How to Defeat the Rubber Barons
The share negotiations with Standard Oil did not wrap up in short order.
Above all, the true scale of the Spindletop field had yet to be precisely established, making it difficult to set any baseline for the talks.
"By every measure, this field is worth no more than ten thousand barrels a day."
Rockefeller's side even leaned on the authority of the United States Geological Survey in their effort to hammer the field's value down.
Waldemar's people, of course, refused to accept it.
"Preposterous! This field can easily produce a hundred thousand barrels a day."
"What kind of joke is that? Where in the world is there a field that yields a hundred thousand barrels?"
Neither side yielded an inch; the standoff remained taut.
Waldemar decided to let the negotiations run their course. So long as the oil stayed in the ground, he believed time was on his side. He left the oil talks in the hands of the British royal family's estate managers and turned his attention elsewhere.
"What we need to be looking at now is rubber."
Waldemar had fixed his gaze on rubber — the commodity that, at the height of the imperial age, had delivered annual returns of several hundred percent.
"Securing the Congo will take a little more time."
"No. Brazil."
"Brazil?"
Before he fully locked down the Congo, Waldemar intended to get his hands on Brazil's rubber trees and taste the sweetness of the rubber trade for himself.
Of course, the Brazilian rubber he coveted was no ownerless raw material. The Amazon rubber harvest was under the iron grip of the notorious rubber barons. These men were infamous for forcing debt upon the indigenous people and then binding them to forced labor through a system that amounted to debt slavery. Facing such outlaws in the lawless rainforests of the Amazon was no simple matter.
Still, looking at those returns, you can't help wanting to snatch it away.
Once bicycles became commonplace and rubber demand exploded, the industry's returns were set to quadruple and more.
"If it's Brazilian rubber, the merchants and planters they call the rubber barons hold dominion. They are local overlords backed by the Brazilian government and by British capital involved in the rubber trade. Coveting that rubber means fighting the barons' entire network of patrons as well. Do you truly mean to take them on?"
According to the famous maxim left by the British critic Thomas Joseph Dunning in his critique of the nature of capital: with a profit of fifty percent, capital grows bold beyond any other; with a hundred percent, it tramples every human law underfoot; with three hundred percent, there is no crime it will not commit, even the risk of the gallows.
The profits Waldemar saw in rubber exceeded four hundred percent. He was therefore ready not merely to fight the rubber barons, but to wage war.
"Of course. We can hardly leave them to enjoy all the fun alone."
He had no intention of charging in head-on from the start, however. Waldemar had his own calculations.
"We'll begin with synthetic rubber."
"Synthetic rubber?"
John Connor had studied rubber thoroughly enough while serving the prince, yet he had never heard of such a thing.
"Think of synthetic rubber as something manufactured from petroleum."
"Was it developed in Germany?"
Connor knew the prince funneled considerable research funds to chemists and wondered whether a breakthrough had come from that quarter. Waldemar laughed.
"No. No such thing exists in the world yet."
Even if it did appear, it would not do so until the twentieth century.
"Then what use is a thing that doesn't exist?"
Waldemar decided to offer the Englishman a hint.
"There was a company that never actually turned a profit, yet everyone believed it did — and poured money into it. You know the one."
"The South Sea Company."
The joint-stock company created by the British government to monopolize South American trade had inflated its share price more than a hundredfold by circulating rumors of profits that did not exist. When the South Sea Bubble finally burst, even Britain's greatest genius, Isaac Newton, had been forced to watch his fortune vanish.
John Connor saw at once what the prince was driving at.
"But the South Sea Company at least possessed a monopoly trading charter from the British Crown and ships of its own. What substance does synthetic rubber have?"
"Substance isn't strictly necessary. All one needs is a device that makes people believe the lie."
"For example?"
"What if we show them a factory ready to stamp out synthetic rubber?"
Build a factory for synthetic rubber that had not even been invented? The notion was absurd. Yet modern confidence men had already proven how devastatingly effective the method could be. The classic case was Theranos, the company that had shaken Silicon Valley.
Theranos had drawn enormous investment on the claim that a few drops of blood could diagnose more than two hundred diseases. Its "substance" was nothing. All people ever saw was the dazzling blueprint Theranos waved before them — and still they believed. Why? Because the lie had seemed plausible enough.
Synthetic rubber would be no different. Tell a carefully packaged story of synthetic rubber borrowed from future knowledge, then let people watch a factory rising for it, and who would refuse to believe?
"That is fraud, Your Highness."
"So it is."
"If the matter ever comes to light, it will stain Your Highness's honor as well."
"What have I to do with a pack of fools who invest in a synthetic-rubber factory?"
"But the capital—"
"Capital carries no name tag, Mr. Connor. You know that as well as I."
John Connor was left speechless by the prince's brazen reply. The logic was outrageous, yet he could not deny it was commercially brilliant.
"Had Your Highness been born in the New World, you would have made a splendid robber baron."
Connor gave reluctant assent to the plan. Waldemar immediately set the synthetic-rubber factory scheme in motion.
The core of Waldemar's rubber-factory design was simple. First, spread the concept of synthetic rubber among the public.
Second, arrange for a well-intentioned investor who had taken an interest to "happen" upon a chemist who had supposedly found a breakthrough in synthetic rubber, and form a company with him.
Third, under that company's name, buy up large tracts of land and throw up temporary buildings so that real investment appeared to be under way.
Fourth, announce that the supply of synthetic rubber had broken Brazil's rubber monopoly.
Fifth, while the rubber barons reeled from the shock, propose to acquire their operations.
Sixth, before the barons could smell a rat, open rubber dealings with the British and settle into the rubber trade chain. The only casualties would be the rubber barons who had "failed to see the tide of the age."
What? We failed to see the tide of the age?
Of course the rubber barons who fell to Waldemar would never quietly accept defeat. They kept private armies, and they possessed guns that spoke more persuasively than words. But Waldemar possessed the backing of a royal house. If they truly became a nuisance, a little pressure applied to Brazil in the name of the Crown Princess would suffice.
There would be some noise, but nothing that could wreck the venture. And the British capitalists who had traded with the rubber barons? So long as their own stakes in the rubber industry were protected, they were the sort who would swallow a measure of discontent and move on. After all, one could hardly open fire on the son of Britain's eldest princess.
Waldemar watched the rubber-factory plan unfold at his leisure.
"Your Highness, what nationality shall we give the rubber-factory investors?"
"It will need to be a country that produces petroleum if the story is to hold water. Make it Romania."
He felt a twinge of apology toward his fellow Hohenzollerns, yet Waldemar did not suffer any great pangs of conscience — not because Romania would one day betray Germany in the Great War, but simply because he was not particularly close to the Sigmaringen branch.
That summer, while Waldemar prepared to dip his spoon into the rubber industry, word finally arrived from the Congo, where he had long been waiting for news.
"Your Highness. We have obtained signatures from nearly all the tribes along the Congo River. The international community will not be able to ignore these treaties."
"I always believed you would bring results, Doctor."
"It is entirely thanks to Your Highness's grace in trusting and supporting me. With that in mind, might I ask for support for deeper inland exploration as well?"
"Of course. If you wish, you may go all the way up the Nile."
"My thanks, Your Highness."
Waldemar's heart swelled at the thought of using the treaties Stanley had delivered to legitimize German — that is, his own — dominion over the Congo.
Once I secure a share of the Amazon rubber trade in Brazil, and once bicycle demand begins to explode, I'll set the plantations running in the Congo and establish myself as the rubber industry's definitive supplier.
By then Britain would also be operating rubber plantations across Ceylon and Malaya, yet they would struggle to match the Congo's profitability — closer to the heart of Europe and better suited to rubber cultivation. Through this grip on rubber, Waldemar meant to lock in his influence over industry itself.
When the negotiations with Standard Oil conclude, the oil will be in my hands as well.
Oil was the blood of industry; rubber was its vessels. Who would dare look down on the man who held both?
The capitalists? The Junkers who enjoyed their privileges inside the Empire?
Waldemar smiled. Not a single one of them had the right.
He sensed that day was not far off.