Chapter 320: Double Standards
The Hechingen Bank is the core component of the Hechingen Consortium—its backbone, so to speak. Many of the consortium's large subsidiaries are branches off that trunk, and around those branches are countless leaves: cooperative partners, raw material suppliers, sales outlets, small companies and ventures funded by the bank, and so on. The headquarters of the Hechingen Bank is effectively the consortium's brain.
Relocating the entire consortium to East Africa is obviously impossible for the time being. East Africa can't yet support a world-class conglomerate on that scale. But moving the bank's headquarters there first is feasible; as long as communication remains smooth, it can continue directing the consortium's overall operations.
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Ernst said, "We'll settle that first, and now we discuss the second topic: textiles. That sector is under your charge, Claison, correct?"
Claison said, "Yes, Your Highness."
Ernst continued, "Why don't you fill everyone in on the textile industry's performance last year and this year?"
Claison replied, "Sure thing, Your Highness. This year, the textile industry's growth is excellent, especially with last year's war boosting our capacity significantly. We received many orders from both Germany and Austria-Hungary. Thanks to the Far East's abundant, low-cost labor and high-efficiency new factories, we eased the pressure on our European plants. We were the first among our peers to free up machines and workers, ensuring a steady, robust supply for military contracts.
The army is always the best customer. Last year alone, northern Germany expanded its troops by a million—whereas previously the North German Confederation's army was about six hundred thousand. Because of the Austro-Italian War, Austria also raised two hundred thousand troops from the rear, plus the southern German states. Between the Franco-Prussian War and the Austro-Italian War, we saw about a million soldiers across those conflicts. And a single soldier needs more than one set of clothing—plus, these wars stretched from summer into winter, so there was a huge demand for winter gear. Though in the latter stages of the wars, other factories ramped up production and took some of our business, we still made a fortune from uniforms alone, leveraging our low production costs, large capacity, and first-mover advantage.
Besides uniforms, we profited greatly from bed linens, blankets, backpacks, boots, and related goods. But of course, these don't match our most profitable areas of finance and investment."
Those last words were mostly filler—everyone knew the bank is best at finance. With about a third of the windfall from the Franco-Prussian War and the Austro-Italian War, the Hechingen Consortium's scale has essentially tripled since before the conflict.
Ernst summarized: "Textiles are a windfall sector. Currently, the consortium's textile business is split by equity into two major categories: the first is our own, wholly owned factories; the second is the American and European textile companies we've invested in (mainly to earn interest through bank loans). I'm not going to talk about the second category right now; let's focus on our own factories.
Up to now, textiles have mainly been administered through the Hechingen Daily Goods Company, the same approach we used for the food processing industry. But the textile business is now big enough to stand on its own. So, for ease of management, I've decided to separate it from Hechingen Daily Goods and establish a new textile group as a subsidiary directly under the Hechingen Bank. Any thoughts?"
Nobody really objected—they all supported the boss's decision. The textile sector had been ready to split out for quite some time.
Once the Far Eastern textile mills were completed, the Hechingen Consortium's textile production capacity reached a leading level worldwide. Along with the Nairobi textile factory currently under construction, the consortium has gained substantial clout in global textiles.
It now ranks just behind the big four (Britain, the United States, France, and the Far East), coming in fifth globally. Previously, the Kingdom of Italy held that fifth spot, but its textile industry suffered greatly from the war, losing the industrial regions of Venice and parts of Lombardy, along with the domestic market of Naples.
The reason we compare ourselves to entire countries is that the Hechingen Consortium alone not only monopolizes the textile market of the East African Kingdom, but also holds significant shares in Germany, Austria-Hungary, Russia, and the Far East.
As for the leading four—Britain, the United States, France, and the Far East—they're huge in size and population, each with enormous supplies of raw materials. The most typical example is the United States: its vast cotton plantations in the South combine with Northern industry, and domestic capacity is soaring. Britain needs no explanation: India alone is enough of an advantage. France is also an established great power, and Napoleon III was a skilled economic developer, so their textile sector remains among the top five. Then we have the Far East, which is massive; even handicraft workshops place it among the world's leading producers. In recent years, the Self-Strengthening Movement has promoted a great number of state-run factories along the coast, boosting efficiency. Yet these government-run factories suffer from rigid management and lagging equipment upgrades, falling behind British, French, and East African factories that invest in China.
Currently, the largest, most modern facility in the Far East is the Qingdao textile factory, which actually counts as East African property, because all negotiations with local officials are handled by East Africa's consulate in Qingdao.
Apart from those countries, Belgium has a decent textile industry, and Japan is growing fast. Austria-Hungary, Germany, and Russia are also doing alright. But Austria-Hungary and Germany's textile output overlaps heavily with the Hechingen Consortium's own.
Overall, the entire world in 1871 is experiencing intense prosperity. Even Paraguay—which was nearly destroyed by war—is recovering thanks to an ongoing influx of Italian immigrants. The Kingdom of Italy and France are having a harder time, but even though France's north has suffered serious losses in defeat, the south, led by Marseille, is developing well. As for northern France, things won't be calm—while Ernst is in this meeting, Parisians in the old revolutionary stronghold are once again preparing to outdo the world. Today is March 21, so there are seven days to go.
Ernst certainly understands the significance of that movement, but he doesn't pay it much mind. It's similar to pulling African tribes from primitive society straight into capitalism—they can't manage capitalism well. A slave-kingdom society is more suitable for them now. Even a feudal monarchy might be too far ahead for the average African tribe. If colonial powers abruptly throw them into a capitalist system, they'll distort it into a unique brand of "tribal capitalism."
East Africa does the same thing—never tries to reform African tribes or kingdoms. If they're conquered, they're conquered; if not, they carry on as usual. If they're willing to cooperate with East Africa, so much the better. Weapons and industrial products are for sale as long as they pay; whether they're tribal chiefs, slave masters, kings, or village leaders doesn't matter.
In short, East Africa doesn't interfere in native internal affairs. Whoever is a slave owner remains one; a chieftain remains a chieftain; a king remains a king—provided they don't oppose East Africa or challenge its interests.
Yes, from this perspective, the tribes around East Africa have it rough, and everything depends on the kingdom's goodwill. But the moment Ernst got into the colonial business, that alone proved he's not one for moral niceties.
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