Chapter 772 Big Collapse
February 1847, City of London, England.
Four months after Austrian grain was imported into the UK, instead of falling, the price of grain in the UK broke through to a new high, reaching 78 shillings per quarter, and then continued to set new historical highs, exceeding 100 shillings per quarter in mid-May. shilling.
During this period, as there were no restrictions under the Corn Laws, Austrian and American grains poured into the British market, and British industrial products also hit the Austrian and American markets.
However, for Austrians, British products are really low-end. Fortunately, there are Hungarians who buy British products at all costs.
Austria's top leaders also acquiesced to this fact. After all, only selling but not buying would make the British blacklisted.
In fact, British fur products were also relatively popular in Europe during this period, and high-quality coal was also well received.
In particular, anthracite has an irreplaceable role in blast furnace smelting and the chemical industry. It is also the best fuel for the military at this time, otherwise the navy with black smoke would be easily discovered.
On the American side, British goods were severely beaten. Northern factory owners strongly opposed allowing British goods to continue to enter the U.S. market, while the South hoped that further reductions in tariffs would help them export grain and cotton.
As the toughest president in the history of the United States, James Polk naturally chose to raise tariffs forcefully, and Britain naturally responded immediately with retaliatory tariffs.
There is almost no obstacle to the British Parliament passing this resolution. After all, the entry of American food into the UK has harmed the interests of too many people.
Although the southern states were dissatisfied, they could only replant those wheat fields with cotton because the price of food in Austria was lower and there were no restrictions from high tariffs.
Most of Austria's grain exports to Britain came from the colonies, and the balance was made up with Hungarian grain and Russian grain.
The quantity of these exported grains has been carefully calculated so that the British will not be unable to eat it. The excess will not be sold in the domestic market but will be stored.
Therefore, domestic food prices remain stable and upward. Because Prussia suffered a disaster, the price of food in Prussia increased, and the price of food in Austria also increased.
However, the Austrian government did not choose to bring the exported grain back to the country to stabilize prices, because it was so good to make extra money from exports. They had never seen so much money in their lives.
And at present, the price is completely within the acceptable range. In fact, with the increase in the national income of the Austrian Empire over the years, food prices have been on the low side. An appropriate increase in food prices will help mobilize the enthusiasm of agriculture.
However, the time when the British were cut off was short-lived. In September 1847, British grain prices were cut in half, and some grain merchants and the bankers behind them went bankrupt.
Of course, the British government is not a fool. They immediately summoned experts from all walks of life to come up with a complete set of plans.
In order to eliminate market panic and save those grain merchants who hold large quantities of goods, what the British government has to do is to prevent grain prices from continuing to fall.
The actions they took were to adjust import tariffs and adjust the import prices of commodities. In fact, in a sense, it can be considered as a temporary restoration of the Corn Laws.
The British imposed tariffs on imported grains from 4 shillings in June 1847 to 14 shillings, and then to 21 shillings soon thereafter.
Wheat prices rose rapidly against the market trend, and people had to accept high grain prices and pay for those big businessmen and bankers.
But the trend of grain merchants going bankrupt continues, as many small and medium-sized grain merchants and those who are less well-informed have sold off their assets before grain prices reversed.
Due to the sudden increase in tariffs and the large-scale bankruptcy of grain merchants, other industries have also been affected, especially those businessmen who mainly engage in foreign trade with the United States, Austria and other countries.
Bankruptcies and runs occurred simultaneously, and the Bank of England had to raise discount rates, which directly triggered panic in the banking industry.
At the same time, some big businessmen with a keen sense of smell began to cash out and leave the market. At this time, the weakness of the UK's insufficient gold reserves or insufficient bank reserves was exposed.
The Bank of England can only raise funds to deal with the current crisis by selling bonds.
However, as the saying goes, good fortune never comes alone, and misfortune never comes alone. In the previously popular railway, investment increased year by year, but the rate of return continued to decline.
In the early days, the return rate of railways was as high as 10%. As the number of railways increased, competition became more and more intense. Because the UK was full of private railway companies, there was a lack of coordination and planning. The problems of duplicate routes and low utilization rates became increasingly prominent. So the rate of return is getting lower and lower.
So this kind of low-quality assets naturally became the first target to be abandoned, and then the stock market also exploded. A national panic began. At this time, the British government had no means to prevent the outbreak of this economic crisis.
Back to a year ago, Scathach was still taking the three little ones to study how to cook the shelled sorghum rice to be more rotten. His sister Ella suddenly ran in and carefully took out a paper bag from her arms.
"Sister! Sister! Look what this is!"
After opening Scathach, a scent of butter entered the nose. In addition, there was the smell of milk and sugar, as well as a faint fragrance that I had never smelled before.
When she came back to her senses, several little devils around her were already drooling. In fact, they had never eaten this kind of food even before the famine, let alone now when they were hungry.
"Ella, where did you get these cookies?" Scathach asked with some suspicion and anger.
Because even the bakers in the town couldn't make such food, it could only have been stolen from the Baron's house.
In fact, what Franz asked for was indeed dry food, and it was dry and hard. However, the palace pastry chef always wanted to save face, and he could not do it badly even if it was intentional.
And at least the raw materials are top-notch, and the techniques are also top-notch. At the same time, the pastry chef specially adds spices to the biscuits to highlight the royal style.
Although the price of spices is much cheaper than in the Age of Discovery, it still seems luxurious to use them for making biscuits.
However, Ella, who was too excited, obviously did not notice these details.
"I traded a stone for it."
"How could you lie to me?"
Scathach was already a bit sulky, she was afraid that her sister might do something embarrassing out of her mind.
However, Scathach did not notice that his sister had cut her hair and now looked more like a little boy.
"Why did I lie to you? Hurry up and get one piece for each person, and leave four more for mom and dad. Come with me."
Scathach didn't know what was going on, so he waved his hand and asked.
"What are you doing?"
"A caravan came to the village, and that's where I got my biscuits. Go get your hair cut, and you'll definitely be able to sell it for a good price."
"real?"
"real!"
"Then wait a minute. I'll wash your hair. If you don't wash it thoroughly, you won't be able to sell it for a good price."
"Yes! Washing can also increase the weight. Change it to more food."
The three little ones didn't understand much, but they were so happy to see the food that they jumped around.