Chapter 446: The Great Dumping

  Chapter 436 The Great Dumping

New York, the largest city in the United States, became more prosperous after the war. Starting in 1865, the American economy began to grow back, and everyone’s days seemed to get better all of a sudden.

Of course, this was just an illusion. There is comparison to happiness, and life has really improved a lot now compared to the time of the war.

The United States is rich in resources, because of the war led to a large reduction in population, especially the greatest loss of young and strong.

Influenced by the supply and demand relationship in the market, in order to obtain enough labor, capitalists had to introduce cheap black labor on the one hand, and raise wages to retain the original workers on the other.

The increase in income eased the social conflicts. It’s the weekend and Tom has asked his girlfriend Elena to go out.

“Tom, have you noticed how much cheaper goods are these days. I was looking at a skirt last month, and now the price has actually dropped by the lower half.”

Tom said bitterly, “Sorry, honey. We’ve already spent our budget for this month, why don’t we wait for next week’s paycheck?”

Influenced by American culture, young people don’t have the habit of saving money. As a member of the moonlight family, Tom was only concerned about prices half a month after payday.

Other than leaving money for living, his paycheck would support him for half a month at most. This is still a good job, he is an honorable employee of a securities company, which can barely be considered as a member of the middle class.

The city of New York is both heaven and hell.

It is only suitable for the rich to live here, and it is better for the poor not to go out. Otherwise, the more you see, the harder your days will be.

For Franklin’s sake, Elena nodded. It couldn’t be helped, with a limited income if you didn’t spend it wisely, you wouldn’t be able to survive in the city of New York.

Not the best, but the most expensive, is the New York of this era. The region with the highest prices in the whole of the United States, or the region with the highest prices in the world.

In the wanderings, Tom’s face gradually gloomy. Discount sale advertisements were everywhere, from small clothing and shoes and socks to large mechanical equipment, almost all of them were tearful sales.

As a high school graduate from Columbia University and working in finance, Tom had to be extra sensitive to the economy.

This large-scale price reduction made him sense that something was wrong. Don’t look at the fact that there are a lot of people snapping them up now, but the total market demand hasn’t changed.

The present rush is equivalent to pre-paying for future purchasing power. It’s a good thing that the United States has a tradition of moonlighters who don’t spend in advance, that’s because credit cards weren’t born.

It is not that the capitalists are merciful, mainly because the technology is not up to standard. Can’t play with such a lofty thing, otherwise it would have long advocated overspending.

Tom said with a bitter smile, “Elena, it seems that we have to prepare for a hard life.”

He was able to notice the problem, would the capitalists in the upper echelons not be able to notice it? In any economic crisis, there is an omen beforehand.

In almost every economic crisis, the consortiums that stood at the top of the capital made a huge profit. If they lost money, they were either too stupid and were underhanded by their rivals, or they were too greedy and wanted to make the last Franklin.

Elena was surprised and asked, “What’s going on, did you lose your job?”

“No, but it’s coming soon.” Tom replied

Elena consoled, “It doesn’t matter, with your ability, it’s easy to find another job. The big deal is that we’re cutting expenses starting next month.”

……

While the two were discussing, the market had already fed back to the final end of the production enterprises. Hit by cheap Austrian goods, many companies were unable to sell their products.

Britain has an economic crisis thing, the ordinary people do not know, but in the capitalist circle is not a secret.

……

At the executive meeting of Citibank, president James said: “Gentlemen, according to our intelligence gathering, the number of ships coming from Austria has increased sharply recently, all of which are transporting industrial and commercial products.

From small toothbrushes, screws and nails to large mechanical equipment. Almost every industry is involved, there is no doubt that this is a dumping.

Not only were the Austrians on the move, but the British were not idle either. This number of ships leaving London and coming to America has increased by one-third.

The British are also dumping goods on us, which is not a good thing for us. Our customers, in the face of the price war they have started, are defenseless.

Or the vast majority of American businesses, for that matter, are defenseless. So we have to take action, or it won’t be long before a lot of bad debt, is going to show up.”

Citibank was the oldest bank on Wall Street, and it was not yet the giant Citigroup of the latter days. The bank’s main business is also not arms, but lending and financial securities.

In this era, the U.S. military industry is very small, and the international arms export market is monopolized by the European powers, these industries can not afford to support a bank in times of peace.

Now the link between Citibank and the military-industrial enterprises, that is, commercial loans, there is no direct investment. Now encountered a crisis, the bank naturally want to first self-protection.

Shareholder Babineaux asked, “Mr. James, what are you going to do? I’m afraid it’s too late to try to push Congress to legislate to raise tariffs and restrict the entry of foreign goods.”

Taking action was inevitable, a legacy left over from the Civil War. While meddling in the American Civil War, the four countries of Britain, France, Austria and Spain also opened up the American market.

Trying to raise tariffs to protect the market was naturally not that simple. This was also the reason why Austrian goods were able to carry out rapid dumping in the U.S. Without tariff restrictions, the low prices became unbeatable.

The most headache is that these industrial and commercial products are not only inexpensive, even in all aspects of performance also exceeds the United States goods.

This era of American industrial and commercial products have always been synonymous with cottage and inferior goods, compared to imported goods, they can only rely on cheap to seize the market.

Now on the tragedy, Austrian goods began to tearful sale, the British also followed to engage in discount sales, the United States of America’s local manufacturing winter came.

James shook his head and said: “Of course not, we are not the savior. The outbreak of the economic crisis is already inevitable, even if we raise tariffs and protect the market.

What we need to do now is to stop the losses as well as make a profit from this crisis. I want the board of directors to authorize the temporary termination of foreign loans.

I’m also prepared to send people ahead to collect on the risky loans. At the same time sell off most of the marketable securities and stocks in your hands, and the bank will draw in professional traders to prepare for shorting the stock market.”

This is not to save the market, but to fall into the well. But none of it is the point, as long as it can make money on the line.

Qualified capitalists, profits always come first. Conscience, social responsibility, these lofty words on the line, who would be silly to take it seriously.

Especially in the 19th century, the bloodiest era of capital, every Franklin’s back is stained with blood and sweat.

There’s nothing to discuss. It’s time to shuffle the deck again. Before resisting the invasion of European capital, one had to make sure one survived.

What happened in the last economic crisis is still fresh in everyone’s mind. Due to insufficient preparation and lack of sufficient cash in hand, there was a heartless money panic in the United States, and Citibank was all but bankrupt.

With the development of the capitalist economy, economic crises have become more and more like a common occurrence. At the beginning, they were once every few decades, but later they became once every 10 years, and soon they will become once every few years.

There are many financial capitalists who make the same choice, and there is no warmth in front of profit. In this age of the weak and the strong, everyone has to survive, and it’s impossible not to be ruthless.

Banks contracted their monetary roots, which soon triggered a chain reaction. Many enterprises are in dire straits, including some enterprises with good benefits, which are caught in a life-and-death situation due to the breakage of their capital chain.

In an instant layoffs and production cuts became the hottest words in American society. The streets and alleys were filled with people looking for work, yet there were few companies hiring. The post-war economic boom that had just begun died a direct death.

The same thing played out in many places around the world, not just the United States. Austria just opened its doors and valves ahead of the others and transferred the economic crisis.

Immediately following the British action, the whole world was directly dragged down. The world’s number one industrialized country is likewise the country with the worst backlog of goods in the world.

The British capitalists, in order to survive, dumped their goods directly on the European continent.

The first to suffer was France, where a large number of British textile products were imported at cabbage prices, which the Paris government was unable to stop by raising tariffs again and again.

There was no way out, this time Austria made the first move, dumping goods into countries with relatively backward economies. By the time the British reacted, the purchasing power of the market had been almost exhausted.

These countries originally did not have much industry, dumping industrial products can not impact on the agricultural economy, and even many people are still in the bargain to buy and celebrate.

European countries are different, everyone’s industry has started. The British dumping of goods has seriously affected the economy of the countries. There was nothing to say, and there was a flurry of tariff firewalls in play.

The crisis widened across the continent, including Austria, who had no way of staying afloat, and a large number of businesses went bankrupt every day.

Everyone’s international markets were in the midst of a sharp contraction under the tariffs. The colonial empires were fine, at least they had colonies to drain and were able to mitigate the crisis.

Countries without colonies were miserable, for example: Belgium, the little industrial powerhouse was hit hard. Without overseas markets, Belgium’s industrial capacity was directly cut in 1868.

Poland, which had just gained its independence, did not escape either. Without the Russian Empire as a large market, Poland’s fragile industrial system, in the first wave of impact fell.

Even the export of agricultural products, did not escape. Originally affected by the economic crisis, international food prices plummeted.

This, coupled with their own lack of access to the sea, increased tariff costs and directly led to the loss of competitiveness of Polish agricultural products.

This complicated the already contradictory Prussian-Polish relationship. The Poles hated the Kingdom of Prussia more and more and imposed tariffs on their agricultural products.

In fact, the Kingdom of Prussia was too self-interested to care about the Poles. When the economic crisis broke out, the British did not spare them as their little brother either.

A large amount of British goods swept in, and the fragile industry of the Kingdom of Prussia was hit hard, with a large number of businesses going bankrupt and the number of unemployed people increasing dramatically.

With industry hard hit, it was only natural that agriculture should be preserved. It was the Junker nobility that was in power, and the interests of the class had to be defended first.

After the Russo-Prussian War, the Kingdom of Prussia gained a large amount of land, and directly changed from a food-importing country to a food-exporting country.

In terms of grain export, Prussia and Poland had become competitors. The good thing was that everyone had just finished the war not long ago, and food production had not returned to its peak, so the competition between them was not too fierce before.

This conflict, by the time of the fall harvest of 1868, the situation was transformed. It happened to be the period when the economic crisis was at its most violent, and the population’s purchasing power declined, and international grain prices fell by 28%.

All major European grain exporters were having a hard time, and in order to secure their own interests, the Berlin government, dominated by the Junker aristocrats, had to restrict Polish grain exports with tariffs.

It was not all the Berlin government’s fault, who made the Polish capitalists, directly dumping grain into the interior of the Kingdom of Prussia?

Initially the two governments had agreed that Polish farm products could not be sold in Prussia. This kind of government-to-government constraints obviously did not limit the capitalists.

Seeing the high price of grain in the Kingdom of Prussia, the capitalists naturally could not help themselves in the face of profit.

At first they just secretly sold a little bit to the people along the way during transportation, and the quantity was not much and did not attract attention. Then the business grew bigger and bigger until the lid couldn’t hide the outbreak.

There is no warmth in front of the interests of the Junker nobles, the interests of the damaged Junker nobles made a fuss, the Berlin government naturally know which side to stand. After negotiating to no avail, it directly offered a tariff move.

(End of chapter)