that would sell was quite straightforward.

The case of the Russian Empire was different; its domestic industry had just started, and poor transportation further isolated communications. Forget about telephones; even telegraphs had not reached every city.

Even those who wanted to switch to growing cash crops didn’t know what to plant. And even if they did plant something, they had no idea where to transport and sell their goods.

Lacking effective sales channels, people naturally resorted to conservative farming. Regardless of the price of grain, at least it was easy to sell as traders would come to buy it.

If it came to growing cash crops, careful consideration was imperative. If there were relevant factories nearby, then there was no problem; people could plant with confidence.

Without factories, large-scale production was necessary; if the output was too small, it might not even cover the cost of transportation.

Foreign Minister Chris-Basham said, “Marquis Manilov, please calm down first. Don’t forget that Austria is the biggest exporter of agricultural products; they stand to lose the most if this continues.

With the plummeting prices of raw grain, the prices of processed grains are also dropping continuously. If this trend persists, the processing enterprises will not escape unscathed either.

To protect domestic enterprises, the Vienna Government has already given them tax cuts, but the market share Austrians hold internationally is still shrinking.

Having acquired cheap raw materials, the grain processing enterprises suppressed by Austria are now starting to flourish.

If the situation of oversupply does not change and raw grain prices continue to slump, the food processing industries of the European countries will soon be able to develop.

From the perspective of interests, the initiative released by the Austrians serves more to preserve their domestic processing and manufacturing industry.

No matter what, Austria remains our most important grain exporting country. Even reopening the United Kingdom market cannot change this fact.

If Austria refuses to accept our agricultural products, then that will be the start of a disaster. No other country in Europe has such a large-scale agricultural product processing industry.”

Alexander II stroked his forehead, feeling a headache even in the face of a bountiful grain harvest. With supply outstripping demand on the international grain market, this year’s grain glut was already a certainty.

If they were to lose Austria, their biggest buyer, there would be no way to handle the domestic surplus of grain piling up like mountains. Preliminary estimates suggested that the Russian Empire had tens of millions of tons of excess grain this year.

Apart from the uncertain contract with Britain, they currently had no other significant orders. At the same price point, no one wanted their grain.

“`

Everyone has stable suppliers, so why would they change randomly, let alone to someone they dislike?

There’s no choice, the Russian People have been severely maligned in Europe in recent years. Now, seventy percent of Europeans don’t recognize Russia as a European country, and therefore, Russians are not considered Europeans.

Of the remaining thirty percent that do recognize them as Europeans, this includes over seventy-four million Russians. In this era, the total population of the European Continent doesn’t even reach three hundred million, so this proportion is quite moving.

Fortunately, at least half of their vast grain supply couldn’t be exported. Otherwise, the competition in the international grain market would have been even more brutal.

This contradicted Alexander II’s original plan completely. Initially, he had wished to use grain as ammunition to leverage control over Europe. Yet before he could even begin, the plan backfired on him.

The plan wasn’t faulty, it’s just that changes occurred abruptly. The main grain exporting countries on the European Continent were Austria, Russia, Poland, and Prussia, the rest hardly worth mentioning.

Overseas competitors were not yet a significant threat. This was because American countries only exported a little over a million tons of agricultural products to the European Continent annually, which didn’t account for a large market share.

This was determined by interests; the United States of America was increasingly committed to cotton cultivation and still held an unbreakable position as the cotton hegemon.

Where price was equivalent, they competed on quality, and where quality was equal, they competed on price. No region’s cotton could compete with theirs at that time.

The British endeavor to cultivate cotton in Egypt had failed early on. After the French took over Egypt, they briefly sought to develop the cotton industry but eventually gave up in the face of American competition.

The Indian cotton cultivated by the British unfortunately cost significantly more than American cotton. With profits at stake and without room for negotiation, Indian cotton failed to become mainstream.

The Austrian West African cotton plantations fared little better. Their production had hardly increased over the years, and domestic capitalists remained loyal fans of American cotton.

There was no alternative, as this was a result of unparalleled natural conditions. Companies that didn’t use cotton from the United States produced goods that lacked market competitiveness.

The government isn’t omnipotent and can’t support every industry. Spreading their efforts too thin typically results in accomplishing nothing. Since Austria had no advantage in the cotton industry, the Vienna Government naturally didn’t invest in it.

Had it not been for the absence of this formidable rival, everyone else’s situation would have been even more difficult.

The current grain exporting powerhouses in America are mainly Brazil and Argentina, but these two countries have a sparse population and limited areas for grain cultivation, hence their production capacity isn’t very large.

Rising from his seat and pacing a few steps, Alexander II had a flash of inspiration and made a decision.

“Reply to the Austrians and tell them that the Russian Empire is also a responsible great power. We agree to cut grain production capacity. The specific measures will follow Austria’s lead, only with some changes needed.

The Fallow Law is not a problem; it can be directly adopted. The law on land reclamation will be changed to: any newly reclaimed wasteland cannot be used to grow grain for the next five years.”

Alexander II had seen the consequences of overproduction, and since international grain exports were no longer profitable, he did not want to continue increasing grain production capacity.

Given that, it might as well grant the Vienna Government some grace. The Russian Empire would halt the increase in grain production capacity, but as for reducing existing capacity – that was out of the question. Such a challenging endeavor was not something the Tsarist Government could achieve.