Chapter 76: Hong Kong (Part 1)

Liu Yu wasn’t disappointed. He simply asked, “Then where in Hong Kong can I buy a telegraph machine?”
This era was the golden age of the Second Industrial Revolution, with new inventions emerging one after another. If there was one major change brought about by this revolution to the world, it was the application of electricity.
In terms of military affairs, trains and telegraphs had sparked a military revolution. Liu Yu certainly didn’t have the means to operate trains that allowed for rapid troop movement, but he could afford to use telegraphs to obtain information quickly.
With a telegraph machine, his control over his troops and his understanding of intelligence would improve significantly. He knew this was a massive project—wiring alone might stretch over a hundred kilometers—but no matter the cost, he felt it was worth it.
After all, even the fastest courier service in the Qing Dynasty could only deliver messages over 400 kilometers in a day. Sometimes, it took Beijing over a month to learn about developments at the border, and in some remote areas, it took as long as three months.
Now, with just a flash of electricity, one could keep track of major events worldwide. Although establishing a telecommunication network in Beiban had its limitations, Liu Yu felt he needed such a bold move—even if it meant spending all of the Banque de Paris’s one million francs.
But Desmond had a different opinion. “A telegraph machine? You’re behind the times. This is electric lighting!”
Electric lighting? Liu Yu hadn’t expected that electric lighting already existed in Hong Kong at this time and had even become somewhat widespread. “The power grid was installed starting in 1879, and now hundreds of households and companies in Hong Kong already use electric lighting.”
It was now 1881—two years since Edison invented the reliable electric light. Both Hong Kong and Shanghai had adopted electric lighting as early as 1879.
This was another change brought about by the Industrial Revolution. In previous eras, due to limitations in communication and shipping speeds, the most advanced Western technologies were years, even decades, behind those in the Far East. But in this age of electricity, the world was moving in sync, while those feudal rulers in the East remained stuck in their ways.
Desmond’s company was one of the several users of electric lighting in Hong Kong. Upon hearing this, Liu Yu asked with a smile, “If you already have electric lighting, surely you must also have telephones installed.”
Desmond glanced at Liu Yu and blinked. “How do you know I’m planning to install telephones? Hmm…”
They both realized almost simultaneously, “Telephones!”
Liu Yu immediately asked, “Where can I find telephones? I need to buy some.”
He suddenly remembered that compared to telegraphs, spreading telephones in Xiliuying was a more feasible and convenient solution.
He racked his brain, thinking about when telephones were invented. Must it be the magnetic telephone now? There should be a central office for magnetic telephones, right?
His arrival in Hong Kong was indeed a perfect timing—telephones were also invented in 1879, appearing in both Hong Kong and Shanghai that same year.
Any advanced technological invention was available to the bourgeoisie in Hong Kong and Shanghai, while third-rate ports like Haifang remained far behind the world’s advancements.

Over there, Desmond had already asked, “How many magnetophone phones are needed? How many switchboards? And how many meters of telephone lines?” The telephones of this era were antique-style magnetophones, similar to the hand-cranked telephones from another time and place—whose call quality was always unstable, and manual switching was required for multiple users. Yet, no matter what era it was, such magnetophones would always remain the military’s preferred choice, never becoming obsolete. These simplest of telephones had advanced advantages: two phones connected by a telephone line could communicate without any switches or other equipment. Even the most advanced mobile phones or satellite phones could never achieve this. During wars, their ability to connect instantly made them immune to any electronic interference or disruption—only two magnetophones needed to be connected. Desmond also provided magnetophone switchboards. In some large Western cities, telephone networks with hundreds of users already existed by this era, but in Eastern cities like Hong Kong and Shanghai, a telephone network typically consisted of only twenty to thirty households, using manual switching—exactly the kind of products Desmond offered. But this was sufficient; even at the company level, a network of twenty to thirty households could enable Liu Yu to easily manage all infantry companies. Before the invention of the telephone, a commander could only direct a limited number of troops directly, due to inherent limitations in his ability to control forces. Through signals, flags, carrier pigeons, or messengers, his command range was only a few kilometers. Napoleon fought desperately at Waterloo, yet his tens of thousands of troops were hiding just over ten kilometers away from the enemy, never being deployed to the battlefield—despite him being the greatest general before the Second Industrial Revolution. A makeshift field telephone network of just twenty telephones could increase the combat effectiveness of the troops by at least 30%. This invisible improvement could bring about a dramatic change in the troops’ performance, and compared to telegraphs, telephones were easier to operate. Training a few operators was a relatively simple task, but training dozens of operators skilled in Morse code was much more difficult. Moreover, telephones allowed commands to be given directly over the phone, while telegraphs required much more complexity—converting written orders into Morse code and then back into written orders. Since the invention of radio was still years away, Liu Yu immediately changed his mind: “I need many telephones, many switchboards, and many kilometers of telephone lines.” He roughly estimated that Shanxi City would need a telephone network for twenty to thirty households, a wartime command network of about thirty households for wartime use, plus several smaller field telephone networks of fewer than ten households each. Whether in wartime or peacetime, a few telephones could double efficiency. All of this required a large number of telephone lines, which were consumable items both in wartime and peacetime. Thus, over a drink, Liu Yu and Desmond finalized the order: 100 telephones, 100,000 meters of telephone lines, 10 magnetophone switchboards, a full set of telephone accessories, plus two backup telephones and 10,000 meters of backup telephone lines.

This order is considered the largest telephone set deal since Hong Kong’s opening. The goods were directly transferred from Desmond’s company, and he sold them to Liu Yu at cost, earning only a modest profit. Naturally, he wasn’t interested in this business; what interested him more was printing banknotes with the printing press—that was the real way to make money endlessly from blank paper. “Once this batch is shipped, I’ll import some New Year paintings from Tonkin and take them to Saigon.”

France started its colonial efforts a bit late, so the franc had far less credibility in the Far East compared to the pound and dollar, especially in Guangdong, where people generally preferred to use Hong Kong dollars. By this era, the Hong Kong dollar was already the most trusted currency in Guangdong. Of the 3.5 million in circulation, HSBC accounted for almost half. Whether in Macau or Guangzhou, merchants preferred using Hong Kong dollars. The use of the franc in these areas was similar to using Hong Kong dollars in Guangzhou in 2008—it was met with constant discrimination. It seemed the best option left was Cochinchina.

That was a French colony for many years, and aside from small coins issued by the Oriental Bank of Commerce and piastres, almost everything in circulation was francs. A circulation of over a hundred thousand francs seemed quite good. But Liu Yu had a longer-term vision. He said, “New Year paintings sell well in Saigon; the locals there like them. But I’ve heard that the natives in Africa also use them for protection against evil spirits.”

Others found their talk confusing; some could hardly hold back laughter. Africa, New Year paintings, protection against evil spirits—what did those have in common? Their knowledge far surpassed that of the Manchu and Han officials in the Forbidden City. They knew Africa was inhabited by black natives who had nothing to do with China, and they didn’t even know what New Year paintings were. This deal would surely result in a loss.

Unexpectedly, Desmond nodded. “Hmm… Africa… that place…” He hesitated for a while before saying, “That place…” Desmond scratched his head again and finally said, “It’s not easy to do business there. You have to start from scratch.” He had no idea what to do in Africa, but he also knew it had greater potential. “We can consider it…”

The French had been operating in Africa for years, seizing many fertile colonies. In these regions, there were differences between the franc and the colonial franc, but the franc was a legitimate currency with no circulation problems. Even some British and Belgian colonies accepted the franc. It was a good suggestion, but difficult to implement. Liu Yu said, “There’s too much backlog of New Year paintings that can’t be sold in Tonkin. We need to find a market for them. The market in Cochinchina is too small, so I think Africa is a good option.”

“By the way, use New Year paintings to replace your dividends.” Desmond was extremely conflicted, but after thinking it over, he realized his customers would likely be the black natives in Africa—people easier to deceive. Spending two hundred thousand francs in Cochinchina was already the limit, but spending ten million francs in Africa wouldn’t be a problem.

“No problem. Prepare more francs for me. I need to stock up a shipload of New Year paintings to send to Africa.”

Desmond was highly determined. A shipload of francs could surely be exchanged for several ships’ worth of gold, silver, and ivory slaves. Even if they couldn’t be spent in French colonies, they would still be useful in Belgian, Italian, or British colonies. He even remembered that in Africa at that time, there were still many independent states like Ethiopia and Sudan, which also accepted francs. Moreover, his francs were of such quality that even professionals couldn’t tell them apart. With careful handling and sufficient discounts, even if the buyers knew they were fake, they would likely still buy them. He estimated the ratio and decided to purchase supplies at 140% of normal prices. Then, Liu Yu offered a constructive suggestion.