Holy Roman Empire - Chapter 477

Chapter 477: Chapter 50, Industry Tuition Fee
 

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There are many types of mineral resources, but coal, iron, and oil are the most important.

Russia, the United States, Austria, India, Canada, and Mexico have high reserves of iron ore;

As for coal mines, China, America, and Russia rank at the top, with Asia, Europe, and North America having high-quality coal;

The distribution of oil is very concentrated, mainly in the Middle East, Russia, America, Mexico, and the United Kingdom.

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Franz still remembers these words from his geography class in his previous life. In summary, Europe is lacking in minerals.

On one hand, the development started too early, and by the 21st century, many resources had been exhausted; on the other hand, the reserves of mineral resources really aren’t that abundant.

Except for Russia, the only exception, the countries in Europe are either poor in minerals or have a single distribution of mineral resources. A typical example is Germany, which lacks almost everything except coal and iron ore.

Even this has made many countries envious, as having the two basic elements for the industrial age is enough. Aren’t our neighbors, the French, still short of coal?

By comparison, Austria is considered fortunate. Perhaps due to its slightly larger territory, it has nearly all types of mineral resources. It’s just that the reserves are somewhat unimpressive.

Of course, this is relative. Compared to European countries other than Russia, Austria’s mineral resources still hold an advantage.

These resources laid the foundation for Austria’s industrial development. By 1870, Austria’s steel production had surpassed that of the United Kingdom for the first time, reaching an annual output of 6.48 million tons and becoming the world’s largest.

Of course, the advantage was not significant, just 20,000 tons more than the British. The main factor for the rapid increase in Austrian steel production was the growth of domestic market demand.

One has a domestic market of over thirty million, and the other of over seventy million. Both have completed industrialization, and clearly, the latter has a greater demand for steel.

Actually, this production still could not meet market demand. Aside from the domestic market, the African Colonies were also a major consumer of steel.

According to data provided by the industrial department, Austria’s demand for steel is expected to double in the next ten years, with a steel demand of up to one and a half million tons.

Seeing this data, Franz felt a headache coming on. The steel production in the Bohemian region had already hit a bottleneck, and the growth of production was slowing down. To rapidly expand production capacity, another technological revolution would be needed.

However, that wasn’t very realistic. There had just been a revolution in steel technology, and achieving another breakthrough in the short term was nearly impossible with existing industrial techniques.

Although the second steel production base in Bosnia and Herzegovina has been developing rapidly, it still has a long way to go to fill this gap. It won’t reach the required capacity in ten years.

Currently, Austria’s main steel companies are mostly concentrated in the Bohemian region (the future Czech region), accounting for 63% of the country’s steel production.

In addition, there are also distributions in regions like Bosnia and Herzegovina, Linz, Bavaria, Württemberg, Saxon, Galicia, and Silesia.

The main reasons for this situation are multifaceted. The steel mills in Bavaria, Württemberg, and Saxon are historical legacies and haven’t developed due to resource limitations.

The region of Bosnia and Herzegovina started its industry too late. The Vienna Government is still busy building roads, and although steel companies have settled there, they can’t reach their maximum production capacity in a short period due to transportation constraints.

Galicia has not been given enough attention by the Vienna Government to compete with Bohemia; Silesia’s issue lies with the Prussians, who left a mess when they took off, which the Vienna Government has just recently sorted out.

Human factors can be overcome, but the most troublesome is the distribution of resources. Austria has plenty of coal and iron ore, but unfortunately, they are not concentrated.

For the steel industry to develop, it must inevitably move closer to the raw material sources, leading to a situation of simultaneous development in all directions.

In Franz’s view, the capitalists’ choices were not wrong. If they were to invest, their primary goal was to make money. If they were far from the raw material sources, the competitiveness of their products naturally couldn’t be guaranteed.

By now, the concentration of heavy industry wasn’t suitable for Austria anymore. When each region’s resource supply is limited, capable of providing only one million tons of steel’s raw materials, you can’t possibly produce two million tons of steel.

To meet the growing domestic demand, opening several industrial bases has become a necessity. Almost every large industrial country, except for resource-concentrated ones like Germany, has multiple industrial bases.

After carefully reviewing the data, Franz made a decision, “There’s no need to ponder this multiple-choice question any longer. With the country’s development, the demand for steel will only grow larger.

Today we add one heavy industrial base, and tomorrow another. It’s better to develop them simultaneously.

Regions like Serbia, Silesia, and Galicia all have the potential to be developed into heavy industrial bases. Let’s list them all this time!

For other regions, as long as they have both coal and iron mines and relatively convenient transportation, they can also be developed.

The government needs to establish appropriate policies and find ways to solve the transportation issues. The final development can be left to the enterprises and the market.”

In this era, governments of various countries let their industries develop freely, and what the industries turn into is largely decided by the market economy.

Austria’s approach, where the government solves infrastructure issues, is already an act of administrative intervention in the market economy, albeit a bit more subtly.

This can be seen by looking at neighboring Russia, the richest country in Europe in terms of resources, yet its steel production is less than one-twentieth of Austria’s.

It wasn’t that Russian capitalists didn’t see the opportunity, it was mostly because transportation was too problematic. Without the Tsarist Government solving the transportation issues, and expecting them to build the roads themselves, who would dare take on such business?

Only after the Tsarist Government took transportation seriously did Russian industry truly begin to develop. Unfortunately, the Russian Empire was too vast, and building roads was exceedingly difficult.

In the original timeline, before World War I, Russians managed to build just over 70,000 kilometers of roads, a result of centuries of efforts by successive tsars.

Before crossing over, Franz often complained about Russian transportation. After arriving in this world, his perspective changed.

Russian roads are genuinely difficult to build. In a land of ice and snow, the technological difficulty and construction costs of building railways are far higher than in European countries, yet the Tsarist Government was unfortunately impoverished.

“If you want to get rich, build roads first,” they say, and it’s not wrong. However, when you don’t even have the money to build roads, it’s truly tragic.

What’s even more tragic for Russians is that not only are the construction costs for railways high, but so are the maintenance costs, much higher than in other European countries. Even if the railways were built, they couldn’t ensure year-round operation.

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In order to ensure the smooth operation of the railways, the railway companies had to invest a large number of workers for maintenance in winter, as many sections of track could be covered in snow within just a few hours.

As a result, the operating costs of the railway went up, and naturally, freight charges increased as well. Originally cheap industrial raw materials became expensive after transportation over long distances.

Considering it was already a late start, facing such adverse conditions, coupled with the decay of the Tsarist Government, it is not surprising that Russia’s industry did not develop.

It is estimated that Alexander II was not yet thinking about these issues, as he was busy leading the Russian people to clear new land.

No, correction, land clearing has been underway for almost two years now, and currently, he must be worrying about how to deal with the increased grain output.

To sell the grain, first, it must be transported out. Let’s not even mention the grain from the Ukraine Region, as the main grain exports of the Russian Empire come from here.

The grain from the Moscow area can also be transported out via rivers. As for the grain from the Caucasus region, first, build roads because it is really headache-inducing without railways.

The most tragic are the Russian people who cleared land in the Siberian Plains, where harsh climate conditions are an issue, but after all, enduring it is easier given the vast lands the Tsar allotted.

Transport issues are a real headache, rivers do exist, but only if your land is next to the river, and moreover, the river must be navigable.

Luckily, Alexander II exempted newly cleared lands from taxes, or else tax officials would have collapsed. People lacking money in their pockets, whether to accept grain for taxes, that’s the dilemma.

Perhaps for the Russian people, this is a happy trouble. No longer need to worry about hunger, and if a few more years go by, everyone’s granaries will be full of grain.

It is still too early to see the power of massive land clearing, but looking at the big data, Franz knows that Alexander II’s reform has already succeeded by half.

Abundance of grain means low prices, in addition to filling the stomachs of farmers, it can also support a large number of workers at the lowest cost.

People are fed, and the country is stable. At least for the next few decades, most Russian people will feel content.

The only problem is whether they can withstand the counterattack from the Conservatives. With so much land newly cleared, why wouldn’t the Russian Aristocracy be tempted?

Once the clearing of the land is completed, there will be individuals ready to reap the benefits. If land consolidation cannot be contained, the Russian Empire will fall back into crisis again.

Land consolidation is a problem for the future, the biggest immediate trouble is the sale of grain. If so much grain cannot be sold on the international market, there will be big trouble.

This time is not far away; next year or the year after, the Russian Empire will face the embarrassment of grain oversupply.

Up to now, Russians have at least newly cultivated 200 million mu of farmland, a number that is almost half the cultivated area of Austria itself.

Luckily, the newly developed land in Russia is rather poor, resulting in relatively low grain yields, as many places are only fit to grow one season of potatoes.

If the yield per unit area were the same as that of Austria, this grain output would have burst the international grain market.

To cope with the Russian grain impacting the international market, Austria has already started to de-stock, with many savvy farmers preparing to switch to cash crops.

As for the grain processing industry, it is still Austria’s domain. By using the advantage of producing and selling their own products, they have defeated many competitors over the years and have controlled the end pricing of the grain market.

Even if Russians export grain, most of it is first exported to Austria, where it undergoes precision processing before being sold to European countries.

Being close to the water gives one first access to the moonlight; this advantage won’t change in the short term unless Russians complete industrialization and develop their own processing industry.

This again involves industry, and changing it is not an overnight problem. Take the flour milling industry for example: Russian enterprises produce flour not only at high costs, but also of poor quality.

The fact that many Russian cities sell flour produced in Austria in their markets shows the competitiveness of Russian enterprises’ products.

The machinery of this era is not that easy to use, unlike the idiot-proof flour mills of later generations that anyone can master.

Current machinery belongs to high technology, without professional technicians, it is basically inoperable, and the shortfall in talent is not so easily made up.

It’s not easy to send people for training technical workers. Machinery exported by countries during this era comes fraught with many hidden troubles.

For instance, machinery exported by Austria comes with manuals entirely in German, and there might even be a few key sentences in local dialects.

Even professional translators can’t always understand the meaning clearly. What to do? Naturally, it’s time to hire experts, thereby businesses can earn another sum from post-purchase services.

If one is particularly unscrupulous, they might set up ambushes in certain areas, deliberately causing buyers to operate incorrectly due to ignorance to continue earning from maintenance fees.

This is why everyone importing Europe’s most advanced equipment has to keep coming and going, without letting the factory earn its fill, you cannot expect the operation to be smooth.

Some unscrupulous traders even sell mechanical equipment at low prices, then rig it, making a killing off maintenance later on.

If not for these intangible obstacles, in an era without technological barriers, the industrial production levels of the world could be on par.

In the entire industry, this is not a secret, with many buyers aware that there might be loopholes in the transactions.

Yet, they have no choice, this is the learning fee for newcomers. If not paid now, it will cost even more in the future.

Those who want to directly obtain the industrial technology of the great powers and quickly reach the world’s advanced level, better go to sleep.

The great powers are not running charities. To ensure their technical lead, deliberately setting up obstacles is the most routine maneuver.

Otherwise, catching up to the industrialized nations would merely mean copying all of their technology, quickly closing the gap.

How could such a good thing happen? If it were that easy, then after so many years, both France and Austria would still be catching up to the British.

Were it not for the outbreak of the Second Industrial Revolution, it is estimated the British advantage could have been maintained much longer.