Holy Roman Empire

In the gold standard era, lacking sufficient gold reserves was absolutely not an option. Even though Britain, France, and Austria were allies, if France’s currency reform ran into problems, the first to take advantage would be Britain and Austria.

It’s not that other countries were friendly with France; they simply didn’t have the strength to challenge it. In a world where the one with the biggest fist has the greatest say and where power is defined by the range of cannons, having the biggest fist had its perks.

Napoleon IV asked in confusion, “If the price of gold remains high, wouldn’t it affect Britain and Austria too?”

Both the British pound and the Austrian guilder were on the gold standard. If gold prices rose, the value of the pound and the guilder would also increase, which could impact British and Austrian export trade.

Finance Minister Alain answered helplessly, “Your Majesty, the primary currencies used in international trade are the British pound and the Austrian guilder. The impact of rising gold prices on them is minimal.

We, on the other hand, are at a greater disadvantage. Due to currency fluctuations, more and more capitalists are choosing to hold pounds and guilders, and the market share of the franc continues to decline.”

This was the power of currency hegemony. While the pound and the guilder were competitors, when it came to maintaining the gold standard, the interests of Britain and Austria aligned.

Besides market share, Britain and Austria also occupy the vast majority of the international import and export trade market, forcing other countries to hold large amounts of pounds and guilders.

This was similar to the U.S. dollar’s dominance in the modern world. Even though holding large amounts of dollars meant being taken advantage of, countries had no choice but to do so to participate in international trade.

Unlike other countries, which could make concessions on currency issues and seek British and Austrian support to complete their gold standard reforms, France had no choice but to hold its ground and fight on its own.

This wasn’t just a matter of pride, it also involved international standing and significant interests. If the French government backed down, the world wouldn’t be dominated by a balance of three great powers, but by Britain and Austria splitting the stage.

Without a doubt, the French government couldn’t afford to compromise on this issue, or else the French public would label them as traitors.

After pacing for a few moments, Napoleon IV declared fiercely, “Since we can’t buy enough gold from the international market, let’s target the countries still on the bimetallic standard. Sell silver in exchange for gold. If they want to drive up gold prices, then we’ll join the game. Right now, the gold-to-silver exchange rate is only 1:23.5, so push it to 1:30, or even 1:40.

If gold prices against silver skyrocket, the value of the pound and guilder will also surge. Once it exceeds the market’s tolerance, they’ll have no choice but to sell gold to stabilize their currencies.”

This was a strategy of mutual destruction. A sudden surge in currency value would undoubtedly affect export trade. Britain and Austria would suffer, and so would bimetallic France.

Apart from a few financial capitalists who could profit, there wouldn’t be any real winners. All participants in international trade would be victims of currency instability.

It must be said that Napoleon IV was ruthless enough. If he couldn’t join the game, he’d flip the table so no one could play happily.

Finance Minister Alain urgently tried to stop him, “Your Majesty, we mustn’t do this. We haven’t completed our currency reform yet. A skyrocketing gold-silver exchange rate would first impact the franc.

If Britain and Austria refuse to compromise and let the market run its course, the franc’s credit system would collapse first, and all nations that haven’t finished their gold standard reforms would suffer major losses.

For Britain and Austria, short-term economic losses in exchange for establishing the gold standard system would be a price they are willing to pay.”

This isn’t yet an era of free trade, and as the world’s two largest colonial empires, Britain and Austria’s biggest trading partners are their own colonies.

No matter how much the currency appreciation impacts the market, as long as their internal circulation systems remain stable, Britain and Austria can withstand it.

Moreover, quite a few countries have already completed their gold standard reforms, so their currencies would move in sync. After canceling out each other’s fluctuations, trade wouldn’t be affected much.

On the other hand, countries with a bimetallic standard would fare much worse. Rapid exchange rate fluctuations would render many import-export businesses unprofitable, and some might even suffer losses just to keep going.

Foreign Minister Montreux echoed this sentiment, “Alain is right. If we follow suit and drive up gold prices, we’ll be falling into the enemy’s trap. While we may lack sufficient gold reserves, we can still find ways to obtain it from other countries. Many nations have not yet completed their gold standard reforms, so we can definitely exchange enough gold from them.”

Napoleon IV nodded thoughtfully in agreement. If it meant solving the problem, he didn’t care which method was used.

In the original timeline, when European countries carried out their gold standard reforms, a lack of reserves led to external plundering as the solution.

Now, history seems to be back on its original track. The long-quiet French Empire is about to show its fangs once again.

...

The French aren’t facing a huge gold shortfall, and they can solve the issue through external plundering. However, the rest of Europe isn’t so fortunate.

Not every country has the strength to rely on colonial exploitation to resolve its problems. Many nations are forced to compromise with Britain and Austria to gain their support for currency reforms.

At the Vienna Palace, Franz found the favorable situation before him almost unreal. The British agreeing to share currency dominance with Austria—could that be a joke?

John Bull’s inaction troubled Franz even more. He was convinced that the British must be plotting something sinister, though it had yet to be uncovered.

Paranoia? Maybe. But staying vigilant never hurts. Being prepared and acting in vain is far better than being caught off guard and suffering later.

...

Winter gave way to spring, and the earth was full of vitality. Every year around this time, Franz would take his family on a spring outing.

This year was no exception, but the destination was a bit special. Jerusalem, an ancient and legendary city, was the endpoint of this trip.

Because the destination was so significant, there were more participants than usual. For example, the elderly Archduke Karl, Archduchess Sophie, his retired uncle, Ferdinand I, and his wife also joined the trip.

This added a lot of pressure for Franz. These elderly relatives were not young anymore, and if anything went wrong during the journey, he would have to turn back to arrange funerals.

Convincing them to stay behind was impossible, as they were real devout believers. As his uncle Ferdinand I said, “My greatest wish is to plant the Habsburg flag in Jerusalem.”

Well, many Habsburg emperors before him had said the same thing, but they weren’t lucky enough to succeed, having faced the Ottoman Empire at its peak.

Now the opportunity had come, and none of them could hold back. Even Franz’s usually calm and quiet father expressed that if he happened to die in Jerusalem, it would be fitting to rest in the presence of God.

If Franz hadn’t intervened, they would have gone over right after the ceasefire agreement was signed. Dealing with a group of religious fanatics left Franz feeling helpless.

Since Austria had recaptured Jerusalem, the number of European pilgrims traveling there had surged. Not only was the city itself crowded, but tents were also being set up outside the city.

To solve the accommodation problem for the pilgrims, the Jerusalem City Management Committee was forced to change its original plan to completely rebuild the city. Instead, they repaired and renovated the existing buildings.

Most of the buildings were turned into inns and hotels, quickly renovated and put into operation.

Before Franz could fully react, Jerusalem had already become Austria’s most famous tourist city. There was no need for any promotion, planning, or advertising—it all seemed unnecessary.

The main reason for Franz’s trip to Jerusalem for his coronation was to make a grand statement, so the ceremony was bound to be elaborate.

To prepare for this grand ceremony, the Austrian government has also invested heavily. A vast amount of manpower and resources were thrown into the effort, and Franz estimated the final cost could reach tens of millions of guilders.

But don’t think of it as expensive as this investment was worthwhile. The recapture of Jerusalem significantly solidified Austria’s rule. In the face of this positive news, various messy ideologies and movements lost their foothold.

This wasn’t just a domestic effect. Austria’s international prestige also skyrocketed. The increase in soft power couldn’t be measured in monetary terms.

On April 3, 1875, Franz set off with his family from Vienna, beginning their pilgrimage.

But no sooner had they boarded the train that problems started cropping up. First, his uncle Ferdinand I had a health episode. Well, that was a minor issue. He had episodes daily, and everyone was used to it by now.

Then, his mother, Archduchess Sophie, fainted. After a chaotic scramble, the doctor’s diagnosis was that the train was moving too fast. She was experiencing motion sickness.

There was nothing to be done but to slow down! Franz’s private train was the fastest of its time, theoretically capable of reaching speeds of 80 kilometers per hour.

Of course, that was only in theory. Railways weren’t all flat. When passing through mountains and bends, it certainly couldn’t run that fast. The average speed was around 40-50 kilometers per hour, which was considered fast for the era.

After slowing down, things improved a lot. What was supposed to be a one-day journey ended up taking until the next day to reach Venice, delaying transport schedules as well.

This was a minor issue, as it only meant the Vienna-to-Venice rail line was closed for an extra day so there were no major losses. But the real test began in Venice. Besides Franz himself, who was prone to seasickness, he also had a family full of elderly, women, and children to worry about.

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