Chapter 305: Seizing the Cotton Market
Prime Minister Felix took out a document and handed it to Franz, saying, Your Majesty, considering the rich resources in the African colonies and the large number of immigrants, we have formulated a colonial economic development plan for your review.
A colonial economic development plan? The term was very avant-garde. As Franz recalled, it was only after the emergence of self-governing dominions that autonomous governments formulated systematic economic development plans.
In most peoples minds, the purpose of establishing colonies was to plunder wealth. Local economic development was basically laissez-faire, with no long-term planning.
Despite his doubts, Franz took the document and read it carefully. He soon understood the reasoning behind the plan.
It wasnt the farsightedness of the Austrian government or the influence of interest groups; rather, it was the instinct of the ruling class.
When the ruling class formulates policy, theres a natural tendency toward self-interest. At present, the aristocratic group dominates the colonization of Africa, just as it dominates the Austrian government.
Before the successful establishment of farms and plantations, many people had doubts. Now that the first plantations were beginning to profit, with successful examples right in front of their eyes, the level of attention had increased significantly.
In the eyes of many traditional nobles, this was God-given wealth that could be passed on to future generations. The better the colonies developed, the more everyones wealth would increase in value.
The ruling class naturally sought to protect its interests, so the Austrian government formulated a colonial development plan without being urged.
Franzs question reflected his concern: Has there been a survey of the terrain from Guinea to the Congo for the construction of a railway? Are there technical difficulties? And how will the financing issues be addressed?
Well, he decidedly ignored the fact that there were still many regions in between that were not under Austrian control.
Anyway, this was a time when might make right. Since Austria had formulated this plan, they must have made preparations to conquer these territories.
Prime Minister Felix explained: The terrain and topography have been preliminarily surveyed by the colonial government. Theoretically, with our current railway construction technology, we are capable of completing this railway construction.
Considering the economic needs, this railway must pass through most cities, and adding in branch lines, the total mileage may exceed 10,000 kilometers. We plan to build it in stages, and areas with harsh geographical conditions can be left for later.
Construction funds will continue to come mainly from private equity financing. The government will finance the shortfall. To stimulate everyones investment enthusiasm, we can allocate the unowned land within 20 kilometers on both sides of the railway to the railway company.
Franz knew that this railway would definitely not be easy to build. Many theoretically feasible technologies would crumble under the high costs during actual construction.
The African colonies were not mainland Austria. Most areas have not been effectively developed, and many raw materials have to be transported from the mainland, which will greatly increase construction costs.
Judging by the economic development of the African colonies, this railroad with both strategic and economic functions may not be profitable for decades to come.
The profit point of the railway company was in the land on both sides of the railways. Whoever builds this railroad will be the biggest landlord.
This was a method learned from the construction of railways in the United States. Now, of course, this land has little value, but once the railway is completed, the value of this land will appreciate.
The railway company could easily build a station in each area and expand to the surrounding regions. By solving the transportation problem, whether its opening plantations or mining in these areas, one can make a decent profit.
If this were the future, such business opportunities would probably be highly sought after. With a radius of twenty kilometers on either side of the railway, thats forty kilometers in total. When the railway is completed, four hundred thousand square kilometers of land could be acquired.
With such a large area, even if there were no resources, the sale of timber alone could cover the cost of construction.
Unfortunately, neither lumber nor minerals buried underground were valuable now. Unless gold and silver mines were discovered, it was uncertain whether or not this investment would be profitable.
After careful calculation, Franz realized that this was indeed a high-quality project.
Building railroads in Africa would save on labor costs. Even with labor protection laws, the natives wouldnt know where to file complaints.
Of course, it would be useless even if they found where to file complaints. Complainants must first learn German for their cases to be accepted.
Natives who could learn German would not be low-level laborers. These talents would have been promoted to overseers long ago. If they were to complain, they would be the first to suffer.
No one wants to lose face, so its usually the overseers who abuse the laborers. No higher-up would humiliate himself by personally going to the railroad construction site to whip people.
Basic materials such as sand, stone, and sleepers can be sourced locally. Cement doesnt need to be imported either; a cement plant can be built locally, saving a significant amount of material costs.
Even for mechanical equipment and rails that had to be shipped from the homeland, only transportation costs would be increased. Overall, construction costs would still be in a manageable range.
With the railway company owning such vast land, even if the development is subpar, selling resources alone could be profitable.
Franz calmly said, Since these problems have been solved, lets proceed with the construction of this railway. But remember to control costs; the government cannot invest a large amount of funds in this railway.
It is reasonable to focus on developing the plantation economy, but there must be a priority on what to grow.
The colonial government can send experts to inspect the area to determine which crops are suitable for each location. Then guide everyone to grow those crops.
The government can compile data on soil quality, climate, hydrology, and other factors for each region and list suitable cash crops for dissemination to the public.
As for the specific crops to be planted, everyone is free to choose; the government wont dictate anything.
Given the current international situation, with the threat of civil war in the United States, their cotton and tobacco exports are likely to be affected. We can make preparations in this area first.
This railway was in everyones interest. Once land transportation was solved, there would be more land for development, instead of being limited to coastal and river areas as it is now.
Of course, as one of the stakeholders, Franz would not object. He even wanted to participate and get a share.
As to when this railway would be completed, or whether it would become an abandoned project, Franz was not worried at all.
Colonial territories are not like the homeland. If there are areas with difficult terrain where construction costs are too high, it doesnt matter if the project is delayed for a few years; the construction deadline is not urgent anyway.
The focus on cotton cultivation was primarily to seize the American cotton market. When the Civil War erupts, cotton exports will definitely be affected.
It should be noted that the value of U.S. cotton exports during this period was nearly $190 million, accounting for two-thirds of the worlds cotton export market share.
Historically, the American Civil War led to a halt in cotton exports, which severely affected the British cotton textile industry.
To avoid being stifled, John Bull forcibly implemented cotton cultivation in India.
After the war, when trade resumed as usual, American cotton exports had already fallen to $6 million, never to regain their dominant position in the cotton market.
The Austrian colonies also had plenty of land suitable for growing cotton. As long as they could seize the opportunity to grab a third of the U.S. market share, the colonial finances would be turned around.
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