Chapter 139: The Oriole Behind
The news of the railway companies going public caused an immediate sensation. In less than three days, the initial shares of these five companies were completely subscribed, raising a total of 3 million guilders in startup capital.
TN: Austria only changed to florins in 1867. In the current timeline, they should be using Austrian gulden or guilder in English. Do forgive me for the error.
One couldn’t help but admire the grandiosity of the nobility. One family contributed as much as 1.8 million guilders without hesitation.
Everyone was well-informed and fully aware of the government’s intention to involve local powerhouses in this venture, preventing any potential disruptions to the railway projects.
Despite the circumstances, there was no reason for anyone to refuse such an opportunity for wealth. If Emperor Franz was willing to share in their prosperity, it meant he regarded them as allies, which put many minds at ease.
The atrocities committed during the suppression of the rebellion last year were conveniently overlooked. Unbeknownst to them, allegiances had subtly shifted, and it was clear that the traitors deserved their fate.
With so many influential figures now invested in the railway projects, Franz didn’t need to worry about the details anymore. These people were even more eager than him to see the railways completed sooner, as that would mean they could start making money sooner.
The surveying teams from the Ministry of Railways had already set out, and to expedite the process, the newly established railway companies had organized their own surveying teams, joining in the effort.
Five railways have simultaneously commenced construction, namely: the Prague-Bratislava Double-Track Railway, the Vienna-Szeged Railway, the Vienna-Milan via Venice Railway, and the Ljubljana-Zagreb Railway.
Certainly, these five are the main lines, but the actual construction distances encompass much more than just these.
For instance, between the Prague-Bratislava Double-Track Railway and the Vienna-Szeged Railway, there will be branch lines connecting them. Meanwhile, the Vienna-Szeged Railway may extend westward to Salzburg. The situation is similar for the Vienna-Milan via Venice Railway, which might include various branch lines and connections.
As for the Ljubljana-Zagreb Railway, since the straight-line distance between the two cities is relatively short at just over a hundred kilometers, it wouldn’t serve as a primary mainline.
Of course, it extends in both directions, stretching westward to Villach, where it connects with the Vienna-Milan Railway, and eastward to Slavonski Brod.
The main tracks alone cover about four to five thousand kilometers, and with various additional branch lines, it easily exceeds ten thousand kilometers.
There’s no doubt that the Ministry of Railways has included some challenging routes within this plan, employing a bundled approach.
This is something that Franz has tacitly accepted. As compensation, the Austrian government will provide railway companies with some free labor, with the specifics determined by the construction conditions.
Once you’re on board, there’s no turning back. Without the labor force in the government’s hands that can be used as expendable resources, it won’t be easy for the railway companies to construct the railways.
Once the casualty rate becomes too high, even if everyone is as cunning as a fox, they won’t be able to hide it.
Just consider this: when thousands upon thousands of people die, the societal impact would be tremendous. And the compensation costs alone could make them vomit blood.
This is also one of the reasons for the slow expansion of railway networks in various European countries. Building only a few hundred kilometers of railway each year and keeping the number of casualties within a certain range is something that everyone can tolerate.
If there were too many deaths and injuries, the workers would also go on strike. Would they have to bring in slaves from overseas for construction? During this era, slaves were by no means inexpensive, and the costs of transportation were significant as well.
During this era, railway construction was an extremely brutal endeavor. Machinery was scarce, and the majority of the work had to be carried out manually, with laborers bearing heavy loads on their shoulders and backs. Hazardous sections often led to casualties, sometimes involving both workers and equipment.
Many unscrupulous railway companies in this period provided opium to workers as a daily necessity. Most laborers couldn’t endure the physical pain and relied on opium to numb themselves. However, after a few years, their health would inevitably deteriorate.
It was undeniable that these newly established Austrian railway companies were representative of such unscrupulous practices. Their hidden shareholders were a group of sanctimonious nobles who, precisely because of their noble status, had to carefully consider their reputation. While many things could be done in secret, they dared not engage in them openly.
Cleaning up their reputation would be a formidable challenge, especially when it entailed the accumulated prestige of generations past. Just observe Emperor Franz’s conduct, and you’ll gain insight. The Emperor himself avoids direct involvement, and even the House of Habsburg’s investments require the use of pseudonyms.
Given such circumstances, what could be more reassuring than employing convicts for railway construction? Even in the event of casualties, public opinion wouldn’t vehemently condemn them, at least not in this era.
Naturally, they would also designate a few managers and CEOs to shoulder the blame, accusing them of mismanagement, and that would bring the matter to a close.
All of these individuals are part of a shadowy organization, their reputations irreversibly tarnished in the eyes of the public. As long as the Austrian Empire exists, their rehabilitation remains an unattainable goal.
It shouldn’t be assumed that Europe didn’t engage in collective punishment. When it came to rebellions, even the high and mighty nobility would face dire consequences, not to mention commoners.
People would feign ignorance; ordinary citizens wouldn’t admit to having rebels in their midst. As long as they stayed quiet and law-abiding, the government would also turn a blind eye.
During times of war, when things were chaotic, it was challenging to investigate, so they simply counted them among the casualties. Otherwise, how do you think Metternich arrived at the death toll?
These individuals were already declared dead in their official records, and their families considered them deceased as well. Many of them even had funerals in advance.
Except for the initial situation when Franz suppressed the Vienna Uprising, where some rebels changed sides and received lighter sentences, rebels in the Italian and Hungarian regions were essentially considered dead.
These individuals became the best kind of laborers; once you’ve died, you can’t die again. So, they were simply cremated, and that was the end of it.
No need to pay wages, no need to provide compensation. There were no families causing trouble, no media condemnation, and no subsequent problems.
The only issue was that these people were in the government’s hands, and using them would come at a cost. While there might not have been as many additional sections as initially promised, there was also no commitment to provide free labor, was there?
After not much hesitation, everyone decided to continue with the construction. They simply placed these sections further down the priority list. After all, it saved the most significant chunk of labor costs, and it wouldn’t increase the budget by much.
In the future, they’ll operate when there’s a profit to be made, and if not, they might run a train every ten days or so. It's up to their discretion.
In Austria, as long as they control the operation schedule, the likelihood of running at a loss isn’t actually that high. Even in remote areas, they can still gather enough cargo for a train every ten days or so.
The planned routes by the Ministry of Railways connect cities, not rural areas. How could there be no business?
For less popular routes, they might not generate significant profits, but the prospect of breaking even isn’t a major concern. Even if they incur some losses, it won’t be a lot.
This highlights one of the advantages of private railway companies: their ability to adapt train schedules for both freight and passenger services based on real-time demand.
Government-operated railways face limitations in this regard. Delegating excessive authority to lower-level dispatchers could potentially lead to mismanagement and complicate oversight.
Private company owners often maintain close scrutiny of their operations, whereas the government grapples with the challenge of preventing corruption among its personnel. Naturally, Emperor Franz cannot personally oversee these matters on a day-to-day basis.
Furthermore, political factors come into play for the government. Many regions require daily railway operations to spur economic development. Although the railway system might initially operate at a deficit, it can stimulate local economies, resulting in increased tax revenue for the government.
Ultimately, whether the government incurs losses or turns a profit is a multifaceted calculation that is difficult to determine.
To avoid large-scale corruption and minimize losses, most of the government-operated railways had fixed schedules in place.
For any adjustments to schedules, numerous layers of reporting and approvals were required, and unless there were exceptional circumstances, most staff members rarely went out of their way to create complications, which would naturally drive up operational costs.
After a series of negotiations, they eventually reached a consensus, and Austria’s railway construction project was launched.
In order to recoup the costs in the shortest possible time, they employed the “three-sided approach” - conducting surveys, designing, and constructing simultaneously.
Just as railway construction was getting underway, everyone reluctantly encountered an issue: it seemed that the sand and gravel mines around the railways had all fallen into the hands of the Austrian Sand and Gravel Group.
This turn of events left many individuals deeply regretful. Prior to railway construction, sand and gravel near cities held little value, and those in remote wilderness areas were virtually ignored.
However, the landscape had now shifted. Railway construction demanded a significant quantity of sand and gravel as essential raw materials. In this era, there were no automobiles, so transportation relied on manpower or animal power. Besides sourcing locally, there were no other options.
As soon as they received this news, the management of the railway company was furious. They had originally been brought in by the shareholders to do the dirty and tiring work, and now it was their turn to step up.
Unfortunately, they didn’t get a chance to perform because, when the Austrian Sand and Gravel Group revealed their connections, everyone acted as if nothing had happened.
Or maybe not. They came prepared to make trouble, but after understanding the situation, it turned into a business negotiation. When they left, they took with them a supply contract already signed with the Austrian Sand and Gravel Group.
It was a genuinely fair and transparent transaction, with all gravel supplies being priced based on the market rate. Unless the market price was manipulated, it could be considered a fair deal.
Franz was well aware of the situation. Making a small profit was acceptable, but going too far and causing public outcry wouldn’t be in his best interest.
As a result, the market price of gravel didn’t increase significantly. It only rose by three times the original rate before the railway construction began. Of course, the railway company was a major customer and received a 20% discount.
All in all, the unit price increased by only four percent, hardly raising the prices significantly. It could definitely be considered a fair deal.
This was well within the rules, as Franz had acquired these mineral resources at a low cost as early as the first half of the year. Many of these resources had been purchased from the nobility.
In this era, information was one of the most valuable assets. Unfortunately, they weren’t well-informed, and their desire for small gains led them to admit defeat in this matter.
The only thing that reassured them was that it seemed that His Majesty the Emperor wasn’t specifically targeting the railways. Along with the sand and gravel mines, he had purchased a myriad of miscellaneous mines, except for the ones with exorbitant prices like gold and silver mines.
Even these sand and gravel mines weren’t all located along the railway lines; they were scattered throughout remote areas. It was clear they were relying on casting a wide net to make profits.
With so many sand and gravel mines, Franz couldn’t possibly send people to manage all of them. After all, the unit price for sand and gravel wasn’t very high, and the profits mainly relied on quantity.
As an emperor who valued his reputation, exploiting the workers was out of the question, and revealing that he was the secret owner of these ventures was also strictly prohibited.
At this point, they needed to find subcontractors. The aristocrats looked down on the dealings of middlemen, but weren’t there still minor nobles and small capitalists?
Franz didn’t need to worry about this. After releasing the news about subcontracting, it didn’t take long for someone to contact the person in charge of the Austrian Sand and Gravel Group.
With purchase contracts in hand and a guaranteed profitable deal, negotiations were relatively straightforward.
The subcontractors were responsible for recruiting miners, managing all activities at the mining sites, and bearing legal responsibilities for their operations.
Based on the actual circumstances, the Austrian Sand and Gravel Group extracted around 20% to 30% of the contract’s profits, leaving the rest to the subcontractors to manage freely. This included paying taxes and worker salaries. The contract would terminate once the railway construction was completed.
Whether or not they could make a profit depended on the subcontractors’ management skills. After all, the contract was signed with the Austrian Sand and Gravel Group, and they had shifted all responsibilities to the subcontractors. Even if significant problems arose, the most that could be traced back was to the Austrian Sand and Gravel Group as the front organization.
And that’s where it ends. The behind-the-scenes remain behind-the-scenes, and those who knew were smart people so nobody would open the lid.
No matter how others calculate and compete, in the blink of an eye, Franz would earn the largest share of profit.
It was estimated that by the time these railways are completed, Franz will have recouped all the money he invested upfront in buying mines, and the mines will be his biggest source of profit.
This was just the beginning. Only a portion of the sand and stone mines had been developed. There’s still a whole heap of mines waiting to be developed. At this moment, Franz realizes that mine owners are the luckiest.
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