Holy Roman Empire - Chapter 523

Chapter 523: Chapter 96, Grain = Labor Force

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London, affected by the domestic crash in grain prices, the capitalists who had signed contracts with the Russians were no longer prepared to honor their agreements.

Openly breaching the contract was definitely not an option, as it would not only violate British law but also involve diplomatic issues.

Moreover, these payments for grain were to be used to repay the Russians’ debts to domestic banks. Since the initial loans had been disbursed, if they breached the contract, the Russians could also legally default, which the bankers would certainly not accept.

Take Black Rye as an example, the current market price in the United Kingdom is around 6 to 7.5 pounds per ton, whereas the contract price agreed with the Russians was as high as 9.1 pounds per ton.

This meant that with this transaction, they would not only fail to make a profit but actually have to pay out more.

Of course, even at a price of 9.1 pounds per ton, these capitalists would not lose out. The added value of the processed products was enough to offset these differences.

However, qualified capitalists were definitely not willing to take this loss, which meant they would earn 1.5 to 3 pounds less per ton of Black Rye.

This figure might not seem significant, but when magnified to the scale of tens of thousands or hundreds of thousands of tons, it became astronomical.

Directly defaulting on the debt was not an option, but that didn’t stump the capitalists. Members of Parliament were there for that very job, and swaying public opinion was also a good method. In any case, they must find a reasonable and legal excuse to default.

An anti-Russian sentiment was rising, and this was not good news for the newly installed Gelson Cabinet.

The “British Pound—Gold System” established currency hegemony, and if the Russians were pressured out at this time, it would be immediately undermined.

The last government nearly overturned the election with this achievement. If they hadn’t dug up old scores in time and incited the families of soldiers killed in the Anglo-Ebura war to create trouble, Gelson might not have been able to move into Downing Street.

Throwing away the newspaper in his hand, Prime Minister Gelson complained incessantly, “Damn it all, they can’t even leave in peace, leaving us this bomb!”

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Such matters were common when governments changed. They were members of the Conservative Party and the Liberal Party, inherently opposed in politics, their identities determined their stances.

How could they not sabotage Gelson to ensure their party’s victory in the upcoming election? If the roles were reversed, Gelson would probably make the same choice.

After all, it was all within the rules of the game. The mess left by the Benjamin Cabinet was completely legal. Gelson had no choice but to privately complain, powerless to do anything and even unable to criticize his predecessor for this issue.

“Prime Minister, the biggest problem now is not those people outside, nor those members of Parliament, but rather that the capitalists don’t want to honor the contract.

Given the current grain prices, according to the treaty signed with the Russians, they could lose millions of pounds every year. Even distributed, that’s not a small figure.

What’s more critical is that it’s not just for one year, but for five consecutive years. Over such a long period, if any misfortune happens midway, they will be replaced by others.”

As he spoke, Finance Minister Laruoke Lloyd picked up the newspaper from the floor, folded it twice, and then tore it up and threw it into the waste basket.

Clearly, he was not as relaxed as he appeared to be. When it came to interests, convincing the capitalists to back down was too difficult.

Even if the government wanted to take action, they couldn’t find an excuse. From start to finish, these people hid behind the scenes, with the farmers they roused being the ones at the front.

Everyone attributed the crash in grain prices to the Anglo-Russian grain loan agreement, considering it a consequence of government interference in the market.

What was previously regarded as an achievement by the former government now became a mess they had to clean up—a thankless task where doing well brought no credit, but failing attracted criticism.

Gelson calmed down and sat back in his seat, asking, “What do they want? Breaching the contract is out of the question, now we still need the Russians.”

The British Pound hegemony had just been established, and the Russians had only just begun their gold standard reform. Before binding the Russians completely, it was impossible to fall out with them.

This would require at least five or six years, hence the Anglo-Russian loan also lasting for five years, with the London Government tying the Russians through the loan. It’s not a loan per se, but using a grain trade contract to describe it would be more apt.

Compared to the huge benefits of currency hegemony, the losses of the grain capitalists were trivial. Even though the previous administration took most of the credit, Gelson still had to continue the policy.

Otherwise, the domestic bankers would send him to meet God. Don’t think that only the United States has the habit of assassinating presidents; Britannia’s capitalists are equally daring.

However, the British Nobility still had certain powers, and the capitalists hadn’t yet gained complete control of the government. Otherwise, the grain capitalists wouldn’t be engaging in such roundabout work.

The era of big monopolies was approaching rapidly, and the time when capitalists would burst forth wasn’t far off. Once the consortiums were established, the era of oligarchic politics would be in full swing.

In comparison, the Prime Ministers of this era were still fortunate. When oligarchic politics arrives, politics becomes the plaything of capital—that would be the real tragedy.

“They want the government to purchase this batch of grain, following Austria’s example to establish strategic grain reserves. In theory, there’s no problem. Britannia is just an Island Country, its own grain production is limited; storing some grain isn’t a big issue.”

The Britannia of this era was at its zenith, and being described as wealthy and powerful was most fitting.

Even though the London Government had amassed a mountain of debt due to the war, they were not the slightest bit panicked.

The massive wealth brought in from the colonies was enough to allow them to handle the situation with ease, and they even had the surplus to establish a strategic reserve system.

Gelson did not object, although he didn’t believe that Britannia needed to establish a grain strategic reserve, he also didn’t plan to stop everyone from making money.

The most prosperous era of Britannia was also its most corrupt. Once such a major project was put in motion, it brought with it a rolling influx of wealth.

With an indifferent smile, Gelson placed his palms face up on the table, “If they can convince Parliament to allocate the funds, I have no objections.”

Of course, this was impossible. If the capitalists had been sure of convincing Parliament to allocate the funds, they would have done so already and spared themselves all this trouble.

Plainly speaking, the influence that grain capitalists held on the British capital market was limited; they didn’t even represent the grain processing industry.

While they did have their own people in Parliament, swaying Parliament’s decisions was still very difficult. Not to mention, their competitors would not allow them to succeed.

Managing to create the current momentum had relied on the current social environment. Without the domestic grain prices plummeting, they couldn’t have organized so many farmers to join the protest.

Finance Minister Laruoke Lloyd shook his head, “If they could convince Parliament, they wouldn’t have come to us. They made a promise, as long as the plan passes in Parliament, they would sponsor our election campaign with 200,000 pounds.

In addition to that, there were other benefits. The specifics are not convenient to discuss openly, they require private communication.”

Politics also require financial support; many backroom deals are hidden behind every election. If there is only investment with no returns, who would sponsor without compensation?

Without revenue, how could a political party survive? Without money to maintain an election team, without money to improve public favorability, on what would they rely to win the general election?

In the face of reality, politicians’ integrity is often quite low. Prime Minister Gelson was no exception; the party needed the support of capital, and from the beginning, the two were intertwined.

…

With the push of the Liberal Party, on October 21, 1872, the British Parliament narrowly passed the proposal to “Establish Grain Strategic Reserves”.

On October 24, the London Government, citing the need to stabilize the domestic grain market, halted the Anglo-Russian grain loan trade.

After a nominal negotiation, a week later, the London Government very reluctantly purchased the treaty-stipulated grain at a price above the market rate.

Undoubtedly, this was all a show for the public. The real reason was to cover for the grain capitalists, letting the government take on their losses.

The Anglo-Russian trade still proceeded smoothly, and Franz was not disappointed. The benefits of currency hegemony were greater, and naturally, the London Government knew how to choose.

The only surprise was that he had not expected the British to establish a grain strategic reserve. Knowing that the Royal Navy dominated the seas and that there was no nation in the world that could rival it, an enemy capable of blockading Britannia simply did not exist.

The change was a minor issue; after all, the ultimate goal was still achieved. Although he couldn’t disrupt the Anglo-Russian trade deal, the collapse of the international grain market still severely damaged the vitality of European agriculture.

In this era, there was no such thing as a food subsidy, not to mention all sorts of taxes could not be reduced. If a government was willing to relieve agricultural tax, it meant they took public welfare seriously.

For the big landowners, an agricultural crisis was an excellent opportunity for consolidation. Why reduce agricultural taxes? Without these taxes, how could the farmers go bankrupt quickly? If the farmers didn’t go bankrupt, how could they proceed with land consolidation?

Tax reductions were inevitable, but only after everyone completed their land consolidations; otherwise, it would be cutting off their wealth.

The widespread bankruptcy of European farmers was also what Franz wanted to see; Austria’s colonies were in need of people.

He didn’t want immigrants from England and France; he had no expectations for Portuguese, Spanish, or Dutch immigrants, but there were always other nations to consider.

Times had changed. Austria’s rule over its colonies had now stabilized, and it could fully absorb some foreign immigrants.

It wasn’t like the early days when, apart from domestic and Teutonic immigrants, Franz dared not accept large numbers of immigrants from other countries.

He was afraid of the tables being turned. With regards to national assimilation, it is usually the numerous who assimilate the few, and it’s not easy to do it the other way around.

This could be considered an exchange of grain for people, as if Austria had sold off a batch of grain and in return gained a workforce.