Recaps

After the Four Powers Convention ended hopes for expansion, Cavour urged Sardinia to ease its hostility toward Austria and focus on recovery. In Vienna, Franz ordered state-owned industries to adapt to the postwar economy or be sold, while preparing to transfer staff to administrative posts in the Balkans.

• Cavour told Vittorio Emanuele II that Sardinia should reconcile with Austria because renewed hostility offered no benefits and hindered economic recovery.
• Vittorio Emanuele II worried that changing policy would conflict with the anti-Austrian hatred the government had fostered, but Cavour said public opposition would fade.
• Franz said Austria's state-owned enterprises should adjust production after the Near East War, and that unprofitable industries could be auctioned off.
• Prime Minister Felix argued that weak postwar prices and staff resettlement made selling the enterprises premature.
• Franz rejected delaying the sales and proposed transferring some employees to fill administrative shortages in the Balkan Peninsula.

After the Four Powers Convention took effect, Austria took possession of several Ottoman territories while France and the Ottomans disputed debt payments. In Russia, Nicholas I approved a plan to reward soldiers with freedom and land, opening a path toward weakening serfdom.

• The British soldiers in Serbia left for home with their families, increasing their number from 2,183 to 3,128.
• Austria and the Ottoman Empire exchanged ratifications, transferring Serbia, Wallachia, Moldavia, and Bosnia and Herzegovina to Austria.
• French representatives used a loan receipt to settle their territorial deal with the Ottoman Empire, and France reduced the Ottoman debt instead of paying cash.
• Nicholas I demanded money for postwar rewards and the rebuilding of Constantinople, but Arestanlirod said Russia could not afford the costs.
• Arestanlirod proposed granting free-person status and land to soldiers and their families in lieu of cash rewards.
• Nicholas I accepted the plan, recognizing that freeing soldiers of serf origin could create an opening for broader abolition of serfdom.

Franz convened a final debate on whether the New Holy Roman Empire should adopt the gold standard, using currency reform to centralize minting rights and replace the states’ currencies. The representatives remained divided over the empire’s gold reserves, and Franz began considering how to secure more gold.

• Franz instructed the delegates to debate only the monetary standard and appointed Prime Minister Felix to chair the meeting.
• Hans argued that limited gold production and the difficulty of earning a trade surplus made the bimetallic standard safer, while Ronggele defended exchanging silver for gold and adopting the gold standard.
• Frank asked about the empire’s reserves, and Finance Minister Karl reported that the central and local governments held 382.6 tons of gold and 8,728.9 tons of silver.
• Jürgen supported reform, arguing that the empire could buy gold with silver while silver prices remained high and follow Britain’s lead.
• Hans warned that the reserves might not support a growing economy in the long term, and Franz considered acquiring gold from colonies before rejecting the risks of pursuing South Africa.

After the New Holy Roman Empire narrowly approved gold standard reform, Franz left its implementation to the cabinet while considering how Austria could build gold reserves without neglecting industrial development. In London, the British cabinet discussed using loans and pound sterling-based settlements to draw Austria into Britain’s monetary system.

• Franz recognized that most major gold-producing regions lay outside Austrian control, but considered mining smaller deposits in Austria, Guinea, and Congo while prioritizing domestic industry.
• The New Holy Roman Empire narrowly passed gold standard reform, and Franz left the remaining work to the cabinet.
• The reform drew attention across Europe, and Prime Minister Granville asked whether the Vienna Government could successfully carry it out.
• John Russell explained that Vienna sought greater central control over currency and judged that Austria had enough funds to proceed.
• Granville proposed offering Austria a loan, aiming to make it adopt a pound sterling-gold system and join Britain’s pound-based settlement network.
• Russell said Britain’s offer would depend on its price, and Granville decided to move quickly to bring more countries into Britain’s monetary system.

Franz learned that British efforts to obstruct the New Holy Roman Empire’s gold purchases had sent gold prices soaring, threatening Austria’s currency reform. In London, Prime Minister Granville chose to sell gold and enlist financial groups to calm the market and stabilize the pound.

• The priests set Franz’s wedding to Princess Helen for March 12, 1855, and preparations began.
• Finance Minister Karl told Franz that British actions had driven international gold prices up twenty percent and halted Austria’s purchases.
• Franz ordered the investigation to continue and instructed Austria to pretend it was still buying gold while seeking supplies through gold-and-silver countries.
• The Granville Cabinet realized speculators had pushed gold prices far beyond the government’s plan and debated selling gold or allowing silver to depreciate.
• Finance Minister George Gray urged a rapid gold sell-off, and Prime Minister Granville ordered the Ministry of Finance to sell gold and seek help from British financial groups.

British financial conglomerates profited from gold-price volatility, triggering a wave of business failures and forcing Prime Minister Granville’s government to seek their help. Meanwhile, Franz married in a grand Habsburg ceremony attended by European kings and royal descendants.

• British financial conglomerates drove gold prices up and down, profiting as the pound’s fluctuations damaged businesses and investors.
• More than two hundred British enterprises were merged and reorganized, while over three thousand went bankrupt.
• Prime Minister Granville admitted his government had been manipulated, and Chancellor of the Exchequer George Gray urged him to cooperate with the conglomerates to contain the crisis.
• Franz held his wedding at St. Stephen’s Cathedral on March 12, following Habsburg tradition.
• Thirteen kings and more than a hundred princes and royal descendants attended Franz’s wedding, displaying the Habsburg Family’s influence.

After the wedding guests departed, Franz watched Britain and France expand their colonial empires while Austria focused on currency reform. He directed Austria to keep buying gold strategically and approved the denominations and name of the New Holy Roman Empire’s Rhenish Guilder, leaving the new currency ready for further development.

• Franz spent more than a month hosting wedding guests and maintaining relations with Europe’s rulers.
• The British resumed their campaign against Burma, and war broke out as D'Alhousie declared Burma a British colony.
• Karl told Franz that British financial syndicates had profited from turmoil in the gold market and that Austria had been caught in the disruption.
• Franz ordered Austria to buy gold when prices fell, sell if the gold-silver exchange rate rose by more than five percent, and let the market remain disorderly.
• Karl presented a sample of the new Rhenish Guilder, and Franz chose a value of 3.66 grams of gold and denominations from one to one hundred guilders.

Austria began colonial operations on the impoverished Sinai Peninsula, where Leo Haver and Andrea decided to seize Al Arish for themselves. After defeating a local nomadic tribe, they struggled with their losses and meager spoils, unaware their actions would have a lasting impact.

• The Vienna Government targeted the Sinai Peninsula as a foothold for securing a future route out of the Mediterranean.
• Leo Haver and Andrea debated how to seize Al Arish, then chose to attack the local tribe and claim its spoils.
• Leo Haver and Andrea led more than a hundred colonists in a surprise attack that killed three men and wounded seven.
• Leo Haver told Andrea to stage the attack as self-defense and signal the military to take over before Egyptian regular troops arrived.
• Leo Haver and Andrea found only camels, sheep, hides, furs, and jars of salt among the tribe's possessions.

Franz and his ministers discussed negotiating with Egypt over Austria’s occupation of the Sinai Peninsula, which they hoped would secure a foothold near the planned Suez Canal. Britain dismissed the occupation as a minor colonial venture, while France chose mediation, leaving the dispute unresolved.

• Franz asked his ministers how to handle Egypt’s protest, and Metternich recommended negotiating and possibly paying for the Sinai territory while keeping Austria’s foothold.
• Felix questioned whether France’s Suez Canal concession would block Austria’s plans, and Franz argued that the canal could be built by citing the ancient Chinese Grand Canal.
• The British Cabinet learned that an Austrian civilian force had occupied an abandoned city in the Sinai Peninsula and decided to watch events while leaving France to deal with Egypt first.
• Napoleon III proposed driving Austria out of Egypt, but Auvergne urged mediation, and Napoleon agreed to negotiate as long as French interests remained intact.

Austria’s colonial team in Sinai was left to hold its position while Austrian and Egyptian representatives argued over blame in Cairo. Jonas threatened war if Egypt tried to drive the Austrians out of Al Arish, leaving French mediation unable to resolve the standoff.

• Peter told Leo Haver and Andrea that Austrian reinforcements would wait on the Cairo negotiations and that they had to hold the outpost or retreat to the coast.
• Leo Haver objected that the contract had not required his men to serve as bait, but Peter said the team was responsible for its unauthorized occupation and might earn rewards if it provoked an Egyptian attack.
• In Cairo, Jonas accused Egypt of robbing the Austrian caravan and presented an appointment letter linking the Aliquisi Tribe to the Egyptian Government.
• Mahamud denied the accusation and demanded that Austria withdraw from Al Arish, while French mediator de Lesseps urged both sides to settle the aftermath without further escalation.
• Jonas warned that any Egyptian force used against the Austrians would count as a declaration of war, and Mahamud could not commit Egypt to such a conflict.

The New Holy Roman Empire released the Rhenish Guilder, giving the Vienna Government control over currency issuance and a new source of seigniorage. Franz reviewed the currency’s reserves with Karl and ordered continued surveillance of foreign investors, warning against seizing their capital except as a last resort.

• On May 12, 1855, the New Holy Roman Empire officially released the Rhenish Guilder, while constituent states’ reserves were consolidated under the Imperial Central Bank but kept in their respective states.
• The Vienna Government’s currency reform gave it the right to collect seigniorage, though Divine Shield remained limited to domestic circulation and international trade was still settled in gold and silver.
• Finance Minister Karl told Franz that Divine Shield’s issuance was going smoothly and that gold and silver reserves were sufficient to withstand market fluctuations.
• Franz ordered Karl to watch for large capital outflows and activate the contingency plan if foreign investors tried to withdraw their funds.
• Karl said the government had gathered incriminating evidence against foreign investment conglomerates, and Franz instructed him to approach them first and use coercive measures only against a few serious offenders.

After learning about new steelmaking methods, Franz directed Algist to investigate open-hearth steelmaking and decided to recruit experts rather than rely on guesswork. He ordered Tyrone to investigate the Siemens Family and establish a scientist archive to identify talent for the New Holy Roman Empire.

• Franz read about Bessemer’s converter process and reflected on Austria’s steel output and the Empire’s growing industrial capacity.
• Franz asked Algist whether existing technology could support open-hearth steelmaking, and Algist agreed to conduct experiments.
• Franz decided to recruit specialists and ordered Tyrone to investigate the Siemens Family.
• Franz ordered Tyrone to establish a scientist archive, focusing especially on scientists from the German region and promising young talent.
• Franz compared the New Holy Roman Empire’s population and resources with those of Russia, Britain, and France, and concluded that France’s slow population growth would widen the Empire’s advantage.

Jonas used a disputed meeting record to justify Austria’s seizure of the Sinai Peninsula, then negotiated its formal purchase and Austria’s withdrawal from Egypt. The chapter ended with Britain, France, and Austria satisfied while Egypt lost the territory and the colonial team received compensation and honors.

• Jonas demanded five million Divine Shields from Mahamud, then shifted to seeking lower tariffs and equal treatment for Austrian merchants in Egypt.
• After Mahamud rejected the demands, Jonas told Will to record the meeting as Egyptian agreement to cede the Sinai Peninsula and ordered Austrian colonists to declare sovereignty.
• On June 26, 1855, Austrian colonists raised their flag over the Sinai Peninsula, prompting an Egyptian protest and diplomatic negotiations.
• On July 21, Jonas signed the Sinai Peninsula Land Transaction Treaty for fifty thousand Divine Shields, and Britain, France, and Austria signed the Cairo Treaty the next day.
• Austria withdrew from colonial activities in Egypt, while the Vienna Government transferred the redemption payment to the colonial team and awarded Leo Haver and Andrea honorary knighthoods.

Franz approved creating a Colonial Ministry and appointing Josip Jelačić to lead it, then considered how Austria could control the Sinai Peninsula despite its lack of water. The government delayed relocating its inhabitants because colonial logistics were strained, while Franz remained confident that future African gold discoveries would repay Austria’s investments.

• Prime Minister Felix proposed a Colonial Ministry, and Franz appointed Josip Jelačić as Colonial Minister.
• Prince Windisch-Grätz warned that the water shortage made stationing two infantry regiments in the Sinai Peninsula costly and impractical.
• Franz proposed relocating the peninsula’s inhabitants and livestock, then using the freed water resources to plant trees and grass.
• Archduke Louis supported Franz’s proposal, while Finance Minister Karl warned that colonial losses and logistical pressures made additional immigration unwise.
• Franz postponed the Sinai resettlement and argued that gold discoveries and fertile land would eventually make the African colonies profitable.

Baron Fikeni led his armed colonial party into the Guinean jungle in search of gold, clashing with a native tribe and suffering further losses to jungle dangers. The party found gold-bearing river sand, and Father Batige judged the area promising, leaving the expedition to survey it the next day.

• Baron Fikeni set out with two hundred men to search for gold in Guinea, after mortgaging his fief to fund the expedition.
• Fikeni's party encountered a native tribe, and gunfire routed them after they attacked; the soldiers found a piece of gold among them.
• Fikeni continued searching, but jungle attacks killed three men and wounded five, while the party's supplies dwindled.
• A man brought Fikeni river sand that appeared to contain gold, and Father Batige examined it and estimated its gold content was at least five grams per ton.
• Fikeni decided the party would rest overnight and survey the river the next day.

Baron Fikeni discovered a rich gold deposit in Guinea and promised his prospecting party a share of its profits. Franz and the Vienna Government decided to use the gold rush to attract immigrants and expand Austrian influence in West Africa, and the government then publicized the discoveries to encourage prospectors.

• Father Buckger confirmed that Fikeni’s river deposit held an estimated fifty tons of gold, and Fikeni promised his companions half the mine’s profits in exchange for guarding it.
• After Fikeni registered the claim, news of the discovery reached Franz, who considered using it to draw immigrants to the African colonies.
• Finance Minister Karl urged more prospecting, while Colonial Minister Josip Jelačić proposed expanding Austria’s footholds around the Gulf of Guinea.
• Franz directed Austria to pursue inland expansion, prioritize fertile land and immigration over gold, and authorize civilian groups to explore the interior.
• The Vienna Government lifted its news blockade, and officials and media promoted Guinea’s gold discoveries across the Empire and Germany, including deposits with exaggerated claims about their gold content.

Gold discoveries across West Africa triggered an international rush, and Franz encouraged German immigrants to settle in the region while the Royal Bank financed mine development. By the end of the chapter, Austria had gained a strong population and military advantage in Guinea Gold Bay, but disputes among the rival powers were escalating.

• Franz told Lopez to welcome German nobles and other people who identified with German culture into African settlement efforts, and promised favorable immigration terms.
• The Royal Bank’s Tedis negotiated a loan with Baron Fikeni, who accepted the terms and signed a contract secured by mining rights.
• Tedis offered Baron Fikeni mining equipment through the Royal Bank’s partnership with Austrian Machinery Group, and Fikeni agreed to consider buying it.
• After gold discoveries drew prospectors from around the world, Guinea Gold Bay’s population grew by nearly two hundred thousand in one year, while conflicts among immigrants and governments increased.
• Franz appointed a Governor of the Gulf of Guinea, placed German-region prospectors in the reserves, and sent an infantry division to strengthen Austria’s position.

Franz discussed Empress Helen’s pregnancy and Maximilian’s future before turning to the crisis in the Gulf of Guinea, where a Portuguese battalion had vanished. He backed a plan for international joint administration to impose basic order in West Africa, leaving the mystery unresolved.

• Empress Dowager Sophie warned Franz to keep his distance from pregnant Helen, and Franz asked about preparations for Maximilian’s marriage to Princess Charlotte.
• Franz considered how Maximilian might be assigned a future role, wary of giving him ambitions that could lead him into political trouble.
• Metternich reported that a Portuguese battalion and more than five hundred accompanying armed men had disappeared while investigating a gold mine in the Gulf of Guinea.
• Franz and Metternich acknowledged that Austria’s colonial forces were among the suspects but chose not to investigate the disappearance, fearing the inquiry could implicate Austrian civilians and spark a political crisis.
• Metternich proposed international joint administration in the Gulf of Guinea, and Franz approved the plan to establish basic order.

Baron Fikeni struggled to manage his productive Guinea gold mine, facing dangerous transport routes and a shortage of reliable workers, while Father Batige considered where to establish a church. In London, Prime Minister Granville weighed how to check Austria’s growing influence in the Gulf of Guinea without provoking a war.

• Father Batige warned Baron Fikeni that the mine’s rising output and lack of workers created serious risks, and Fikeni said the New Brook Colonial Government would collect the gold and bring supplies.
• Baron Fikeni told Father Batige he had asked a friend at home to recruit workers, then suggested building a church near the mine, where he hoped to establish a town and farms.
• Father Batige asked whether Fikeni planned to trade his homeland estate for African land, and Fikeni said he wanted additional property for his children without giving up the family estate.
• Metternich sent diplomatic notes to six nations over the Gulf of Guinea crisis, and Prime Minister Granville questioned why Austria had gained such an advantage in the region.
• Colonial Secretary William explained that Austria had more than two hundred thousand immigrants in the Gulf of Guinea and could mobilize a large force, prompting Granville to seek ways to restrain Austria without resorting to war.

Franz addressed the colonial labor shortage and the high mortality rate among immigrants, ordering stricter enforcement of health and safety regulations. He set declining mortality targets for the colonies and approved Felix's proposal to make safety and hygiene education mandatory at home.

• Felix proposed reimbursing immigrants' round-trip fares to attract more settlers to Africa.
• Franz noted that immigrant mortality reached 5.8% overall and that deaths from disease varied sharply between settlements such as New Brook and Ghana.
• Josip Jelačić warned that strict oversight could drive private colonial groups to settle elsewhere.
• Franz ordered compulsory enforcement of colonial health and safety rules and set targets to reduce immigrant mortality.
• Felix proposed mandatory domestic safety and hygiene education, and Franz approved the plan.

The New Holy Roman Empire enforced the Safety and Health Act at home and promoted disease prevention in its African colonies. In New Brook, Mayor Stephen urged officials to reduce immigrant deaths and develop agriculture, leaving the city government set to request central-bank policy loans to help finance farms and plantations.

• Factories improved workers’ living conditions, Vienna introduced safe-water and boiled-water rules, and litterers were sentenced to sweep the streets.
• Lieutenant Colonel Stephen announced that New Brook had become a city and that he had been appointed its first mayor.
• Stephen told officials to develop farms and plantations alongside mining, while Diego reported that New Brook’s third-quarter deficit was only 2,000 Divine Shields.
• Matt Damon proposed clearing vegetation, burning garbage, and controlling pests to reduce disease, and Stephen ordered the city to fund the measures.
• Engelbert and Gold explained that high loan rates and limited funds hindered farm development, so Stephen decided to seek central-bank policy loans from the homeland.

Franz and his ministers planned how to contain an approaching economic crisis caused by severe overcapacity and the risk of foreign capital leaving Austria. They agreed to attract capital into public infrastructure projects while using deposits and strict bidding rules to protect the government and keep investors tied to the country.

• Franz presented an economic report warning that Austria and the United States faced severe overcapacity and that foreign capital might flee when a crisis struck.
• Finance Minister Karl proposed guiding capital into urban infrastructure projects, with private contractors financing construction and the government paying only after completion.
• Prime Minister Felix warned that the projects would worsen overcapacity and offered little profit, while Karl argued that they could absorb capital and support the economy.
• Franz approved the plan in principle, ordered that only capable contractors win bids, and proposed requiring project security deposits.
• Franz explained that deposits would reveal contractors' financial strength, protect the government from unfinished work, and encourage investors to keep funding projects in Austria.

In July 1856, the Vienna Government opened a massive infrastructure program to foreign investors, using railway tenders and other projects to attract capital while positioning the state to gain influence over the railways over time. In London, Barclays Bank’s leaders debated the risks of investing in the New Holy Roman Empire and resolved to pursue profitable projects while avoiding assets they considered too dangerous.

• The Vienna Government launched the Lock-In Plan, inviting domestic and overseas companies to bid on railway lines and other infrastructure projects.
• Franz expected most railway routes to become operationally profitable over decades and planned to let economic crises bring railway companies under government influence through shareholdings.
• President Genos told Barclays Bank’s investors that the Vienna Government’s infrastructure plan involved 240 million pounds in investment and required careful selection of projects.
• Simon argued that British and French investments made Austria vulnerable to a crisis if foreign capital withdrew, while Bernat doubted Austria faced serious danger.
• Genos urged the investors to target valuable assets, including urban water networks, and Simon proposed helping issue construction bonds.
• Bernat urged Barclays’ railway companies to secure Austrian lines, raise their share prices, and pass the projects on to other investors.

The Anglo-Persian War began after Persia, backed by Russia, captured Herat, and the conflict gave Britain reason to concede in the Gulf of Guinea negotiations. Franz agreed to consider limited financial support for Russia while Metternich warned that Russia lacked the funds for a major war and was chiefly trying to delay Britain’s expansion in India.

• Persia captured Herat with Russian backing, prompting Britain to declare war and opening the Anglo-Persian War.
• Britain’s need for international support eased the Gulf of Guinea negotiations, and seven powers signed a treaty dividing coastal zones and setting rules for colonial footholds and inland gold discoveries.
• Franz saw that the treaty’s tangled occupations gave Austria the strongest position in the Gulf of Guinea, though Britain’s naval power kept Austria from dislodging it.
• Metternich told Franz that Russia wanted diplomatic support and a loan, and Franz authorized negotiations over a small loan secured by collateral.
• Metternich explained that Russia was unlikely to enter the war directly because its finances were strained and domestic conflict over serfdom reform limited its ability to expand abroad.

Franz rejected Austria’s involvement in Morocco and focused on consolidating overseas colonial outposts under the New Holy Roman Empire. At Schönbrunn Palace, his empress gave birth to a healthy prince, but the family kept Franz from holding the newborn.

• Josip Jelačić urged Franz to act in Morocco, but Franz declined, saying Austria should digest its recent gains and develop unclaimed parts of Africa.
• Franz welcomed colonial groups from German states under the New Holy Roman Empire, and the Colonial Ministry counted forty-one overseas outposts, twenty-seven of them under Vienna’s rule.
• Franz explained that he would allow ambitious men to establish kingdoms overseas, provided their claims depended on his imperial investiture.
• The Habsburg family and Austrian nobles gathered at Schönbrunn Palace to witness the empress’s delivery and confirm the child’s bloodline.
• The doctor announced that the empress had given birth to a healthy prince, and the gathered witnesses confirmed that he was a boy.
• Franz finally approached his newborn son, but the women and Archduke Charles kept him from holding the child.