Chapter 776: Armenia |
With the internal issues of the Anti-Ottoman Coalition resolved, only one final matter remained—finding a king for the newly independent Armenians.
The Kingdom of Armenia had been extinct for over a thousand years. Its former royal house had long vanished into the annals of history, leaving no legitimate heirs to claim the throne.
Situated between Russia and Austria, this fledgling nation was destined for a difficult future.
If Russian-Austrian relations remained amicable, there would be no problem. But should tensions rise between the two powers, Armenia would inevitably be forced to take sides.
Franz had no interest in such a precarious position. But while the House of Habsburg might decline the offer, that did not mean other royal families would do the same.
Europe had no shortage of deposed or declining noble houses.
For core members of these families, their prestigious lineage still granted them access to high society. With those connections, at worst, they could still live as wealthy gentlemen.
But for those in the side branches, things were much more difficult. Their fallen houses had no surplus resources to support them, leaving them to fend for themselves.
The lucky ones might still hold onto a hollow title and get by. The unlucky ones simply faded into obscurity, indistinguishable from commoners.
Was this a political hot potato?
Perhaps, but what was there to fear? Even a single day as king was still a day spent as royalty.
As long as European society recognized their reign, it would be an instant leap in social standing, one that could elevate them to the very top.
Ever since the House of Habsburg announced its withdrawal to the Armenian throne’s claim, the downside of having too many relatives became apparent. The Vienna Palace grew livelier than ever, with an endless stream of people arriving to leverage their family connections.
Foreign Minister Wessenberg reported, “Your Majesty, the Russians want to support Grand Duke Vladimir Alexandrovich as the King of Armenia.
The Russian government has already begun lobbying the Armenian leadership, offering them terms they can hardly refuse. As long as we do not oppose it, the election results are essentially decided.”
Franz smiled slightly and asked, “Oh? Are the Russians willing to give up Batumi?”
(Note: Batumi is now a port city in southern Georgia.)
As a buffer state between Russia and Austria, the newly formed Kingdom of Armenia had a different territorial layout than in the original timeline.
Its land now resembled the shape of a banana, bordering Persia to the east and the Black Sea to the west. The total area was around 30,000 square kilometers, with Yerevan remaining its capital.
If that were the case, the Armenians would have secured a great deal. Unfortunately, the Russians refused to let go of the crucial coastal access, leaving Armenia as a landlocked country.
The small Caucasus city of Batumi was the closest seaport to Armenia and the most coveted territory for its people.
Wessenberg shook his head and replied, “No, the Russian government is unwilling to give it up. However, Alexander III has designated Batumi as the personal fief of Grand Duke Vladimir Alexandrovich.
If the Armenians accept him as their king, their trade and access to the port will remain unrestricted. Otherwise, well…”
This was standard practice. There was no way the Russians would easily give up such a valuable bargaining chip.
The Armenians might still be able to access Austrian territory for passage, but even the closest route to the Port of Hopa would require an extra hundred miles of travel.
From the perspective of modern times, such a distance would be a minor inconvenience, taking just an hour or so. However, in this era, it meant an additional two days of transportation time.
Once or twice wouldn’t matter, but repeated trips would result in significant losses. From the very beginning, the Russians had set up this trap.
After understanding the situation, Franz responded indifferently, “Since the Russians have prepared so thoroughly, let them have their way.”
Armenia held little strategic value and was not worth Austria’s excessive effort. The unique terrain of the Caucasus had already determined that it would never be the main battlefield in any Austro-Russian rivalry.
It wasn’t impossible to win over the Armenians, but the costs far outweighed the benefits. It was better to hand them over to the Russians and use the opportunity to lure Russia southward into Persia.
Chancellor Felix cautioned, “Your Majesty, the Russians may not genuinely intend to control the Kingdom of Armenia.
Although we have already defined Armenia’s territorial boundaries, population relocation takes time and, more importantly, requires significant financial resources.
From resettlement to reconstruction, the costs would easily exceed ten million guilders. Without such an investment, the Kingdom of Armenia simply cannot be established.
Even though the Russian government recently reached a deal with us, most of the funds were used to offset debts. In reality, they only received 20 million guilders.
Losing half of that just to secure Armenia? I doubt the Russians are that generous.”
There was no issue with that. At this point, the Kingdom of Armenia existed only in theory. Even the provisional government was still on its way to the capital, meaning the country essentially had nothing.
Relocating the population was easy, but resettlement was the real challenge. Even if everyone took up farming, they would still need food supplies for the first year, seeds, basic tools, and housing.
After more than a year of war, with no income during that time, the Armenians had already exhausted their resources.
In the latter stages of the conflict, the Armenian insurgents were only able to hold out because Austria had airdropped supplies to them. Otherwise, they would have been finished long ago.
If the Russians wanted to take Armenia under their wing, they would have to pay for it and help establish the new kingdom.
Unfortunately, not only was the Russian government strapped for cash, but Russian financial institutions were also short on funds.
This was a result of the Russo-Prussian War and Alexander II’s reforms. Many of Russia’s old financial institutions had backed the wrong side and were dismantled, while the newly emerging ones were still in the primitive capital accumulation and lacked the resources to engage in international lending.
As the saying goes, “He who takes another’s money must obey.” The Russian government itself was reliant on Austrian loans and had to bow to Austria’s influence. What chance did tiny Armenia have?
If Armenia accepted Austrian loans, it would be forced to follow Austria’s lead. Otherwise, its financial system would collapse in an instant.
Franz shook his head. “That’s not necessarily the case. The funds needed for the Kingdom of Armenia won’t have to be spent all at once.
The Russians can invest in stages. First providing an emergency sum of one or two million guilders, then allocating 300,000 to 400,000 guilders per month for the remaining expenses.
After this round of debt reduction, the Russian government will be able to cut its monthly debt payments by 950,000 guilders. Finding an extra 300,000 to 400,000 guilders per month shouldn’t be too difficult.
It’s best if we push the Russians to take on this responsibility. If that doesn’t work, we can bring in British and French capital. Unless absolutely necessary, we should avoid investing in this ourselves.”
It wasn’t just the Russian government that was short on funds, the Austrian government’s treasury wasn’t in great shape either. Franz had no real desire to approve loans with uncertain returns.
War devours money. To finance this conflict, Austria had already spent nearly 260 million guilders on military expenses, and that was with a joint military effort.
Otherwise, the costs would have included the upkeep of hundreds of thousands more troops, as well as pensions for tens of thousands of casualties, pushing the total to at least 400 million guilders.
Securing full control over the Ottoman Empire had come at a price. The costs of resettlement and compensation for allies, when converted into cash, were already approaching 300 million guilders.
And that wasn’t the end of it. The real financial burden was post-war reconstruction.
Due to the large-scale population transfers, much of Anatolia would remain uninhabited for a long time.
By the time Austrian settlers arrived, the land would have already been reclaimed by nature with cities reduced to ruins, roads overtaken by forests, farmland turned to wilderness.
According to Austria’s plans, the government intended to invest 1.2 billion guilders over the next decade to rebuild Anatolia.
Even when averaged out, that still meant an annual expenditure of 120 million guilders.
With so much money needing to be spent in the short term, it was no surprise that Austria’s treasury was running dry.
If Austria’s domestic financial market hadn’t already matured and developed sufficient financing capabilities, Franz would have had a much harder time keeping positive.
Of course, compared to other countries, Austria’s government finances were still relatively stable.
Austria had a substantial gold production, and as long as its economy continued to grow, it could print more money.
With a sufficient gold reserve and a vast economic base, the Guilder had already become a global currency, and the Austrian government’s annual seigniorage revenue was an astronomical figure.
To put it simply, Austria’s annual income from seigniorage was already approaching the total financial revenue of the Russian Empire.
In terms of pure economic size, Russia’s economy was only about one-third that of Austria’s core territories. However, the gap in funds that the two governments could actually mobilize was already tenfold in Austria’s favor.
The advantages of an industrial nation over an agricultural one were on full display here. The only country in the world that could rival Austria in financial power was Britain.
But having access to large amounts of capital didn’t mean it could be squandered recklessly. Britain, with its relatively small landmass, might have had that luxury but Austria did not.
Developing the newly acquired territories would require diverting massive amounts of capital. Thinking that just ten billion guilders in government investment could develop millions of square kilometers was nothing more than a fantasy.
Government spending was only meant to serve as a catalyst. The real development of the Near East would rely primarily on private capital.
Of course, the first step was immigration. If railways were built but there were no people along the routes, there would be no need for trains in the first place, which would be quite an embarrassment.
Since domestic capital was already allocated elsewhere, secondary concerns like Armenia naturally had to be cast aside.
“Yes, Your Majesty,” responded Foreign Minister Wessenberg.
***
https://postimg.cc/gallery/PwXsBkC (Maps of the current territories of the countries in this novel made by ScH)