Chapter 545: The Czar’s Choice

  Chapter 533 – Chapter 103 – The Czar’s Choice

St. Petersburg, after the agrarian crisis was in full swing, became the center of the swirling storm.

European public opinion has accused the Russians of deliberately creating an agricultural crisis, attempting to use the opportunity to wash out the European agricultural production system, monopolize the European food supply.

This argument is also true, the Tsarist government did have this plan, but before it could be implemented, the agricultural crisis broke out.

Agriculture is the most difficult to monopolize the industry, there is almost no threshold, anyone can plant the land. Land suitable for cultivation is everywhere these days, and no colonial empire needs to be constrained by others.

The Tsarist government had the desire to monopolize Europe’s food supply, but not the ability to implement it. The cost of agricultural production in Russia was not superior, and it was almost impossible to win the competition.

In the face of the overwhelming accusations of public opinion, Alexander II decisively chose to ignore them. Anyway, in continental Europe, the tsarist government had always been scolded, and he was used to it.

Public opinion could be ignored, but the reactions of the European governments were not to be feared by Alexander II.

As of April 1873, several politicians had already publicly stated that they wanted to impose tariffs on imported agricultural products in order to protect their own agriculture.

Behind the seeming fairness of adding tariffs on all agricultural imports together, there was actually a strong sense of malice.

Of the four major agricultural exporters in Europe at present, the Kingdom of Prussia has the smallest market share and has been hit the least.

The Kingdom of Poland is ranked second to last and is now embroiled in an internal struggle, and the situation couldn’t be worse.

Despite the fact that in terms of total exports, the Russian Empire ranked second, but in terms of that volume, they were still the rightful leader.

Austria has the largest total exports, and in addition to local food processing, it also imports agricultural products from Russia and Poland for processing, most of which is held up by the added value of the products.

After the outbreak of the agricultural crisis, the tsarist government is also ready to do their own processing, not to leave the Austrians the opportunity to earn the difference.

Unfortunately, the domestic industrial strength is too weak, resulting in high processing costs, in the face of the brutal market competition, the loss of competitiveness.

By the impact of the agricultural crisis, Austrian agricultural processing enterprises cut capacity, the total amount of agricultural products exported by Russia to Austria has also declined, but still accounted for more than half of the total foreign agricultural exports.

From the point of view of interests, both sides are also considered to be a loss and a gain. Alexander II had just received a telegram from the Austrian Association of Agricultural Processing Companies, hoping that they would cut the total amount of grain exports.

A large number of cheap raw grain exports to the international market, directly into the European countries, this for the Austrian agricultural products processing enterprises, but also a life and death battle.

The competition in the market is becoming more and more intense, and these processing companies are certainly not going to sit on their hands. It is impossible to lose money and make a profit.

Capitalists are very shrewd, and what seems to be a bland telegram is actually an ultimatum.

Capital is profit-seeking, and if there is no more profit in agricultural product processing, the capitalists will not mind immediately abandoning it.

Since 1872, savvy capitalists have been making the transition. Now that we are at the outbreak of the second industrial revolution, there are still many projects that can be invested in, and there is no need to hang oneself on a tree.

If the Russians were willing to lower the total amount of grain exports, everyone’s profits were guaranteed and business could continue.

Otherwise, things will not be good. Affected by the plunge in grain prices, almost every grain capitalist’s warehouse was filled with grain, waiting for the market to pick up.

If there is no hope in sight, everyone is left with no choice but to leave the market. This is definitely not a good thing for the Russians, because of the Russian-Austrian alliance, Austrian processing companies have always prioritized the purchase of Russian agricultural products.

To the European continent the situation is very different, in the same conditions, almost no capitalist is willing to cooperate with the Russians.

This is the aftermath of the loss of credibility, which cannot be remedied in a short time. Now Russian agricultural products are exported on the basis of cheapness.

The international price of grain is constantly going down, and it is actually being pulled down by Russian grain exports. In order to sell grain out, they have to make price cuts.

As soon as the Russians lowered the price of their grain exports, the market had to follow suit. International grain prices are now at their lowest point in decades, and everyone’s profits have been squeezed out.

Alexander II knew the consequences of doing this, but looking at the piles of grain, losing money they had to sell.

Moreover, the definition of “lose money” can not be generalized, the export of food for foreign exchange, while the domestic circulation is the paper ruble.

The tsarist government issued paper rubles, the outside world is not recognized. In international trade, the current use of the most gold, silver, pounds sterling, guilders, francs.

The international credibility of the ruble is not as good as the krone of the Nordic Confederation or the Dutch guilder, and even the Swiss franc and the Prussian mark are more popular than the ruble.

From the point of view of national development, even if it is again a loss, the tsarist government must obtain foreign exchange as much as possible, otherwise it can not balance the trade deficit, which will lead to the outflow of gold and silver.

Just keep losing money is not a solution, in order to smooth out the losses, the tsarist government has already devalued the ruble twice.

This is undoubtedly a heavy blow to the ruble, which has just been reformed on the gold standard, and has seriously undermined market confidence.

Currency cannot be devalued all the time, economists have warned Alexander II, if we keep playing like this, the market is being played, it is better to continue to use gold and silver as currency!

Regulating his emotions, Alexander II: “What do you think of the telegram from the Austrian Association of Agricultural Processing Enterprises?”

The fact that a trade association could directly send him a telegram threatening him made Alexander II very angry. If he didn’t have no choice, he really wanted to cut off the deal between the two sides and forget about it.

Of course thinking about it, but if he really wanted to go through with it then he should just forget about it. Without this biggest buyer, their life will be even more difficult.

Finance Minister Kristan Val: “Your Majesty, unless all the countries cut down on their food exports and work together to raise the price of food, we must not cut down on our exports.

There is still a large amount of agricultural products in the country that are not being sold, especially in the newly developed Siberian region, where no one is interested in the local grain at all, and the government is taxed on the grain.

The Ministry of Finance is organizing manpower to transport it, and if it can’t be sold, all these tax revenues will be finished.

If there’s no way to solve the problem of unsold grain, we’ll just use it to pay off our foreign debt. Whether they take it or not, we’ll only use the grain to pay for it.”

In Kristanvar’s opinion, everyone was able to tolerate the previous reneging on the debt. Now that the Tsar’s government was willing to recognize the previous debt, this was already a very good face, but still want to pick and choose?

Foreign Minister Chris Basham shook his head back and forth, “No, it was not easy for us to reach an agreement with the countries, if we do this, we will immediately fall into another diplomatic dilemma.

According to the prior agreement, the countries have agreed that we use agricultural products to offset the debt in batches, there is no need to get so extreme.”

Grain debt repayment is the greatest achievement of the Russian Foreign Ministry, and the total amount of debt repayment is spread over fifteen years. If they were to pay off the debt with grain all at once, they would have solved the agricultural crisis, but the debtors wouldn’t be able to stand it!

Grain that can’t be sold is worthless. Chris Basham does not want the achievements of the Ministry of Foreign Affairs to be destroyed, that would also be a disaster for the Russian Empire.

The words to cut production capacity were not raised by tacit agreement. The call for production cuts launched by Austria last year has turned into a joke.

With the exception of Austria itself, which cut its grain acreage, all three countries, Russia, Prussia and Poland, merely shouted slogans and introduced a few laws.

When it comes to concrete implementation, everyone realizes that it’s not that way at all. It is impossible for the law to stipulate which piece of land grows grain and which piece of land does not.

It is not a leap for any decree to be implemented. Even for the law on fallow cultivation, which was widely recognized by the society, when it came to its concrete implementation, the officials below did not know which land had been fallowed and which land had not been fallowed.

Without prior statistics, how can we talk about implementation? In the face of reality, officials everywhere have tacitly chosen to start counting from now on.

If grain is planted this year, then this piece of land should be left fallow next year. Everyone is counting clearly, and no one has anything to say.

As a result, the area planted with grain in various countries has increased rather than decreased this year, and the government is likewise powerless to do anything about it. If we want to wait for regulation to take effect, it may take several years.

The role of market self-regulation may be more effective than the government’s decree. Continuous loss of money for several years, the general public may not reduce the area of grain cultivation, but the nobles will certainly reduce production.

Minister of Agriculture Manilov interrupted: ”There is no point for the two of you to argue about this, unless the agricultural crisis is resolved fundamentally, the crisis behind will only get worse.

Even if we forcibly throw the grain to the debtors, that can only treat the symptoms but not the root cause, the agricultural crisis can’t be gotten rid of in one or two years’ time.

According to the data released by the Austrian Ministry of Agriculture, if no measures are taken and the market is left to regulate itself, this agricultural winter may last for more than ten years.

Russia is a big agricultural country, if the agricultural crisis lasts for more than ten years, the preliminary estimate is that tens of millions of farmers in the country will go bankrupt as a result, and it may even be 20 million or 30 million.

The empire’s industrialization process is developing rapidly, but to accommodate such a large number of bankrupt people is not something that can be accomplished in a short period of time.

Our biggest problem now is not the stagnation of food in the country, but how to ensure that the farmers do not go bankrupt on a large scale.

According to the current situation, this year’s domestic bankrupt farmers will be several times that of last year’s, with roughly 50,000 to 80,000 families going bankrupt, and with the agrarian crisis continuing, this number will grow geometrically every year.”

It’s close to saying it plainly: if you can’t eat enough food, you might as well go to war!

The agricultural crisis broke out at a bad time; if it had happened a few years earlier, during the Russo-Prussian War, the outcome of the war might have been rewritten.

Gray livestock is worthless, as long as there is food in hand, the tsarist government can carry on the war. A tsar who could feed his soldiers was already a good tsar, and all other problems could be overcome.

Don’t look at the Russian Empire now seems to be a smaller circle, if a war breaks out, the Russians’ war potential, absolutely far more than a few years ago.

This is the advantage of having more food, how much food is stagnant, as long as the farmers do not go bankrupt on a large scale, the problem is under control. To put it bluntly, when everyone is fed, no one will rebel.

The fact that the Russian peasants did not blame the Tsarist government for the seriousness of the agricultural crisis, and that Alexander II’s prestige remained intact, is the benefit of having enough to eat.

After a few moments of contemplation, Alexander II decided to give in to reality. “Death is not the way of the poor”, other people’s bad luck is better than their own bad luck.

“The Ministry of Foreign Affairs and the Vienna government communicated deeply, this time, at all costs, we must also pull them down.”

Experienced a failure, Alexander II’s arrogance has abated a lot, in the act of convergence a lot.

This was a crisis and likewise an opportunity. If operated well, the Russian Empire could still use Austria’s power to take out an enemy.

……

(End of chapter)