Chapter 275: Stuck in the Economy

The development of the colony only involved a small part of the Vienna government's energy, and the current focus is still on the country.

After the war in the Near East, Austria's economic growth rate should have declined, but capitalist free economic markets are often irrational.

The economy of the entire New Holy Roman Empire is like an out-of-control carriage, rushing forward all the way. At this time, the brakes can no longer be pulled, and the carriage can only be watched as it runs farther and farther on the road of no return.

Government intervention in the market economy? Franz didn't want to take the blame for detonating the economic crisis, nor could he bear the blame.

The overall overcapacity in the capitalist world determines that no matter what measures are taken, an economic crisis will break out.

Taking measures can only prolong the crisis, and the longer the crisis lasts, the more damaging it will be.

This is not a problem of a single country in the New Holy Roman Empire, but involves all capitalist countries. Unless everyone intervenes in the market together, it is possible to survive the crisis smoothly.

Vienna Palace Economic Conference

Franz took out a document and sent it to everyone, saying seriously: "This is the latest economic report, everyone should read it carefully.

The situation of blind investment in our country is very serious. Many industries have overcapacity, and a large number of products have been backlogged.

In the short term, it is impossible for us to find a new market to absorb these excess capacity.

Newly developed Balkans and African colonies, although some capacity was consumed.

However, the speed of new markets is far less than the madness of the domestic capital market.

Abroad, too, all major capitalist countries have experienced excess capacity to varying degrees. Right now, the situation with us and the United States is the most serious.

This is a risk that must be taken in the case of large-scale introduction of foreign capital. Once the economic crisis breaks out, British and French capital will definitely withdraw funds and leave the market. If we cannot handle it properly, the consequences will be very serious. "

Chancellor of the Exchequer Carr said: "Your Majesty, we cannot directly interfere with the free flow of capital, and the best way now is to introduce them to the real economy.

When capital has become real estate such as factories, railways, and infrastructure, it will be difficult for them to leave. "

When capital becomes real estate, it is necessary to cut meat if you want to leave the market. In times of economic crisis, these industries are worthless, and you can't even find a buyer.

No one takes over, these invested capital will be locked up by the market. If you want to untie it and wait for the economy to pick up!

However, once the economy picks up, many of these industries have become high-quality assets, and there is no need for capitalists to abandon these industries.

Prime Minister Felix frowned and said: "This is too much trouble, and more foreign capital will be invested in the real economy, and the overcapacity situation will be even more serious.

Even if these capitals are retained, the scale of the economic crisis will be exacerbated, and the final harm will be borne by us. "

Chancellor Carr explained: "There are two sides to everything and if you want to minimise the crisis then it's best for them to invest in urban infrastructure.

For example: Now we have promoted the urban safe drinking water project, the reconstruction of drainage network, the construction of urban roads...

There is no overcapacity in these industries, and there are more than 300 cities in the New Holy Roman Empire. Because of government funding, at the moment we are only doing infrastructure improvements in big cities.

These areas can accommodate a large amount of capital, but once the economic crisis breaks out, the capitalist capital chain will break, and there will be a large number of unfinished projects, which still need the government to take over. "

Prime Minister Felix asked with concern: "The acquisition is a small problem, the biggest problem is the construction of urban infrastructure, which has always been funded by the government, and these projects are basically not profitable.

If you want capitalists to invest, you must first let them see the profit point. That's all for the urban safe drinking water project. Waterworks can charge water fees. How can other infrastructure make profits? "

Chancellor of the Exchequer Carr explained: "Of course there is no profit point. The investment in infrastructure construction is too large, and most of the projects are public welfare. It is impossible to make money on the project itself.

Therefore, we have to do it in a roundabout way, for example: bidding from the public, the government only provides a small amount of money in the early stage, and let the capitalists advance the construction, and after the project is completed, it passes the inspection and then settles the project payment.

None of these projects can be completed in a short period of time, and the amount of investment is very large. Once the economic crisis breaks out, the banks tighten their money supply, and the economic chain of most capitalists will be broken.

As long as it is stated on the contract that we will not pay for unfinished projects, we can save a lot of money.

If the consortium behind these foreign capitals is willing to inject capital and continue to complete these projects, then it will be the best.

The influx of new capital and the continued construction of these projects will inevitably drive the economy of many industries, and this economic crisis will be over.

Anyway, the money for this infrastructure construction will be paid out sooner or later, and we can still get through an economic crisis smoothly. "

Franz's eyes lit up. Isn't this a copy of Roosevelt's New Economic Policy? It’s just that the scale is not that large, and the initial basic starting point was not to get through the economic crisis, but to tie up foreign capital.

That's right, it's stuck. Infrastructure projects, as long as the money is invested, they are locked up. Don't expect the Vienna government to pay in advance until it's finished.

Either the capitalists and Austria will tide over the difficulties together, and we will overcome this economic crisis together; or cut the meat

Leaving the market, all previous investments have been lost.

In order to mitigate the damage caused by the economic crisis, pulling people into the water now is the best option. In the worst case, it is nothing more than leaving an unfinished project, and the Vienna government is responsible for taking over.

In the past, Franz could have made the capitalists jump into the huge pit of railway construction, but now he naturally doesn't care about letting them jump into the pit of infrastructure construction.

This is not a pit. During the normal economic development period, they are all properly high-quality projects, and there is no such thing as a pit.

After thinking about it, Franz warned: "The plan is very good, but you must pay attention to the degree.

It must be ensured that the winning bidders are all powerful capitalists. If a group of households who have no power connection get the project, we will end up being caught.

Retaining foreign capital is just a means, not an end. Our ultimate goal is to get through this economic crisis smoothly.

According to the current situation, there is a serious overproduction in the capitalist world and the outbreak of the economic crisis, that is, the problem within this year or two.

When necessary, a margin system can be introduced. Let the capitalists who undertake these projects pay the project security fund first, and return it after the project is successfully completed. "

The outbreak of the economic crisis, in addition to overcapacity, is also characterized by a lack of money in the market. Everyone's funds are concentrated in the hands of a few people, resulting in insufficient liquidity.

This is the age of the gold standard, and it is impossible to issue a large amount of money. Franz will not devalue the currency unless the economic crisis is too severe to bear.

Then it is very important to keep capital in the country as much as possible. Mandatory means to supervise finance and prohibit capital outflow are the worst means.

If you are unable to change the rules, it is very necessary to abide by the rules. Blindly breaking the rules will inevitably be backlashed.

As a member of the rules system with a vested interest, Franz did not believe that breaking the rules was suitable for Austria.

It is necessary to retain foreign capital within the scope of the rules. In this case, Franz does not want the second generation of domestic aristocrats to run out and make trouble. If they have the strength, that’s all. If they have no money to run out to undertake projects, wouldn’t they harm others and themselves?

This is not a joke, but a fact. The wealth of the noble family does not mean that every family member is wealthy, and many noble children can actually only get a small part of the property.

Land, titles, and core industries will not be shared, otherwise these families will be lost in a few generations.

The eldest son who often inherits the family business has enough assets to inherit and will not go out to mess around; the second son who does not have much assets is often active in the gray area.

Franz has encountered a lot of this kind of dead boy. In the great revolution of 1848, I don't know how many noble families, because these children died, and the families behind them were ruined.

Afterwards, the major aristocratic families strengthened their restraint on their children. Most of the noble children who were active in thinking were brutally suppressed by their parents.

In recent years, they have all behaved relatively calmly. After all, they have personally experienced the great revolution. One-third of the nobles in the country lost their titles, and half of the families fell because of this. Everyone has a sense of awe.

Chancellor of the Exchequer Carl asked suspiciously: "Your Majesty, what is the margin system?"

It's not that he is ignorant, but that there is no concept of a security deposit system at all in this era, and the earliest security system will only appear 40 years later.

It is normal that such an advanced concept cannot be understood. Everyone has become accustomed to Franz's active thinking, and he often puts forward some new ideas.

Franz explained: "It is very simple to ask the winning bidder to pay a sum of money as a guarantee that the project can be successfully completed.

Including labor wage payment guarantee, project quality guarantee, and project completion guarantee. After the project is successfully completed and the wages of the workers are clearly settled, the government will return the guarantee in full. "

Prime Minister Felix asked: "Your Majesty, isn't it the same that this money is deducted from the project payment?"

Franz shook his head and said: "It's different, deduction from the project payment does not determine the capitalist's financial strength.

They completely hold the contract signed with the government, go out to find bank loans, and rely on bank loans to complete construction projects.

If it doesn't matter in normal times, it will not affect the normal progress of the project, but once it encounters an economic crisis, the situation of the bank shrinking its money will be different.

Our current purpose is to retain foreign capital, not to create a fortune opportunity for some people. Once the project is unfinished, we will have to take care of it.

By charging a margin, our risk is minimized. If the capitalists do not want to bear this loss, then they must tide over the difficulties with us. "

This is a psychological problem, and the more capital invested, the harder it is to let go. The greater the capital locked up, the tighter the interests of the capitalists are tied to Austria.

In order to prevent the previous investment from being wasted, the capitalists can only allocate more funds to fill in the pits to ensure the normal progress of the project.