Chapter 124: The Austro-Spanish Alliance

While Gao Da was traveling and enjoying the scenery, the Spanish government was not idle. Considering that Spain's reforms urgently required support from countries with a certain industrial and economic foundation, the Spanish government engaged in long-term consultations with the Austro-Hungarian government, eventually signing a brand-new "Austro-Hungarian-Spanish Alliance Treaty."

However, this alliance was not a military alliance in the true sense, but rather more of an economic and diplomatic cooperative alliance.

This alliance treaty greatly strengthened economic exchanges between Spain and the Austro-Hungarian Empire. Spain's vast mineral resources and other materials could be conveniently transported to the Austro-Hungarian Empire by sea, while the Austro-Hungarian Empire's grain and other industrial products could also reach Spain via sea routes.

In addition to strengthening cooperation in the economic sphere, both sides also held consultations on tariff issues and agreed to jointly lower tariffs to enhance economic exchanges between the two countries.

What Spain was more interested in, naturally, was the Austro-Hungarian Empire's relatively advanced industrial and other technological expertise.

Most of the equipment for Spain's industrial development was imported from the Austro-Hungarian Empire and Italy, with a small portion imported from the German Empire; this was also the reason for Spain's relatively rapid industrial development.

After signing the alliance treaty with the Austro-Hungarian Empire, the Spanish government also signed a similar alliance treaty with the Italian government.

Although Italy's overall strength was not comparable to that of the Austro-Hungarian Empire, it still possessed a certain scale in terms of industry and economy; in any case, as long as it could provide help to Spain, that was enough.

With the assistance of Italy and the Austro-Hungarian Empire, the speed of Spain's industrial development was quite fast. Railways and roads were being built everywhere, and various types of factories, led by steel mills and chemical plants, were constantly being constructed, giving the whole country a prosperous appearance.

However, while developing rapidly, the speed of Spain's overall construction was also kept within a relatively reasonable range.

There was no helping it; the name of the 1873 economic crisis was too resounding, and its impact on the world economy was second only to the Great Depression that began in 1929.

Gao Da still had an impression of the economic crisis about to occur next year, so naturally, he had to ensure as much as possible that Spain's development remained within a controllable range, rather than developing recklessly without limits.

Speaking of this upcoming economic crisis, the real reason was the frantic construction of railways by various countries, which constantly stimulated the growth of domestic industry and the economy.

As everyone knows, when the scale of industrial production far exceeds consumption demand, an economic crisis will inevitably break out.

How exaggerated was the development of various countries during this period? Since the end of the American Civil War, the entire country had entered a new wave of industrial development.

In the seven years from 1865 to 1872, the total mileage of railways started in the United States exceeded 31, 92 miles, which is over 50, 00 kilometers of railway.

This was already close to 10 times the scale of Spain's existing railways, and the fact that the Americans built such a massive amount of railway mileage in just seven years was enough to show how exaggerated the development of American industry was during this period.

It was precisely under this wave of railway construction that the United States' pig iron production grew from 755, 00 tons in 1865 to over 2 million tons, and coal production grew from 22. 59 million tons in 1865 to nearly 50 million tons.

Spain's current industrial scale could not even catch up to a fraction of the United States', and the fact that American industry was still increasing at an extremely exaggerated speed was precisely the reason for the outbreak of the economic crisis.

So the question arises: why would the American economic crisis affect the whole world?

First, with the development of colonialism and technology, the economic ties between countries around the world were becoming increasingly close.

Second, more than half of all the funds for American railway construction came from investments by Britain, France, and other European countries, which was precisely the reason why the American railway crisis affected the whole world.

Moreover, the situation of overproduction did not only appear in the United States; this phenomenon also existed in other European countries.

Since its victory in the Franco-Prussian War, Germany had entered a period of rapid industrial and economic development. After acquiring Alsace and Lorraine, France's extremely important industrial and mineral regions, German industry already had a very solid foundation.

Coupled with the 5 billion francs that the French almost gave to Germany for free, German industry had sufficient "angel" startup capital.

Under such circumstances, it would be a strange thing if German industry did not develop at a volcanic speed.

And the British were not far behind. As the most powerful country in the world, Britain's industrial development speed was also relatively fast. At this point in time, Britain was still the world's most powerful industrial nation; it would take a long time for the United States and Germany to catch up to and surpass Britain.

It could be said that, except for France, which had lost industrial and mineral regions and needed to pay a large amount of reparations after its defeat in the Franco-Prussian War, other European countries were basically in the midst of rapid development.

This also led to the European economy beginning a period of prosperity from the end of 1871, and 1872 was even more incomparably prosperous.

This economic crisis had the potential to affect Spain, and Gao Da maintained a high degree of attention regarding this.

Spain also had a stock exchange. The Madrid Stock Exchange was founded in 1831 and had a history of over 40 years by now.

However, compared to the exchanges in Vienna and London, the scale and influence of the Madrid Stock Exchange were not large, which could be considered good news.

After all, the larger the stock exchange, the greater the impact it would suffer during an economic crisis. Don't look at the massive amounts of capital flowing in and out of the London and Vienna stock exchanges every day; once the economic crisis broke out, the number of bankrupt enterprises could reach into the thousands.

This economic crisis that broke out in 1873 was also considered a sign of capitalism shifting from free development to monopoly management. After this economic crisis, a large number of small and medium-sized private enterprises faced bankruptcy and were eventually acquired by larger enterprises.

One monopoly giant after another emerged during this economic crisis, and the capital of various countries shifted from a large amount of small and medium-sized capital to large capital, and began to have a more profound influence on the governments of various countries.

For Gao Da, how to gain sufficient benefits from this economic crisis was a problem that needed to be pondered.

The good news was that for Spain, whose industrial and economic scale was not large, the impact of this economic crisis would ultimately be limited.

The main outbreak point of the economic crisis was in the United States, and those affected were countries with relatively strong economies and industries, such as Britain and the Austro-Hungarian Empire.

Spain did not need to worry too much about the impact of the economic crisis; instead, it could take advantage of the opportunities brought by this economic crisis to acquire some important foreign companies and enterprises.

Although these companies went bankrupt, the technology and employees possessed by these companies were real and existed.

As long as these factories and enterprises that went bankrupt during the economic crisis could be acquired, and some of the employees who lost their jobs could be enticed to come to Spain, it would be a very good supplement for Spain's technical talent.

At the same time, the means of production and some equipment from these companies and enterprises could also accelerate Spain's industrial development.

For the royal family, acquiring these bankrupt enterprises at a low price and reorganizing them would allow for the formation of giants in various industries.

First update, seeking support!

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(End of chapter)