Date: July 5th, 1905 – Belgrade, Kingdom of Serbia
The early summer weeks settled into a pattern for Petar. The austerity measures remained a contentious topic in the capital's coffee houses and the corridors of the Skupština. However, Prime Minister Pašić, with his decades of political experience, managed to contain the overt discontent, channeling it into parliamentary debates that, for now, led nowhere conclusive. Under General Putnik's stern guidance, the army was abuzz with preparations for the eventual arrival of the first Maxim machine guns and the establishment of the new training school at Ćuprija. Reports on the improved boot situation were slowly, incrementally positive.
For Petar, however, this period was one of active, if quiet, strategic planning. While the cogs of military modernization grew slowly, his focus increasingly turned toward the dire need for economic revitalization. Austerity could fund immediate security needs, but it could not build an empire or sustain a populace's loyalty indefinitely. He eagerly awaited Milan Stojadinović's proposal, hoping the young economist's ideas could offer a path beyond mere belt-tightening.
Towards the end of June, Colonel Mišić informed him that Gospodin Stojadinović had completed his confidential report. In an informal setting, another discreet evening meeting was arranged in Petar's private apartments to encourage frank discussion. Milan Stojadinović arrived looking less nervous than on their first encounter, though still with an air of respectful deference. He carried a meticulously bound document, thicker than Petar had anticipated.
"Your Majesty," Stojadinović said after the initial greetings, "I have endeavored to address the task you set me with the thoroughness it deserves."
"I have no doubt you have, Gospodin Stojadinović," Petar replied, gesturing for him to present his findings. "You chose to focus on a strategy for developing a specific domestic industry. Which one, and what are your conclusions?"
Stojadinović had chosen to focus on a comprehensive plan for revitalizing and expanding Serbia's nascent mining sector, specifically targeting coal and iron ore, with a long-term view towards establishing a domestic steel industry. His proposal was titled: "Fueling the Future: A Strategy for National Resource Development and Industrial Self-Sufficiency."
As Stojadinović began to outline his plan, Petar listened with growing absorption. The young economist didn't just rehash known facts about Serbia's mineral deposits; he presented a phased strategy. Phase one involved a significant state-sponsored geological survey program, employing foreign experts initially but also establishing a Serbian School of Mines and Geology to train domestic talent. This survey would accurately map and quantify reserves, moving beyond the vague estimations Petar had previously encountered. Phase two proposed the modernization and expansion of existing key mines, like the Majdanpek copper mine (which also had iron and pyrite deposits) and several promising coal seams in eastern Serbia. This would involve attracting foreign investment, but Stojadinović proposed a model of joint ventures where the Serbian state retained majority ownership or significant profit-sharing and insisted on technology transfer and the employment and training of Serbian workers and engineers. Phase three, the most ambitious, outlined the gradual development of a domestic iron and steel industry. This would start with improving smelting techniques for existing, smaller operations, then move towards constructing a modern, integrated steel mill strategically located to access coal, iron ore, and transportation links. Perhaps, Stojadinović suggested, along the Danube or Morava rivers.
"The key, Your Majesty," Stojadinović explained, his earlier nervousness now replaced by the passion of his conviction, "is not merely to extract raw materials for export, as we largely do now. That keeps us dependent and poor. We must aim to add value within Serbia. Processing our ores, eventually producing our steel, will create skilled jobs, reduce our reliance on expensive imports, provide materials for our industries – including defense – and ultimately generate far greater national wealth."
He also addressed funding. He acknowledged the kingdom's tight finances but suggested several innovative approaches beyond general taxation:
Targeted Resource Development Bonds: Specifically for funding the geological surveys and initial mine modernizations, with returns potentially linked to the future output of those mines. A National Industrial Development Fund: Seeded by the state, perhaps through a small percentage of existing state monopoly profits or specific export duties on raw materials (thus incentivizing domestic processing), which could then offer loans or take equity stakes in promising industrial ventures. Proactive pursuit of foreign direct investment: Not passively waiting for offers, but actively marketing Serbia's potential to specific industrial concerns in France, Belgium, Britain, or even America, offering carefully structured concessions that protected Serbian interests while providing attractive returns for investors.
Peter listened intently, occasionally interrupting with sharp questions that drew upon Alex Volkov's engineering knowledge and understanding of industrial processes. He queried Stojadinović on the types of mining technology required, the logistical challenges of transporting ore and coal in a country with limited rail infrastructure, the availability of skilled labor, and the potential environmental impact – a concern far ahead of its time in 1905 Serbia, but one Alex's 21st-century sensibilities brought to mind.
Stojadinović answered each question thoughtfully. He admitted the challenges were immense and that his plan was for the medium to long term, requiring sustained political will and significant investment. But he argued convincingly that the alternative—continued stagnation and dependency—was far worse.
"This is… a remarkably comprehensive and ambitious vision, Gospodin Stojadinović," Petar said when the presentation concluded. He was genuinely impressed. The plan was audacious but grounded in a logical progression and offered concrete, if challenging, steps. It was precisely the kind of forward-thinking blueprint he had hoped for. "You have dedicated immense effort to this."
"I believe in Serbia's potential, Your Majesty," Stojadinović replied.
Peter spent several minutes in silence, reviewing key sections of the written report Stojadinović had provided. The detail was impressive, from estimated costs for geological surveys to projections of increased revenue from modernized mines. "The establishment of a Serbian School of Mines and Geology," Petar mused aloud. "That is a crucial element. We need experts, our engineers, not to be perpetually reliant on foreign knowledge." Alex Volkov, the engineer, strongly resonated with this. "And your funding proposals," Petar continued, "particularly the Resource Development Bonds and the National Industrial Development Fund, are innovative. They offer a way to mobilize capital for these productive enterprises, perhaps bypassing some general budgetary constraints Minister Paču rightly guards."
He looked directly at Stojadinović. "This is not a plan that can be implemented overnight, nor by a single ministry operating in isolation. It requires a coordinated national effort." He made a decision. "Gospodin Stojadinović, I will not let this excellent work gather dust as your previous memoranda did. Could you take this further? I am considering the formation of a small, temporary 'Royal Commission for National Resource Development.' Its initial mandate will be to conduct a more detailed feasibility study of Phase One of your plan – the geological surveys and the immediate modernization of one or two key existing mines. It will also be tasked with drafting a charter for the proposed Serbian School of Mines and Geology and the National Industrial Development Fund."
Stojadinović's eyes widened. "A Royal Commission, Your Majesty?"
"Indeed," Petar affirmed. "It would operate directly under my purview initially to cut through inter-ministerial rivalries and bureaucratic delays. I would like you to serve as its secretary and principal researcher. You would be given a small staff, access to relevant government departments, and a modest budget for initial operations. Your task would be to refine these proposals into concrete, actionable plans that can be presented to the government for formal approval and funding."
This was a significant step. Peter was essentially creating a parallel structure to bypass the inertia of the existing system and give a talented young man a direct channel to influence policy. It was a gamble, as it might cause resentment among his established ministers, particularly Paču if he saw it as an end-run around his fiscal authority. But Petar felt it was necessary if he was to achieve the rapid progress he desired.
"Your Majesty," Stojadinović said, his voice filled with emotion. "I… I am overwhelmed. I accept this responsibility with the greatest humility and dedication. I will devote all my energies to it."
"I expect nothing less," Petar said. "Colonel Mišić will assist you with the administrative formalities of establishing this commission. I want your first progress report within three months. Focus initially on selecting the most promising areas for the new geological surveys and identifying one existing mine that offers the best potential for rapid modernization and a visible return on investment. We need some early successes to build momentum and justify further expenditure."
After Stojadinović departed, filled with a potent mixture of excitement and the weight of his new responsibilities, Petar felt a sense of strategic satisfaction. He was not just reacting to events anymore; he was beginning to set his agenda to lay down the long-term foundations for the Serbia he envisioned. The army was being slowly upgraded, and now, a blueprint for economic self-sufficiency and industrial growth was taking shape.
His thoughts briefly touched upon the shadowy presence of the Black Hand. Mišić continued to provide discreet, infrequent updates. The organization remained a potent, unpredictable force. Peter knew that a stronger economy, a more prosperous and united populace, and an army loyal to the state and its legitimate institutions rather than clandestine societies were the best long-term counters to such internal threats. Stojadinović's work, if successful, could contribute significantly to that broader goal.
The path was still incredibly challenging. There would be resistance, setbacks, and the ever-present threat from larger, predatory powers. But tonight, as he looked at Stojadinović's meticulously drafted "Blueprints for Prosperity," Petar allowed himself a moment of cautious optimism. He was gathering his tools and his team. The forging of an empire, brick by painstaking brick, had truly begun.