African Entrepreneurship Record

Chapter 599: Chapter 277: Persuading a Joint Venture

”Karl, if you are interested in supporting the future construction of the northern railway, I have a method that serves two purposes. Not only can it avoid delaying other projects in East Africa, but it can also allow the extension of the northern railway to start ahead of schedule, to connect East Africa with the Chad colony as soon as possible and contribute to the colonial endeavors of the Sigmaringen family,” Ernst said.

Prince Karl was indeed intrigued and asked, ”I wonder what method you have?”

Ernst replied openly without embarrassment, ”Karl, you know that railway construction is not really difficult; it’s just a matter of money. Just like before in the United States and Germany, capitalists were madly building railways, with a large influx of hot money, causing the railways in these two countries to grow rapidly every year, which eventually led to the economic crisis of 1873.”

”Of course I know that, but the economic crisis is now over, and the railway market is back on track. Germany’s development is now more gradual. Before I came to East Africa, the crisis had already greatly eased, and social development was very rapid.”

In fact, the world economy is still in depression, far from what it was before the crisis. However, society keeps developing and cannot truly stagnate. Although Germany’s development has slowed somewhat, compared to other countries of the same era, it is still quite optimistic.

Moreover, Prince Karl and others of the older generation are experienced; they know that the rapid economic growth before the crisis was not normal.

Ernst continued to say, ”Therefore, for East Africa to build railways in advance, it only needs to solve the funding problem. However, the East African government’s expenditures have been very high in recent years, so there is no extra money to support the development of two railways simultaneously.”

What Ernst said was not wrong. The East African government’s finances have never been abundant, but in the world, there has never been a government with enough finances.

For example, East Africa’s fiscal revenue in recent years is much stronger than that of most countries in the world. It’s the wealth created by 50 million people. East Africa can obtain considerable revenue just by relying on taxes, and there is a batch of state-owned enterprises in East Africa, whose profits are also abundant.

So now, if East Africa wants to build two railways at the same time, there may be financial pressure, but it’s not that it can’t be done. They just want to spend the money wisely. The value of the Azande Plateau on the extension of the northern railway for East Africa is currently not high, so it’s not worth building. It’s better to build more branch lines in the Matebel Province to fully utilize the mineral resources there and develop inland industries.

Ernst is the type of person with a fixation, hoping for balanced development between inland and coastal areas. The Far East couldn’t achieve this in the past, but East Africa and the Far East are different countries.

Firstly, the inland climate of East Africa is superior to the coast. In tropical countries like East Africa, the cooler the climate, the more welcome it is. While temperate countries prefer warmer areas, this is also an important reason why the population of the Three Kingdoms in the post-era United States and Russia migrated southward.

For example, in the Far East Empire, the population in the northeast moved southward, while the population in the northeastern United States migrated to the ”Sunshine Zone” in the south. Russia, needless to say.

Therefore, the climate advantage of East Africa’s inland areas is still quite conducive to balanced development across various regions in East Africa. Most of the country is tropical savanna climate, which favors balanced population distribution.

Secondly, East Africa’s inland resources far surpass those of the coast, and the inland resource variety is rich, especially in Matebel Province and Heixinggen Province. These provinces’ resources can meet most industrial needs; the only thing lacking is petroleum.

However, the two most important petroleum resource provinces in East Africa are also inland, namely, the Nile River Province and North Lake Province (Uganda).

The resource conditions in East Africa’s inland areas give a high lower limit for future inland development, allowing favorable competition with the coast.

The coast’s only advantage over the inland is maritime transport, but this advantage is significant enough. The comparison of advantages and disadvantages between the two is about equal.

But Prince Karl does not quite understand these things. After all, he only looks at the surface of East Africa, while the true development of East Africa is only understood by Ernst and a few high-level officials.

Prince Karl asked, ”So you mean that as long as we solve the funding issue, we can start the northern railway ahead of schedule?”

Ernst nodded, making his meaning clear. He said, ”If Sigmaringen can invest a part, then we in East Africa by gritting our teeth and tightening our belts can still advance the extension of the northern railway.”

This puts Prince Karl in a difficult position. To achieve the northern railway extension, at least more than a thousand kilometers would be needed. This is not a big deal for a large country like East Africa, but for Sigmaringen, it’s extremely difficult.

Currently, just investing in the Chad colony has already cost a lot, but acquiring nearly two million square kilometers of land was indeed worthwhile and has seen some returns. However, investing in the railway is unpredictable.

Therefore, Prince Karl said with some difficulty, ”Ernst, you know that Sigmaringen and your Heixinggen were the same before. Although they are great nobles, in reality, they don’t have much wealth.”

This is true. Heixinggen and Sigmaringen, these great nobles, are not uncommon in Europe, though not widespread. Previously, Sigmaringen and Heixinggen were both traditional military aristocrats developing in the army. Nobility was more about networking, force and power, social status, while financial strength was actually less than that of capitalists.

”Karl, Sigmaringen certainly doesn’t have so much money, but Sigmaringen still has Romania. Romania, regardless of its size, is a country, and its energy is not inferior to many countries,” Ernst said.

Ernst was aiming for Carol I. Actually, the current Romania is purely a small and weak country. In the past, Romania had a good strength because it developed after annexing Hungary’s territories.

But that being said, Romania is still much stronger than Sigmaringen, a principality only the size of a township, with quite a number of wealthy people. As the ruler of Romania, Carol I, who led Romania in gaining independence from the Ottoman Empire, has a decent reputation.

”But although the ruler of Romania is your cousin, our family cannot possibly control Romania’s wealth,” Prince Karl said.

Ernst: ”My point is to issue bonds in the name of the Romanian royal family. If Sigmaringen wants to develop Chad merely relying on its own strength, it won’t work. It must have the support of Romania.”

Ernst deeply understands this. If East Africa relied only on the original wealth of the Heixinggen royal family, it would have long gone bankrupt. The largest contribution to East Africa’s colonization comes from the financial power of the Heixinggen consortium.

Prince Karl: ”The problem is, how do we repay the debt?”

”That’s easy. Karl, you can’t view problems with old thinking now. You have nearly two million square kilometers of land in hand. This land definitely has a lot of mineral resources. You can repay the debt with these mineral resources, which is also why I want you to invest in the northern railway. If you want to sell these minerals, you must rely on the railway. The sooner the extension of the northern railway is completed, the sooner you can profit from the mineral resources. Correspondingly, with mineral resources, you can attract investment to further strengthen the construction of the colony.”

Prince Karl listened carefully to Ernst’s words and also thought it made a lot of sense. Thinking this way, the northern railway is indeed very important for Sigmaringen. If investing in this railway seems really worthwhile.