Holy Roman Empire

The four-party negotiations are still in progress, 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 their dumping of countries around the world.

The Americans were the first to suffer. Even under the butterfly effect of Franz, Austria diverted a part of international capital, but this did not solve the American 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 serious as in history.

Unfortunately, with the rapid development of the US railway industry, the surrounding industries have not been driven.Under the competition of British commodities, the metallurgical industry has also shrunk, and the cotton spinning industry has also developed slowly.

Railroad tracks, pig iron, locomotives, cotton cloth, 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 cannot bear it.The cotton industry, which was hit first, kicked off the bankruptcy wave.

Soon it spread to the stock market, the stock price diminished, and more companies were implicated.

A large number of factories went bankrupt, and banks and financial companies were naturally unable to protect themselves. A large number of bad debts appeared, a running-out crisis broke out, and banks went bankrupt.

The economic crisis in the United States soon spread to the United Kingdom, the market shrank, British industrial and commercial exports also suffered, 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 In order to stop losses and deal with the possible economic crisis in the country, British capitalists have withdrawn funds from the US market.

Against this background, the US financial market in the fall of 1857 saw a money shortage, and the entire banking system was paralyzed. 62 of the 63 banks in New York stopped payment, and the discount rate exceeded 60%.

The economic crisis broke out in the United States in an all-round way, and the unprotected American market is fragile. This economic crisis directly triggered the American Civil War.

The capitalists in the north need cheaper labor to increase profits, and tariff barriers are needed to protect their interests. The planters in the south, on the contrary, need to reduce tariffs to export cotton and buy cheap industrial and commercial products.

Stimulated by the economic crisis, the industrial owners in the north decided to overturn the table, and began to advocate the benefits of slavery and trade barriers, preparing to pinch the source of money from the plantation owners in the south.

Obviously this is not acceptable to the southern plantation owners. The abolition of slavery can be tolerated by everyone. The system of contracted labor is not much worse than slavery, but the question of tariffs cannot be discussed.

The industrial and commercial products in the north are of poor quality, low efficiency and expensive prices. Why should we use them?

Not to mention the increase in tariffs, the export of food, cotton, and tobacco will be fatally hit. For every additional dollar of tax, they will have to reduce their profits by one dollar, and they are robbing them of their money.

The conflict of interest between the two parties was too serious to be discussed at all, and finally the southern plantation owners who were at a disadvantage 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 sides is greater than cooperation.

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

Vienna Palace

Prime Minister Felix said solemnly: "Your Majesty, the economy that broke out in the United States has spread to the United Kingdom, and it will affect us soon.

Once the British have left their funds, many domestic companies will have insufficient funds, and an economic crisis will erupt."

Franz replied casually: "This is an inevitable result. At least we have already 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 their heads. In order to cope with the economic crisis, the Vienna government made a lot of preparations. First, they secured a part of the capital so that they could not flow out. They also issued huge bonds to accumulate funds.

Even if part of the British and French capital is withdrawn, the Vienna government also holds a lot of pounds and francs, which can be directly redeemed without causing gold and silver outflows.

Chancellor of the Exchequer Karl proposed: "Your Majesty, the crisis is still within the controllable range, so can the approval system for huge capital flows be postponed?

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

In this era, capital can be circulated freely between countries, without any restrictions.As the first person to eat crabs, it is possible to become a hero, and the greater possibility is to become a martyr.

Once met with the repugnance of capitalists, it will be very unfavorable to Austria in the future international trade.

Franz thought for a while and said: "Approval is still necessary, and a notice can be issued. The capital flow of more than one hundred thousand Aegis must be declared 1 to 3 months in advance.

We guarantee that all legal capital flows are unrestricted, and the sources of funds that cannot be determined must be explained clearly and confirmed that they are not illegal gains before they can leave the country.

The excuse that the government can find more, for example: some triad groups, transfer funds; or some corrupt officials, transfer finances ...

Taking advantage of the economic crisis before it broke out in Austria, so as not to make everyone think that we are restricting the free flow of the economy."

Checking the legality of the funds once again will add a lot of work to the government, but to fight crime, it is also acceptable to add a little cost.

As for restricting the flow of funds, this is totally not worth mentioning. You can declare it in advance.At most, it adds an umbrella to the financial market, allowing the government time to prepare in advance.

Otherwise, a currency crisis like the one in the US is a lesson.Suddenly, a large amount of foreign capital is leaving, and the government has no reaction time at all, and can only swallow this bitter pill.

"Yes, Your Majesty!"

...

Apart from the addition of a financial firewall, the Vienna government has done nothing. It is still the era of capitalist free market economy. Too much government intervention in the economy will arouse many people's resentment.

Moreover, Franz did not know how to intervene.In any case, overcapacity is an indisputable fact. This problem is simply an unsolvable problem.

Austria ’s industrial capacity in 1857 was more than four times that of 1847, far exceeding the world average, and the sequelae was naturally overcapacity.

This is an inevitable result of industrialization. The efficiency of mechanical production is much higher than that of manual production. The growth of the market obviously cannot keep up with the growth of industrial production capacity.

Therefore, after the first industrial revolution, every time, an economic crisis broke out in the capitalist world.

Looking for new markets is actually very nonsense at this time.In the context of economic crises in various countries around the world, where is there any market.

This is not an afterlife, there are markets where there are people.Productivity is now limited, and the social wealth created is also limited. Most people simply do not have purchasing power.

Taking the Russian Empire as an example, more than 70 million people rank first in Europe. On the surface, this is a big market.

In fact, except for the more than 10 million nobles and free people, the rest are serfs. They have no personal freedom. What is the purchasing power?

This limited market has long been divided up. I want to continue to increase exports and wait for the tsarist government to complete the serfdom reform!

Relying on the colonial market is also nonsense. Except for a small number of colonies such as India, Cuba, the Philippines, and the South Seas, most overseas colonies are in a state of development.

The number of immigrants is small, and the locals have no purchasing power. If they want to export industrial products, they cannot find buyers.

Under such circumstances, once overcapacity appears, the economic crisis is inevitable.The best option is not to cover the lid, but to let the crisis break out.

Survival of the fittest, survival of the strong, and death of the weak.This is also the driving force for the advancement of science and technology. Enterprises that do not want to be squeezed by competitors on the spot must replace equipment in a timely manner and eliminate backward production capacity.

Even if it is a cottage business, it must work hard. If it is not fast enough, the copying ability is not strong enough, and the cost is not low enough, it will die.

Time passed in a hurry, and by the end of 1857 the economic crisis had spread from Britain to France.By early 1858, the economic crisis continued to spread to Belgium, Austria, and Germany ...

The entire European continent, except for the Russian empire that has not yet completed reforms, no one can be alone. Under the blow of the economic crisis, all countries have suffered heavy losses.