Chapter 460 Conflict
Since the Age of Exploration, commercial prosperity has been inseparable from ports. Good ports can better promote economic development and the population gathers in coastal areas. The Industrial Revolution brought about the rise of railway transportation, which greatly improved land transportation capacity and enabled inland areas to develop.
However, the restrictions on this development are much higher than those on sea transport. Railway construction is constrained by various factors, which has also caused disputes between regions. Areas where railways pass can drive regional economic development and even directly create new cities. However, if railways do not pass through, even ancient cities may decline.
"In many areas of East Africa, railways were built first and settlements were formed later. If the railways do not decline in the future, these villages and towns formed along the railways will likely continue to prosper."
"Not only that, railway construction has increased East Africa's transportation efficiency by more than three times. In the past, we needed a large number of manpower and livestock to transport goods to the seaport area. Now, inland areas only need to transport goods to the nearest railway station, and then they can be exported to the seaport by rail."
"Railway construction in East Africa was a loss-making business from the beginning, with investments made without considering returns, but now we are seeing the benefits of this investment, that is, the inland areas are developing rapidly, and the gap between the eastern and western regions of the kingdom is narrowing, which is of positive significance to the kingdom's rule."
…
"Since 1875, we have found that the German government has significantly increased its targeting of our companies, especially those named Hechingen, which have been subject to significantly more difficulties. Obviously, in the eyes of the German government, we have become a piece of fat meat, and the Bismarck government has obviously turned a blind eye to our interests."
"Bismarck represents the Junker group behind Germany. The wild growth of Hechingen in Germany in recent years has obviously stimulated the Junker landlords."
“And just yesterday, someone in the German parliament proposed to increase tariffs on agricultural products, with agricultural products from our East African Kingdom being a key focus.”
Constantine and Ernst listened silently to their subordinates' reports. It was obvious that the Germans could not sit still!
Ernst: "Father, see! I said that the Hohenzollern name cannot be our umbrella of protection. When we chose to develop in East Africa, we actually completely separated from the original group and became their competitor."
The group that Ernst referred to was the Junker nobility. The business scope of the Junker nobility could not be said to be exactly the same as that of the Hechingen Consortium, but it was pretty much the same.
The market means that I take more and you take less. Obviously, the Heixingen Group is too large and has too much market share, which seriously threatens the business of the Junker nobles.
Constantine: "I just telegraphed to William I this year, and he promised not to embarrass the East African Kingdom!"
Ernst: "The Prussian royal family and the Prussian government should be viewed separately. Their interests are not consistent. The Prussian royal family must fundamentally obey the will of the state. This is the basis of their existence."
Constantine: "What now?"
Ernst: "There is no better solution except to gradually withdraw investment from Germany and transfer the money to other regions."
After all, the Heixingen Consortium is not East Africa, so East Africa can do nothing if the Heixingen Consortium is targeted. However, just like Jewish capital, capital has no homeland, and if it is not wanted here, it will find other places to go.
Constantine: "So where are you going to invest your money?"
Ernst: "Austria-Hungary, the Far East, Argentina, these three areas."
East Africa was not mentioned, but East Africa has always been the biggest drain on the Hechingen Consortium. The Austro-Hungarian market is actually not bad, and political centralization is not strong. However, the more so, the less capital is constrained by the government. The Rothschild family is doing well in Austria. There is no need to say much about the Far East. The market is huge, and the cooperation with East Africa is also very deep. Especially after the visit of the East African fleet, the words have become more polite. Argentina has a good prospect, at least it can follow the United Kingdom and the United States to get a share of the soup.
Constantine sighed and said, "Well, let's do it!"
As the instructions were issued from the headquarters of the Hechingen Bank, part of the funds in Germany flowed to other countries. In order to respond to Germany's pig-killing behavior, East Africa was also preparing to stop purchasing German steel after the contract expired and instead increase purchases from the Austro-Hungarian Empire.
The outflow of a large amount of funds caused a small-scale panic in the capital market, but now is the period of the Great Depression, and this panic spread instantly, eventually triggering a new round of crisis.
The German government, which had just recovered, immediately felt the pressure. As a large amount of funds flowed out of the German market, the unemployment rate rose again.
William I asked: "What's going on? Hasn't the economy just started to improve?"
Bismarck said confidently: "Your Majesty, don't worry. Now is an economic crisis, so some twists and turns are not a big deal. Everything is under control."
That being said, in reality the Heichenrich Consortium mainly withdrew from the German agricultural investment market. Coincidentally, as soon as the Heichenrich Consortium withdrew, someone took over the business left behind by the Heichenrich Consortium.
However, these businesses are not so easy to take over. In the past, the Hexingen Consortium cooperated with them, so it would reserve a certain share for the Junker nobles to help them sell their products in the international market.
It is no longer necessary now. Many of the sales channels built by the Heixingen Group, especially the supermarket system, can be replaced by agricultural products from East Africa.
It would be better for the Junker nobles to have their own sales channels to sell their goods, otherwise the losses will definitely be huge, and Ernst will not show any mercy. Of course, the Junker nobles are not a monolithic group.
After unpleasant experiences with the Prussian Junker nobility, the Hechingen Consortium strengthened its cooperation with the nobility in southern Germany, with Baden, Württemberg and Bavaria all becoming beneficiaries.
After all, Germany is a federal system, especially the states in southern Germany, which enjoy relatively full autonomy, at least economically. They can pull one group together and fight another, so as to better divide the opponent.
The competition between Germany and the Hechingen Consortium mainly occurred in the grain market, but was not very fierce in other areas. The Junker nobility was just a general term for German nobility.
For example, in the industrial field, the competition between the Heiheingen Consortium and the Junkers was not fierce, because the Heiheingen Consortium focused on light industry and emerging industries, while the industrial Junker aristocrats concentrated on heavy industry, and the two sides developed separately.
However, the Hechingen Consortium was inclined towards East Africa in agriculture, which was bound to lead to a conflict with the landowning Junker nobles. Even though the Hechingen Consortium had made concessions long ago, this was far from meeting the psychological expectations of the agricultural Junker nobles.
The Hechingen Consortium was not afraid of such competition. Its main investments in Germany were channels and food processing. It did not necessarily rely on the landlord Junker nobles. In the words of later generations, the landlord Junkers were located at the downstream of the industrial chain.
However, food processing enterprises also belong to the real industry, and the real industry is easy to be managed and controlled, and is obviously not as flexible as the financial industry. Therefore, it is urgent to transfer food processing enterprises to East Africa.
East Africa actually has a primary food processing system, but mid- to high-end processing and production are mainly carried out in Germany and Austria. Now that Germany has suffered a setback, Ernst is also able to transfer the food processing company to East Africa.
(End of this chapter)
Continue read on readnovelmtl.com