Holy Roman Empire - Chapter 329

Chapter 329: Chapter 16: The Cotton Crisis

Franz was naturally unaware of the concerns of the British, as he was still troubled by the Suez Canal project at this time.

There were two main problems:

First, the Canal Company’s extensive use of slave labor had led to public condemnation in Europe;

Second, the construction costs of the canal had overrun, necessitating additional investment.

The second issue was easy to solve, the Canal Company had decided to issue more stocks to raise funds, and the problem could be resolved before long.

Under normal circumstances, it would not have been difficult for France and Austria to suppress European public opinion. In those days, there were not many humanitarians, and few people would stand up for a bunch of Egyptian slave workers.

Moreover, these slave workers were provided by the Egyptian Government, and the Canal Company had paid them.

Previously, even if the newspapers had reported on it, they were targeting the Egyptian Government. After all, it was they who organized the labor and withheld the salaries.

Anyway, Egypt was not a European country, and European public opinion, whatever that was, did not affect them; they might as well take the blame.

Now it was different. In order to promote cotton cultivation in the Egypt Area, the British had to compete with the Canal Company for labor.

The British, who built the Suez Railway, were also in a competitive state with the Canal Company.

Inevitable conflicts of interest arose, and hence the contradictions. In order to strike at the Canal Company, John Bull stirred up public opinion to pressure the company.

Once the shit-stirrer took action, there was not enough cover-up. France and Austria were not charities; to cut costs, the Canal Company inevitably reduced labor costs.

Now, the Canal Company paid the Egyptian Government one million Divine Shields a year, which seemed like a lot, but spread over 150,000 laborers, it was only 6.66… Divine Shields per person.

This amount was less than the monthly salary of an ordinary worker in Austria. Moreover, this sum included compensation for land acquisition, labor management fees, and so on.

John Bull not only exposed all these insider details but also published some photographs, including pictures of the workers’ living and working conditions.

The graphic photos, coupled with artistically processed explanations, stirred Franz’s compassion.

If one looked closely, they would notice that the abusive overseers were Egyptian, which was the only piece of good news.

The benefits of subcontracting labor became apparent; there was someone else to take the heat. Had John Bull not deliberately created public opinion, the Canal Company could have pushed all responsibility onto the Egyptian Government, and there would have been no issue.

Franz asked, “What do the French plan to do?”

The French were now leading the canal’s construction and were also at the center of public opinion, with the French government under the most pressure.

After all, Parisians possessed a spirit of internationalism. French domestic newspapers were attacking the Canal Company, and some even directly criticized the French Government, demanding that the Paris Government take responsibility.

In Austria, the public opinion was much more moderate; newspapers analyzed responsibilities objectively and fairly, refusing to take the blame.

The first to be criticized was naturally the Egyptian Government; mainstream opinion held that it was the Egyptian Government that had failed to fulfill its responsibilities, and it should bear the primary blame.

Only then was the Canal Company’s lax supervision blamed, a failure of the company’s management.

For a publicly traded, multinational joint-stock company, it was not an affair of the Austrian Government. If every small shareholder had to be responsible, wouldn’t all investors be accountable?

Foreign Minister Weisenberg answered, “The French are still hesitating and have not given a clear stance. The public opinion in France has put a lot of pressure on them.

The embassy has reported that Parisians have taken to the streets in protest, the Canal Company’s headquarters in Paris have been surrounded by protesters several times, incapacitating normal operations.

Our representatives have proposed to the board of the Canal Company to relocate the headquarters to Vienna to ensure smooth operation, and the discussion is ongoing.”

Franz had no doubts about the relocation of the headquarters. Throughout history, there were not just one or two companies driven away by French citizens; a company unable to operate normally had no choice but to move.

As an investor, Franz also did not hope that the French government would cave and intervene in the Canal Company’s operations.

After all, the reputation of the Canal Company was not within the realm of concern for investors. Unless the government intervened, the Canal management would definitely hold out to the end.

The current situation was much better than it had been in history. It was well-known that the Suez Canal was a joint project of France and Austria, and though the civilian newspapers were fiercely critical, the governments had not commented.

Politicians were not fools; it was a political game between England, France, and Austria, and to make a stance was to align diplomatically.

Despite the British being impressive, on the European Continent, the words of France and Austria carried more weight. Even the British allies knew that silence was golden now.

After some consideration, Franz said, “Well, since the British have broken the rules first, there’s no need to be polite.

Find an opportunity to sell the British dark history we have collected to the Canal Company. Let our people in the Canal Company take action to push this counterattack.”

It was not the best method, but it was the most effective one. In that era of colonial empires, none were much cleaner than the others.

The British can reveal the dark history of the Canal Company, so naturally, the Canal Company can also expose the dark history of the British.

After all, France and Austria are behind the Suez Canal Company, and it is ready to confront the British Government head-on, with no need to be fearful.

When everyone was brought to the same level, and public opinion got busy, they would stop focusing on the Canal Company.

News only attracts attention because it’s new. Once the storm passes, the Canal Company’s management can announce improvements in labor conditions, such as adding a potato per day, and after buying off a few newspapers to wash their image, all will be whitened.

This is a matter of strategy; now is not the time for the Canal Company to show timidity. No matter what action is taken, it is impossible to satisfy everyone, and it might even trigger greater turmoil.

…

In the West Africa region, a large plantation owned by Carlos welcomed an uninvited guest.

“Sir Carlos, our intention to purchase cotton this time is very sincere. We are willing to increase the price by ten percent over last year’s,” the guest offered.

Carlos smiled faintly and said, “I’m sorry, Mr. Max, but I really can’t feel the sincerity you mention.

The outbreak of the American Civil War this year has already ensured a reduction in cotton production. In addition to the Northern government’s blockade, how much cotton will actually be exported is a question.

Moreover, there was a bumper crop of cotton last year, and prices were inherently low. With so many favorable conditions, the price of cotton is bound to be guaranteed.

To my knowledge, the price of cotton on the London futures market has already risen by fifty-six percent.”

Max explained as if it were nothing, “Sir Carlos, the price of cotton on the futures market is speculative.

You should understand what a fifty-six percent increase in cotton prices means; the market simply cannot bear such astronomical prices.”

This was a fact. A fifty-six percent increase in cotton prices was simply unaffordable for the cotton-spinning industry; otherwise, even if cotton fabrics were produced, they would not be sold.

In that era, the market’s capacity was limited. The widespread adoption of industrial cotton fabrics was mainly due to their cheapness. An abrupt increase in price by half would make them unaffordable for the public.

The two fell silent. After a while, Sir Carlos named his price: “An increase of forty percent on last year’s price, and I will sell all my cotton to you this year.”

Max shook his head and said, “An increase of twelve percent on last year’s price is already the highest price in nearly a decade.”

Sir Carlos replied with a cold laugh, “As far as I know, Felix Trading Company is also planning to increase their cotton purchasing price by twelve percent this year. If it’s the same price, why should I sell to you?”

Max made another offer, “Okay, I’ll raise it by another two points, that should suffice, right?”

Sir Carlos shook his head, “Mr. Max, Felix Trading has been purchasing cotton in West Africa for a long time, while your Daville Company has always been buying cotton from the United States.

This choice is easy to make. I cannot offend my long-standing partners for a slight benefit; no plantation owner in West Africa would do this.

If you just want to buy a batch of cotton for emergency use, then I suggest you buy directly from Felix Trading!”

Max started to feel a headache coming on, as this was the biggest issue. It was because this year’s cotton supply from the United States was unreliable that he was instructed to buy cotton in the West Africa region.

But this market had long been cornered by others. If they wanted to enter, the only way was to offer a higher price.

As for buying from cotton merchants, it would be strange not to be swindled. He had hoped to exploit a time difference, to cheat plantation owners who were out of the loop on current news, but his plan failed from the start.

…

At the London headquarters of Daville Cotton Purchasing Company, there was a discussion about the failed attempt to corner cotton from West Africa.

Purchasing director Kenneth said, “The situation is clear now. News of the American Civil War has come. Unless we significantly increase the purchasing price of cotton, we simply cannot outbid the Austrians.

You should know that buying cotton from the West Africa region also means paying import and export duties. Our cost is already significantly higher than theirs.

If we engage in a price war now, even if we buy enough cotton, we might not make any money.”

This was a pragmatic issue. Whether American cotton could be shipped back was still an unknown factor, affecting next year’s cotton prices.

If the Northern government blocks the South, cotton prices will surely skyrocket, and those who have hoarded cotton could make a fortune. Otherwise, they’d have to think about how to sell the cotton in their hands.

Market manager Mal analyzed, “Due to the civil war, this year’s U.S. cotton production has dropped by at least a third, and because of the conflict, the Indian region’s cotton crop has failed for three consecutive years.

Even if the cotton crop in West Africa region is abundant, the overall international cotton output is still on a downward trend, and the increase in cotton prices has become inevitable.

Harvest time for cotton is not far off. If we want to secure enough cotton, we must act quickly.”