Chapter 316: An Iron Battalion, A Soldier in Flowing Water
Chapter 306 – An Iron Battalion, Soldiers in Flowing Water
Economic crises in the capitalist world tend to come and go in a hurry. The first global economic crisis finally came to an end in early 1859.
By the end of 1858, Austria’s gross industrial product had fallen by 29.7 percent compared to the previous year, the total economy had dropped by 17.3 percent, more than 3,000 enterprises had gone bankrupt, and the number of unemployed people had once exceeded the one million mark. ……
Franz finally understood why everyone is so afraid of the economic crisis, the Vienna government but actively take measures to deal with the results of the loss is still so big, not to mention the countries that did not take measures.
Of course, the Austrian economy in the loss of so much, and before the economic wild growth is also directly related to the Franz fired up the railroad company, the market value is once fell below the peak of one-tenth.
The economic crisis brought large losses, but also not just a bad thing. Looking at the problem from another angle, it also meant that the industrialization of Austria was almost completed. Only when a capitalist economy develops to a certain extent can such losses occur.
If the capitalist economy had not developed, it would not have suffered much even if there had been an economic crisis.
The Russian Empire next door is an example, does the economic crisis have anything to do with them?
The worst losers in this economic crisis are the US and Austria, the US because the British drew back their money, there was a money shortage in the market and the weak central government was completely at a loss.
Austria is naturally the capital crazy influx, capitalists blind investment brought about by the sequelae. After the economic crisis, the market returned to rationality, which is not a bad thing.
After a first glance at the economic report, Franz nodded with satisfaction.
Without any experience to draw on, being able to come out of the economic crisis so quickly, the Vienna government’s performance was still qualified.
Prime Minister Felix opened his mouth and said, ”Your Majesty, the economic crisis is over, and all the world’s economies are starting to pick up. The cabinet has decided to end the economic stimulus policy so that there will not be another frenzy of blind investment.
In order to cope with this economic crisis, the government has increased its infrastructure investment, and our political deficit for the 1858 fiscal year was as high as 280 million Shenduan, which has seriously exceeded the government’s financial capacity.
In order to reduce the financial pressure, the government plans to compress the financial expenditure in the next three years and gradually reduce the debt by 30 million Shenduan.
Projects that have already begun construction will continue, and all projects that are being planned and not yet under construction will be postponed.”
Infrastructure also costs money, and as the biggest receiver in this economic crisis, the Vienna government has also spent a huge amount.
The funds raised by the bond issue were partly used to take over the rotten projects; partly in the form of investment into the railroad companies and industries related to the national economy and people’s livelihood.
The fiscal deficit of 280 million guilders was what was spent. Two and a half years of fiscal revenues were turned into infrastructure projects and corporate equity.
The remaining portion has to be earmarked. It’s not like all the projects are rotten, and the lasso program is still lassoing a lot of people.
People are continuing to complete the project, the government will naturally have to pay for the project. The Vienna Government attaches great importance to credibility, and payments are made immediately upon completion and acceptance.
The government is out of money, naturally want to cut expenses, the first cut in the infrastructure investment.
The first cut was made in infrastructure investment. This infrastructure construction was already equivalent to ten years of investment in normal times, so naturally it could not be sustained.
Even if it is crazy, Franz can’t come up with double the revenue every year and put it into infrastructure development.
In times of economic crisis, a wave of emergency response is okay. After the economic crisis is over, the infrastructure should still be prioritized for economic gains.
Franz thought about it and said, “This is inevitable, our total debt is already the fourth largest in the world, we really should cut some of it.
Now that the infrastructure of important towns and cities in the country are covered, there are no big necessary projects in the short term, and infrastructure construction can come to an end first.
In the next two to three years, the government’s financial pressure may be greater. After that time, the large number of corporate stakes we hold in our hands should yield returns.”
When he said this, Franz himself had no bottom line. It was not true that it produced a return, but unfortunately the largest sum of money, which went into the railroad company, was an investment that would not see a profit.
Unless, of course, he now relaxed his policy and allowed the railroads to give up some of their cold routes and to operate only in commercially prosperous areas.
Economically, doing so would be the greatest gain; politically, it is something that should never be done.
Covering the railroads to every city on the mainland that needed them was not just for economic development, but more for strengthening the central government’s control over the localities.
Against this background, Franz could only say sorry to the speculators who were caught up in the late stage. For the sake of national development, the railroad companies had to operate at a loss first and not aim at profit in the short term.
If the government hadn’t bundled the railroad projects during the hot market period, and the capitalists were free to build the railroads, it is estimated that there would be three or five railroads running in parallel in the prosperous areas, and there wouldn’t even be a single railroad track in the economically backward provinces.
This has been proven in Britain and France, where railroads with no economic value are simply not built, and there is a great deal of duplication in economically prosperous areas.
If this is the only pitfall, forget it. The problem is that many of the enterprises in which the government has taken a stake belong to the heavy industry, which is the kind of investment with high input, long cycle and high return.
In the short term, these enterprises have to expand production and promote technological innovation, basically do not see the dividends, counting on these investments to make up for the financial distant future.
Of course, from the very beginning, the Government of Vienna did not expect to be able to gain much from it.
More than anything else, the government is still providing life-saving capital to the enterprises through its equity participation, so as to preserve these core industries.
This is the equivalent of the current government living a hard life, leaving a rich home base for the government that comes after it. This kind of thing, too, can only happen in politically stable countries.
If a country with frequent government changes, it’s good enough not to leave trouble for the next one, and you want to leave them with a home base, dream on!
This is also the reason why many countries have more and more government debt, anyway, as long as they are happy with this term, who cares about the life and death of the successor?
A session piled up, to the end of the debt, the government had to be influenced by the consortium, gradually reduced to the voice of money.
Iron camp, running water soldiers.
Monarchical countries are different, the cabinet government will change, Franz the emperor can not change, even if you want to change the successor that also his children and grandchildren. Nature will not allow anyone to sacrifice the future development for the sake of immediate interests.
(End of chapter)