Empire Rise: Spain

Chapter 123: The Theo Alliance

While Carlo was traveling and sightseeing, the Spanish Government was not idle either. Considering that Spain’s reform urgently needed support from a country with a certain industrial and economic foundation, the Spanish Government engaged in prolonged consultations with the Austro-Hungarian Imperial Government on this matter and signed a brand-new 《Austro-Hungarian Empire-Spain Alliance Treaty》.

However, this alliance was not a true military alliance, but more like a cooperative alliance relationship in economic and diplomatic aspects.

This alliance treaty greatly strengthened the economic exchange between Spain and the Austro-Hungarian Empire. Spain’s large amount of mineral resources and other materials could be conveniently transported to the Austro-Hungarian Empire via sea transport, and the Austro-Hungarian Empire’s grain and other industrial products could also reach Spain via sea transport.

In addition to strengthening cooperation in the economic aspect, the two sides also held consultations on tariff issues and agreed to jointly reduce tariffs to strengthen economic exchange between the two countries.

What the Spanish side was most interested in was naturally the relatively advanced industry and other technological technologies of the Austro-Hungarian Empire.

Most of the equipment for Spain’s industrial development was imported from the Austro-Hungarian Empire and Italy, with a small portion imported from the German Empire, which was also the reason for Spain’s relatively fast industrial development speed.

After signing the alliance with the Austro-Hungarian Empire, the Spanish Government also signed a similar alliance treaty with the Italian Government.

Although Italy’s overall strength was not as good as the Austro-Hungarian Empire, it also had a certain scale in industry and economy, and anyway, as long as it could provide help to Spain, it was fine.

With the aid of Italy and the Austro-Hungarian Empire, Spain’s industrial development speed was still relatively fast. Various places were carrying out construction of railways and roads, various factories headed by steel mills and chemical plants were also continuously under construction, and the entire country presented a prosperous posture.

However, while developing rapidly, the overall construction speed of Spain was also restricted within a relatively reasonable range. There was no way around it; the name of the 1873 economic crisis was too resounding, and its impact on the world economy was second only to the Great Depression that began in

Carlo still had an impression of the economic crisis that would occur next year and naturally wanted to guarantee as much as possible that Spain’s development remained within a controllable range, rather than unrestrained arbitrary development.

Speaking of this economic crisis that was about to erupt, the real cause was the crazy construction of railways by various countries, continuously stimulating the growth of domestic industry and economy.

As is well known, when the scale of industrial production far exceeds consumption needs, an economic crisis will follow.

How exaggerated was the development of various countries during this period? After the end of the Civil War in the United States, the entire country entered a new wave of industrial development.

From 1865 to 1872, within seven years, the total mileage of railways under construction in the United States exceeded 31,092 miles, which was over 50,000 kilometers of railways.

This was already close to 10 times the scale of Spain’s existing railways, and the Americans built such a massive railway mileage in just seven years, which was enough to show how exaggerated the industrial development in the United States was during this period.

It was precisely under the wave of railway construction that the pig iron production in the United States grew from 755,000 tons in 1865 to over 2 million tons, and coal production grew from 22,159,000 tons in 1865 to nearly 50 million tons.

Spain’s current industrial scale could not even catch up to a fraction of the United States’, and the United States’ industry was still increasing at an extremely exaggerated speed, which was also the reason for the outbreak of the economic crisis.

So the question arises: why would the American economic crisis affect the whole world?

First, with the development of colonialism and technology, the economic ties between countries around the world were becoming increasingly close.

Second, more than half of the funds for railway construction in the United States came from investments by Britain and France and other European countries, which was exactly the reason why the American railway crisis affected the whole world.

Moreover, the situation of overproduction did not only occur in the United States; it also appeared in other European countries.

Since the victory in the Franco-Prussian War, Germany had entered a period of rapid industrial economy development. After obtaining the extremely important industrial mining areas of Alsace and Lorraine from France, Germany’s industry already had a very solid foundation.

In addition, the nearly 5 billion francs in funds that the French practically gave to Germany for free provided sufficient seed capital for Germany’s industrial development.

Under such circumstances, if Germany’s industry did not develop at an explosive speed, that would be the strange thing.

The British were no slouch either. As the world’s most powerful country, Britain’s industrial development speed was also relatively fast. At this point in time, Britain was still the world’s most powerful industrial nation, and it would take a long time for the United States and Germany to surpass Britain.

It could be said that, except for France, which lost industry and mining areas after the defeat in the Franco-Prussian War and needed to pay large amounts of indemnity, other European countries were basically in rapid development.

This also led to Europe entering the prosperous stage of its economy from the end of 1871, and 1872 was even more extremely prosperous.

This economic crisis could potentially affect Spain, and Carlo attached great importance to it.

Spain also had stock exchanges. The Madrid Stock Exchange was established in 1831 and now had more than 40 years of history.

However, compared to the exchanges in Vienna and London, the Madrid Stock Exchange was not large in scale or influence, which could also be considered good news.

After all, the larger the scale of the stock exchange, the greater the impact it would suffer in an economic crisis. Don’t think that the London and Vienna stock exchanges had large amounts of funds flowing in and out every day; once the economic crisis erupted, the number of bankrupt enterprises could be in the thousands.

This economic crisis that erupted in 1873 was also seen as the mark of capitalism changing from free development to monopoly operation. After this economic crisis, a large number of small and medium-sized private enterprises faced bankruptcy and were ultimately acquired by larger enterprises.

One monopoly giant after another emerged in this economic crisis, and the capital of various countries transformed from a large number of small and medium-sized capitals into large capital, and began to exert even more profound influence on the governments of various countries.

For Carlo, how to earn sufficient benefits in this economic crisis was a question that needed consideration.

The good news was that, for Spain, whose industry and economic scale were not large, the impact of this economic crisis was ultimately limited.

The main outbreak location of the economic crisis was in the United States, and the countries affected were also powerful industrial and economic nations like the United Kingdom and the Austro-Hungarian Empire.

Spain did not need to worry too much about the impact of the economic crisis; on the contrary, it could acquire some important foreign companies and enterprises through the opportunities brought by this economic crisis.

Although these companies went bankrupt, the technology they possessed and those employees existed in real terms.

As long as it could acquire these factories and enterprises that went bankrupt in the economic crisis, and take the opportunity to attract some employees who lost their jobs to come to Spain, it would be a very good supplement to Spain’s technical talent.

At the same time, the production materials and some equipment of these companies and enterprises could also accelerate Spain’s industrial development.

For the royal family, acquiring these bankrupt enterprises at low prices and reorganizing them could form giants in various industry sectors.

First update, seeking support!