Holy Roman Empire-Chapter 997 - 11: The Stock Market Crash Comes

Chapter 997: Chapter 11: The Stock Market Crash Comes

No matter how hard life was, days had to be lived. Following the simple coronation ceremony, the first decree of Carlos was a major purge.

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Now, there were not many good citizens left in the City of Paris. Those who had survived were not to be trifled with, and without an internal cleansing, His Majesty Carlos would not be able to sleep.

The main targets of the purge were naturally the remnants of the Revolutionary Government, including the lower and middle-level bureaucrats who had defected, and the thugs, hoodlums, and violent criminals who took advantage of the chaos in Paris.

“Governments flow like water—the officials are ironclad.”

That no longer applied. There was a large group of nobility supporting the restoration of the Bourbon Dynasty, and the high positions that were vacated were clearly not sufficient to distribute.

The great nobles disdain these insignificant official posts, but that did not mean that the rural nobility lacked interest. Moreover, even if they were not interested personally, there were brothers, sisters, and cousins to be provided for.

After all, the core of the Restoration Nobility Alliance were these individuals, and now that it was time to reward their services, was it too much to ask for Carlos to arrange jobs if he could not provide enough monetary rewards?

Then, the bureaucrats who had been seated in their positions for centuries were the unfortunate ones who had been lying low for many years, but had finally become targets.

Without investigation, one would not know, but a check could be shocking. There were rumors from outside like “Napoleon IV has emptied France” and “high officials of the Republican Government have drained France,” but these were, in fact, proven to be merely rumors.

They were all fugitives, and even if they could embezzle funds and leave, how much could they really take? Those who truly had the power to empty France were still these inconspicuous bureaucrats.

Perhaps one did not take much, but their large numbers were overwhelming. If everyone took a share, even a substantial family wealth could be drained by these bureaucrats.

Not to mention, one-third of the immovable properties in Paris had been occupied by these bureaucrats. Many factories and businesses also involved their silent shares.

The seized cash and liquid assets were even more plentiful. For example, in the home of a director named Feldo, 200 kilograms of gold, various precious metals and jewels, and hundreds of billions of Francs were found.

Well, Francs aside. The Francs issued by the Republican Government had ten zeros on the highest denominations. Everyone was a billionaire, yet hundreds of billions of Francs had less purchasing power than a few thousand Francs from the past.

However, the difference was that among the seized Francs, there was a substantial amount of lower value currency, clearly from the era of the Bonaparte Dynasty, totaling hundreds of millions of Francs.

Without doubt, this was an unfortunate time to have seized them. What was once a huge sum of money had now turned into mere paper; a loaf of bread cost millions of Francs, and the mountainous pile of small denomination Francs was not even enough for a week’s sustenance for an ordinary person.

It also seemed ridiculous to think about it, even big corrupt figures could not outpace inflation—how ordinary citizens survived was a mystery.

Missing the peak period of wealth to seize property, the numbers seemed grand, but the actual value was significantly reduced.

Carlos was not disappointed, as this was anticipated. Although Francs were worthless, foreign currencies, gold, and jewels were still valuable. All things considered, he had at least tens of millions of Divine Shields, which could alleviate the immediate crisis.

The remaining immovable properties and silent shares in enterprises could not be converted into cash immediately and were difficult to value.

With money came food, and with food, the situation could be stabilized. Compared to the “excellent performance” of the previous two administrations, the Bourbon Dynasty that managed to fill bellies, even barely, had become the savior in the eyes of the people.

No one knew how long this gratitude would last, but, for the time being, the situation in France had stabilized. Plans to restore production were underway, and social order was being normalized.

…

Watching the Bourbon Dynasty struggling, Franz breathed a sigh of relief. As long as Carlos could stabilize the situation in France, he was content.

As for the issue of reparations, it was good to have them, but not troubling if absent, for they could be delayed indefinitely. Franz certainly would not press for debts when the French were penniless.

However, good times were always brief. Influenced by the end of the civil war in France, on January 6, 1894, the Vienna Stock Market reached new heights before rapidly plummeting 9 points in the afternoon, with the military sector leading the decline by 21 points.

This was just the beginning. After the market opened the next day, the military-industrial sector once again led the decline, dropping by 19 points by the afternoon close.

In just two days, the military-industrial sector had evaporated 40 percent of its market value, directly dragging the overall market down by 15 points and obliterating tens of billions of Divine Shields’ worth of wealth.

The situation was far from over. After an agonizing weekend, the stock market continued to fall by 3 points when it reopened on Monday, with the military-industrial sector leading the decline by an additional 7 points as some individual stocks even saw a 90 percent evaporation of their market value.

Both being financial centers of the Holy Roman Empire, when the Vienna Stock Market plummeted; Frankfurt could not escape its fate either. At this moment, both were equally unlucky, neither more fortunate than the other.

In January, the stock markets of these two major financial centers were continuously falling. Even if there was an occasional rebound, it dropped back again the following day.

By the end of January, the Vienna Stock Market had fallen 34.7 percent from its peak, and Frankfurt was not much better, with the overall market falling by one-third.

The military-industrial sector, which detonated this crisis, was even harder to watch. Companies that were halved included high-performing blue chips, and those with core technology were cut by two-thirds., and ordinary companies were lucky to retain one-fifth of their market value.

There was no way around it. Military enterprises were fundamentally cyclical stocks that thrived on war dividends; making a profit during peacetime was already commendable. The financial statements during wartime were as splendid as they were disastrous post-war.

The current decline was merely a market panic triggered by the end of the civil war in France. Franz was certain that if these military enterprises were to release their financial statements for 1893, their stock prices would plunge further.

The reason was simple: last year, orders from the Shinra military drastically decreased, and the Anti-French Alliance, major importers of weapons, also stopped their purchases.

The much-anticipated civil war in France and the Japanese-Spanish war mainly consumed the inventories accumulated after the victory of the Anti-French Wars, without bringing in much order for domestic military enterprises.

With no orders came no performance. Almost all military enterprises had carried out major layoffs last year, which was the biggest negative factor on its own.

In fact, military stocks had started their decline at the beginning of the end of the wars in Europe. However, mid-year tensions escalated with the imminent Anglo-Austrian conflict and successive outbreaks of the Japanese-Spanish war and the civil war in France rekindled the market for a time.

Unfortunately, those who caught this last wave were the unlucky buyers. The main factor causing the stock price crash was the unexpectedly swift end to the civil war in France, preventing the dealers from offloading their holdings. To cut their losses, they had to sell frantically.

As the stock market crashed, the real economy was also in turmoil. Only a minority of companies managed to transform in time. Most companies still clung to hope, trying to weather through.

With the stock market crash came a wave of difficulties in financing, bankruptcies, and unemployment, which directly disrupted Franz’s good mood.

He had originally thought the economic crisis would be triggered by the bankruptcy of the Italian sub-states’ finances, but the early end of the civil war in France preemptively burst that bubble.

The bubble exceeded the plan, and its burst came sooner than scheduled, which was clearly not good news, meaning the Vienna Government’s preparations were still incomplete.

There was no way around it; the market was too fragile to endure further turmoil. The military stocks’ bubble burst due to the devastating news of the end of the civil war in France, and Franz could not possibly extend the timeline by stepping in to buy up stocks himself.

Frankly, he had tremendous respect for those brave enough to step in and buy on the first day of the stock market crash. Especially those playing with leveraged buys, these were truly the bravest of the brave, in other words—doomed.

While he admired them, there was certainly no need to emulate them. Once the opening act of the stock market disaster was underway, anyone entering would be devoured.

As a result of the stock market crash, police in all major cities of the Holy Roman Empire had to work overtime. High-rise buildings, bridges, and rivers became key monitoring targets, as the frequency of suicides had risen significantly.

According to statistics from the Vienna Government, the number of suicides in the Holy Roman Empire in January 1894 had increased by 114.6% compared to the same period last year, and there were even more attempted suicides.

There was no way around it. The world is this cruel. Since one had chosen to gamble, they had to bear the consequences.

The only consolation for Franz was that he wasn’t the only one suffering—there was a whole group of equally beset companions.

As the largest economy in the world, once the economy of the Holy Roman Empire had issues, none of the industrial nations globally could escape it.