Chapter 329: Cotton Crisis (Bonus Chapter)
The British concerns are naturally unknown to Franz, who is currently troubled by the Suez Canal project.
There were two main issues:
Firstly, the Canal Company extensively employs slave labor, which has sparked condemnation in European public opinion;
Secondly, the cost of canal construction has exceeded the budget, requiring additional investment.
The second issue is easily resolved; the Canal Company has decided to issue additional shares to raise funds externally, which should solve the problem before long.
Under normal circumstances, it would not be difficult for France and Austria together to suppress European public opinion. In this era, there werent many saints, and few would stand up for a group of Egyptian slaves.
Moreover, all these laborers are being provided by the Egyptian government, and the Canal Company has paid the Egyptian government for them.
Previously, even if there were newspaper reports, they were all directed towards the Egyptian government. After all, they are the ones who organized the laborers and withheld their wages.
Anyway, Egypt isnt a European country, so European public opinion, whatever it is, doesnt affect them. Let them take the blame.
But now things are different. To promote cotton cultivation in the Egyptian region, the British had to compete with the Canal Company for labor.
The British-built Suez Railway is also in competition with the Canal Company.
Conflicts of interest between the two sides are unavoidable, leading to contradictions. To strike at the Canal Company, John Bull incited public opinion to pressure the company.
Once the troublemaker made a move, even fig leaves were not enough. France and Austria arent charity organizations; the Canal Company needs to cut costs, inevitably reducing labor costs.
Currently, the Canal Company pays the Egyptian government one million guilders annually, which might seem like a lot, but when divided among 150,000 workers, its only about 6.66 guilders per person.
This amount is less than the monthly salary of an ordinary worker in Austria. Whats more, this amount includes compensation for land acquisition, labor management fees, and so on.
John Bull not only exposed all these inside details but also attached several photos, including pictures of the workers living and working conditions.
The bloody photos, coupled with artfully crafted textual descriptions, even stirred Franzs sympathy.
Upon closer examination, one would notice that the overseers inflicting violence are Egyptians, which is somewhat of a silver lining.
The benefits of outsourcing labor have emerged, along with providing scapegoats. Had John Bull not purposefully manufactured public opinion, and had the Canal Company foisted accountability onto the Egyptian authorities, the matter could have been easily dismissed.
Franz asked: How do the French plan to handle this?
The French were currently leading the canal construction and were also the focus of public opinion, so the pressure was greatest on the French government.
After all, the French people are rich in internationalist spirit. Newspapers in France are all criticizing the Canal Company, with some even directly targeting the French government, demanding accountability from them.
The same thing happened in Austria but public opinion was much more restrained. The newspapers analyzed responsibility fairly and objectively, resolutely avoiding assumptions of blame.
Naturally, the first to be criticized was the Egyptian government, with mainstream opinion holding them primarily responsible for not fulfilling their duties.
Next comes the inadequate supervision of the Canal Company, which is seen as the responsibility of the companys management.
When problems arise in publicly traded companies or multinational corporations, its naturally not related to the Austrian government. If even small shareholders are to be held accountable, then arent all shareholders responsible?
Foreign Minister Wessenberg replied, The French are still hesitating and have not given a clear stance. The domestic public opinion has put great pressure on them.
Reports from the embassy indicate that people in Paris have taken to the streets in protest. The headquarters of the Canal Company in Paris has also been surrounded by protesters multiple times, making normal operations impossible.
Our representatives have proposed to the board of directors of the Canal Company to relocate the headquarters to Vienna to ensure that operations can proceed smoothly. Currently, the matter is still under discussion.
Franz had no doubts about the issue of relocating the headquarters. Historically, companies driven away by French protesters are not few. If a company cannot conduct its operations normally, relocating becomes inevitable.
As an investor, Franz also does not wish for the French government to give in and interfere in the operations of the Canal Company.
The reputation of the Canal Company is not within the considerations of investors. Unless there is government intervention, the management of the canal will surely hold out until the end.
The current situation is much better than in history, no matter how you look at it. Everyone knows that the Suez Canal is a joint project of France and Austria, but despite harsh criticism in the newspapers, governments of various countries have not expressed their opinions.
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Politicians are not fools; whats currently happening is a political game between Britain, France, and Austria, and expressing attitudes is equivalent to taking sides in diplomacy.
The British are indeed powerful, but in Europe, France, and Austrias words carry more weight. Even Britains henchmen understand that silence is golden.
Franz thought for a moment and said, Lets do this: since the British have broken the rules first, theres no need to be polite.
Lets find an opportunity to sell the dirt weve collected on Britain to the Canal Company. Lets have the people in the Canal Company take action and drive this counterattack.
This isnt the best method, but its the most effective one. In this era of colonial empires, no one is cleaner than anyone else.
If the British can expose the Canal Companys dirty laundry, then naturally the Canal Company can also expose the Britishs misdeeds.
Anyway, behind the Suez Canal Company are France and Austria, so facing off against the British government is no big deal. Theres no need to be timid.
When everyone is brought to the same level and public opinion is distracted, they wont continue to focus solely on the Canal Company.
News only grabs attention because its new. Once the storm passes, if the Canal Companys management announces improvements in labor conditions, like adding an extra potato per day and buying off a few newspapers, it will all be forgotten.
This is a matter of strategy; now the Canal Company absolutely cannot back down. No matter what they do, they cant satisfy everyone, and it might even cause a bigger uproar.
In the West African region, Carlos plantation welcomed an unexpected visitor.
Mr. Carlos, our offer to purchase cotton this time is very sincere. We can increase the price by ten percent compared to last years cotton prices.
Carlos smiled faintly and replied, Im sorry, Mr. Max, but I havent felt the sincerity you speak of. With the outbreak of the American Civil War, this years cotton production decrease is already a certainty.
Coupled with the blockade by the Northern government, its uncertain how much cotton can be exported. Moreover, with last years abundant cotton harvest, prices were already relatively low.
Given these favorable conditions, cotton prices are bound to be guaranteed. As far as I know, cotton prices on the futures market in London have already risen by fifty-six percent.
Max nonchalantly explained, Mr. Carlos, cotton prices on the futures market are speculative. You should understand what a fifty-six percent increase in cotton prices means; the market simply cannot bear such exorbitant prices.
This was a fact: a fifty-six percent increase in cotton prices was simply unbearable for the cotton textile industry. Otherwise, even if cotton fabric were produced, it would ultimately be unsellable.
In this era, the markets capacity for bearing such increases was limited. The widespread popularity of industrialized cotton fabric was primarily due to its affordability. A sudden fifty percent increase in prices would render it unaffordable for the masses.
The two fell silent for a moment. After a while, Carlos quoted a price: Ill sell you all my cotton this year at a forty percent increase over last years prices.
Max shook his head and responded, A twelve percent increase over last years prices is already the highest cotton price in nearly a decade.
Carlos sneered, As far as I know, it seems that Felix Trading Company is also planning to increase their cotton purchasing price by twelve percent this year. If its the same price, why should I sell to you?
Max made another offer, saying, Alright, Ill raise it by another two percent. Surely thats acceptable?
Carlos shook his head. Mr. Max, Felix Trading Company has been purchasing cotton in West Africa for a long time, while your Darville Company has always been buying cotton in America.
The choice is quite simple. I cannot afford to offend our longstanding partners for a slight gain, and neither would any plantation owner in West Africa.
If you only need to purchase a batch of cotton urgently, I suggest you buy directly from Felix Trading Company!
Max felt a headache coming on. This was the biggest trouble. It was precisely because the cotton supply in the United States couldnt be guaranteed this year that he had to resort to purchasing cotton in West Africa.
But the market here has long been occupied by others. They want to intervene, but apart from raising prices, they have no other means.
As for purchasing from cotton merchants, not being extorted would be unusual. Originally, he wanted to take advantage of the information gap, tricking the less-informed plantation owners, but the plan failed right from the start.
The headquarters of the London Darville Cotton Purchasing Company is currently discussing the news of the failure to acquire cotton from West Africa.
The procurement manager, Kenneth, said, The situation is clear now; news of the American Civil War has arrived. Unless we significantly raise the cotton purchase price, we simply cant compete with the Austrians.
We must remember that purchasing cotton from West Africa also entails paying import and export duties, which already makes our costs much higher than theirs.
Now, if we engage in a price war, even if we manage to purchase enough cotton in the end, we might not make any profit.
This is a real issue; whether the cotton from the United States can be transported back remains uncertain, and this impacts the price of cotton in the coming year.
If the Northern government blocks the South, cotton prices will surely skyrocket, and these hoarding cotton merchants will make a killing. Conversely, they will have to consider how to sell the cotton they hoarded if that doesnt happen.
Marketing manager Marty analyzed, Because of the civil war, cotton production in the United States has fallen by at least 30% this year, and due to the turmoil, cotton in India has been a complete failure for three consecutive years.
Even if cotton in West Africa has had a bumper crop, the overall international cotton production is still declining, and a rise in cotton prices has become inevitable.
The time for cotton harvest is not far away now. If we want to snatch enough cotton, we must act quickly.
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