African Business Chronicles

Chapter 44 – A New European Order

August 23, 1866 – German States

Prussia and Austria signed an armistice in Prague, officially ending the Austro-Prussian War.

Because the conflict had lasted only seven weeks, it became known as the "Seven Weeks' War," and it concluded with a clear Prussian victory.

This war laid the foundation for the unification of Germany under Prussian leadership, removing Austria—the greatest obstacle on that path.

Austria, in turn, not only lost its leadership over the German Confederation but also fell into political turmoil at home.

As a result of its military defeat and the rise of separatist movements, Austria was forced to compromise with the Hungarian nobility. The Austrian Empire, as it had been known, was now coming to an end. In its place, the Dual Monarchy of Austria-Hungary was about to take the stage.

But Austria-Hungary would never be as powerful as a centralized empire. The push-and-pull between Austrian and Hungarian nobility would drain much of its energy. Austria, as a European power, had essentially lost its regional influence.

The war had been so brief that Ernst had only managed to make a modest profit from arms and supplies before it ended. With the fighting over, the Hexingen Consortium quickly returned to its regular business operations.

Still, the war did affect Ernst in important ways. With Prussia firmly established as the dominant power in the German states, and since Hexingen's business empire had been built within Prussia's sphere, the Consortium now stood to grow more rapidly than ever.

Hexingen products would now face fewer trade barriers throughout the German lands. The Hexingen Development Bank would be able to expand its services across the region more efficiently.

The war shocked the rest of Europe. Britain, France, and Russia hadn't expected Austria to lose so easily to upstart Prussia. Now, a rising star had emerged on German soil.

Perhaps the most frustrated man in Europe was French Emperor Napoleon III. Prussia's rapid victory shattered the old European order—an order that had benefited France.

Italy's alliance with Prussia during the war would also shift the European balance of power. As a protector of the old system, Napoleon III had hoped to preserve the status quo.

Had he known how weak Austria had become, he might have intervened earlier to support it.

But Bismarck had executed the war flawlessly. He ended it quickly and struck a deal with Austria just in time to prevent foreign interference.

As the victor, Prussia imposed only modest terms: Austria had to hand over Holstein and pay a manageable indemnity.

These lenient conditions meant that Austria and Prussia did not become permanent enemies. In fact, they grew closer.

Austria needed Prussia's help to suppress internal unrest. It also had to be wary of its southern neighbor, the Kingdom of Italy.

But Prussia and Italy were allies—and in the future, Prussia would work to reconcile Austria-Hungary and Italy. This budding alliance would become the foundation of the Triple Alliance before World War I.

However, tensions between Austria and Italy would eventually contribute to the alliance's collapse. One could say that the seeds of World War I were planted right here.

In the moment, though, victory brought celebration. At the Prussian royal palace, Junker nobles and King Wilhelm I hosted a grand banquet.

Laughter filled the halls. For anyone with status, an invitation to the palace party was a prized ticket.

Prince Constantin of Hexingen and his son Ernst attended as honored guests. Constantin had served on the General Staff during the war, and Ernst's businesses had supported the army—both of them were prestigious nobles by birth.

For men like them, attending a royal celebration wasn't a matter of if, but when. Even without contributing to the war effort, top-tier nobility could walk right through the palace gates.

Aside from aristocrats, the most numerous attendees were military officers.

In Prussia, the military was deeply respected. Serving as a nobleman in the army elevated one's status even further.

Wilhelm I, like his forefathers, raised a toast to the soldiers. At his side stood the two key architects of victory—Bismarck and Moltke.

Also standing in the front row were high-ranking nobles like Prince Constantin and Prince Karl Anton. Ernst stood behind his father.

After Wilhelm declared victory, he proclaimed that this triumph marked the beginning of a new era—one in which Prussia would lead the German states toward unity and prosperity.

The hall erupted in thunderous applause.

The second half of the banquet was more relaxed—time for socializing.

Ernst, now a young star in the noble world, mingled easily. He met old friends like Leopold and other aristocrats.

Despite not earning battlefield honors, Ernst was admired for his financial success. In an era where wealth was becoming as valuable as noble lineage, Ernst had become the ideal aristocrat-entrepreneur.

If a commoner had built the Hexingen Consortium, the aristocracy would've scorned him as a vulgar upstart. But Ernst had done it as one of their own.

Europe's nobility, especially in Prussia, were obsessed with appearances. Their expenses were enormous. Even top nobles often relied on loans to maintain their image.

This was why Jewish bankers had flourished in Europe: kings and nobles alike needed money.

But when debts couldn't be repaid, resentment brewed. The Jews were already seen as outsiders, and their involvement in shady lending and money laundering only deepened the hatred.

Despite their intelligence and cohesion, they were branded as heartless moneymen. For most people, finance and Jews were one and the same.

Ernst's Hexingen Development Bank became one of the few major banks in Europe not tied to Jewish financiers.

Everyone knew Ernst was rich. If you didn't need a loan, fine—but if you did, better to deal with Ernst than let Jewish banks bleed you dry.

And since Ernst was a noble himself, he couldn't, in good conscience, charge fellow nobles exorbitant interest.

This led many aristocrats to borrow from Hexingen.

Some weren't great at managing money and fell behind on payments. Ernst, unable to collect quickly, found an unexpected benefit:

If you couldn't repay the loan, you could at least encourage your subjects to deposit savings in the Hexingen Bank.

Thus, the bank entered markets it previously couldn't reach.

And since most loans were backed by property, even if debtors defaulted, Ernst could seize land or other assets.

Despite the risk, the Hexingen Bank developed a solid reputation among the nobility.

Watching his son network with high society, Prince Constantin felt a quiet pride.

His son had grown up—no longer sheltered, but an independent man with real achievements.

But Constantin was getting older, now over 60. He worried: if Ernst didn't marry soon, would he ever see his grandson?

He made up his mind. It was time to find Ernst a suitable bride.

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