Chapter 586: Persuading for a Joint Venture
"Uncle Karl, if you're interested in supporting the future construction of the Northern Railway, I actually have a solution that could benefit both sides. It would avoid delaying East Africa's other construction projects while allowing the extension of the Northern Railway to begin early, helping to establish a solid connection between East Africa and the Chad colony, and boosting Sigmaringen's colonial ventures," Ernst said.
Prince Karl was indeed intrigued. He asked, "And what exactly is your solution?"
Ernst, without hesitation, replied, "Uncle Karl, as you know, railway construction is not technically difficult. It all comes down to funding. Just like in the past, in the U.S. and Germany, capitalists frantically built railways and flooded the market with hot money, which ultimately caused the economic crisis of 1873."
"That much I know. But the crisis has passed, and the railway market is now back on track. Germany's development has become more gradual. Before I came to East Africa, the crisis had already eased, and society was progressing rapidly."
In reality, the global economy was still in recession—far from its pre-crisis prosperity. But society never stands still. While Germany's pace had slowed, compared to most countries of the time, its outlook remained optimistic.
Veterans like Prince Karl understood this well. Though the economy once surged ahead, they knew it wasn't sustainable.
Ernst continued, "So if East Africa wants to build this railway ahead of schedule, it's just a matter of funding. But in recent years, the government's expenditures have been massive, and we don't have the surplus to fund two railway projects at once."
Ernst wasn't wrong. East Africa's treasury was never truly "full." No government ever feels like it has enough money.
Still, East Africa's fiscal revenue was stronger than most nations—thanks to a population of 50 million, which generated substantial wealth. Tax revenue alone gave the government a solid income, and state-owned enterprises added even more.
In truth, East Africa could afford to build two railways. But Ernst preferred to spend wisely. Right now, the Azande Plateau—the proposed endpoint of the Northern Railway extension—held little value. It was better to use those resources to expand branch lines in Matabele Province and maximize the value of its mineral resources by developing inland industry.
Ernst was obsessed with developing both the interior and the coast evenly. In his past life, the Far East had failed at this, but East Africa was different.
First, the inland climate was better than the coast. In tropical countries like East Africa, cooler highlands were more desirable, while temperate nations preferred warmth. This explained the southward migration in the U.S., Russia, and China.
Second, East Africa's interior had far more resources—especially in Matabele and Hechingen Provinces. These two regions could support most industrial needs—only lacking oil.
But East Africa's two most important oil regions—Nile Province and North Great Lakes Province (Uganda)—were both inland.
In short, the interior's development potential was extremely high. Coastal areas had an edge in maritime transport, but that alone didn't outweigh the interior's advantages.
Of course, Prince Karl wasn't aware of all this. He only saw the surface. Ernst and a handful of top officials knew the full picture.
"So you're saying, if funding is secured, the Northern Railway extension could begin ahead of schedule?"
Ernst nodded. "Exactly. If Sigmaringen can invest part of the cost, then we can tighten our belts and make the Northern Railway extension happen sooner."
That put Prince Karl in a tough spot. Building 1,000+ kilometers of railway might be no big deal for a major power like East Africa—but for tiny Sigmaringen, it was daunting.
Just building up the Chad colony had already cost a fortune. Yes, they gained nearly two million square kilometers of land—a great deal—but rail investment had no guaranteed return.
So Prince Karl hesitated. "Ernst, you know that Sigmaringen is like Hechingen once was. Though a noble house, we're not wealthy."
That was true. Houses like Hechingen and Sigmaringen were military aristocracy—rich in prestige and connections, not money. Capitalists had deeper pockets.
"Uncle Karl, of course Sigmaringen can't provide all the funding. But you still have Romania. Romania may be small, but as a country, it's more powerful than a single principality."
Ernst was targeting King Carol I. Romania was weak now, but in Ernst's past life, it rose after annexing part of Hungary.
Even so, Romania was far stronger than tiny Sigmaringen. There were plenty of wealthy elites. Carol I had earned national recognition by leading Romania to independence from the Ottomans.
"But Romania is ruled by your cousin. We don't control the kingdom's wealth," said Prince Karl.
"My point is to issue bonds—in the name of the Romanian royal house. Sigmaringen cannot develop Chad alone. Romania's backing is essential."
Ernst knew this firsthand. East Africa would've gone bankrupt without the financial muscle of the Hechingen Consortium.
"And how do we repay those bonds?" asked Prince Karl.
"Simple. Stop thinking in old ways. You now hold nearly two million square kilometers of land. That land surely contains valuable mineral resources. Use them to repay the debt. That's also why I want you to invest in the Northern Railway. To extract those minerals, you need trains. The sooner you finish the line, the sooner you profit—and attract investors to build your colony."
Prince Karl listened carefully. The more he thought about it, the more it made sense. The Northern Railway was crucial to Sigmaringen—and investing in it might be more than worth the cost.
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