African Entrepreneurship Records 2

Chapter 1306: America Joins the War
1917 to 1918 were two years of turbulent international situation. The country was already at the juncture of World War I, and the establishment of the Soviet Union was a major historical event that was in no way inferior to that of World War I. In 1918, another incident occurred that added fuel to the already tense international situation.

In March 1918, with the active solicitation of Britain, the United States finally and hastily declared war on the Allies. The Allies, which had just lost this great Russian general, were instantly given a shot in the arm.

In Rhine City, the East African government once again launched a heated discussion.

East African Finance Minister Logans said: "It is obvious that the United States joined the Allies. From an economic perspective, the United States has become the largest creditor of the Allies since the outbreak of the war. If the Allies are defeated, the United States will inevitably face the risk of the Allies being unable to repay their loans."

"This is obviously unacceptable to the US government and companies. If the Allies lose the war, not only will Americans not be able to make a fortune from the war, but they will lose everything."

"This could trigger a bankruptcy crisis for domestic companies in the United States, which in turn could lead to a national economic crisis. A large number of unemployed workers could have more serious consequences for the U.S. regime than not joining the war, so the United States has been tied to the chariot by Britain."

Although East Africa is also a creditor of the Allied Powers, East Africa and the United States are different after all. The most important point is that the scale of interest exchanges between East Africa and the Allies is much larger than that of the United States.

This means that the victory or defeat of the Allies and the Central Powers is not enough to have a decisive impact on the economy of East Africa.

What's more, since 1917, East Africa has begun to withdraw from the European market on a large scale, turning its attention to conquering the markets of southern countries and devoting itself to cultivating its own economic sphere of influence.

Moreover, East Africa's loan review is obviously not friendly enough to European countries. The most typical example is the previous trade between East Africa and Russia. Russia's national credit is almost zero in East Africa, and the trade between the two countries is even settled through barter.

Of course, it is also a fact that the financial industry in East Africa is underdeveloped. The free market has been opened for less than ten years, private capital is very weak, and the government intervenes excessively, which has led to very slow development of the financial industry in East Africa. The only advantage is probably that it is relatively stable.

After all, the financial industry is a game where the big fish eat the small fish. East Africa’s financial industry can never be a rival to other established financial powers, so in the early stages, East African governments must intervene in the financial market to maintain the stability of their own “fish ponds”.

On the contrary, American financial institutions of all sizes had almost no barriers to entry compared to East Africa, and the U.S. government also lacked regulation of the free market. A large number of American financial institutions, companies and even the U.S. government issued a large number of war bonds to Europe.

In addition, there is another factor that cannot be ignored, that is, the United States has extensive connections with Europe in the financial field, which is unmatched by East Africa.

Before the opening of the market, financial cooperation between East Africa and European countries was almost limited to the government level. However, American companies and financial institutions have been developing for hundreds of years and even have a European financial background. Especially the former colonial master, Britain, its financial industry has a certain degree of integration with the United States itself.

This has led to the fact that almost all American companies and financial institutions with a certain level of strength have their own channels of contact with Europe.

It also means that it is impossible for the US government to prevent US companies and financial institutions from having direct contact with Europe. Of course, the US government obviously has no such intention.

This has led to American companies and financial institutions that are greedy for Europe's wealth lending to European countries almost unscrupulously.

In the field of industrial capital, American companies were also unable to resist the temptation of the European market because the United States was not well prepared at the beginning of the war, which made East African industrial products popular in the two major camps in Europe.

How could Americans not be jealous when they saw East Africa making money in Europe? This further stimulated the competition between Americans and East Africa for the European market in the later stages of the war.

As for why it is Europe, the reason is simple, that is, Europe has strong consumption power and rich accumulation. It can be said that the markets outside Europe combined are difficult to compare with the European market. Since the Age of Exploration, most of the world's wealth has undoubtedly flowed into Europe in the hundreds of years. Otherwise, Europe would not be able to support the existence of the five top powers (Britain, France, Germany, Austria and Russia).

When the United States wants to enter the European market, it faces restrictions from Britain and France. This is different from East Africa. East Africa has several more trade routes with Europe than the United States (including land trade routes), while the United States cannot avoid Britain and France when trading with Europe due to its location.

Of course, Russia's Siberian Railway is an option, but railways obviously cannot compete with sea routes. What's more, the Siberian Railway is very long, the climate is harsh along the way, the maintenance cost is high, it is prone to failure, the Russian railway system is inefficient, and so on. As a result, except for Japan and the Far Eastern Empire, few countries pay attention to the Siberian Railway as a trade route.

In contrast, the Berlin-Baghdad-Basra Railway, the most important land trade artery between East Africa and the Allies, is only one-third the length of the Trans-Siberian Railway, and the climatic conditions are much better than those along the Siberian line.

However, with the Ottoman Empire's entry into the war, this major transportation artery has now been shut down. At the end of last year, the British sent troops from Persia and directly invaded the Persian Gulf territory in the south of the Ottoman Empire.

In short, it is difficult for the United States to compete with East Africa in terms of geographical conditions for trade with Europe. Of course, the United States is not without advantages. After all, the North Atlantic route is conducive to trade between the United States and the Allied Powers.

The two core countries of the Allied Powers, Britain and France, were originally countries along the North Atlantic coast. Coupled with the obstruction of the British, this forced American entrepreneurs who wanted to make a fortune from the war to continuously increase trade with the Allied Powers.

It can be said that over the past four years, the interests between the United States and the Allied Powers, especially Britain, have become increasingly intertwined. From the perspective of economic interests, it was not surprising that the United States joined the Allied Powers.

Logans went on to say, "The United States' geographical disadvantage means that they only have the Allies as their cooperation target. Even if the U.S. government wants to bypass the Allies and the Central Powers to conduct large-scale trade activities, it cannot do so. Today, the Allies have basically completely cut off the Central Powers' foreign trade."

"The Americans are like gamblers who are obsessed with gambling. They keep increasing their bets on the Allies, even spending all their wealth. So from an economic perspective, the United States will never allow the Allies to fail."

"What ultimately pushed the United States into the war was most likely the collapse of the Russian Tsarist regime, which unbalanced the war between the Allies and the Central Powers."

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Summarizing Loggans' words, we can roughly infer the deep-seated reasons why the US government joined the Allies.

To a large extent, the U.S. government was forced to join World War I because of the huge interest groups composed of American financial institutions, enterprises and other organizations. Even if the U.S. government wanted to learn from East Africa and sit back and watch the situation, it would be impossible to do so.

East Africa does not have this kind of trouble. Of course, East Africa also has its own interest groups, especially the powerful bureaucratic group in East Africa, but the problem is that the bureaucrats in East Africa have little connection with Europe.

Even in the German region of Europe, which is the core source of East African immigrants, Germany and the Austro-Hungarian Empire, the interests of the upper classes of both sides were not close enough. In contrast, the relationship between the upper classes of the United States and the United Kingdom was very close.

After all, most of the East African bureaucrats came from the lower classes, and even if they wanted to curry favor with their German aristocratic fellows, they might not necessarily be attracted by these "political upstarts."

Moreover, the geographical location of East Africa does not allow East African bureaucrats to force their way to Europe. Transportation from East Africa to Europe cannot be done without the sea route, which takes more than ten days. Generally, it is not an important matter, so it is difficult for East Africans to find opportunities to deal with European nobles. On the contrary, there are many small countries in Europe and nobles are numerous, so it is much more convenient for them to visit each other.

These reasons have affected the exchanges between East Africa and European countries, but Ernst is happy to see this.

(End of this chapter)