The four-party negotiations are still in progress, and a crisis has quietly arrived. The overcapacity of 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 first one to suffer was the Americans. Even under the butterfly effect of Franz, Austria diverted some of its international capital, but this could not solve the crisis in the United States.

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

Unfortunately, with the rapid development of the United States' railway industry, surrounding industries have not been driven. Under the competition for British goods, the metallurgy industry has also shrunk, and the cotton spinning industry has also developed slowly.

Railway tracks, pig iron, locomotives, cotton, hardware, machinery... are all filled with British products, and the local industry is squeezed to a difficult step.

Now that the British have increased their efforts to dump, these industries cannot stand it. First of all, the impact of the cotton spinning industry kicked off the bankruptcy wave.

It soon affected the stock market, and the stock price plummeted and became out of control, and more companies were involved.

A large number of factories went bankrupt, and banks and financial companies naturally could not survive. A large number of bad debts appeared, bank runs broke out, and banks went bankrupt.

The economic crisis in the United States quickly affected Britain. The market shrank, Britain's industrial and commercial exports were also impacted, a large number of enterprises went bankrupt, and British capitalists, as investors, also suffered heavy losses.

Capitalists are keen to respond. In order to stop losses and deal with the possible economic crisis in China, British capitalists have withdrawn funds from the US market one after another.

Against this background, in the fall of 1857, the US financial market experienced a shortage of money, 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 in the United States in an all-round way, and 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 need tariff barriers to protect their interests; while planters in the south need to lower tariffs in order 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 abolition, preparing to strangle the wealth of the southern plantation owners from the source.

Obviously this is not something that southern planters can accept. Everyone can tolerate abolition of slavery. The contract labor system is not much worse than slavery, but the tariff issues cannot be negotiated.

Industrial and commercial products in the north have poor quality, low efficiency and high prices. Why should we use them?

What's more, if tariffs increase, food, cotton and tobacco exports will be fatal. For every dollar of tax increases, they will reduce their profits by one dollar, which is completely robbing their money.

The conflict of interest between the two sides was too serious and it was impossible to reach an agreement. In the end, the southern planters, who were at a disadvantage, began to make an independent move.

The economic crisis broke out in the United States and Austria had little to do with it. The trade volume between the two countries was very small. Everyone was exporting agricultural products, and the competition between the two sides exceeded cooperation.

However, when the economic crisis hit Britain, European countries would find it difficult to survive alone, and Austria would not be an exception.

Vienna Palace

Prime Minister Felix said seriously: "Your Majesty, the economic outbreak in the United States has affected Britain and it will not take long to affect us.

Once the British withdraw funds and leave, many domestic companies will experience insufficient funds, and an economic crisis will break out."

Franz replied as if nothing had happened: "This is the inevitable result. At least we were prepared for it. There will be no shortage of money in the country. As long as the normal exchange rate of the banking industry is guaranteed, the crisis will be within a controllable range."

Everyone nodded. In order to deal with the economic crisis, the Vienna government made a lot of preparations. First, it trapped some of the capital, which prevented them from flowing out, and then issued huge bonds to accumulate funds.

Even if some of the British and French capitals are withdrawing now, the Vienna government also holds a large amount of pounds and francs, which can be redeemed directly without causing gold and silver outflows.

Secretary of Finance Carl proposed: "Your Majesty, the crisis is still within the controllable range, so can the huge capital flow approval system be temporarily suspended?

After all, doing so will damage our reputation. There is no need to do so unless it is absolutely necessary.”

In this era, capital could be circulated at will among countries without any restrictions. As the first master to take the lead, he might become a hero, and even more likely he would become a martyr.

Once it is disgusted by capitalists, it will be very unfavorable to Austria in future international trade.

Franz thought for a while and said, "There is still a need for approval. You can issue a notice. Money flows of more than 100,000 Syrians must be declared in advance for 1 to 3 months.

We ensure that all legal capital flows are not restricted and that funds that cannot be determined must be explained clearly and prove that they are not illegal income before they can leave the country.

On the pretext that the government can find more, such as: some underworld groups transfer funds; or some corrupt officials transfer finances...

Taking advantage of the economic crisis before the outbreak in Austria, we will not let everyone think that we are restricting free economic movements.”

Checking the legality of funds will add a lot of work to the government, but to combat crime, it is acceptable to increase a little cost.

As for restricting capital flows, this is not worth mentioning at all. You can declare it in advance. At most, it will add a layer of protection to the financial market, so that the government can prepare in advance.

Otherwise, the currency crisis like the United States is a lesson learned from the past. Suddenly, a large amount of foreign capital was about to leave, and the government had no time to respond and could only swallow this bitter fruit.

"Yes, your Majesty!"

...

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

Besides, Franz didn't know how to intervene. In any case, overcapacity is an indisputable fact, and this problem is simply an unsolvable problem.

In 1857, Austria's industrial production capacity was more than four times that in 1847, far exceeding the world average. The sequelae is naturally overcapacity.

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

Therefore, after the First Industrial Revolution, every period of 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 countries around the world, where is there any market?

This is not later generations, where there are people, there is a market. Nowadays, the productivity is limited, and the social wealth created is also limited, and most people have no purchasing power at all.

Taking the Russian Empire as an example, with a population of more than 70 million ranks 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 all serfs, and they have no personal freedom. What is the purchasing power?

This limited market has long been divided up. If you want to continue to increase exports, wait until the Tsarist government completes the serfdom reform!

Relying on the colonial market is nonsense. Except for a small number of colonies such as India, Cuba, the Philippines, and the Southeast Asian countries, most of other overseas colonies are in a state of rest.

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

In this case, once overcapacity occurs, an economic crisis is inevitable. The best choice is not to cover the cover, but to let the crisis break out.

Survival of the fittest, the strong survive, and the weak are finished. This is also the driving force for the progress of science and technology. Companies that do not want to stand still and be squeezed to death by competitors must replace equipment in time and eliminate backward production capacity.

Even if it is a copycat enterprise, it must work hard. If it is not fast enough, the counterfeiting ability is not strong enough, and the cost is not low enough, it will die.

Time flies, and by the end of 1857, the economic crisis spread from Britain to France. By the beginning of 1858, the economic crisis continued to expand to Belgium, Austria, and Germany...

No one can survive on the entire European continent except for the Russian Empire, which has not yet completed reforms. Under the blow of the economic crisis, all countries have suffered heavy losses.
Chapter completed!