Holy Roman Empire

Chapter 415: Russo-Austrian Relations Cool Down

On October 7, 1866, the Ottoman government sent an ultimatum to the Russian ambassador, demanding that the Russians hand over Constantinople within 48 hours, or it would be war.

The ultimatum did not even last for 48 hours. Upon receiving it, the Russian ambassador directly replied, “Then war it shall be!”

How could the Russians have missed the Ottoman Empire’s preparations for war when they were so obvious? As old foes, the Russian government had never relaxed its surveillance of the Ottoman Empire.

The Russian Foreign Ministry also tried to appease the Ottomans, but since they could not offer any benefits, their efforts were naturally in vain.

Seeing the mobilization of the Ottoman government, Alexander II knew that war was inevitable.

A quick glance at the map confirmed this. The Ottoman Empire had few choices; it had only three neighbors.

Geography dictated that Persia was not a good target, and even if it were defeated, there would be little to gain. The Ottoman government had no need to fight over this barren region.

Austria was not an option to attack, or rather, unreachable — the only adjoining territory was the Sinai Peninsula which they were separated by its vast deserts. Attempting an invasion of the Balkans by sea was beyond their capabilities, not even having an opportunity to land troops.

That left only Russia. Its Black Sea Fleet had been wiped out in the Near East War, and its finances were still strained after all these years, preventing it from fully recovering.

With British and French support, they could attack either the Caucasus or Constantinople. Blockading the Bosporus Strait, which was only a few hundred meters wide, would be easy, and onshore artillery could do the rest.

The pretext for war that the Ottoman government had painstakingly prepared had turned directly into a farce.

Eighty thousand Russian troops had already been assembled in Constantinople, and the total Russian troop strength in the Russian-occupied Balkans was as high as 150,000. In comparison, the Caucasus was the weak point.

Both sides had already declared war, so the fighting had to go on. This time, the Ottomans finally had a decisive numerical advantage, so they were naturally going to go for broke.

In St. Petersburg, upon receiving news of the Ottoman declaration of war, Alexander II’s brow furrowed even deeper. There were more and more enemies, and this was not a good thing.

In reality, the Russian Empire had already mobilized almost its entire war potential. Limited by transportation and production capacity, this was the maximum force they could deploy.

500,000-600,000 troops in Eastern Europe were fighting to the death with the Prussian-Polish coalition, and there was still no sign of winning the war. 50,000 troops were also deployed in the Nordic region to guard against Sweden taking advantage of the situation.

Another 70,000-80,000 troops were deployed in the Far East, but because the area they ruled was so vast, not many troops could be deployed to the battlefield.

In Central Asia, 300,000 Russian troops were fighting hard against the enemy, or rather, being beaten up. Most of these troops were hastily recruited, and it was good enough if they could hold the line.

The Balkans seemed to have plenty of troops, but in fact, the 150,000 Russian troops could at most defend Constantinople. Fortunately, the French sold their Balkan colonies to Austria, otherwise, they would have had one more potential enemy.

More troops were also needed in the Caucasus now, and no one could guarantee that the Ottoman government’s attack was not a feint. If the Caucasus was lost, the enemy could kill all the way to the Volga River Basin.

Alexander II really felt that there were not enough troops. Millions of Russian troops were fighting hard on the battlefield, and the domestic economy had been severely affected to support this war.

A war of attrition was the most painful. Unable to put in more troops, the human wave tactics could not be played out, which was a serious challenge for the Russian army.

Even worse, the European powers had already clearly seen the true state of the Russian Empire. The so-called “one million Russian troops” was just a joke, as on any battlefield the Russian government could not actually deploy forces of that size.

These changes also affected Russo-Austrian relations. The Austrians felt that the alliance was dispensable, while the Russians felt that their Austrian allies were not pulling their weight.

“With the outbreak of war with the Ottomans, our only trading partner left is Austria,” Finance Minister Reutern said in a low voice. “This year’s fiscal revenue is expected to be the lowest in 30 years, and it is possible to continue to decline next year.”

Such misfortune left the Finance Minister lacking confidence in his words. Although the responsibility was not theirs, when there was no money, the problem still fell on them.

It was fortunate that they had extracted funds from the Jews previously, otherwise the Russian government would have gone bankrupt already. Even so, Reutern still did not dare relax his vigilance.

Such windfalls cannot happen every day. According to the current situation, it won’t be long before they face a financial crisis again.

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

“This year’s financial revenue is expected to fall to about 150 million rubles. If the war continues, it may fall to 120 million rubles next year.”

Finance Minister Reutern’s voice grew smaller and smaller. It should be noted that before the outbreak of the war, the Russian government’s annual revenue had exceeded 300 million rubles, and now it has been directly halved.

Reality is so cruel. The Russian Empire is now surrounded by enemies on all sides. Except for the Arctic Ocean, there is war all the way from Eastern Europe to the Far East.

Overseas trade has shrunk sharply, and the huge profits once brought by grain exports are now gone.

Compared with the relatively small amount of export trade, the import trade volume is growing rapidly. Russia’s foreign trade is settled in gold and silver, and this change has led to a large outflow of gold and silver from the country.

The consequences of the loss of wealth have quickly been reflected in the economy, and deflation has become a social problem that the Russian government cannot avoid.

“It seems that the Austrians have made a lot of money again.”

Alexander II’s seemingly casual remark revealed the change in the relationship between Russia and Austria. If your misfortune was their gain, even the best friendship will become estranged, and the same is true for state relations.

No one responded to this remark as the friendship between Russia and Austria was still politically correct. Whether it was envy or jealousy, these could not change the fact that the Tsar could not do without Austria.

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Alexander II was right. Austria has indeed made a lot of money recently. Due to the war, the Bosporus Strait is blockaded, and Austria has naturally monopolized trade with Russia.

Sweden in Northern Europe also made a small fortune, but their national strength is limited and there are not many commodities they can export.

In addition to trade with Russia, another benefit is that Austria’s share of the agricultural products market has increased. Russian grain exports can now only be sold to Austria first and then sold to the international market after processing.

This dealt another blow to competitors. Enterprises that originally purchased Russian grain for processing now have to scramble for raw materials in the international market due to the lack of raw materials.

After Russia and the Ottomans went to war, the transaction prices in the international grain market rose by another 10% in a short period of time. This is just the beginning. As long as the supply and demand relationship is not resolved, grain prices may continue to rise.

In the middle of the 19th century, half of the world’s population was starving, and hundreds of thousands or even millions of people died of starvation each year.

Against this background, the food shortage in Europe is obviously not something that can be solved in a short time. It is easy to say that food production should be increased, but it is difficult to do so in practice.

The major colonial empires do not lack land, but the problem is that the initial investment in reclaiming land for food cultivation is not small, and the market return rate is not high enough.

If there is a surplus of grains, there is a great chance that it will rot in the fields. It’s not that people don’t need food anymore, the bigger problem is that many people can’t afford food.

In this era, only European countries have market purchasing power, other regions are self-sufficient, and those who cannot be self-sufficient can only go hungry.

Purchasing power limits production capacity. In the event of emergencies, grain prices will naturally rise in the short term. Perhaps everyone has reserves, but capitalists want to make money, and absurdly high grain prices are also one of the means.

This has little to do with Austria. No matter how international grain prices change, as the world’s largest grain exporter, domestic grain prices are very stable.

As one of the beneficiaries, Franz’s wallet has become heavier again. But this no longer aroused Franz’s interest. At the critical moment of the Industrial Revolution, it is obvious that new industries have more “prospects”.

Foreign Minister Wessenberg frowned and said, “Your Majesty, the Russian ambassador informed us that they will raise tariffs due to the war.”

Franz frowned. Raising tariffs will inevitably affect the trade volume between the two countries. But does the current Russian Empire really have the capital to raise tariffs?

Confused about the intentions of the Russian government, Franz didn’t bother to figure it out.

“Perhaps it’s time we should raise the prices of our exports too!”

The wool comes from the sheep, and the rise in tariffs leads to the rise in commodity prices. This is a normal business concept.

Perhaps the increase in tariffs can protect some Russian industries. However, now it is wartime, and the largest trade commodities between the two countries are strategic materials.

These are necessities, and the Russian government must also accept the price increase. Raising tariffs now, isn’t this just giving capitalists an excuse to raise prices?

This price increase will definitely exceed the tariff increase, and the Russian government itself will be the one who will suffer in the end.

Franz was sure that this decision was not made by Alexander II. It was like lifting a rock and hitting your own foot, and Alexander II was not such a fool.

Either it was that the Russian government was facing financial problems, prompting the bureaucrats to hastily prescribe foolish policies like quack doctors; or it was domestic capitalists pushing for it, scheming to gain greater profits.

The truth was obscured, as no one could have imagined that Alexander II’s casual remark would spark ideas among his subordinate officials, leading them to make a stupid decision that effectively ended the honeymoon period between Russia and Austria.

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

This decision did indeed protect many domestic industries. On the surface, it appeared to be a good policy. In the early stages of industrial development, protecting national industries would benefit domestic industrial growth.

However, the benefits never materialized, and the negative consequences occurred first. The Russian government would soon pay a painful price for this.

Because the increased tariffs caused prices of imported Austrian goods to rise, to save money, the Tsarist bureaucrats chose to procure supplies from domestic enterprises instead — a pitfall was about to be formed.