Holy Roman Empire - Chapter 441
Chapter 441: Chapter 14: Making Money is Just an Accident
If the Christmas Eve of 1868 saw the Austrian New Energy Power Company make a name for itself in the civilized world with the “City that Never Sleeps,” then 1869 cemented its position as the industry’s overlord.
Following a series of patent grants, the standards of the Austrian New Energy Power Company had become the international standard for electrical systems.
Breaking that standard system wouldn’t be difficult; it could always be done with enough money. It’s just that no one knew exactly how much money would need to be poured in.
If it were an excessively profitable industry, then consortia might give it a try. Unfortunately, the electric power industry was just emerging, and the urban electricity supply systems, while looking appealing, were hard to profit from.
No one knew when the market would mature, but everyone was crystal clear about when the patents would expire.
This era had not yet entered the high-paced times, and people’s sense of crisis was not so acute; they simply did not believe that within two or three decades, electricity would become the mainstream of the era.
Take steamboats as an example, which were created by Joffrey in 1796. At that time, it was also considered a technology that would change the era. However, more than seventy years later, the main type of ships in the seas were still sail-powered.
There were many other examples like this; a technology goes through a time period from its emergence to its widespread application. The length of this period directly determines the commercial value of the technology.
To promote the advancement of electrical technology, Franz had sunk millions of Divine Shield into it, and if the subsequent promotion costs were factored in, the cost had already exceeded tens of millions of Divine Shield.
It should be noted that this was not merely a single technology, but an entire industrial system. This included upstream industries such as steel, copper smelting, rubber, and others, as well as downstream elements like power transmission, generators, electric lamps, electric meters…
It could not be done without substantial investment; it was not just the work of one or two scientists or dozens of engineers, but a test of a country’s industrial strength.
This was also why most technological inventions and creations in the 19th century were concentrated in Europe and America. Without a complete industrial system, even if someone gave you atomic bomb manufacturing technology, you still couldn’t make one.
Franz was in high spirits. The Austrian New Energy Power Company was profitable, although through technology sales, which was a good start.
If nothing unexpected occurred, a consortium centered on the Austrian New Energy Power Company would emerge in the near future.
Since the advent of the capitalist era could not be stopped, then the best course would be to take control of it.
Those who follow me prosper, those who oppose me perish!
As an Emperor, Franz did not lack authority. With the power he held and an advantage in foresight, laying out an industrial plan in advance and subtly controlling the Empire’s economy was not an impossibility.
This stack of thick business contracts was the proof of his confidence; as of now, the Austrian New Energy Power Company had already signed strategic cooperation treaties with hundreds of cities.
Not just the cities of Austria, but also those of other European countries had reached an agreement, primarily based on collaboration.
Simply put, the Austrian New Energy Power Company contributed discounted technologies and some capital to partner with local governments to establish subsidiaries, jointly contributing to the advancement of human lighting endeavors.
The idea of foreign companies monopolizing national power supplies certainly scared everyone, but it was different when it became a domestic company.
Many local governments are not directly investing in companies, so this portion of shares could also be taken by private capital, and the specific share distribution would naturally be calculated based on the contributions from both sides.
When it comes to profits, everyone can become friends. No one doubted the prospects of electricity; it’s just that considering the cost, everyone tacitly agreed to postpone the construction.
Each party obtained what they needed, and the Austrian New Energy Power Company completed its strategic layout, extending its influence to various European nations.
The politicians had secured contracts that satisfied their constituents; as for when they would actually be fulfilled, that was no longer important. They had already garnered the political achievement.
Investors were investing in the future. Right now, it was only about signing contracts and providing a small amount of capital to establish shell companies. When profits loomed in the future, that would be the time to truly invest money.
Influenced by these contracts, the stock prices of gas companies had fallen quite a bit. Ordinary people had no idea how high the cost of electricity was, and many assumed naively that gas lighting would soon be replaced by electric lamps.
This judgment was not entirely wrong; gas lamp lighting was also costly, just cheaper than electricity before it became widespread. Once the electrical system was perfected, the monthly cost of electric lighting would actually be more cost-effective.
An ordinary household with just a few light bulbs, usually only uses one at a time; at most a few kilowatt-hours per month, which equated to just a few pennies on the electricity bill.
The expense was mainly in the supply equipment, making the initial connection fees very high. The bare minimum cost was at least several dozen Divine Shield, something ordinary people could not afford, becoming the biggest obstacle to widespread electricity adoption.
This was still the case with a high installation rate. If the installation rate in the area was low, the cost could reach up to a thousand Divine Shield.
After all, whether it’s one family or several dozen using electricity, only one line is needed; the more households that join, the lower the amortized cost per customer.
Regardless, as long as these contracts became reality, the Austrian New Energy Power Company would have secured a long-term meal ticket.
Even if these subsidiaries weren’t highly profitable, just by providing technical services to them and selling accompanying electric power equipment, the company would have enough to thrive.
Even if they were to do nothing and just bide time until the 21st century, they would still rank among the top 500 in the world. Fortunately, in this era, no one thought that far ahead; otherwise, these deals wouldn’t have been so easy to clinch.
It shouldn’t be said that they were taken; it was as if the deals were delivered to their doorstep. The Austrian New Energy Power Company didn’t even need to go out and solicit business; the clients came to them proactively.
Complacency is a harmful mindset; how can a non-progressive company become a great enterprise?
“Tell Mark Oliver to keep it up and lay as many stakes as possible in the ground. Take advantage of the absence of major players, and bring in more cities.
Also, repackage the company. The Austrian New Energy Power Company isn’t just an ordinary company, but one with grand aspirations.
Our goal is: to light up the world, and making money is just a byproduct.
If some partners have concerns, let them have a majority stake in the subsidiary. In any case, we now need to expand quickly, complete the European strategic layout soon, and then extend our reach to the whole world.”
Monopolizing the power supply is impossible; what can be done now is to stake claims to cities with the advantage of foresight.
As for the countryside, where business would lose money, that’s the government’s concern and not currently in the planning of the Austrian New Energy Power Company. But who knows about the future.
Such public infrastructure and livelihood projects will be profit-restricted by governments in the future, otherwise, mere spit would be deadly.
By that time, rural electrification can be taken into consideration. The added construction and maintenance costs directly dilute the profits of the subsidiaries.
No longer a wildly profitable industry, the public naturally won’t complain. Retaining a reasonable profit of about ten percent, no one will have any objections.
Moreover, a reduction in the profits of subsidiaries does not mean a reduction in the profits of the parent company. Less dividends, but later the costs for equipment maintenance and the purchase of spare parts go up.
Even if there are calls for nationalization of the power industry, it depends on whether local governments dare to take over. The additional costs of changing from a private to a state-owned enterprise are not just a matter of a few percentage points; it’s not surprising for a profitable company to become a loss-making one.
If the government wants to nationalize it, Franz wouldn’t mind selling at a good price. Companies with backing never worry about being swallowed up. This is a legitimate business; if the government wants nationalization, it must do so according to the rules and buy out the company’s shares at a premium.
After all, by then, he would have already made enough profit. Coupled with the income obtained in other respects, it could be much more than the direct profits.
This is the advantage of a consortium, where one industry drives a series of industries. Even if an industry appears to be loss-making on the surface, it compensates by making profits in other respects.
…
“This is the City that Never Sleeps; indeed, it is the most beautiful city in the world, incomparable to Tokyo!”
“Of course, only London and Paris in the whole world can be mentioned in the same breath. It’s hard to say how long it will take for Tokyo to reach this level.”
The conversation was between Okubo Toshimichi and Ito Hirobumi. After winning the war of the fall of the shogunate in 1868, they established the Reformation Government headed by Emperor Meiji.
In order to recover sovereignty, Emperor Meiji sent delegates to Europe to negotiate with various governments. The negotiations also served as on-the-spot inspections, learning the ways of powerful countries in Europe.
The more they saw, the more they felt the gap between the two sides. The Japanese of this era had no pride at all; they were entirely in the image of a well-behaved student.
You can tell they were not very enthusiastic; they had visited many countries along the way, but the negotiations were not going well at all.
The European countries hardly took them seriously. Dream on if you think they’ll amend treaties and return sovereignty! Would they spit out the flesh that’s already in their mouths, in the 19th century, an era of survival of the fittest?
It’s unclear whether it was good or bad luck for them. At this time, Franz was inspecting the Balkan Peninsula, accompanied by several ministers from the Cabinet.
With the big shots not around, it was naturally impossible to convince Austria to make concessions with just clever words.
Austria’s Foreign Ministry had given a clear answer early on; to amend treaties was possible, but they would have to exchange benefits for it, or they could also buy out their rights for money; empty talks were useless.
With such definitive words, negotiations naturally broke down. Their request to meet with high-ranking government officials was also rejected by the Foreign Ministry. There wasn’t an elaborate reason, just pure contempt.
At that time, Japan’s international status was very low, even lower than the Montenegro Duchy, and the European countries simply treated them as natives.
Ito Hirobumi and others visited six or seven European countries and were not given the appropriate diplomatic etiquette. They had to pay bribes if they wanted to meet with high-ranking officials of those governments; otherwise, they were simply unavailable.
Since negotiations were unsuccessful, they could only conduct field visits and learn the ways of the powerful countries. Although they all claimed to be constitutional monarchies, the systems of England, France, and Austria were all different.
From a preliminary observation and understanding, Ito Hirobumi had already realized that none of the models of England, France, and Austria were something they could manage.
All three were long-established empires which, even at their most declined, were strong in Europe, and their troubles were basically internal problems; they never faced the risk of becoming colonies.
This was not something Japan could compete with; they didn’t have enough cultural depth to resist external threats.
Okubo Toshimichi asked, “Ito-kun, have you noticed that here in Vienna, we don’t see thick black smoke, which is so different from Paris and London.
It is said that Europe is in the midst of an economic crisis, with many factories closing down. Now the Austrian Emperor personally inspects the local areas, does that mean Austria is in a severe economic crisis and we don’t have any factories operating in Vienna?”
Looking at the bustling streets, Ito Hirobumi pointed and said, “It doesn’t seem like it; this is entirely the scene of a prosperous era. If the economic crisis were that serious, I’m afraid these ordinary people would not be able to smile at all.
Moreover, Vienna is known as the City that Never Sleeps; these many street lights must cost no less than four to five hundred thousand taels of silver in electricity bills every month.”
Electric lights were a novelty they encountered only after entering London, and it had shocked their understanding.
However, in London, electric lights were a privilege of a few wealthy people, and in order not to lose face for Japan, they only observed from a distance without close contact.
In Austria, it was different; the electric power companies had already started promoting electric lights. Not only were there streetlights on the streets, but even the hotel they were staying in had electric lights installed; after seeing so much, they became numb to it.
Ito Hirobumi’s guess of four to five hundred thousand taels of silver for monthly electricity expenses plunged the entire delegation into silence. Everyone unconsciously compared it to Japan, and embarrassingly realized that Vienna’s electricity bill was half of their fiscal revenue.
Of course, this figure was not entirely accurate; the price of street lighting is different from residential electricity, so calculating it, the monthly electricity cost was only about a hundred thousand taels of silver.
This money was not paid by the Vienna City Government, but rather it was apportioned among the merchants. Everyone was happy to pay this tax; since Vienna lit up, commerce had become even more prosperous.
The reputation as the City that Never Sleeps still attracted quite a number of people. These visitors spurred commercial prosperity, and Vienna was showing signs of developing into a tourist city.
The head of the delegation, Iwakura Tomomi, waved his hand and said, “Let’s not delve into it; this is the Austrians’ territory. Whatever the case, it has nothing to do with us; maybe this city just doesn’t have any industry!”
Not having any industry is something he didn’t even believe himself. In this era, cities without industry did exist, but those were in backward areas.
Every city in the powerful nations had smokestacks belching smoke. Austria was no exception; Vienna was just an exception that arose because of Franz’s intervention.
The rising thick black smoke was even considered by many as a sign of a strong country. The foul-smelling London had been idealized by many.
The Japanese, known for going to extremes, were not to be mentioned; if you carefully look at their literary works from this period, many positively depicted these scenes.
In short, all these emissions were fragrant to them.
