African Entrepreneurship Records

Chapter 419 Crisis breaks out

 February 3, 1873.

Austria Vienna.

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, which made the Austrians happier. .

The dual 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. The outbreak of war also started the military recruitment process. This Under such circumstances, Austrians are not very 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 was not affected at all. Austria's industrialization was slower than that of France and Prussia, but it was 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 amazing, and this This period was also the stage of privatization of Austrian railways.

 But all this came to a head at the end of 1872, when 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 booming, and the market is full of praise, which gives fanatical investors the illusion that they can't buy it without grabbing it.

 Wait until February, and the bad news came.

 February 4, Barclay Railway Company defaulted.

  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, and countless stock investors became destitute overnight. According to preliminary statistics yesterday, seventeen people committed suicide one after another in 24 hours. It is the total paralysis of credit and the suspension of securities transactions, and Austria’s economic winter is coming.”

Franz listened to the Chancellor's report with an expressionless face. As a mature 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 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 spread to other areas."

1848 was a terrible number for Franz. At that time, the Habsburgs were almost overthrown. Franz came to power in a turbulent period. In the following ten years, Austria's development was also quite unsatisfactory, which was only recently changed. 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 beating the drum and passing the flowers around. 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 joined the world market would be the first to be affected.

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 slower than other countries, and the development of the financial industry was also relatively chaotic. In addition, the Austro-Hungarian Empire had a dual system of government. The regulation of the financial industry is bound to be worse than other countries.

Capitalists in other countries can still huddle together before a thunderstorm, trick the leek first, and withdraw safely. There are many ethnic groups in the Austro-Hungarian Empire, and there are more factions. Therefore, the Austrian capitalists are less concerned with martial ethics and lack of moral integrity. Communication, mutual suspicion under vicious competition, this made the Vienna Stock Exchange the first to have a thunderstorm, a dead Taoist friend will not die a 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 is bound to first affect the business of the Hechingen Consortium. What is certain is that East African grain exports will inevitably suffer setbacks, because this crisis is accompanied by a strong agricultural crisis.

International food prices have originally been fierce 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 in the Kingdom of East Africa, this agricultural crisis will become even more powerful.

 Ernst received the news on the day of the thunderstorm at the Vienna Stock Exchange. 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 Germany. Therefore, dumping by companies under the Hechingen Consortium is not only It is a matter of one country in the Kingdom of East Africa, but the Hechingen Consortium is pulling the agricultural products of 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 into 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, and international food prices directly exploded.

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 Junker landowners and the Hungarian landowners were actually passive beneficiaries. Obviously this was impossible to happen. As for The food crisis has been exacerbated, which is exactly what Ernst wants to see. Because East Africa is not a free economic market, 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 matter of making money or not, but that he cannot sell at a loss, unless it is really for nothing. deliver.

 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 was not transported within East Africa. Given economic value, the land was snatched, and the labor force was directly prostituted from indigenous laborers. East African farmers could maintain their basic needs for food and clothing, but their needs were nothing compared to the benefits they created for the Hechingen royal family.

 (End of this chapter)