Rise of Australia

Chapter 654 The Great Depression

As time goes by, it no longer matters whether other forces were behind the stock market crash.

For the current United States, the most important thing is how to stabilize the economic order after the stock crash and reduce the impact of the stock crash on the national economy.

With the collapse of the stock market, the economy of various industries in the United States has fallen into a devastating disaster, and chain reactions are constantly occurring.

Whenever faced with such a disaster, the first thing people can think of is to withdraw their savings from the bank and purchase emergency supplies such as food and medical supplies.

Just the day after the stock crash, July 7, the money reserves of all New York banks fell by more than $15 million, the vast majority of which were withdrawn by private depositors.

There are many banks in the United States, but most of them are small and medium-sized banks. Each branch has limited currency reserves and cannot handle so many frequent withdrawals.

It's clear that there are far more people who want to withdraw money after a stock crash than people who want to deposit money.Coupled with the fact that a large number of small banks cannot come up with more money to return to these depositors, the only outcome they face is bankruptcy.

A wave of bankruptcies and runs brought the U.S. banking industry to collapse in a short period of time.Not only the small banks, but also the famous American families, Morgan, Rockefeller, etc., their banks are also experiencing massive withdrawals.
Where did all the money in the bank go?Banks must make money, and all money cannot remain in the bank's vault.

Under normal operating conditions, most of the bank's funds are distributed as loans to businesses and individuals who need loans.

But in the context of a stock market crash, can those companies still come up with funds to repay the banks?It's obviously impossible.

Because the stock market value has evaporated, a large amount of property has disappeared in an instant.This also directly breaks the capital chain between banks and enterprises. Banks and enterprises face only one outcome, which is to be overwhelmed by the anger of the public after being unable to withdraw funds.

At this time, both big and small banks are in panic, and such a crisis is enough to bankrupt large banks.

In order to stabilize the situation, some powerful banks can only urgently demand payment from enterprises to ensure that their banks will not be in danger of bankruptcy.

Facing emergency reminders from banks, small and medium-sized enterprises can only lay off employees to the greatest extent and reduce their own expenses.

But this will also lead to waves of unemployment. Everyone became a victim in this incident, and only a small amount of capital that knew the news in advance survived.

Come August, according to US news reports, the latest number of unemployed people in the United States has reached 8 million, and more than 700 million households are already facing food shortages.

On the streets and cities in the United States, you can see long lines of people lining up to receive relief food anytime and anywhere.

These people may have been white-collar workers, corporate employees, or skilled workers before, but now they are all unemployed people living on relief grains.

Such a large number of unemployed people directly caused the collapse of order in the United States. Since mid-July, the crime rate in American cities has increased by 44.1%. More than 200 million students have been forced to drop out of school because their families can no longer afford to attend school. s expenses.

According to US media estimates, in the half-month period from the end of July to the beginning of August, the number of people who committed suicide nationwide has exceeded 30, and the number of people who have starved to death is also around 20.

A wave of grain grabbing has broken out in many cities. Food prices in various cities have increased several times within half a month, but they are still in a stage where supply exceeds demand.

Such a crisis is no longer an economic problem during the stock market crash. With various waves of unemployment, it has become a social problem affecting the United States.

How to deal with the nearly [-] million unemployed people, coupled with the food shortage problem of tens of millions of people, gives the current President Coolidge a very headache.

In fact, the U.S. government is really helpless about this.There are even many people within the government who believe that the market will adjust automatically, that the current difficulties are only temporary, and that the U.S. economy will recover in the future.

But if we understand the harm done to the United States by the Great Depression in history, we would not say this.According to historical statistics, the U.S. economy has been declining year by year since the Great Depression. In four years, the U.S. gross national product plummeted by more than half, directly returning the U.S. economy to decades ago.

In September 1932, Fortune magazine estimated that during the Great Depression, 9 million adult men, women, and children in the United States were without income, nearly 3400 percent of the entire U.S. population.

More importantly, a large number of people in rural areas are not included in the statistics.Although rural people are the main producers of food, this does not mean that all rural people will hoard large amounts of food at home.

The U.S. government's relief target has never been rural people. After all, the rural areas are wider and more scattered, and the U.S. government does not have much power to provide relief.

How huge was the impact of the Great Depression on the United States?
According to some rumors from later generations, some people once walked 900 miles (approximately 1450 kilometers) to find a job, and some stayed at the door of the employment agency all night, just to find a job that could be protected.

Because of the large number of unemployed people, some positions for recruiting employees have been robbed by everyone.

An employment agency on the streets of New York publicly recruited 30 people. On the day of the open recruitment, more than 7000 people gathered on the street where the employment agency was located, causing the employment agency to collapse.

What's more, some people secretly set fires in the woods just to get the government to hire them as firefighters.

According to estimates by American financial magazines, at least [-] million people in the United States are currently seeking jobs, but there are very few companies that can provide jobs. More people are looking for jobs aimlessly and ultimately get nothing.

Such a tragic situation in the United States has naturally affected Europe.

Although the British government had prepared in advance, the London stock market collapsed like the United States.

The good news is that with the British government's early precautions, the rise in the London stock market before the collapse was not as exaggerated as that in New York. Naturally, it will not attract so many people to invest in the stock market, and the number of people affected by the stock market collapse is also within an acceptable range. Inside.

More importantly, the British government has made preparations to provide relief to the population in advance and has also stocked up a considerable amount of emergency food, so that at least the unemployed will not go hungry.As time enters August, the number of unemployed people in various countries continues to grow.

A European newspaper has compiled data from various countries and compiled a ranking of the unemployed population in each country:

No. 1, the United States, with an estimated 750 million unemployed people.

No. 2, the United Kingdom, the number of unemployed people is expected to be 500 million.

No. 3, Germany, the number of unemployed people is expected to be 440 million.

No. 4, France, the number of unemployed people is expected to be 350 million.

No. 5, Austrian Empire, with 220 million unemployed people.

No. 6, an island country, has 200 million unemployed people.

No. 7, Italy, with 110 million unemployed people.

No. 7, Spain, with 55 unemployed people.

No.8, Tsarist Russia, with 50 unemployed people.

No. 9, the Netherlands, with 40 unemployed people.

No. 10, Portugal, with 20 unemployed people.

Where is Australasia?
This is the question that almost everyone has after reading this news report.Because almost all the major powers are on this unemployment ranking list, except Australasia.

Logically speaking, Australasia has a population of 3000 million, and its physical constitution is highly similar to that of Europe and the United States, so it should be within the affected range.

Even island countries, due to the large amount of aid from the United States and American capital, are facing huge unemployment pressure and low-income problems among the rural population due to the impact of this economic crisis.

Although Australasia is relatively far away from Europe and the United States, it shouldn’t be off the list.Even countries like the Netherlands and Portugal are on the list. How can the economic size of Australasia's great powers not be affected?

In fact, the Australasian economy and stock market did suffer, but the impact was basically minimal.

Even if you look more carefully, you can find that countries such as Soviet Russia and the Republic of Turkey have basically not been greatly affected.

Australasia was behind the crash of the New York stock market, and Arthur was the first to prepare for the crash.

Even before the New York stock market crashed, Arthur ordered several of his consortiums to take precautions and asked the royal consortium to prepare enough funds to prevent people from making emergency withdrawals.

The good news is that Arthur's words are quite effective in Australasia, and the people are not too panicked, and there is no run on withdrawals.

In this way, at least the banking industry will be relatively stable.Once the banking industry is stable, companies will not be too panicked and will not have to rush to reduce the number of employees and reduce expenses.

Due to various factors, the unemployment rate in Australasia has not increased much. After all, the royal consortium has a lot of employees.

Although some foreign companies have laid off some employees due to their own costs and various reasons, these unemployed people were quickly taken over by other companies. At least people do not have to worry about the risk of their own unemployment.

Besides, there are really people who can't find a job temporarily. The Royal Relief Committee and the government have also set up relief food collection points to prevent the unemployed from going hungry.

Under these factors, the unemployment rate in Australasia has remained below [-], which is completely within control.

The number of unemployed people in Australasia has always been a public figure, and it was quickly reported abroad by European and American media.

As a result, the unemployed population of less than [-] instantly attracted the attention of the world, and Australasia naturally became a place that the unemployed people yearned for.

In fact, the Great Depression was also the time when the United States lost its largest population.The only country in history that was not affected by the Great Depression was the Soviet Union. The Soviet Union also attracted a large number of Americans and even Europeans at this time.

But now, that role has come to Australasia.A country that has not been greatly affected by the economic crisis can even guarantee the income of its workers. Isn't this a holy place in the hearts of the unemployed?

But for those unemployed people, how to get ferry tickets to Australasia has become their biggest headache.

As the number of unemployed people in the United States continues to increase, a large number of Americans choose to go to Europe or other regions to survive.

This has also caused the price of ocean-going ferry tickets to rise again and again. It used to cost 15 US dollars to travel to Europe, but now the price has risen to more than 50 US dollars.

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(End of this chapter)