Chapter 314: The Textile Revolution
In the Royal Square, everyone looked at each other in dismay.
Their original plan was for the Crown Prince to attend a banquet upon arriving in Lyon, followed by a ball, and only then would serious matters be discussed the next day.
Unexpectedly, His Royal Highness did nothing of the sort. Instead, he immediately dropped the bombshell, "Lyon is doomed."
Most of the people present were involved in the textile industry. Although they felt the Crown Prince's words were somewhat exaggerated, it was an undeniable truth that their industry would face brutal competition from the British.
Joseph paused, then pointed to the automatic loom specially placed beside him. "Our only way to compete with the British right now is through production efficiency!
"As you all must have heard, this automatic loom weaves more than ten times faster than a hand loom. With continuous improvements, its efficiency will only continue to increase.
"This means that factories using automatic looms will only need to employ one-tenth of the workers they currently do!"
He was subtly shifting the concept here; while automatic looms were highly efficient, they still required many workers to operate, reducing the workforce by at most a quarter. Of course, fabric output would significantly increase.
Joseph continued, "Only by doing so can our textiles hope to approach the British cost.
"This means their costs will only get lower, and our products will completely lose their market!"
British automatic looms were a trade secret, and France was not privy to the specifics. Hearing the Crown Prince speak this way, everyone immediately grew anxious.
In fact, Mirabeau's people had previously promoted automatic looms to them, but without Joseph's forceful persuasion, no one had paid much attention. Now, they realized the situation was truly dire.
Seeing that the atmosphere was sufficiently built up, Joseph changed tack. "The good news is that the number of automatic looms in Britain is not yet large, and they are all water-powered.
"This is what I just referred to as 'the last chance'.
"If Lyon begins to massively adopt automatic looms now, combined with our latest High-Pressure Steam Engine for propulsion, we can surpass Britain in production efficiency and reclaim our rightful market!"
What he didn't mention was that once automatic looms became widespread, they would also promote improvements in steam engines, creating a positive feedback loop.
The factory owners present whispered among themselves for a while. Boyer, the President of the Lyon Chamber of Commerce, stepped forward at everyone's request and bowed to Joseph, hand over his chest. "Your Royal Highness, everyone here is actually aware of the advanced capabilities of automatic looms, it's just that... they are too expensive.
"An automatic loom, along with its matching steam engine, costs over 16,000 Livres. To achieve scale, one would need to purchase at least three looms. Furthermore, training workers and trial production also require significant investment."
He glanced behind him. "Most people here would find it difficult to raise such a large sum. And even if they pooled money to buy the looms, if there's any issue with raw materials or the market, leading to poor sales, the massive initial investment could quickly bankrupt the factory..."
Joseph nodded slightly upon hearing this. He knew that Boyer was addressing very real concerns.
In the eighteenth century, adopting new technology was an extremely risky endeavor due to insufficient technical verification, misinformation, or a lack of supporting policies.
Even in Britain, the birthplace of Europe's new technologies, it took over a decade to popularize automatic looms, and even then, they were water-wheel driven. Steam-powered automatic looms wouldn't truly flourish in Britain until the 19th century.
Similarly, nearly a decade had passed since Watt completed his steam engine improvements, yet annual sales were still fewer than 20 units.
In France, it was entirely thanks to Joseph, who used small parish banks to provide loans to rural areas for purchasing water pumps for irrigation, that steam engine sales were boosted. Otherwise, Murdoch's technological iterations wouldn't have advanced so quickly.
However, as someone who had experienced the age of capital in a later life, Joseph already had a mature countermeasure.
He raised a hand, signaling for silence, and declared loudly, "Regarding your concerns, the government has made preparations.
"That is, investment insurance services!"
The people in the square once again looked at each other in dismay. They understood the word "insurance," but when "investment" was added before it, no one knew what it meant.
Although the insurance industry had emerged in the 17th century, by now it had only developed a handful of types, such as marine insurance, fire insurance, and life insurance.
Joseph smiled and explained to the crowd, "The French Commercial Insurance Company can accept policies for investments in automatic looms. The company will then verify the factory's capital and operational status, and dispatch business representatives to supervise production.
"Should an insured factory go bankrupt, the insurance company will audit the factory's operations and accounts. As long as no fraudulent activities are found, investors will receive 80% of their invested capital as compensation.
"Naturally, the factory's corresponding assets will be taken over by the insurance company."
Frankly, this type of insurance carried enormous risk for the insurance company, but Joseph had full confidence in automatic looms. As long as factories operated normally, bankruptcy should not occur.
Even so, if a business failed, he could still, as the insurance company, reclaim factory assets, merge them into a massive textile corporation, and continue operations under a government investment model.
For the sake of France's textile industry revolution, the newly established French Commercial Insurance Company, under the French Reserve Bank, would have to bear these risks.
The factory owners present immediately began to whisper excitedly. 'If we only stand to lose 20%, it's definitely worth a try.'
'To have such insurance available, it's a tremendous help.'
'I just wonder if this insurance company can truly afford to pay out if something goes wrong...'
'I heard Monsieur Varennes mention that this company has stakes from the French Reserve Bank, so funding shouldn't be an issue.'
'That's wonderful then! I've long wanted to try a few automatic looms. Is anyone interested in partnering with me?'
Joseph struck while the iron was hot. "Perhaps you've already heard the news: we have signed a trade agreement with Austria and the six South German states.
"From now on, Lyon's textiles can be directly sold to South Germany via the Rhine River. Tariffs will at least be consistent with British goods, and even lower for countries like Baden."
A gasp of astonishment instantly erupted across the square.
Penetrating such a large market as South Germany was an enormous boon for France's textile industry. Future sales volumes were likely to increase dramatically.
Joseph, however, continued to "stimulate" the crowd. "Furthermore, we have secured new wool sources in the Pacific, with production capable of exceeding a million pounds, and even surpassing two million pounds next year. The price is only half that of the wool currently on the market!"
In reality, he was being modest; New Zealand was a shepherd's paradise. If sheep numbers increased, output could even significantly surpass Britain's!
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