In July 1856, the Austrian governnt officially began implenting the Trapping Plan, increasing infrastructure investnts and openly inviting bids from external parties.
At the sa ti, the construction of the railway network began, with railway lines planned for almost every city and then put out to bid.
This ti, not only dostic railway companies but also overseas railway companies were allowed to participate in the bidding without any investnt restrictions.
Following the usual practice, each railway line was granted exclusively to a single railway company, thus preventing redundant construction, avoiding waste of resources, and satisfying everyones desire for monopoly operation.
It all seems very promising, on the condition that the railway companies start and finish their work on ti. Failure to do so ans they must get ready to face the consequences!
According to the new plan, the total railway mileage in the New Holy Roman Empire will reach an astounding 97,000 kiloters when the construction of the railway network is completed.
At present, the country's railway network is only 15,800 kiloters long, with 32,100 kiloters under construction, almost doubling the existing network.
Recognizing that so of the newly planned railway routes are too remote to be profitable, the Austrian governnt is promising permanent tax exemptions for these isolated sections to attract investors.
While this news could fool ordinary investors, smart people knew it was just a pie in the sky. But in the age of market frenzy, who cared?
Smart people realize that whether the project ultimately succeeds or fails, as long as theyre not the last ones left holding the bag, they can still make money from it.
Even though none of the Austrian railway companies has ever turned a profit, railway stocks have been on a steady rise and are highly valued in the capital markets.
Currently, operational railways are profitable, creating the illusion for many that investing in railway companies is a foolproof venture, especially considering the potential for monopolistic operations in Austrian railways.
The Austrian governnt also boasted unscrupulously in the bidding for the projects, citing the current economic growth in the New Holy Roman Empire, the demand for rail transportation, and the high population growth to paint a rosy picture.
After being packaged in this way, many speculators fell for it. In theory, all these railway lines should be profitable, even the most remote ones like the one in Bosnia and Herzegovina.
These statistics are not deceptive; indeed, the profitability of railways is only a matter of ti. In this era of no cars or airplanes, no mode of land transportation can compete with railways.
The territory of the New Holy Roman Empire is not vast, with no extrely remote areas or uninhabited borders. There is potential for discovery throughout the land.
Franz estimates that if the Austrian governnt does not restrict railway transport prices, more than 70% of the lines could be profitable after ten years. Twenty years later, over 90% of the lines could be profitable. By the thirtieth year, all lines could be profitable.
These profits are calculated without regard to construction costs, based solely on operating revenues in excess of operating costs. The return on investnt may take a long ti.
Before the cost of construction was recouped, repairs would be needed, no matter how well they were maintained. After decades, most of the rails and sleepers would need to be replaced.
Since it was pie in the sky, Franz didnt mind making it even more tempting, like the Austrian governnts promise to subsidize heavily loss-making lines to ensure normal railway operations.
This promise was aningless in practice. For lines where operating costs cannot be recovered, railway companies are likely to abandon them!
In the end, the Austrian governnt, whether it provides subsidies or not, has to ensure the normal operation of the railways. It is the governnts responsibility and duty to ensure the proper functioning of essential transport infrastructure, and this expenditure is unavoidable.
Besides, it wouldnt even take that long. With economic crises, the capital chains of the railway companies would break, forcing them to accept state equity investnts, so that after several crises, the Austrian governnt would eventually beco the largest shareholder.
Why break the rules when its possible to hold majority control within the regulatory frawork?
Gaining control through economic ans was far superior to overturning the table and crudely declaring the nationalization of railways.
In addition, the managent system of a joint-stock cooperative is much more cost-effective than the direct appointnt of bureaucrats by the governnt.
London
Barclays Bank has now ford the embryonic structure of the Barclays Bank Consortium. Aside from not publicly announcing the formation of the consortium, it essentially relies on capitalists connected to the bank and already has the strength of a consortium.
The Banks resources alone exceed 100 million pounds, with the potential to leverage over 300 million pounds through the financial markets. Its influence extends to industries in excess of 500 million pounds, making it one of the leading consortia in the UK.
President Genos presented a stack of docunts to everyone and said, Ladies and gentlen, not long ago the Austrian governnt made a landmark announcent of substantial investnt in infrastructure.
This includes railways, ports, municipal water projects, municipal engineering renovations, and even so water conservancy projects, all of which are eligible for bidding.
The expected total investnt is a staggering 480 million guilders, or 240 million pounds, spurring related industries expected to exceed 500 million pounds. This is a feast of capital, but it also cos with so very challenging obstacles.
Our topic today is how to get the biggest piece of the pie while minimizing risk.
I distributed the information to everyone. In general, it is similar to what we already knew, but now in more detail, with specific projects.
The prominent capitalist Simon asked, Mr. Genos, as far as I know, the Austrian governnts total fiscal revenue last year was only 121 million guilders, and it wont exceed 128 million guilders this year. Can they co up with such a large sum for investnt?
Genos replied calmly, Austrias economy has developed rapidly in recent years. The Austrian governnt took advantage of the war in the Near East to get out of financial difficulties.
After the annexation of several German states, the newly ford New Holy Roman Empire now has a total population of over 50 million, and its economic output surpasses that of the French, just below ours.
Currently, their governnts total debt is less than 80 million guilders, which is a relatively low debt ratio. If they seek external financing, I believe none of us would refuse, right?
Refuse? Why refuse? The British, who have a serious capital surplus, are looking for investnt opportunities everywhere these days. Faced with a premium client, how could they refuse for no reason?
If loans could influence the New Holy Roman Empires financial market, then the potential benefits would be even greater.
Simon replied without hesitation, Of course, the Austrian governnt is now a premium client. As long as they are willing to join the pound-gold system, there is no problem providing them with loans.
However, they wont join. The Austrians would still want to maintain the guilder-gold system and wouldnt easily compromise with the British governnt.
In that case, should we still do this deal?
Capitalist Bernard retorted, Why not do a profitable deal? Controlling their financial market through loans, and subsequently influencing the decisions of the Austrian governnt through financial ans to make them accept the pound-gold system, is a long-term endeavor.
Our approach is in line with the governnts strategy, it just needs a little more ti. The New Holy Roman Empire is also a great power. Getting them to compromise will not happen overnight. It is more prudent to take it slow.
Except for the first sentence, which was true, the rest was nonsense. Controlling the financial market through loans could work in theory.
But the Austrian capitalists were no fools either. For their own interests, they would also resist the capital invasion, with the Austrian governnt clearly on their side.
Its unheard of for a single loan to control the finances of a large nation.
Unless they can create financial difficulties for the Austrian governnt, making it heavily dependent on foreign loans, only then would they inevitably be influenced.
But in that case, the premium custor becos a sub-par custor, and there is no need for the deal to continue.
Genos said solemnly, Let the British governnt proceed with their plan; we can support them, but only if it doesnt harm our interests.
Lets not forget that the bait thrown by the Austrian governnt is poisoned. They require investors to advance construction funds and also pay a deposit.
If unforeseen circumstances occur during the project that lead to a break in the capital chain, not only will the upfront investnt go down the drain, but the deposit will also be confiscated, with all the risks borne by the investors.
This project, which requires a significant amount of funding, seems almost tailor-made for us, and thats highly unusual.
Analyzing the current economic situation, it seems that this round of economic developnt is reaching its limits. The fruits are ripe and the days of harvest are not far away.
As the economic crisis approached, the Austrian governnt ca up with this grand plan. I strongly suspect that they are trying to trick investors into paying the deposits.
Bernard said without hesitation, Even if theyre ripping us off with the deposit, its based on the premise that the project will be abandoned. If it is successfully completed, they will have to pay. I dont think the Austrian governnt will default.
Compared to the deposit, I think a more significant risk is that they are trying to involve others. Once everyone invests in these infrastructures that cant show imdiate returns, even if there is an economic crisis, it will be difficult to get money out of Austria.
Investors have no choice but to continue to invest in order not to lose their previous investnts. As long as these projects continue as normal, the impact of the economic crisis on Austria will be minimized.
However, I highly doubt that Austria will experience an economic crisis.
They have never really experienced what a real economic crisis is like. Is it necessary for them to make such a fuss?
Simon sneered, Bernard, your thinking seems to be stuck a couple of years in the past! Since 1850 the Austrian market has been the most favored region for British capital.
As of now, the total investnt of the British capital in the New Holy Roman Empire should exceed 180 million pounds, and the investnt of the French capital there would not be less than 50 million pounds.
Even Barclays Bank has invested more than 15 million pounds in the country. If we all withdraw our funds together, Austria's economic crisis will erupt imdiately.
They had reason to be arrogant. In this era, it is the pinnacle of the British Empires capital dominance. Even the French, who are closest in power, cannot compare with them.
Genos glanced at the crowd and said, Regardless of any sches the Austrians might have, as long as it doesnt interfere with our money-making, we can continue our cooperation.
Judging their plans based on the information we have now is unreliable. Regardless of the conspiracies of the Austrian governnt, the projects they have proposed this ti do contain many high-quality assets.
All we have to do is sift out those high-quality assets, find a way to acquire them, and let others deal with the remaining diocre assets.
If possible, everyone can also try to see if we can throw so seemingly attractive but actually inferior projects at our competitors.
In my personal opinion, the Urban Safe Drinking Water Pipeline Project is very promising. We can take it over, and once this project is completed, you can imagine the profits of monopolizing the water supply for an entire city.
Simon said very cooperatively, Genos, youre as sharp as ever, identifying the most effective and valuable projects.
Our water companies have always been the most stable source of inco, almost unaffected by market fluctuations.
However, I think as long as the Austrians offer a high enough price, we can take on so municipal engineering projects. In addition, we can help them issue construction bonds to et the financing needs of the project.
Clearly, his interest is not in municipal construction projects, but in issuing bonds which was a profitable business co rain or shine.
These bonds are not for their own use, but to be sold on the London financial market on behalf of the Austrian governnt. Whether they are eventually redeed doesnt matter to them. Theyve already earned fees for the process and the exchange.
Bernard added, Our railway companies cant sit idly by either. Dostic business growth is almost stagnant and the potential for developnt is limited.
Regardless, we should seize this opportunity to acquire so rail lines, drive up the stock price, and then find another buyer to take over.
Of course, everyone in this situation is aware of the crisis. But that doesnt stop them from making money. As long as the profits are substantial, who cares what the Austrian governnt is up to?
The different opinions among them also represent their diverse interests. Within the sa consortium, everyones developnt direction cannot be identical.
Everyone has their own goals, and intimate cooperation can only be achieved when interests do not clash.
If this could not be achieved, then those who should split would still split. To put it bluntly, a group was just a combination of interest groups. If the conflicts of interest were too great, falling out would be natural.
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