Chapter 514: A New Height of Drawing Big Cakes

  Chapter 503 – The New Height of the Pancake

Out of the Palace of Versailles, Alexandrovich has no interest in touring, obviously this trip to Paris did not go well.

Napoleon III released goodwill to Russia, just for purely political needs, to demonstrate to the European countries, does not mean that France is really going to pull Russia together.

Without the humiliation of the Peace of Frankfurt, the haughty French hadn’t been able to look at Russia as a downtrodden barbarian.

Especially after the Anglo-French-Austrian alliance, the pressure on French diplomacy was gone, and the world could no longer find an enemy for them to take seriously, at least on the surface.

Before Alexandrovich’s trip to Paris, the government in St. Petersburg still had high hopes, attempting to capitalize on the French pulling Russia’s strings to obtain financial assistance.

The reality was very harsh, and it was not easy to get money from the usurious empire. Bankers were shrewd, especially with the discredited Tsarist government.

Even the pre-promised loan of 500 million francs was now in question, with the French requiring them to take gold and silver as collateral.

Don’t think it’s surprising that Alexander II was also working on monetary reforms, only taking very small steps, and now the French were hitting them for reserves.

Since Alexander II’s reforms, the development of industry, the building of railroads, and agricultural reforms became the three main strategies of the government.

Although the plan was good, it all needed financial support. Because of the war, it led to a massive outflow of gold and silver from the Russian Empire, resulting in a serious lack of its own capital.

The tsarist government came up with a way to absorb foreign capital, regrettably, the European banks refused to provide them with loans, even the investment is very cautious.

The Alexander II reforms were better than history, there was a ready-made example next door to learn from. All other problems can be figured out, only raising money can’t be learned.

Austria’s development to this point, halfway through all several times to issue bonds to the outside world, raising hundreds of millions of guilders of funds. Until now, the Vienna government has had to pay off tens of millions of guilders in debt every year.

Because of its credibility, the Tsarist government could not borrow money at all. Even taking the right of way and taxes as collateral didn’t do anything, the Tsarist government said to renege on the debt.

Back then, forced by the debt crisis, Alexander II had to declare a debt default, and now the aftermath has erupted.

It’s not that Alexander II’s decision-making was wrong; if he hadn’t defaulted on the debt the finances would have been crushed by the foreign debt, and the situation would only have gotten worse.

To put it bluntly, even if they hadn’t defaulted on the debt, they wouldn’t have been able to borrow much. Bankers were too savvy to lend money to a lord who had no ability to repay.

In the original time and space, the French lent money to the Russians, that was forced to do nothing. The pressure on national defense was too great, and they had to pull in allies to share the pressure.

France’s sudden drop in overall national power as it entered the late 19th century was due to this. The government lent out so much money that there was less for domestic development.

No need to think about it now, the French would certainly not be bursting at the seams to support them. Even if they were to loan sharks, the French would only lend money to the masters who had the ability to repay.

Austria, for example, is now in debt to the French. With the development of the mainland and the development of the colonies, the financial income of the Vienna government alone is definitely not enough.

Austria’s private capital accumulation is also not rich enough, this background Franz naturally borrow foreign debt. Of course, not simply international loans, the vast majority of the debt is in the form of bonds.

Most of the bonds here, are in the name of the project to raise money, the debt is not all the Vienna government.

It was similar to the Americans borrowing money to build railroads, mortgaging the railroads to the Bank of England and using the borrowed money to build the railroads.

In the event of an economic crisis, the railroad went bankrupt and the Bank of England was left holding the bag.

The same is true for many projects in Austria, where a large amount of debt is owed to the banks and a bunch of bonds are issued to the private sector, with the government investing only the start-up capital.

Anyway, these projects are standard commercial operations, and in case of an accident, the big deal is that a company goes bankrupt.

Economic proximity is also an important factor in the alliance between Britain, France and Austria. From the perspective of globalization, whenever there is an economic crisis in Britain and France, Austria is implicated, and vice versa.

Want to get rid of this situation, in fact, is also very simple, just one word – wait. When the domestic private capital has finished accumulating, there will be no need to go outside to borrow money.

We also take what we need, one side of the excess capital is in urgent need of export, the other side of the development needs to lack of funds, the two sides just to cooperate.

The original time and space Americans are so developed, if there is no world war, they also did not turn over so quickly, from debtor countries into creditor countries.

Of course, debtor nations and creditor nations are not in the absolute sense. Domestic enterprises foreign banks money, domestic banks have also gone out to develop, the same is also in foreign loans.

Even if the Russian empire is capital-starved, the same banks are exporting capital abroad. This is all normal economic activity, mainly for profit.

Having figured out the French position, Alexandrovich did not dwell on it. After visiting French industry, he traveled directly to London by ship.

This time he relaxed, the tsarist government had no illusions about getting loans from the British. Unless the English bankers were out of their minds, this could not happen.

The government of London could not be expected to help guarantee it, could it? The two sides were enemies, and even if the Russian Empire had fallen and had taken a back seat among the British rivals, the hatred that had built up in the early days was not so easy to dissolve.

Moreover, both Prussia and Poland were the British’s little brothers, and that couldn’t be done even if it was to keep their men from getting cold feet.

……

The diplomatic action of the Russians still attracted the attention of the Kingdom of Prussia. Even without Bismarck, Wilhelm I still managed the Kingdom of Prussia.

After a series of political struggles, the Junker nobility, which had been united for a short time because of the war, was now in tatters.

For example, the industrial Junkers, the financial Junkers, the operational Junkers, the court Junkers, the chamber Junkers and the rural Junkers.

The men were no longer ironclad, and the king’s power was naturally consolidated. Politics in the Kingdom of Prussia began to return to normal, the military was still very powerful, but it was no longer a monopoly.

A new balance of power was formed internally, and Wilhelm I set his sights on the European continent. As an enemy, he was aware of the Russians’ every move.

The Russians wanted to get out of their isolation through diplomacy, and naturally William I could not agree to this.

In the royal palace in Berlin, the top military and political leaders of the Kingdom of Prussia gathered together to business how to sabotage this diplomatic move of the Russians.

“The Russian Crown Prince’s trip to Europe this time was invited by the French, there must be a transaction of interests between France and Russia, but the possibility of an alliance between the two countries is unlikely.

England, France and Austria have already allied themselves, and at this time the French have no basis for an alliance with the Russians. The French were trying to raise the price of the Russians, and wanted to get a heavier voice in the Triple Alliance.

What the Russians lacked most now was money, and the French had a lot of capital. Alexandrovich’s first visit to France was mainly for the purpose of loan.

From an economic point of view, now that the credibility of the Tsarist government had been completely lost, no banker would be stupid enough** to lend them money.

The only hope for the Russians is the usual exchange of political favors ……”

Listening to Foreign Minister MacKnight’s boasts, William I frowned, not only the Russians were short of money, Prussia was also short of money now.

The financial situation of the Berlin government was even worse than that of the Tsarist government. At least the Russians had reneged on their debt and did not have to pay it back, while Prussia had to bear a heavy debt.

In the last few years, the number of people from the Kingdom of Prussia who run away to Austria to make a living has been increasing day by day, and a large part of the reason for this is the heavy tax burden.

In order to pay off its debts, the Berlin government has had to increase the burden on the population at home. Those who could not bear it, ran away.

Wilhelm I did not dare to stop them, most of them ran away from the ragged people, lost their livelihood in the country, and stayed is a hidden danger.

If it were not for the possibility of emigration, Prussia would have been in flames. The victory over the Russian Empire brought only glory, the newly expanded land can not be converted into wealth in a short period of time, is still in the input stage.

The populace had not gained any real benefits, and the mere status of a great power still could not deceive the stomach.

Of course the spiritual gains were still useful, and even though times were hard for everyone, the populace was still very supportive of the government.

Even if they couldn’t get along, they just emigrated and left, not running off to revolution.

This aspect is somewhat similar to Japan, except that Japan does not have a flood relief window, and people who are hungry and desperate still have to make trouble, such as grabbing rice.

William I interrupted, “What is the plan of the Ministry of Foreign Affairs? Whatever the Russians are up to, all we need to do now is destroy.”

There was no need for any reason, the enemy was going to do what they were going to do, and it was right to let them do what they couldn’t.

The internal reforms of the Tsarist government were beyond their meddling, but international diplomacy was something that Prussia could disrupt.

Compared with other countries, William I had no confidence in diplomacy, but compared with the Russians, he was still sure.

After a few seconds’ pause, Foreign Minister McKnight replied: ”Your Majesty, it is unlikely that the Russians want to obtain funds from the outside world, and the biggest political purpose should be to improve diplomatic relations with various countries.

Now that France and Russia are moving closer together, it has also irritated the government in Vienna. To this day, the Russo-Austrian alliance no longer brings political benefits to Austria, but is rather a diplomatic burden.

There are not many years left until the end of the Russo-Austrian alliance, and the Foreign Ministry plans to magnify the rift between them and not allow Russia and Austria to renew the treaty.”

The destruction of the Russo-Austrian alliance was of great significance to the Kingdom of Prussia, and it was directly related to winning the next Russo-Prussian War.

Prime Minister Mauch shook his head and said, “This is not enough, the Russo-Austrian alliance is not just about political benefits, it also comes with a great deal of economic significance.

The Russian Empire is now almost a dumping ground for Austrian goods. Austria alone accounts for 63% of Russia’s total import and export trade, and a benefit of this magnitude will not be easily let go by the Viennese government.”

Interest is always the best bond, and there is nothing that cannot be compromised in front of it. Even though Russia and Austria have a not-so-small conflict, the two sides still maintain an alliance for the sake of interests.

Foreign Secretary McKnight explained, “That’s right, Mr. Prime Minister. But we also need to look at the data, in recent years the total trade between Russia and Austria has been declining.

The Tsar’s government is trying to get rid of its economic dependence on Austria, and the Russians have raised tariffs several times in order to develop domestic industry.

The Austrians wouldn’t be able to keep their current market share if Russian industry wasn’t so backward that their products weren’t competitive in the market.

The great campaign of opening up the countryside, which was implemented by Alexander II, had already borne fruit, and the stagnation of Russian agricultural products this year became a foregone conclusion.

Russian Crown Prince after this trip to Europe, it is likely to Britain and France to open the domestic market, in exchange for domestic agricultural products can enter the international market.

Austria in the loss of the Russian market monopoly, but also face the impact of Russian agricultural products in the international food export market, the relationship between the two countries will certainly be greatly affected.

Now the Russians and Britain and France reached an agreement on the more, Austria’s loss of interest will be greater. A short period of time may not be obvious, three or five years later this change will be very obvious.

As long as the Austrians are allowed to see greater benefits, it is not impossible to abandon the Russian-Austrian alliance.

For example:

Convince them that as soon as we win the next round of the Russo-Prussian War, they will be able to acquire the Ukrainian region and the Russian Balkans, cutting off the Russians’ food export routes.”

The crowd blushed profusely, clearly taken aback by McKnight’s startling statement.

The room suddenly fell silent, leaving only the sound of the crowd’s breathing and the faint sound of their heartbeats.

……

(End of chapter)