Chapter 287： Economic crisis (1/2)

The Quartet negotiations are still ongoing, and a crisis has quietly arrived. Overcapacity in the capitalist world has been fed back to the market. In order to destock, British capitalists have increased dumping to countries around the world.

The first people to suffer were Americans. Even under Franz's butterfly effect, Austria diverted some international capital, but this did not solve the US crisis.

From 1848 to 1858, Americans built 25,000 kilometers of railways, 8,000 kilometers less than in history, and the railway bubble was not as severe as in history.

Unfortunately, with the rapid development of the American railway industry, the surrounding industries have not been driven. Under the competition of British goods, the metallurgical industry has also shrunk, and the cotton spinning industry is also developing slowly.

Railroad tracks, pig iron, locomotives, cotton, hardware, machinery ... are full of British products, and the local industry has been squeezed.

Now that the British have stepped up their dumping efforts, these industries can't stand it. The cotton industry, which was hit first, kicked off the tide of bankruptcy.

It soon spread to the stock market, and the stock price fell out of control, and more companies were implicated.

A large number of factories went bankrupt, and banks and financial companies were naturally unable to survive on their own. A large number of bad debts appeared, the run-out crisis broke out, and the banks went bankrupt.

The US economic crisis soon spread to the United Kingdom, the market shrank, British industrial and commercial exports were also impacted, a large number of companies went bankrupt, and British capitalists as investors also suffered heavy losses.

Capitalists reacted keenly. In order to stop losses and deal with a possible domestic economic crisis, British capitalists have withdrawn funds from the US market.

In this context, a shortage of money occurred in the US financial market in the fall of 1857, and the entire banking system was paralyzed. 62 of the 63 banks in New York stopped paying, and the discount rate exceeded 60%.

The economic crisis broke out across the United States. The unprotected American market was fragile. This economic crisis directly triggered the American civil war.

Capitalists in the north need cheaper labor to increase profits, and they need tariff barriers to protect their interests. In contrast, planters in the south need to reduce tariffs in order to export cotton and buy cheap industrial and commercial products.

Stimulated by the economic crisis, the northern industrialists decided to overturn the table, began to advocate the benefits of slavery and trade barriers, and were ready to suffocate the financial resources of the southern planters from the source.

Obviously, this is not acceptable to plantation owners in the south. Everyone can tolerate the abolition of slavery. The system of underemployment is not much worse than slavery, but the issue of tariffs cannot be discussed.

Northern industrial and commercial products are of poor quality, low efficiency, and expensive. Why should we use them?

What's more, if tariffs increase, grain, cotton, and tobacco exports will be fatally hit. For every dollar of tax increase, they will have to reduce their profits by one dollar, which is simply stealing their money.

The conflict of interest between the two sides is too serious to be negotiated at all. In the end, the southern plantation owners began to become independent.

The economic crisis in the United States has little to do with Austria. The trade volume between the two countries is very small. Everyone is an exporter of agricultural products. The competition between the two parties is greater than cooperation.

However, after the economic crisis spread to Britain, it was difficult for European countries to survive alone, and Austria was no exception.

Palace of vienna

Prime Minister Felix solemnly said: ”Sir, the economy of the United States has spread to Britain, and it will not affect us for a long time.

Once the British people allocate funds to leave, many domestic companies will run out of funds, and an economic crisis will break out. ”

Franz replied casually: ”This is an inevitable result. At least we are well prepared. There will be no shortage of money in the country. As long as the normal exchange of the banking industry is guaranteed, the crisis is within control.”

Everyone nodded. In response to the economic crisis, the Vienna government made a lot of preparations. First, it locked up some capital so that they could not flow out. It also issued huge bonds to accumulate funds.

Now even if some British and French capitals retreat, the Vienna government also holds a lot of pounds and francs, which can be directly redeemed without causing outflows of gold and silver.

Chancellor of the Exchequer Carl proposed: ”Your Majesty, the crisis is still under control, can the huge fund flow approval system be suspended?

After all, doing so will damage our reputation, and it is not necessary to do so. ”

In this era, capital can flow freely between countries without any restrictions. As the first owner to eat crabs, he may become a hero, and he is more likely to become a martyr.