In the Royal Square, everyone looked at each other in bewilderment.
They had planned that after the Crown Prince arrived in Lyon, he would first attend a banquet and then a ball. The serious discussions weren’t expected to start until the next day.
Unexpectedly, His Highness did nothing of the sort, but came out swinging with the explosive statement that “Lyon is finished.”
However, the majority here were involved in the textile industry. Although they felt the Crown Prince’s words were a bit over the top, the fact that the industry would face brutal competition from the British was undeniable.
Joseph paused, then pointed to the automated loom that had been specially placed beside him, “The only thing we can compete with the British on right now is production efficiency!
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“Everyone should have heard that the spinning speed of this kind of automated loom is more than ten times that of a manual loom. As it continues to improve, the efficiency will increase even further.
“This means that a factory using automated looms only needs to employ one-tenth of the workers it used to!”
Here, he was actually playing a bit of a conceptual sleight of hand. Though the efficiency of automated looms was high, they still required a large number of workers to operate them—perhaps they could reduce the workforce by at most a quarter. Of course, the output of cloth would increase dramatically.
Joseph continued, “Only in this way can our textiles possibly approach the cost of the British ones.
“However, the British began using automated looms several years ago.
“That means their costs will be even lower in the future, and our products will completely lose their market!”
The details of the British automated looms were a commercial secret. France was not clear about the specifics. As the Crown Prince spoke, everyone suddenly became tense.
Actually, representatives from Mirabeau had previously promoted automated looms to them, but they had not hammered it home like Joseph, so nobody took it seriously. Only now did they realize the urgency of the situation.
Seeing that the atmosphere was primed, Joseph finally shifted his tone, “The good news is that the quantity of automated looms in England is not that many, and they are all water-powered.
“This is what I meant by ‘the last chance.’
“If Lyon starts using automated looms on a large scale from now on, coupled with our latest model of high-pressure steam engines, we will be able to surpass the British in production efficiency, and thus reclaim our rightful market!”
What he didn’t mention was that once automated looms were widely deployed, they would also promote the improvement of steam engines, creating a positive feedback loop.
The factory owners present murmured amongst themselves for a while. Boyer, the President of the Lyon Chamber of Commerce, stood up at the crowd’s behest, and gestured respectfully to the chest in front of Joseph, “Your Highness, in reality, everyone is aware of the advanced capabilities of automated looms. It’s just that… these things are too expensive.
“A loom along with its steam engine costs more than 16,000 livres. To achieve economies of scale, we’d need at least three looms. Plus, there’s the cost of training workers, trial production, and other expenses—it all adds up to a substantial amount.”
He glanced behind him, “Most people here would find it difficult to come up with such a large sum of money. And even if we were to pool resources to buy the looms, if there were any issues with the raw materials or market, leading to poor sales, the enormous initial investment would quickly bankrupt the factory…”
Upon hearing this, Joseph nodded slightly. He understood that Boyer was mentioning very real concerns.
In the 18th century, new technologies were extremely risky due to insufficient technical validation, misinformation, or lack of supportive policies.
Even in England, the birthplace of new technologies in Europe, it took more than a decade to popularize automated looms, and they were still driven by water wheels. As for automated looms driven by steam engines, it would not be until the 19th century that they came into their own in England.
Similarly, it had been nearly ten years since Watt made improvements to the steam engine, yet the annual sales were still less than twenty units.
France relied entirely on Joseph using parish banks to lend to the countryside so they could buy pumps for irrigation, which in turn promoted steam engine sales. Otherwise, Murdock’s technological iteration would not have progressed so swiftly.
However, as someone who had experienced the capitalist era in later generations, Joseph had already developed mature countermeasures.
He raised his hand to signal everyone to be quiet and said loudly, “Regarding everyone’s concerns, the government has already made preparations.
“That is to invest in the insurance business!”
The people in the square looked at one another in confusion—they understood the word “insurance,” but when “investment” was added in front, no one knew what that meant.
Although the insurance industry had emerged in the 17th century, its development had been limited to a few types such as maritime insurance, fire insurance, and life insurance.
Joseph explained to the audience with a smile, “The France Commercial Insurance Company can accept investments in automatic looms for insurance purposes. Afterwards, the company will verify the financial and operational status of the factory and send sales representatives to supervise production.
“Should any insured factory go bankrupt, the insurance company will investigate the factory’s operations and accounts. As long as there is no fraudulent behavior, investors can receive compensation of 80% of their investment amount.
“Of course, the corresponding assets of the factory will be taken over by the insurance company.”
To be honest, such a type of insurance carried a great risk for the insurance company, but Joseph had ample confidence in the automatic loom. As long as the factories operated normally, bankruptcy should not occur.
Even if operations did fail, he could still, in the capacity of the insurance company, reclaim the factory’s assets and merge them into a massive textile company, continuing operations in a government-invested mode.
It had to be the newly established France Commercial Insurance Company, under the Bank of France Reserve, that would take on these risks for the technological revolution in France’s textile industry.
The factory owners present immediately started to whisper excitingly among themselves:
“If we only lose 20%, it might be worth a try.”
“To have such insurance is truly a big help.”
“The question is whether the insurance company could afford to pay out if there’s a problem…”
“I’ve heard Mr. Valerna mention that this is a company in which the Bank of France Reserve holds shares, so there should be no issue with funds.”
“That’s wonderful! I’ve been wanting to try out a few automatic looms for a while now. Who wants to go in on it with me?”
Joseph struck while the iron was hot, “Perhaps you’ve heard the news that we have signed trade agreements with Austria and the six states of southern Germany.
“Henceforth, textile goods from Lyon will be able to be sold directly through the Rhine River to southern Germany, and at a minimum, tariffs will be on par with British goods, and even lower for countries like Baden.”
A collective gasp burst forth from the square.
Gaining access to such a large market in southern Germany was an absolute boon for France’s textile industry, and future sales volumes were likely to increase significantly.
Yet Joseph continued to “stimulate” the audience, “Moreover, we have obtained a new wool source in the Pacific Ocean, with production that can reach over a million pounds, and next year it might even surpass two million pounds. The price is only half of the current market rate for wool!”
In fact, he was being somewhat modest—New Zealand was a paradise for sheep farming, and if the flock sizes were increased, the production could even exceed that of England by a considerable margin!
