Chapter 530: Cold Winter

  Chapter 518 The Cold Winter

St. Petersburg, since the failure of Crown Prince Alexandrovich’s trip to Austria, the Tsarist government has realized that the Russian-Austrian alliance has come to an end.

Three feet of ice is not cold in a day. With the passage of time, conflicts between Russia and Austria accumulated day by day.

Previously, the two governments relied on the alliance to suppress the discordant voices, which could no longer be suppressed.

Russian-Austrian relations changed from the time Alexander II succeeded to the throne. The personal inclinations of the emperors of monarchies should not be underestimated in their influence on politics.

After the outbreak of the Russo-Prussian War, Austria did not give full support to the Russians, and apart from its interests, more than anything else, it was expressing its dissatisfaction with the Czarist government.

No great power is willing to be someone else’s little brother, especially after the power contrast between the two sides changed. The initial game between Russia and Austria was actually a struggle for alliance dominance.

Alexander II did the right thing, only the bureaucrats of the Tsarist government did not compete and lost the Russo-Prussian War, and from then on, the Russian Empire went from strength to strength and lost its alliance dominance.

If the Tsarist government had been willing to concede defeat, then it would have been over, and the Russo-Austrian alliance would have remained the most important political power group in Europe.

Obviously this was not possible, and the pride of the Russian Empire could not be defeated in a single battle. Looking back over the long history of the Russian Empire, how could the Tsar really give up his European hegemony when worse times than the present had passed?

Franz had little interest in continental hegemony, but Austria’s geographic position was such that it could not be avoided in the battle for continental hegemony.

Austria’s volume was there, and even if he said he was not interested, no one would dare to believe him. In that case, it can only be hard. Now France and Austria together to divide the hegemony of the continent, is this background appeared.

For the Tsarist government, the broken Russian-Austrian alliance is indeed a blow, but the alliance between the two countries still has a few years to go before it expires, and there is no threat in the short term.

The most important thing now was to find a gold master who was willing to pay in time, otherwise Alexander II’s reforms would not go on.

The ideal choice was, of course, Austria, and the Tsarist government could use the foreign debt to tie the two countries a little closer together. Now the Viennese government dared to abandon the Russian-Austrian alliance, and that was because they did not owe enough.

If the debt owed by the Tsarist government to Austria, instead of the current 183 million guilders, was 1.83 billion guilders, it is estimated that no matter what, the Vienna government would only be able to hold on for dear life.

According to the current situation, when the Russian-Austrian alliance expires, the tsarist government owes the debt is also paid off.

This is not something that Alexander II can delay, the Austrians are just taking a cut of the Russian tariffs, which amount to more than twelve million guilders per year.

The higher the Tsarist government set the tariffs, the faster this repayment would go. Together with the fact that there were also some mineral resources offset in kind, Russia was still able to repay more than ninety percent of the debt due each year.

The collateralized loan, by Alexander II can not renege on the debt. Otherwise Russia and Austria will immediately turn the other cheek, when Austria to the two countries trade channel a closed, Russia will immediately break out of the economic crisis.

There is no way, this is the geographic location of the decision. If Austria blocked the door, more than 70% of Russia’s exports are finished.

Ukrainian grain does not go from the Dardanelles, can not go by land to St. Petersburg, and then loaded on a ship for export, right?

According to the current international situation, if Russia and Austria really flipped, the Russian Empire would be completely blockaded. Austria in the back of the drum a little, sponsoring two ironclad, Prussia will dare to block the Baltic Sea.

It’s already the age of ironclads, and the Russian Navy’s pile of broken ships can be dismantled for firewood. Most of them are wooden warships that haven’t been updated in over twenty years, what more do you want?

It is not that Alexander II did not pay attention to the navy, do not know warships to be updated, is really the government pocket no money. Since the outbreak of the Near Eastern War, the Tsarist government’s finances have never been better.

Prussia and Austria close to Alexander II is not worried, although the Kingdom of Prussia has given up the unification of the German region of the strategy, but Austria has not, this is a can not be overcome.

Alexander II asked relationally, “How are the talks with the British going, are they willing to provide us with a loan?”

This loan was extraordinary, and the Russians were repaying it with grain. If the British agree to issue this loan, the tsarist government will have to send one million two hundred thousand tons of wheat, four hundred thousand tons of corn, three hundred thousand tons of barley to England every year ……

What appeared to be a loan might actually be better described as an export of grain. Only in the international agricultural market, the competitiveness of Russian agricultural products is really too low.

If direct low price dumping, then put put the international food prices down, the relatively high cost of planting Russian agricultural products will become unprofitable.

In order to avoid the worst case scenario, Russian economists have proposed loan bundling sales to contract a country’s food imports at a price lower than the international market.

The reduced profit would be the cost of the loan’s property. It was better than fighting a price war with competitors and ending up losing money.

“Your Majesty, the British are asking for the amount of the loan to be reduced by half, and also to reduce the price of the grain offset by one-fifth, which is equivalent to 70% of the current international grain export price.”

Foreign Minister Clarence Ivanov’s answer made Alexander II’s face change greatly, grain export is not a profitable industry, if the 70% discount can not even recover the cost.

Alexander II asked undaunted, “What if we agree to join the free trade system, so that the ruble and the pound sterling peg?”

Clarence Ivanov replied, “If that’s the case, there’s no problem with the loan, but there’s still no way to negotiate the price of food.

The British grain merchants believe that the current international grain prices are too high and will fall drastically in the near future, insisting that they will only accept a seventy percent discount on the current market price.”

If the current market price is taken into account, the total value of the agricultural products that Russia plans to convey into Britain is as high as 38 million pounds, and if there is a 70% discount, it will only be 26.6 million pounds, and the difference between them is as high as 11.4 million pounds.

Alexandrovich grimaced and said, “The British are blackmailing, we absolutely cannot accept such conditions!

At 70% off the market price, not only will we not be able to profit from the grain export, but we will lose money instead.

Unless the purchase price of grain is further lowered, but the price of grain in the country is already very low, and if it is pushed down further, the people will lose money on their farms.”

Grain is a large variety of commodities, and transportation has always been a big problem. The Russian Empire is not well connected and transportation costs are high, these costs must be taken into account.

Usually this part of the cost ended up on the heads of the farmers who produced the grain, and now if it was exported at 70% off the market price, and then fell on the heads of the farmers, they would have to go bankrupt.

The peasants were the largest group of the Tsar’s supporters, and this was the cornerstone of his rule. If they were driven out of business, the Tsar’s government would be unstable.

Alexander II sighed, shook his head and said: “The plunge in international food prices has become a foregone conclusion, the British judgment is not wrong.

The international market is that big, and our increased grain production is that much, once it is put on the market, the international grain prices will blood crash.

To put it mildly, if all of Russia’s excess grain can be shipped out, even if all the other grain-exporting countries stop exporting, there won’t be a food panic in Europe.”

This is the aftermath of the Great Reclamation, and despite solving the land problem in the country, excess food production capacity has also become a serious social problem.

What is even more tragic is that the farmers who just got the land were highly motivated to produce food, and Russia’s food production is still in the process of climbing.

As the price of food fell, the Russian grain brewing industry began to flourish. But this kind of high-grade wine, the general public simply can not afford to consume, the market is very limited. Want to rely on the winemaking industry to consume excess food production capacity, that is impossible.

Alexandrovich thought for a moment and said: ”Then guide the farmers to switch to cash crops, and we’ll plant whatever is in short supply on the market.

If we don’t cut back on domestic food production, the international food market will sooner or later be bursting at the seams. As far as I know, the Vienna government is already interested in abolishing the agricultural tax.

Their food production costs are already lower than ours, and they also have a complete supporting industrial processing chain, so their ability to resist risk is definitely stronger than ours. If a price war breaks out, I’m afraid there will be millions of bankrupt people in the country every year.”

Alexander II nodded, he did not suspect that Alexandrovich was exaggerating. It would have been the truth, with the exception of the Ukrainian region, all other lands in Russia had relatively high food production costs.

Even the Ukrainian region, because of underdevelopment and utilization, the agricultural production technology here was backward. Obviously black soil, the result of grain acreage is still not comparable to Austria.

This is the aftermath of the market is not enough, no matter how to say that the total population of the European continent is less than 300 million, the countries themselves produce food to meet most of the demand.

Want to expand the food export market, the only way is to first use low-priced food impact market, down countries of agricultural production.

Alexander II was initially planned this way, as long as the collapse of the countries of the agricultural, then Russia has mastered the lifeblood of the European continent.

The plan was a good plan, the only problem was that the Tsarist government had insufficient financial resources. Competitors are too strong, playing low price dumping, in the collapse of the countries of agriculture at the same time, also has the potential to collapse the Russian agriculture.

In fact, not only Alexander II had this plan, Franz also formulated a similar plan, only in the end it was abandoned.

There is no way, now is the colonial era, which power lacks a piece of food-producing land? If the local food production is insufficient, can’t the colonies find a way?

Can not do monopoly, playing low price dumping that is and wallet. Now agriculture is still profitable, there is absolutely no need to make all the profits.

Alexander II mood is a little low, said in a serious tone: “cut food production capacity, change to cash crops is necessary, but this is not overnight can be completed. Grain cultivation is relatively simple, farmers are used to planting.

To change this traditional planting pattern, we must learn from Austria. Aleksandrovich, you’ve also been to Austria, you should be well aware of how advanced their agriculture is. Where is the gap, have you found it?”

Alexandrovich fell into deep thought, he hadn’t stayed in Austria for too long, and his understanding was only limited to Vienna, most of the time it was still through newspapers.

“There should be climate, transportation, agricultural technology, and supporting processing industries. There is no way for us to make up for the gap in climate, and the last three points can still be slowly caught up.”

Alexander II nodded and said, “In that case, then we’ll take this loss.

If we don’t reach an agreement with the British now, I’m afraid that after a few more months of fall harvest, our grain can’t even be sold at 70% off of the current market price, and a lower price is better than smashing it in the hand.

If there is no large-scale natural disaster, when our grain harvest enters the international market, this year is destined to be an agricultural winter, and then there will be a large number of agricultural products that are not sold.

We’ll lose money then anyway, so we might as well get the loan first. By then we can also reduce agricultural taxes and minimize farmers’ losses.

Only when the railroads are repaired and the domestic transportation problem is solved will the Russian Empire have a future, for now let the British be complacent!

If it wasn’t for the sake of fighting Austria, maybe this condition wouldn’t even be offered by the British. They are not short of this batch of cheap grain, and the grain processing industry in Britain is not very developed.

If the London government doesn’t give preferential policies, these grain merchants won’t invest in the agricultural product processing industry, after all, this is the field where Austria is the hegemon, and they don’t have any advantages.”

……

(End of chapter)