Chapter 632: Deterrence
The wooden rail line's potential didn't end at transport fees and wages for laborers. For a small state like Baden, with a population of just over 2 million, the projected revenue was enough to significantly elevate the standard of living across the entire nation.
Karl Friedrich struggled to maintain his composure, forcing a polite smile.
"Your Highness, the cost of building such a wooden rail line… You know our financial situation. I'm afraid we can't possibly afford such an investment."
"There's no need to worry," Joseph replied, raising his glass in a gesture of reassurance.
"The Bank of France will provide you with a 900,000-franc loan to cover the construction costs. All you need to supply is the labor."
Karl Friedrich's face lit up with excitement. Raising his glass to clink with Joseph's, he exclaimed:
"To Franco-Badenese friendship! I can't express my gratitude enough, Your Highness. You will always be my truest friend. May God bless you!"
Joseph took a sip of wine, then placed his glass down with a serious expression.
"Your Majesty, once this vital trade route is established, I fear it may attract the envy of certain nations. They might even resort to war to disrupt it."
Karl Friedrich froze, confused. Baden was bordered by France, Württemberg, and Austria—France and Württemberg were allies, and Austria had been conciliatory to win the favor of the German states. Who would want to attack Baden?
Before he could voice his thoughts, Joseph continued resolutely:
"To protect this trade route, our two nations must conduct a joint military exercise to prepare for potential invaders."
"A joint… military exercise?" Karl Friedrich hesitated, unfamiliar with the concept, though he could roughly infer its meaning.
Joseph nodded.
"This concerns our 900,000-franc investment. We must demonstrate our unwavering commitment to defending trade routes."
The message was clear: no military exercise, no loan, and no trade hub for Baden.
Karl Friedrich hesitated, then asked cautiously:
"Our troops would only be conducting exercises, not crossing borders? And the French forces would withdraw once the exercise is over?"
"Precisely. We can draft a joint exercise agreement to include these terms."
Relieved, Karl Friedrich finally succumbed to the allure of immense benefits and raised his glass once more.
"To the success of our joint military exercise!"
Hesse-Darmstadt, Marburg
In a stately meeting room, Ernst Werner von Lützke, Hesse-Darmstadt's chief foreign advisor, scrutinized Bailly with the shrewdness of a seasoned merchant.
"Ten million francs… I must admit, it's quite tempting."
Bailly added with a smile:
"And with an interest rate of only 3%."
Lützke leaned back, shaking his head.
"However, no amount of loans can resolve the severe trade imbalance we face with France.
"Loans eventually run out, and repayment follows. After that, our trade deficit will continue to grow."
Bailly frowned slightly. Negotiations with Württemberg and Augsburg had gone smoothly, but dealing with Hesse-Darmstadt, backed by the North German Trade Zone, was proving far more challenging.
Fortunately, Joseph had prepared Bailly for various scenarios before his departure. Following their contingency plan, Bailly said:
"You could use this loan to stimulate domestic industries."
"Oh?" Lützke raised an eyebrow. "Care to elaborate?"
"For instance, you could subsidize industries with potential," Bailly suggested.
"Providing financial support to workshop owners would enable them to improve production techniques, purchase better equipment, and even raise workers' wages to boost productivity.
"Just a few years ago, our paper and steel industries were similarly uncompetitive. Strategic subsidies helped elevate them to their current positions."
Lützke nodded instinctively, the logic seeming sound.
What Bailly didn't mention was the risk: direct subsidies often failed to foster genuine industrial advancement. Instead, businesses could grow dependent on government handouts, only to collapse once subsidies were withdrawn.
Bailly continued confidently:
"For instance, you could allocate 1.5 million francs to purchase hundreds of steam engines from the French United Steam Engine Company. I could even secure a discount for you.
"These machines would revolutionize your wool textile industry."
Lützke wavered, intrigued. He knew Britain and France's textile industries had slashed costs with steam power. Perhaps Hesse could follow suit.
Nodding thoughtfully, he said:
"I'll report this proposal to the Grand Duke."
March 10, 1792
The signatories of the Rhine-Seine Treaty convened at Karlsruhe Palace to vote on a pivotal proposal with the potential to reshape the trade landscape.
Wilberforce, Britain's representative, stood by a tall window, conversing quietly with Austrian delegate Count Reinfels.
The British Undersecretary of Finance, mired in controversy over his involvement in inciting slave revolts, had taken this assignment to temporarily escape the storm at home.
"You needn't worry about France's maneuvering," Wilberforce assured with a confident smile.
"We can match those loans. Even if our amounts are slightly smaller, the prospect of renegotiating the trade agreement should sway these nations to our side."
Count Reinfels frowned.
"Baden and Württemberg will undoubtedly side with France. Augsburg and Hesse-Darmstadt must both vote in favor to ensure Britain's entry into the treaty."
"Tomorrow, I'll meet their representatives again to ensure—"
A distant boom interrupted him, followed by a series of rumbling explosions.
Wilberforce exchanged a puzzled look with Reinfels.
"Cannons?"
Summoning a palace guard, Reinfels demanded:
"What's happening outside?"
Before the guard could answer, a Baden court official approached with a deferential smile.
"Gentlemen, please don't worry. It's merely the 'Resolute Will' joint military exercise."
North Wing of Karlsruhe Palace
In another chamber, Hesse-Darmstadt's representative, Lützke, raised an eyebrow.
"A joint military exercise?"
The same court official explained warmly:
"Yes, a joint exercise between Baden and France to safeguard trade routes. Over 50,000 troops are participating.
"If you're interested, the northern hills offer a fantastic vantage point."
After a brief hesitation, Lützke instructed his entourage to prepare a carriage and headed to the northern outskirts of Karlsruhe.
As the carriage advanced, the smell of gunpowder grew more pronounced. When they reached open fields devoid of homes, a cacophony of drumbeats echoed ahead.
The driver halted abruptly as a long line of soldiers in pristine white uniforms, armed with August-pattern caplock rifles, marched past.
Interspersed with supply wagons and flanked by cavalry relaying commands, the column stretched endlessly, forcing Lützke's party to wait for over an hour. His carriage seemed like a mere leaf in a vast, surging tide of troops.
Finally, as the procession faded into the distance, a Baden officer approached the carriage. After verifying Lützke's identity, he pointed toward a nearby hill.
"If you're interested in the exercise, that hill offers an excellent view."
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