Holy Roman Empire

Government guidance, still, couldn’t withstand the enthusiasm of capital; interests are always alluring, blinding people to risks.

Without government support, they had to find ways to reduce costs, such as: locating factories in suburban areas, or convenient small towns, where land costs could be greatly reduced.

Without tax incentives, it was no problem, as Prusso-Russia was buying aggressively, and factory profits were now ample; they could afford to overlook those few percentage points.

"Good advice is wasted on the damned, and great mercy won’t save those who refuse to save themselves."

Watching capital fling itself into the fire like moths, Franz had no choice but to turn a blind eye.

The madness of the market, besides greed, was also a more serious social problem. The capitalist world’s economy was facing industrial overcapacity once again, especially in the Anglo-Austrian two countries.

The crisis had not erupted, related to international relationships. From 1873 to 1878, the second Near East War broke out, along with colonial wars started by England, France, and Austria to divide the African Continent.

Wars consumed a tremendous amount of wealth and materials, and the market’s prosperity masked the crisis of overcapacity. If the Prusso-Russian war did not break out, a new economic crisis would have erupted by next year at the latest.

After years of accumulation, surplus was not just in production capacity, but capital was also in excess.

As the saying goes, the only real money is the money spent; money lying in the bank is just a pile of numbers. With the majority of industries already saturated and in surplus, capital needed new investment avenues.

Following the usual pattern of courting disaster, whenever it came to this point, the stock market would start to stir. A massive influx of funds into the stock market would create an unprecedented boom, then the bubble would burst, and the surplus capital would evaporate along with it.

"Better him than me," they say, and the animosity between Prusso-Russia was then capitalized upon. Austria supported the Tsarist Government, while England and France supported the Berlin Government, not just for political needs but also driven by capital.

With the money lent out, the problem of capital surplus naturally disappeared. Wars via massive orders promoted economic development.

Most importantly, the industrial crisis, which was mainly between the Anglo-Austrian industrial powers, had spread across the entire European Continent due to the stimulus of war; no one could hope to escape unscathed.

Dragging everyone into the fray was not a zero-sum game. To be exact, it was called targeting potential competitors.

Economic warfare differed from military warfare. The most significant losses were not necessarily suffered by the combatant nations; it was more likely that the top powers’ gambits resulted in the annihilation of the third, fourth, fifth... countries.

Under the free trade system, the global market remained limited, unable to satisfy everyone’s desires, thus necessitating a survival-of-the-fittest battle for resources.

Industrial power in England and Austria accounted for 29.8% and 36.5% of the world’s total industrial output, respectively, with their export volumes representing 49.6 and 24.7% of the world’s total exports.

Due to interests involved, conflicts had become inevitable. Capital consumes; in this world of survival of the fittest, the first to fall were definitely the weak.

Now that speculators were swarming to profit from war, it wasn’t that they were completely unaware of the risks, but rather, involved parties often became blinded and many believed they could outpace others.

As long as they could find a sucker before the crisis erupted, they could reap immense profits.

Vienna Palace

Prime Minister Mirabelon: "Your Majesty, up to now, we have successively sold 76 factories, and negotiations are underway for the remaining ones, which are expected to be all sold within the next two months.

The shares and bonds we hold are also being sold off slowly, to avoid causing market turbulence, so right now we’ve only disposed of about one-tenth.

Impacted by the market’s heat, the divestment proceeds are slightly more substantial than expected. We’ve already garnered 130 million divine shields and expect about 440 million divine shields after everything is sold."

Yet our actions have attracted the attention of certain observant parties. Our following moves might encounter some difficulties."

Franz nodded, being noticed was inevitable. Selling off assets when the market was hottest, such a contrarian practice, would indeed be surprising if it went unnoticed.

But it was unavoidable; over the years, the Royal assets had snowballed, and if they didn’t retreat early, it soon wouldn’t be possible.

The idea of finding a high-paying sucker the day before the crisis, Franz could only say that was living in a dream.

Where in the world are there so many fools? Not to mention that, once the Prusso-Russian War ended, the value of these factories would be deeply discounted.

Perhaps the ample profits earned during wartime might compensate for the losses brought about by the devaluation of the enterprises, but buyers would be hard to come by afterward.

If there was no sucker, they would have to bear the brunt, relying on robust capital to survive the most cutthroat of years.

It might look trivial, but in the end, the remaining players in these low-tech industries would definitely be those with strong finances; but considering the Royal family’s sprawling operations, Franz felt uneasy without stocking up on ammunition in advance.

After deciding to start a dumping war with the British, Franz decided to completely abandon the food processing industry, textile industry, and primary processing manufacturing.

Once the crisis erupted, these low-tech industries would be hit the hardest, and Franz was not prepared to persevere in this area to the bitter end.

Selling off 274 factories in one fell swoop, covering more than 14 countries, such a grand gesture could even qualify for a Guinness World Record.

Factories were not needed anymore, and as for invested stocks and bonds, selling them early meant relaxing sooner. Cash in hand is safer—nominal market value is the least reliable.

After some thought, Franz said, "Well done. The market is too crazy now, and there’s no need for us to join them in their doom."

Besides these asset sell-offs, starting from next May, we need to gradually reduce our holdings in several long-term invested listed companies.

That includes our holding companies; if the share price exceeds the normal market value, sell off a portion, then repurchase after the stock market crash has passed.

Especially with overseas investments, we need to dispose of them as quickly as possible. For example, the investment in the Panama Canal, it’s time to find someone to take over the plate!

This crisis may far surpass previous ones, and it will likely last for a long time. For the next two years, our investments will be short-term and conservative."

Man-made disasters are far scarier than market norms; economic warfare, once erupted, cannot be resolved in just a day or two.

Without phasing out a large amount of outdated production capacity to free up the market, capital will not cease its efforts.

In such a critical moment, the bigger one stretches out, the greater the loss in the end.

Subsequent conglomerates mostly turned towards the financial industry; very few stuck with manufacturing, and that’s an important factor.

Reality once again proved the importance of confidence; Franz was self-aware that he was never any business genius.

Had it not been for having firsthand information, seizing investment opportunities, and avoiding the crisis in time, the royal industry would have suffered tremendous losses long ago.

Of course, if it wasn’t for all this information, the royal industry would not have extended its reach so far. Investing in whatever makes money is inherently unscientific.

Even huge conglomerates cannot cover all industries. "Samsung" in later years is an example—spreading itself too thin, which, without the nation’s rescue efforts, would’ve spelled its doom.

For better development, it is inevitable to drop some baggage. This is just the beginning; in the years to come, the Royal Consortium will shed even more business sectors.

Not shedding now is mainly because of the hefty profits. Traditional and emerging fields are relative; what is high-tech with a bright prospect today may become traditional tomorrow.

Surprised, Prime Minister Mirabelon asked, "Your Majesty, are you giving up the shares of the Panama Canal now without waiting for the final harvest?"

Franz shook his head, "There is no need. From the current situation, it seems we can’t wait for the final harvest.

Once an economic crisis breaks out, the Panama Canal project will cease to progress. We’re not suited to remind the French unless they decide to reel in their nets ahead of schedule.

Our shareholding is limited, and even if we harvest early, the profit is very limited. Withdrawing now is perfect to avoid the upcoming turmoil.

If stock investors knew that the canal they’re looking forward to could disappear overnight, who knows what might happen."

The royal family needs a good reputation—we can’t earn every kind of money. Exiting early is also a good thing; it saves us the resources needed for damage control later.

Others may not know, but Franz was clear that for the next thirty years, the Panama Canal had no chance of becoming operational.

It’s not a technical issue; it principally stems from political unwillingness. The Vienna Government has always been opposed, and the lack of action is because the canal was just started and not yet a pressing concern.

The French capitalists enticed the Austrian Royal Family to invest mainly to reassure shareholders and give the illusion that the Vienna Government would not interfere.

Had it not been for knowing that these people only wanted to harvest profits on the stock market, Franz would not have gotten involved, even with lucrative profits.

The aim of providing credibility has been achieved; leaving with a fee is no issue. As for the fate of the Panama Canal Company, it has nothing to do with an investor who exits beforehand.

After all, the Panama Canal is listed in Paris; it’s the French investors that are duped.

If the Canal Company were to go bankrupt, no matter how they try to shift the blame, Franz wouldn’t be the one to shoulder the pot.

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