Austria wasn’t the only one to recognize the impending crisis. The Austrian government had merely acted first. Following Austria’s opening of the dumping floodgates, British capitalists quickly followed suit. At the time, overseas trade was dominated by Britain and Austria, which together accounted for three-quarters of the global market share. What was called “international competition” was essentially a rivalry between these two nations. The market was finite. The more one side gained, the less the other could claim. Neither side could afford to yield. The reason Britain and Austria hadn’t directly clashed was that their development trajectories differed. Britain’s largest export was textiles, while Austria’s was agricultural products. The two largest categories of international trade at the time. They accounted for 68.3% and 21.6% of total international trade, respectively. Notably, the proportion of textiles was increasing year by year, while the share of agricultural products was declining. The disparity in these proportions was not only due to the price scissors between industry and agriculture but also related to the trade models. Britain’s textile industry relied on importing raw materials, processing them, and then exporting the finished goods. Austria’s agricultural products, on the other hand, were mostly domestically produced, with relatively fewer raw material imports. In terms of sheer industry scale, agriculture undoubtedly surpassed textiles. This was determined by population structure as over 80% of the world’s population was engaged in agriculture. However, when it came to profitability, agriculture couldn’t compete with textiles, even after processing. In the textile industry, Britain’s biggest competitor was France. Their earlier efforts to establish cotton plantations in Egypt ultimately ended up benefiting the French. With the raw material issue resolved, France’s cotton textile industry rapidly developed, becoming a pillar of its domestic economy. In the French government’s African development plan, expanding cotton plantation areas was listed as the top priority. If the French plan succeeded, Britain’s dominance in the cotton textile industry would face a significant challenge. This was also one of the main reasons for the cooling of Anglo-French relations. In the agricultural sector, Austria’s biggest competitor was the Russian Empire. Due to the war, Russia’s nascent national industry had suffered heavy losses. Limited by technology and capital, Russia was unable to fully process its agricultural products in the short term, forcing it to temporarily serve as a raw material supplier for Austria. “Temporarily,” however, did not mean permanently. The Russian Empire remained one of Austria’s greatest potential competitors in the agricultural sector. The competition between Britain and Austria was primarily concentrated in the field of industrial manufacturing. Britain was the leader of traditional industries, while Austria was the leader in emerging industries. From a future perspective, these were the most important industries. However, in the short term, their markets remained very limited. This was determined by the unique nature of these industries. Without adequate infrastructure, blindly adopting new equipment could lead to crippling costs, making it more economical to stick with outdated steam engines. … Frankfurt, the traditional financial hub of the German region, has regained its luster after joining the new Holy Roman Empire. Today, it has become one of the world’s four major financial centers, surpassing Vienna and ranking just behind Paris and London. Of course, the notion of “four major financial centers” has not gained widespread acceptance, as London, the top-ranked city, is roughly equivalent to the combined strength of Paris, Frankfurt, and Vienna. This is despite Austria having secured control over several gold-producing regions. Without this advantage, London’s dominance would be even more pronounced. The legacy of a world hegemon cannot be erased overnight. For a long time to come, London will remain the world’s financial center. The British have concentrated the resources of an entire nation to nurture a single city, a development model different from Austria’s. Despite limited resources, Frankfurt’s rise above Vienna can be attributed to several unique factors. First is its influence. Frankfurt has long been renowned throughout the German region, home to numerous banks and substantial financial resources. Second is its geographical location. Situated in the heart of the German region, near the Austro-German border and close to Prussia, it is ideally positioned to attract capital from these nations. Finally, and most crucially, Austria’s national policy avoids creating supercities. As the capital, Vienna has not aggressively competed for resources. With so many advantages, Frankfurt, already the financial center of Central Europe, naturally soared to new heights. With advantages come disadvantages. While Frankfurt has become a hub for Central European capital, it has also inevitably been affected by the economic fluctuations of neighboring nations. After the defeat of the Kingdom of Prussia, the Frankfurt stock market was among the first to feel the impact. Fortunately, the Austrian government refused to extend loans to the Prussian government, sparing Frankfurt’s financiers from plunging into that massive pit. The brunt of the impact was borne by listed Prussian companies, especially those in Russian-occupied territories, which were virtually wiped out. According to statistics, over the past six months, more than 30 people in Frankfurt have committed suicide due to the fallout of the Russo-Prussian War. This is the norm. Every financial center has its share of unfortunate souls. Even during the best market conditions, there are those who lose everything and resort to desperate measures. On a crisp autumn morning, the wind swept fallen leaves into the air, one of them striking Flores in the face. A sense of foreboding washed over him. As a seasoned stock speculator, Flores had established his own securities firm in Frankfurt. Although it was still very small, he had at least escaped the fate of being a perpetual victim of market manipulation. Like a casino, the house always has better odds than the gamblers. After establishing his securities firm, Flores had teamed up with others to speculate on several stocks, experiencing the thrill of being the house and making a hefty profit. If nothing went wrong, a few more successful ventures like that, and Flores could climb even higher, potentially becoming one of the dominant players in the market. However, everyone has their streak of bad luck. Following the lead of a financial heavyweight, Flores joined the speculative frenzy surrounding the Russo-Prussian War. Unfortunately, this time they bet on the wrong side. The crushing defeat of the Prussian-Polish Federation led to massive losses, leaving them with a significant amount of capital tied up. In the financial markets, gains and losses are part of the game. Flores had the mental fortitude to weather such fluctuations. Being stuck with tied-up capital wasn’t the end of the world. As long as the companies didn’t go bankrupt, once the aftermath of the Russo-Prussian War subsided, a few well-timed positive announcements could free up the trapped funds. This kind of situation was common in the stock market. If the invested capital was substantial enough, even in the absence of good news, it could be manufactured. As a seasoned speculator, Flores always adhered to the principle of diversified investments. As long as a full-blown market crash didn’t occur, he could withstand one or two failures. Shielding his face with his hand, Flores quickened his pace. He trusted his instincts deeply. They had helped him survive two stock market crashes. By the time Flores arrived, the Frankfurt Stock Exchange was already bustling with activity. Not wasting time in the main hall, he headed straight for his company’s office. Though it was called an office, it was actually a small room of less than fifty square meters, shared by three securities firms. There was no other choice. In this era, without electronic trading, stock transactions relied entirely on manual processes, making access to real-time information crucial. Real estate inside the exchange was incredibly expensive. This tiny space, less than fifty square meters, cost a staggering 2,000 guilders per month in rent and it wasn’t even for sale. In any other location, that amount of money could easily buy a large house. If it weren’t for the need to attract clients and project an image of power, Flores would never have indulged in such extravagance.
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