Chapter 169: Development
Chapter 166 Development
In a flurry of disturbances in 1850, so quietly passed. Seemingly ordinary year, to Austria to bring the impact, but its far-reaching.
A large number of foreign capital influx into Austria, led to the development of the domestic economy, a variety of factories as spring up.
The most intuitive impact of economic growth is the increase in government revenue. Although many industries were given tax exemptions, the government also gained a large amount of tax revenue in the upstream and downstream sectors.
In 1850, the tax revenue from industry and commerce increased by eight percent compared to 1849, or just over four million guilders. It seemed a small figure, but Franz was very satisfied.
This was only the beginning; when the tax exemption period ended, that was when the growth in tax revenue would explode.
The benefits of industrial and commercial development will obviously not be the only ones, and the supporting chain of enterprises, too, will grow with it.
This is reflected in the production of raw materials, product sales, transportation, food and entertainment, and other industries, and it can be seen in the finances.
In 1850, the Austrian economy grew by eighteen point seven percent, and the government’s tax revenues increased by nine point four percent.
This is not a high figure, any country after the opening of the market, will be ushered in the rapid economic growth, soaring thirty to forty percent of the examples.
However, in the same period in Europe, Austria’s economic development speed is also considered to be the best.
Undoubtedly, the dividends of economic growth were directly invested in the military and not able to continue to be invested in reproduction.
Of course, Franz didn’t dare to invest in reproduction either. If it weren’t for the limitations of communication and transportation conditions in this era, the rate of fiery economic growth within Austria would have been even faster.
It is not that a fast rate of economic growth is necessarily a good thing. The most important thing for a country is sustained development, and a short-term economic surge, and if the market doesn’t keep up, then overcapacity can’t be avoided.
Overcapacity means that a lot of goods cannot be sold and have to rot in the coffers. Wealthy enterprises can also cut production capacity for transformation, weak enterprises naturally only bankruptcy a road.
The bankruptcy of enterprises, the increase in the number of unemployed people, the market purchasing power continues to decline, and again feedback, capitalists have to continue to cut production capacity, layoffs, the vicious circle began, the outbreak of economic crisis.
In a way, this arms race also prolonged the high growth rate of the Austrian economy. The army itself is a consumer group, and expanding the army is also expanding the consumer market.
The fastest growing thing in Austria now was the railroad, which had been under construction since 1849, and now there were as many as hundreds of sections under construction.
The annual growth of the railroad is 265 kilometers, and make no mistake this is not something that is being built only now, but a railroad that was started a few years ago and completed exactly in 1850.
The railroads that were started in 1849 are still nowhere to be seen, and this is something that railroads are not like roads. Highway construction can build a section and pour a section of pavement, while the railroad is not the same, unless a section is completed, or even if the track is laid, you dare not run a train, ah?
But by 1852, it was estimated that some sections of the plains could be opened to traffic, and the question of whether they would be put into operation earlier was known only to the railroad companies themselves.
This little problem, the Austrian government will not ask, these private railroads are self-financing, and the government has nothing to do.
In order to encourage people to build railroads, the Austrian government also announced a tax exemption policy. From the beginning of the railroad project, the next ten years will not collect taxes on railroad operations.
If you want to make money, you should build the road and operate it in advance, and delaying the construction period is not good for your wallet.
Taking advantage of the hot environment of the railroad, the Austrian government packaged a large number of railroad lines to the private railroad company, demolition and relocation costs can be by the government, the prerequisite is to get the right to build the railroad, within one year must be started within ten years must be opened to traffic.
As far as Franz knows, up to now, the Austrian government even coaxed, peddled out of the total mileage of the railroad route more than 40,000 kilometers.
God knows how many rotten projects will be left in the end, anyway, the government will not lose. Even if the back take over the bad project, it is still cheaper than building from scratch, is not it?
The railroad company is also aware of these problems, but the hot market will deceive people’s eyes, the Austrian economic growth also deceived many people.
In addition to the financial consortium to promote, but also to promote the ambitions of investors. Many speculators are thinking of selling their shares at the highest point and making a fortune.
If you want to speculate on the stock price, you naturally have to make a beautiful statement. If a railroad company in the hands of only so many hundreds of kilometers of railroads, no matter how much you brag about it, it will not attract many people.
If there are thousands of kilometers, or even tens of thousands of kilometers of railroads, then there is no need to brag about it, someone will give you a blueprint for the development of a blueprint out of the brain.
Relying on the railroad to make money is only one aspect, control of certain areas of the railroad network, even if it is to invest in other industries, the same can use the hands of the transportation network to squeeze the peer, a concept of business empire appeared.
In the hottest era of European railroads, there may be four or five railroads operated by different companies between two cities, directly competing in the market.
The Austrian government is quite temperate, at least did not authorize the same section of the road to different railroad companies, which allows many people to see the opportunity.
Is there a more lucrative business in the world than “monopoly”? Even if the economic value of the railroad line is not high, once the formation of the market monopoly, it is also a big profit ah!
Franz would not admit that he was using this kind of mentality to persuade capitalists to invest in railroads. Monopoly can be operated, which avoids the waste of resources brought about by market competition, as long as it does not affect the development of the domestic economy, Franz does not mind the emergence of monopoly enterprises.
If the domestic economic development is affected because the freight rate is too high, then the people who make the rules can likewise modify the rules , e.g. Price Bureau, Railway State-owned ……
These discordant topics, the Austrian government will never tell the investors, otherwise how did the British consortium get lured over?
The Americans have done things, and Franz doesn’t mind following suit once. Regardless of that much, the first to fool you to fix the railroad, and then, when the railroad is finished with no use, then you can consider the problem of turning the other cheek.
In Franz’s opinion, the previous Hong Kong engaged in public utility projects, the maximum profit shall not exceed fifteen percent, is a good policy.
If the Austrian government copied it, the public should be very supportive, right? As for the railroad company, fifteen percent of the profit can also let them live a very nourishing.
The question of when the investors will be able to recover the construction costs is not known. Anyway, the front investors have earned, behind the receiver is never unlucky.
The development of the railroad, naturally stimulated the steel industry, a family of steel companies have expanded production capacity, ready to share in the next feast.
In order to effectively integrate resources and enhance the competitiveness of enterprises, in March 1850 the Austrian Ministry of Industry ordered the merger of seven state-run iron and steel enterprises into the Austrian Iron and Steel Group.
Austria’s first annual output of 1.2 million tons of raw steel, iron production of 18.4 million tons of giant iron and steel enterprises were born. Artistic processing, is the annual output of 200,000 tons of steel, the world’s first steel group was born.
Is not really the world’s first steel group, this question remains to be proved, but become Austria’s first steel enterprise is an indisputable fact, the entire Austrian empire half of the steel production capacity in this group.
In this era, the world’s steel production of more than 100,000 tons of countries, are only single-digit, more than a million tons of countries on the British.
If not everyone stays at this level, the Austrian media would not dare to blow this bull, in general, this era of news people still have integrity.
After the merger, these several steel mills began to divide up the work, according to the geographical location of each place, give full play to their own resource advantages to integrate production capacity.
Simply put, according to the quality of the iron ore, suitable for steelmaking that is all used for steelmaking, suitable for ironmaking take iron, do not engage in mixed production mode.
The core of the core technology of several enterprises together, each take advantage of the strengths utilized in industrial production. At the same time, a smelting technology research and development department was formed to promote technological innovation.
According to the plan, in 1851 the Austrian steel group’s production capacity will be increased to 240,000 tons, 1852 will be increased to 320,000 tons, 1853 will exceed 450,000 tons ……
These plans are not haphazard, completely based on the market needs of the formulation, not to expand production capacity how to grab orders?
Austria’s railroad network construction, but a piece of fat meat, the relevant enterprises do not want to go to bite on a bite.
According to a meter of railroad using 60 kg of steel calculation, a kilometer will need to consume 60,000 kg of steel, that is to say, the light of Austria’s railroad network plan, the need to consume more than two million tons of steel.
Such a good opportunity, if the steel companies do not expand production capacity, that is the brain into the water.
In order to support the steel industry, the Austrian government has decided not to extract profits from the newly formed group in the next five years, and also injected a million guilders into it for technological innovation.
Not only the steel business, many related industries are desperately expanding production capacity, Franz is also in the muffled wealth.
Don’t look at sand and gravel, these small things are not insignificant, in fact, people who have been engaged in engineering know that these insignificant things can be not low profit.
Preliminary estimates, each kilometer of railroad just pouring concrete will consume tens of thousands of tons of sand and gravel aggregate, the thick layer of gravel above the need for stone is an astronomical figure.
Any large amount of goods, profits also went up, these small insignificant things, in fact, not less profitable than the production of railroad tracks in the steel mills.
It’s just that most of the time, it’s spread out in the hands of countless retail investors, making it seem unremarkable. Franz just used his foresight to get ahead of the game and run a monopoly.
Of course the monopoly operation thing, he will not admit. If you don’t believe me, you can check the contract between the railroad company and the Austrian mining group, both of which can prove that monopoly operation does exist.
Only those in the know won’t say anything, and the media won’t even report it.
External explanation: the Austrian Mining Group is only an agent, these mines are distributed in dozens of enterprises, in order to avoid unhealthy competition, we have joined together to set up a group and the railroad company negotiations.
That’s right the truth is so, in order to avoid being the railroad company to pressure the price, everyone just joined together. Didn’t you see that the final price of the deal was very close to the market price?
If it was a monopoly, it would have been a price increase, and since it didn’t go up significantly, it wasn’t a monopoly.
What is lying money, 1850 Franz finally felt. For this small and insignificant business, he made an annual profit of one million two hundred and thirty thousand guilders.
This is just the beginning, with the advancement of the railroad construction, a long time in the future, he can lie down to make money.
Unfortunately when the construction of the railroad is completed, there will be no more outlets for these wild gravel mines, and the only way to make a big profit again is to wait for the construction of the highway network. From the current situation, there is no need to look forward to the next thirty or forty years.
(End of chapter)