Chapter 1523 Electrified Railway Proportion
The beneficiary of East Africa's early investment in South America will obviously be the west coast of East Africa. Although the west coast of East Africa has developed well in recent years, there is still a clear gap compared with the east coast.
If we want to change this situation, South America and West Africa, two regions with interests related to the west coast of East Africa, must be given priority in layout, so that the west coast can become the economic highland of the South Atlantic, siphoning funds, talents and resources from countries and regions along the entire South Atlantic coast.
Between West Africa and South America, there is no doubt that the latter is more attractive to East Africa at present. On the one hand, the influence of Britain is shrinking, and on the other hand, South America is more maturely developed than West Africa. As for West Africa, various countries are entrenched, the level of civilization is relatively low, and the cultural and racial differences with East Africa are too obvious.
…
Time flies and it is 1932.
Last year, as the East African governments made drastic economic adjustments, they successfully withstood the adverse tide of the global economic crisis and became one of the few economies in the world to go against the current in the economic storm.
However, this is accompanied by a lavish spending of money, for which the East African government has had to resort to austerity measures.
Crown Prince Friedrich held a meeting at the Ministry of Railways today to discuss the "losses" of the East African Railway.
"Railways are important transportation facilities that are related to the national economy, national defense and military strategy, and basic livelihood. Since the beginning of this century, the Empire's railway industry has developed rapidly and has become the world's third largest railway network."
"It has made important contributions to boosting national economic growth, driving regional economic development, balancing regional economic differences, and improving traffic conditions."
"However, with the development of the times, the railway crisis has now erupted all over the world. Except for underdeveloped countries and regions such as the Soviet Union, the railway assets of many countries have actually become negative assets. Our East African railway also has this development trend."
“So, I hope everyone can brainstorm and come up with a detailed and practical plan on how to reform the East African Railway.”
In 1931, the world's three major railway networks were the North American railway network, the European railway network, and finally the East African railway network.
Among them, the United States has 430,000 kilometers of railways, ranking first in the world. Europe is second in the world with a length of more than 350,000 kilometers. Finally, East Africa's domestic railway lines also exceed 310,000 kilometers.
With the outbreak of the economic crisis, the US railway industry suffered heavy losses. The European railway industry performed well overall, and railway construction in the Soviet Union was in a stage of rapid development. Although East Africa had some confidence, the problems were already quite serious.
Minister of Railways Wells analyzed: "Your Highness, the current problems in the operation of East African railways are caused by the special national conditions of East Africa."
"The losses in the railway sector are due to both internal and external factors. The internal factors are systemic and inherent deficiencies, which can only be adjusted continuously. The external factors are mainly the rise of other modes of transportation, which have created competition with the railways."
"Take the European railways, which are currently the best-performing in the world, for example. The reason they are able to barely maintain their operations is because the European market and demand are huge."
"Europe's population is more than twice that of East Africa, and its area is much smaller than that of East Africa. In terms of passenger transport alone, the profitability of East African railways is doomed to be poor."
Early railways were definitely a business that was sure to make money. After all, in the early stages of railway construction, there were few lines, and most of the early railways were built in economically developed, densely populated, or resource-rich areas. In addition, there was no competition from other modes of transportation such as automobiles, so they almost monopolized the main passenger transport market.
Take the situation of railways in the world in the 19th century as an example. At that time, there were no cars, and railways were the fastest, most convenient, most comfortable, and most stylish means of transportation. Therefore, if conditions allowed, railways would definitely be the best option for people traveling in the 19th century.
However, in the 20th century, the situation was completely different. As the saying goes, scarcity makes things valuable. But look at Europe, North America and East Africa today. The length of any of them would be ranked among the top in the 21st century.
Not to mention developed cities and industrial and mining areas, railways can be seen in remote villages, even in forests, rainforests, deserts and mountain valleys.
In short, the common problem faced by developed industrial countries today is the problem of over-construction of railways, especially in the United States.
Wells emphasized: "The United States has more than 400,000 kilometers of railways, the longest in the world, but the total population of the United States is less than a quarter of that of Europe, and even has tens of millions fewer people than East Africa."
"At the same time, because of the laissez-faire attitude of the U.S. economy, the railway industry is in a state of chaos. Many railway companies even build duplicate lines, engage in price wars to attract passengers, and the railway systems are incompatible. Therefore, the U.S. railways are suffering the most in the economic crisis and have suffered the most losses."
"In addition to this, the explosion of the US automobile industry is also an important factor in the collapse of the railway industry. Although East Africa is the world's largest automobile industry country, with more than 30 million cars on the road."
"But compared to the United States, our automobile industry has developed relatively slowly. The U.S. population is only 120 million, but the number of cars owned exceeds 25 million, which is higher per capita than the Empire."
Although the United States is the world's second largest automobile producer, due to its economic system, the U.S. government's attitude towards the development of the automobile industry is completely different from that of the East African government.
In the development of the transportation industry, the East African government prefers a balanced development model, with comprehensive development of railways, roads, aviation, and water transportation. In terms of road transportation, East Africa is dominated by technology and brand cultivation rather than blindly pursuing quantity.
The situation in the United States is completely different. American companies of this era are very similar to the companies in the rapid industrialization stage of the Far East Empire in the previous life. As soon as they smell a little blood, all companies rush in, eventually causing product prices to become "rock-bottom prices."
This is reflected in the development of the automobile industry. Since the 1920s, under the guidance and regulation of the government, East Africa's automobile industry has upgraded and transformed, and steadily expanded the mid-to-high-end market.
At the same time, the U.S. government completely let domestic car companies go their own way. Coupled with the influence of the stock market, the U.S. automobile industry expanded rapidly, and there were no barriers to entry.
Therefore, American companies do not care about technology, workers, market demand and other factors. They just take the money and enter the industry. Anyway, they have shareholders to back them up, so they are not afraid of waste.
This eventually led to the direct collapse of the American automobile industry during the economic crisis of 1929. However, before 1929, many American economists confidently stated that "the American automobile industry will surpass East Africa in the near future."
Taking the development of the American automobile industry in the past 20 years as an example, this judgment is not unreasonable. Before 1920, the American automobile industry was completely incomparable with that of East Africa.
By 1927, the United States' annual automobile production had surpassed East Africa, and its national car ownership was rapidly catching up with East Africa. At the same time, the U.S. automobile industry was still growing rapidly.
According to this trend, it is possible that within a few years, the United States will surpass East Africa in terms of car ownership and become the world's number one.
However, the result is also very obvious, that is, this development trend of the US automobile industry is unsustainable. The Great Depression of 1929 dealt a direct blow to US auto companies. Even now, many large US automakers are still struggling in dire straits.
The development of the U.S. automobile industry relies on the domestic market and tariff protection. After the outbreak of the economic crisis, the U.S. unemployment rate remained high, residents' income dropped significantly, and the domestic market collapsed.
In the international market, American cars cannot compete with East African, German, and even French car companies. Therefore, the United States can only reap the consequences.
Of course, the U.S. auto industry suffered heavy losses, but this did not prevent it from causing severe competition and impact on U.S. rail passenger transport.
Today, the number of cars in the United States may reach 26 million, while the U.S. population is only over 120 million, which means that one in every five people in the United States owns a car.
And this is not the most deadly threat to American railway companies. After all, railways have more advantages in medium and long-distance transportation. However, there is a situation in the United States that seriously undermines this advantage.
That is, the oil price in the United States is "cheap". Yes, the gasoline price in the United States is the lowest among the major countries in the world.
On the other hand, in East Africa, the world's largest oil producer, oil prices are not cheap, especially vehicle fuel prices, because East Africa has a "fuel tax" like Europe, and the proportion of fuel tax in East Africa is relatively high in the world.
As a result, East African residents must consider costs and choose the most appropriate means of transportation when buying cars and traveling.
Americans don't have this concern. Low oil prices mean that Americans won't feel too bad about choosing a car for long-distance travel. As a result, no one is willing to take the train as a means of transportation.
Wells emphasized that: "In the United States, because of the price of oil, people can choose private cars, then long-distance buses, and finally, they may consider trains."
"In addition, American rail passenger transport is also limited by technology. While Europe and East Africa are accelerating the transition to electrification or fuel locomotives, American train locomotives are still dominated by steam locomotives. Whether in terms of speed, efficiency, or comfort, they are still at the level of the last century. Therefore, the riding experience of American rail passenger transport is extremely poor. If I were an American, I would not choose to travel by rail. This is also due to the incompatibility of the American railway system, the inconvenience of changing trains, and delays."
This does have a significant impact on rail passenger transport in the United States. Today, Europe and East Africa are moving towards rail electrification, diesel locomotives, and even high-speed rail, but American railways are still clinging to steam power.
Just imagine, the breathtaking speed of a steam locomotive, as well as the huge pollution and noise problems, how could it possibly compete with a car with rubber tires.
By 1931, the world's railway electrification had made great progress. Not to mention East Africa, even European countries have achieved remarkable results in the field of railway electrification. Among them, Switzerland has achieved a railway electrification rate of more than 50%, ranking first in the world.
Other European countries also performed quite well. For example, Sweden reached 30%, Norway 25%, Germany exceeded 20%, Austria-Hungary 10%, and the United Kingdom 3%.
At the same time, the electrification rate of railways in the United States was less than one percent, almost zero. The reason was very simple: the United States had abundant coal resources and low coal prices, so the fuel cost of steam locomotives was low.
Then, the terrain of the United States is mainly plains, which also affects the demand for electrification of US railways.
On the other hand, these are the advantages of European countries. The more complex the terrain in Europe, especially in the mountainous areas, the greater the demand for electrification. Mountainous countries like Switzerland, Norway, Sweden and Austria all have electrification rates of over 20%.
On electrified railways, electric locomotives have a much better climbing ability than steam locomotives, which is very important for mountainous countries or countries with many mountainous areas.
At the same time, these countries have another characteristic, that is, they are rich in hydropower resources. After all, Europe has a lot of rainfall, and mountains are an important source of water. It is convenient to use the terrain to build hydropower stations and provide cheap electricity support for railway electrification.
Similarly, the above reasons also apply to East Africa. Coupled with East Africa's policy support, the electrification of East African railways has now reached an astonishing 33%, making it the world's largest electrified railway operator.
Therefore, the decline of American railways is not only caused by external factors, but also by the lack of attention to technological improvement, chaotic system, lack of unified management and supervision and other problems, which together led to the decline of the American railway industry.
Wells said: "Therefore, there are almost no major problems with East African railways in various fields, and losses are inevitable. Even European countries have loss problems in passenger railways."
"But, Your Highness, you must know that Europe's population is more than twice ours, so passenger transport is bound to be a loss-making business. However, considering people's livelihood, national defense, regional development and other factors, we cannot cancel some passenger routes at all."
From the very beginning, Ernst set the tone for the construction of the East African Railway, which is that it cannot be considered solely from an economic perspective, but must also take into account social development, regional balance, national defense and military, national strategy, and basic people's livelihood.
Many of the above words have nothing to do with "profit". For example, the Walvis Bay Railway in East Africa is difficult to make a profit, but this road is indispensable. Whether it is for communication between the people on the southwest coast of East Africa and the country, or from the perspective of national defense and security, this railway is indispensable.
At the same time, he is also involved in driving local economic development, such as the development of mineral resources in Southwest Province, overseas trade in the inland plateau areas of Southwest Province, etc.
Friedrich said: "We can't just do nothing, right? The government is under great financial pressure right now, and you should make some sacrifices, even if it means reducing operating costs."
In response, Wells said: "Your Highness, we do have a plan for this. To sum up, there are about three points."
“The first is to cancel some operating lines, especially in some resource-depleted cities in old industrial areas of East Africa. These railways can be cancelled to reduce maintenance and operating costs.”
"Then we need to speed up the electrification of railways. The speed, efficiency and comfort of electrified railways will be greatly improved, so that they can compete with highways and become more attractive to enterprises."
"Finally, we will speed up the research and development of high-speed trains to further improve railway speed, efficiency and comfort. This is also the main focus of the Ministry of Railways now."
(End of this chapter)
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