Chapter 419 The crisis broke out
February 3, 1873.
Vienna, Austria.
For Austrians, the entire year of 1872 is unforgettable. In 1872, like other countries in the world, the Austrian market was unprecedentedly prosperous. In addition, Austria defeated Italy and recaptured Venice. It makes Austrians happier.
Double economic and military victory is the most confidence-boosting thing for the citizens of any country. Originally, along with the overheating of the economy, a large number of job opportunities were created, and the outbreak of war led to the recruitment of troops. Work has also been started. Under this situation, Austrians are not too enthusiastic about immigrating overseas.
The direct manifestation is that in 1872, the number of Austrian immigrants to East Africa dropped sharply to less than 5,000 throughout the year. Because the Austrian government intended to import German people to Venice, the immigrants changed from flowing to East Africa to mainly flowing to cities and Venice. .
Since 1848, the only major setback the Austrians suffered was their failure in the Austro-Prussian War and being kicked out of the German region by Prussia.
However, Austria's economy has not been affected at all. Austria's industrialization is slower than France and Prussia, but it is also developing rapidly.
The construction of railways is a direct reflection of this economic situation. From 1859 to 1872, the entire Austro-Hungarian Empire built more than 7,000 kilometers of railways. The data may not be comparable to other great powers, but it is still Astonishingly, this period was also the stage of Austrian railway privatization.
However, all this took a turn at the end of 1872. At the end of 1872, 76 railway companies in the Austro-Hungarian Empire defaulted on their bonds. Among the 384 listed railway companies, 279 companies do not have any dividends to distribute.
However, railway stocks are still popular all the time, and the market is full of applause. This gives fanatical investors the illusion that they can't buy it without grabbing it.
Wait until February and the bad news comes.
On February 4, the Barclay Railway defaulted.
On February 5, Cook Railway Company defaulted.
On February 6, Kenyons Bank defaulted.
On February 7, all railway stocks fell, and then the stock prices on the Vienna Stock Exchange poured down like a waterfall under the gaze of investors. That night, many gamblers took to the rooftop.
The Court of Vienna.
"Your Majesty, according to statistics, more than 400 million guilders evaporated from the Vienna Stock Exchange in one day. Countless stock investors were destitute overnight. Yesterday, the preliminary count of suicides was 17 people24 What followed was a complete paralysis of credit and the suspension of securities transactions, and Austria's economic winter was coming."
Franz listened to the Chancellor's report expressionlessly, as a mature man. As the emperor, Franz was obviously much more stable.
Franz asked directly: "To what extent will this crisis affect the empire?"
"We don't know yet, but the impact may still be greater than that of 1848, because the scale of this crisis is obviously much larger. Except for a few state-owned enterprises, the entire railway industry is facing the risk of paralysis, and the current crisis itself has started from the railway Spreading to other areas."
1848 was a terrible number for Franz. At that time, Habsburg was almost overthrown. Franz came to power in a storm. In the following ten years, Austria Development has also been quite unsatisfactory, and it has only recently reversed its decline. As a result, the economic crisis broke out again before we could live a comfortable life for a few days. In fact, the capitalist economic crisis broke out first in Austria. It is not surprising at all. Economic crisis is a game of drumming and spreading flowers. In recent years, as the industrialization of the Austro-Hungarian Empire has deepened, it was natural that the Austro-Hungarian Empire could not avoid the cyclical rate of capitalist development.
The prosperity before the economic crisis was a typical example of data falsification and overtaxation. The financial market and stock market were deformed and distorted, and they remained at abnormally high levels for a long time.
The economic crisis of 1873 was a far-reaching worldwide economic crisis. This crisis first broke out in industrial countries and then spread to other countries. All countries that join the world market will be affected first.
The regions that are not affected are the Far East, South America and other regions. Historically, Africa was not affected. However, due to the variable of the East African Kingdom, it will also be affected now. The East African Kingdom is not big, but it represents nearly one-third of the country. Africa, as well as Egypt and other North African countries, cannot escape this economic crisis.
As for why Austria became the first outbreak site, it was entirely due to the national conditions of the Austro-Hungarian Empire. The industrialization of the Austro-Hungarian Empire was originally a step slower than other countries, and the development of the financial industry was also relatively chaotic. The imperial dualist government must have worse control over the financial industry than other countries.
Capitalists in other countries can still huddle together before a thunderstorm, fool the leek first, and withdraw safely. There are many ethnic groups in the Austro-Hungarian Empire, and there are more factions, so the Austrian capitalists are more The lack of martial ethics, lack of communication, and mutual suspicion under vicious competition made the Vienna Stock Exchange the first to suffer a thunderstorm. Isn’t it true that the dead Taoist friend will die of the poor Taoist!
Although all countries have economic problems and everyone is cheating, whoever is more deceptive will have a later crisis. It is obvious that the banks and entrepreneurs in Vienna are not as good as the old foxes in Britain, France, the United States and other countries.
With the outbreak of the economic crisis in the Austro-Hungarian Empire, it will inevitably affect the business of the Hechingen Consortium first. What is certain is that East African grain exports will inevitably suffer setbacks, because this crisis is accompanied by a strong agricultural crisis.
Originally, international food prices were due to fierce competition in the output of newly developed lands in North America, Tsarist Russia, and Australia. With the addition of the new player, the Kingdom of East Africa, the agricultural crisis will become even more powerful.
On the day of the thunderstorm at the Vienna Stock Exchange, Ernst received the news. On that day, all companies under Hechingen began to lower their product prices and were the first to join the dumping war.
It should be noted that the food companies under the Hechingen Consortium not only do business in East Africa, but also do business in Germany and the Austro-Hungarian Empire. They are the largest grain distributors in the entire Germany, so the Hechingen Consortium’s Dumping by companies is not just a matter of the Kingdom of East Africa, but the Hechingen Consortium is pulling agricultural products from East Africa, Germany, and the Austro-Hungarian Empire to dump together.
East Africa, Germany, and the Austro-Hungarian Empire are all internationally important grain-producing countries. When the Hechingen Consortium started the grain dumping war, huge amounts of cheap agricultural products from the three countries poured in. All over Europe.
At the same time, the East African mainland also stepped up its time to negotiate (order) with the Zanzibar Sultanate to export food to the entire Arab region and parts of Southeast Asia through the channels of the Zanzibar Sultanate.
The Hechingen Consortium caught the whole world off guard as soon as the crisis broke out, causing international food prices to skyrocket.
Ernst was confident about this. Even if other countries wanted to liquidate, they would have to bring Germany and the Austro-Hungarian Empire with them. The Junkers and Hungarian landowners were actually passive beneficiaries. Obviously this was not the case. What may happen, as for the food crisis to be exacerbated, is exactly what Ernst wants to see, because East Africa is not a free economic market, and the crisis will not have any negative impact on East Africa.
Although the collapse in food prices will cause Ernst to make a lot of money, it is good to be able to make money now. As long as it is a little later, it is not a question of whether to make money, but that he cannot sell at a loss. Get out, unless it's really free.
In fact, as long as the grain exported from East Africa can be sold for one penny, the Hechingen Consortium can get one penny of profit. This is the result of the special economic system of the East African Kingdom.
From the moment the grain was shipped out of East Africa, it was decoupled from the East African Kingdom and was directly assigned to the Hechingen Consortium. The labor and production costs for this grain were almost non-existent because the grain There is no economic value in East Africa, the land is snatched, and the labor force is directly prostituted from indigenous laborers. East African farmers can maintain their basic needs for food and clothing, but their needs are compared with the benefits they create for the Hechingen royal family. Not worth mentioning at all.
(End of this chapter)