Chapter Eighteen: Swallowing One's Pride for the Sake of Peace

Due to the influence of the deductions, Frederick III did not approve the plan to expand the army by half a million men, only symbolically increasing it by one hundred thousand. This incident was, in fact, the direct cause that prompted Field Marshal Moltke’s resignation. Frederick III did not attempt to persuade Moltke to stay; instead, citing Moltke’s declining health, he immediately approved the resignation and appointed Waldersee as Chief of the Imperial General Staff. In doing so, he effectively issued a warning to Bismarck.

As a result, during the deliberations on the annual fiscal budget, Bismarck made significant concessions—not only approving a naval budget as high as one billion marks, but, at Frederick III’s behest, also compressing the army budget to ten billion marks, rather than the twelve billion Moltke had requested.

Taking this opportunity, Crown Prince Wilhelm formally proposed the expansion of the Kiel Canal to Frederick III. The emperor was very interested in the project, as it was a fundamental infrastructure endeavor crucial to the nation’s interests. But where would the money come from? Beyond funding, there was another pressing issue no one could ignore: labor.

Unlike Great Britain, an established empire, the German Empire was a rising industrial power, and labor shortages had always been a major hindrance to its development.

Of course, the most proactive party was not Frederick III, but rather Feng Chengqian. The expansion of the Kiel Canal would benefit not only the empire’s capitalists but also its navy. However, both funding and labor needed to be addressed.

Frederick III tasked Bismarck with resolving the financial issue, mainly through bank financing and involving the empire's capitalists in the canal’s construction.

As for labor, Feng Chengqian approached Frederick III directly.

“Importing labor?”

“Your Majesty, the most pressing matter now is to acquire enough labor, not to worry about where they come from,” Feng Chengqian had long since formed his ideas but had never found the right opportunity to present them. “We are not Britain, and we have no colonies like India. We cannot expect to draw labor from our colonies. However, there are remedies—there is a surplus of labor in the Qing Empire.”

Frederick III smiled, as if he had already anticipated Feng Chengqian’s suggestion.

“Perhaps Your Majesty thinks I am being partial, but is there a better option?”

“I do not doubt you, but those people from the Qing Empire…”

“As long as they are human, they are labor. What they lack is only proper training.” Feng Chengqian paused briefly. “Moreover, others have already tried this before.”

“Tried?”

“When America built the Pacific Railroad, they hired many laborers from the Qing Empire. Without them, the transcontinental railroad across the Rocky Mountains could never have been completed in just six years.”

Frederick III nodded thoughtfully, indicating he understood Feng Chengqian’s point.

“Like a railroad, a canal requires only the most basic labor. Since the empire lacks labor, why not hire workers from the Qing? Furthermore, the wages required by Qing laborers are far lower than those of the empire’s workers, which would significantly reduce the cost of the canal expansion.”

“If it’s just a matter of hiring, I’m afraid it still won’t meet the demand.”

“Then other methods must be considered.”

“You have an idea?”

“The Qing Empire has already ordered two warships from the empire. Why not propose that they offset the payment for the warships by supplying laborers?”

“Well…”

“Of course, this amounts to indirect payment, and the banks would need to facilitate it.” Feng Chengqian smiled and continued, “The Qing Empire has been vigorously pursuing modernization in recent years and will surely purchase more armaments. If we can seize this opportunity, it will also bring substantial income to the empire’s military industries.”

“This is indeed a win-win solution.”

“In fact, it is currently the only viable one.”

Frederick III smiled and said, “I will give it serious consideration and discuss it with the Chancellor. If this is accomplished, next year’s naval budget will not disappoint you.”

“You are too gracious, Your Majesty. Everything I do is for the good of the empire.”

“The question is, will those Qing laborers be usable?”

“Your Majesty means…”

“I know something of the Qing Empire. Though vast and resource-rich, it is extremely backward, and its people are profoundly ignorant. I am concerned that the laborers we recruit will not be up to the task of expanding the canal.”

“That is indeed a problem.”

“Do you have a solution?”

“We can pay more attention during recruitment, choosing young men as much as possible. If necessary, we can provide them with skills training.”

Frederick III nodded thoughtfully.

“Of course, these decisions can be made once we have recruited the workers.”

“Very well. Since you are fluent in Chinese, you shall take charge of this matter.”

“Your Majesty…”

“I cannot handle everything myself, and the Chancellor is far too busy to concern himself with such trivialities,” Frederick III said with a smile. “Besides, the canal’s expansion greatly benefits the navy. It is only fitting that you assume some responsibility.”

“I will not fail Your Majesty’s trust.”

With this matter settled, Feng Chengqian could finally rest a while. However, expanding the Kiel Canal was far from a simple internal affair for the empire. As soon as the news broke, it immediately attracted Britain’s close attention. In early October, Prime Minister Salisbury personally telegraphed Bismarck to inquire about the empire’s intentions regarding the canal expansion. Although Bismarck promised that the project was purely economic and intended to improve inland shipping, Salisbury still expressed deep concern, as the canal could also serve military purposes.

With Britain intervening, the canal expansion was delayed. Not daring to antagonize Britain, Bismarck proceeded with extreme caution.

The crux of the matter was the canal’s navigational capacity. At that time, ten-thousand-ton ships were still rare; most river transports were only a few hundred tons, with the largest barely reaching a thousand. Yet the empire planned to increase the Kiel Canal’s capacity to thirty thousand tons, and some even proposed fifty thousand, lest another expansion be needed in twenty years.

The chief proponent of increasing it to fifty thousand tons was Feng Chengqian.

Though others were unaware, Feng Chengqian knew very well that in twenty years’ time, battleships would reach thirty thousand tons, with some main vessels even exceeding forty thousand. Only by increasing the canal’s capacity to fifty thousand tons could the empire’s navy freely move its capital ships between the Baltic and the North Sea during wartime, without having to round the Danish peninsula, thus ensuring the canal’s military value.

The problem was that if this happened, the true purpose of the expansion would be blatantly obvious. There was no doubt that Anglo-German relations would rapidly deteriorate, while France and Russia would seize the opportunity to draw closer to Britain, and Russia might even again propose the construction of the Trans-Siberian Railway.

After months of negotiations, Bismarck ultimately made concessions. At year’s end, Germany and Britain signed a secret agreement: Britain would provide a £15 million loan for the Kiel Canal expansion and participate in its design and planning. After the expansion, the canal would permit the passage of vessels up to thirty thousand tons displacement, with drafts not exceeding seven meters and beams not exceeding twenty-eight meters.

Britain was not offering the loan out of charity, but to ensure full participation and supervision of the project. Politically, this was a necessary concession by the German Empire to maintain friendly relations with Britain—or, rather, to buy more time.

Without compromise, there could be no harmony.

The empire had no choice but to swallow this bitter pill, and Feng Chengqian had to accept reality as well.

What Feng Chengqian did not expect was that after the publication of the “Kiel Canal Expansion Agreement,” there was a storm of public opinion both in Britain and within the empire.

In Britain, commentators labeled Salisbury a traitor, claiming that helping the German Empire expand the strategically vital Kiel Canal was tantamount to digging Britain’s own grave and would inevitably bring endless troubles. Although politicians knew Salisbury had secured the best possible deal for Britain, many ill-informed people, incited by agitators, created a crisis of confidence for Salisbury, the first since his second cabinet.

In the empire, no one scolded Bismarck; thanks to the influence of propaganda, everyone saw him as a victim. The ire of the population was not directed at the Chancellor’s perceived weakness, but at Britain’s overbearing interference, as it was Britain that had imposed these humiliating conditions on the empire, Britain that had brazenly meddled in its internal affairs, and Britain that was doing all it could to hinder the empire’s rise.

Such popular animosity, once formed, is hardest to dispel.

Thus, the Anglo-German conflict came to the surface.

Previously, most of the empire’s citizens had regarded Britain as an ally, as Britain had always supported Prussia during the wars of German unification and had greatly assisted North German unity. Now, however, public opinion toward Britain was bound to change.

Many attribute the origins of the First World War to the German Empire’s expansionist ambitions, but how many recognize that it was Britain’s relentless pressure and obstruction of the empire’s growth that drove Germany down the path of war, ultimately forcing it to stand alone against all the major European powers for four long years, despite being vastly outmatched in overall strength?

When a nation’s people are united in the face of a threat, that nation is invincible.

Spurred by public sentiment and propaganda, the empire’s bankers showed great enthusiasm, raising as much as 2.5 billion marks by year’s end.

With the financial issue largely resolved, only the matter of labor remained.

On December 8, Bismarck summoned Chen Jitong, the Qing Empire’s chargé d’affaires in Germany, to the chancellery and inquired about the status of the “Dingyuan” and “Zhenyuan” warships. Ostensibly, this was a simple inquiry, but in reality it was a hint: the empire could build even better warships for the Qing at a lower price.

For the Qing, then actively planning its navy, this was a windfall from heaven. It should be noted that the purchase of the “Dingyuan” and “Zhenyuan” alone had cost 3.4 million taels of silver, nearly emptying Li Hongzhang’s coffers. Bismarck’s proposal to offset the warship payments by exporting labor was naturally welcomed by Li Hongzhang.

Two days later, Chen Jitong returned to the chancellery—this time, Bismarck notified Feng Chengqian, instructing him to meet with the envoy from the Qing Empire.