Holy Roman Empire - Chapter 415

Chapter 415: Chapter 102, Russian-Austrian Relations Turn Cold
On October 7, 1866, the Sultan Government delivered the final ultimatum to the Russian Envoy, demanding that the Russians hand over Constantinople within 48 hours or face war.

This declaration of war didn’t even wait for the 48 hours to expire; upon receiving the ultimatum, the Russian Envoy replied directly, “Then let there be war!”

With the Ottoman Empire’s large-scale war preparations, how could it be hidden from the Russians? As archenemies, the Tsarist Government had never relaxed its surveillance of the Ottoman Empire.

The Russian Ministry of Foreign Affairs also tried to woo the Ottomans, but they couldn’t present any benefits, and the result was naturally fruitless.

Seeing the mobilization by the Sultan Government, Alexander II knew that war was inevitable.

One look at the map was all it took to confirm it. The Ottoman Empire didn’t have many options, with a total of three neighbors around it.

Geographically, Persia was not an easy target, and even if victorious, there wasn’t much to gain; it was an area the Sultan Government did not need to attack.

They dared not strike Austria, or rather, they couldn’t even touch it, for only the Sinai Peninsula shared a border, and a vast desert separated them. Attacking the Balkan Peninsula by sea was beyond their capabilities; they didn’t even have a chance to land.

That left Russia. The Black Sea Fleet had been entirely destroyed during the Near East War and, constrained by finances, it still hadn’t recovered after many years.

With support from England and France, attacking either the Caucasus region or Constantinople was viable. Sealing a strait only a few hundred meters wide like the Bosphorus Strait was too easy; it could be done with direct shore bombardment.

The war pretext painstakingly prepared by the Sultan Government turned into a farce.

In Constantinople, eighty thousand Russian troops had already been assembled, and on the Russian Balkan Peninsula, the total force of the Russian Army had reached one hundred and fifty thousand. In comparison, the Caucasus region was the weak point.

Now that both sides had declared war, the battle still needed to be fought. This time, the Ottomans had not easily acquired a significant advantage in troop strength, and they certainly wanted to make a big move.

In St. Petersburg, upon receiving the news of the Ottoman declaration of war, Alexander II’s frown grew even tighter. The enemy was increasing, which wasn’t good.

The war potential of the Russian Empire was almost fully mobilized. Due to transportation and production limitations, this was the maximum force they could employ.

In Eastern Europe, five to six hundred thousand troops were engaged in a fierce struggle against the Prusso-Polish Coalition Forces, and there was no sign of a chance to win the war yet. Meanwhile, to guard against Sweden taking advantage of the situation, fifty thousand troops were also deployed in the Nordic region.

In the Far Eastern region, seventy to eighty thousand troops were also deployed, but due to the vastness of their rule, not many could be committed to the battle.

In the Central Asian region, over three hundred thousand Russian troops were engaged in a bitter fight with the enemy, or rather, they were being pressed hard. Most of these troops were hastily recruited, and managing to hold the line was already considered good.

Although it seemed there were ample troops in the Balkan Peninsula, the one hundred and fifty thousand Russian soldiers could at most defend Constantinople. Thankfully for Russia, France had sold its Balkan colonies to Austria, sparing them an additional potential enemy.

Now, reinforcements must also be sent to the Caucasus region. No one could ensure that the Sultan Government wasn’t executing a feint; if the Caucasus was lost, the enemy could march all the way to the Volga River Basin.

There weren’t enough troops to spare, and that was Alexander II’s honest feeling. A million Russian soldiers were struggling on the battlefields, and to support this war, the domestic economy was already severely affected.

Waging a war of attrition was excruciating—as more troops couldn’t be committed, the human wave tactic couldn’t be realized, presenting a grave challenge to the Russian Army.

What was worse was that European countries had seen through the weaknesses of the Russian Empire, and the so-called ‘million Russian Army’ was a joke. On any battlefield, the Tsarist Government couldn’t deploy a million-strong army.

These changes also affected the Russia-Austria relationship; the Austrians felt the alliance was dispensable, whereas the Russians thought their Austrian allies were not pulling their weight.

Finance Minister Kristan whispered, “Your Majesty, after the war with the Ottomans breaks out, Austria will be our only remaining trade partner.

This year’s fiscal revenue is likely to hit a thirty-year low, and there’s a possibility it may continue to decline next year.”

Such a turn of events left the Finance Minister with little confidence. Although it wasn’t their fault, with no money left, the problem fell on their shoulders.

Luckily, a sum had been previously raised from the Jews; otherwise, the Tsarist Government would have been bankrupt by now. Even so, Kristanval didn’t dare to let his guard down.

This kind of windfall couldn’t happen every day, and based on the current situation, it wouldn’t be long before they faced a financial crisis again.

Alexander II asked indifferently, “How low will it be?”

“This year’s fiscal revenue is likely to drop to around 150 million rubles, and if the war continues, it might fall to 120 million rubles next year,” replied Finance Minister Kristanval, his voice growing quieter. It’s important to note that before the outbreak of war, the Tsarist Government’s fiscal revenue had already exceeded 300 million rubles, and now it was cut in half.

Such is the cruel reality. The Russian Empire too was besieged from all sides, safe only from the Arctic Ocean, with warfare stretching from Eastern Europe to the Far East.

Overseas trade had significantly contracted, and the enormous profits once brought by grain exports no longer existed.

Compared to the lesser-export trades, the import trade volume was increasing sharply. Russia’s foreign trade was settled in gold and silver, and this shift caused a substantial outflow of domestic precious metals.

The consequences of wealth drainage were soon reflected in the economy, as monetary contraction had become an unavoidable social issue for the Tsarist Government.

“It looks like the Austrians have made a good profit again.”

Alexander II’s seemingly offhand remark had already summed up the shift in Russo-Austrian relations. My misfortune is your fortune— even the best of friendships become distant under such circumstances, and the same applies to relations between nations.

No one responded to that comment, as Russo-Austrian amity was still politically correct. Whether it was grudging or jealousy, none of it could change the fact that the Tsarist regime couldn’t do without Austria.

…

Alexander II was not wrong, as Austria had indeed earned a lot recently. Due to the war, the Bosphorus Strait had been blocked, and Austria naturally monopolized trade with Russia.

Sweden, in the Nordic region, also made a small fortune, but their limited national power meant they could export only a few commodities.

Beyond the trade with Russia, another benefit was that Austria’s market share in the agricultural sector had risen. The Russians could now only sell their grain exports to Austria first, which would then be processed before being sold on the international market.

This dealt another blow to competitors, as companies that used to buy Russian grain for fine processing were now scrambling for raw materials on the international market due to the lack.

After the Russians and Ottomans began their war, the price of grain on the international market rose by ten percent in a short period. This was just the beginning; as long as the supply and demand issue was unresolved, the price of grain could continue to rise.

In the mid-19th century, half of the world’s population was starving, with hundreds of thousands, even millions, dying of hunger each year.

Against this backdrop, the shortage of grain in Europe was clearly not a short-term issue to be solved. Although increasing grain production sounded easy, actually doing so was quite difficult.

The major colonial empires were not lacking in land, but the problem was the significant initial investment required to clear and plant the land, coupled with a low market return rate.

If there were a bountiful harvest, a lot of the grain might rot in the fields. It wasn’t that people didn’t need grain, the bigger issue was that many couldn’t afford to buy it.

In that era, only the countries of Europe had the market purchasing power; other regions were self-sufficient. In places that couldn’t support themselves, starvation was the only option.

Purchasing power limited production capacity. When faced with emergencies, it was natural for grain prices to spike temporarily. Perhaps everyone had reserves, but capitalists wanted to make money, so inflating the price of grain was one of their tactics.

This had little to do with Austria; regardless of international grain price fluctuations, as the world’s leading grain exporter, domestic prices remained very stable.

As one of the beneficiaries, Franz’s wallet had significantly fattened. That no longer piqued Franz’s interest, as with the advent of the Industrial Revolution, it was clear that emerging industries had more “monetary prospects”.

Minister Weisenberg said with a furrowed brow, “Your Majesty, the Russian Envoy has informed us that due to the war, they intend to raise tariffs.”

Franz’s brow furrowed; an increase in tariffs was bound to affect the trade volume between the two countries. But did the Russian Empire really have the capital to raise tariffs?

Unable to discern the Tsarist Government’s intentions, Franz couldn’t be bothered to care further.

“Perhaps it’s time for our export goods to see a price increase as well!”

The wool comes from the sheep itself; it is normal business practice for a rise in tariffs to lead to higher goods prices.

Increase in tariffs might protect certain Russian industries. However, during wartime, the primary trade goods between the two countries were strategic materials.

These were necessities; even if prices increased, the Tsarist Government had to accept them. Raising tariffs now, wasn’t it providing capitalists with an excuse to raise prices?

The resulting price increase would definitely exceed the increase in tariffs, and the Tsarist Government itself would ultimately suffer the loss.

Franz was certain this decision had not been made by Alexander II. It was clearly a self-sabotaging move, and Alexander II was not such a fool.

Either the Tsarist Government’s finances were in trouble, leading bureaucrats in their panic to adopt a foolish policy, or it was driven by domestic capitalists seeking greater benefits.

The truth was obscured, and no one expected that Alexander II’s sigh of lament would lead his bureaucrats to make a foolish decision, thus ending the honeymoon period between Russia and Austria.

If Alexander II had known, he certainly would have regretted it.

Indeed, the decision protected a good number of domestic industries. On the surface, it seemed like a sound policy, protecting national industries at the dawn of industrial development and favoring the growth of domestic industry.

However, the benefits did not materialize, and the evils had already taken effect first; the Tsarist Government soon paid a heavy price for it.

Because tariffs led to increased prices for Austrian imports, the Tsarist Government bureaucrats, in an attempt to save money, chose to purchase materials from domestic enterprises—a disaster in the making.

…