Chapter 427 Capital Transfer

The industrial age is characterized by periodic economic crises.

In 1837, the first great bull market in the history of the United States ended, and after several years of gloom, the stock market finally ushered in a recovery.

The reason for the recovery is simple, the frenzy of railroad construction has profoundly affected the country's economy and has quickly become a major commodity in the stock market.

In this era, when the middle class earned only $1,000 a year, and the cost of building a railroad was $36,000 per mile, no individual could afford such a high cost, but the capital problem could be solved by financing it from the stock market through a joint-stock company.

It is precisely because of this that railway securities have become the darling of Wall Street, which is the best subject to absorb idle funds in society.

"The distance between the east and west of the North American continent is 3,000 miles, and if the cost of each kilometer in the east is 36,000 dollars, the total cost is more than 100 million dollars. In a very dark and narrow roadside hotel, Ji Aojian was calculating the scope of financing, "This is only the most conservative estimate, in the mountainous and desert areas we have walked over, the construction conditions of the railway are far more difficult than in the east, and the cost per kilometer will rise significantly." ”

"So if $100 million in securities is issued, will the total amount of money on Wall Street be able to take over?"

"Definitely not, I suspect that the total market value of the New York stock market is only a few hundred million dollars. "So we can't issue so many shares right now." ”

"But if you don't issue this amount of securities. But if you claim to build a transcontinental railway, the public will directly suspect that you are a liar. ”

"The transcontinental railway is a long-term project, and it has to be repaired section by section. Ji Aojian said casually. "We can tell the public that the first round of equity financing was for the construction of the Eastern Railroad, which runs from the East Coast to the Missouri River upstream of the Mississippi River, which is the longest railroad and waterway in the United States, and is also important for economic development. Even if the western section of the Transcontinental Railway is not built in the future, the eastern section alone is definitely an investment. ”

"Hmm. If half of it were built, it would only be necessary to build 1,500 miles of railroad, and it would also bypass the western region, which has the worst geological conditions. Cost accounting remains at $36,000 per kilometre. Ji Mengying said, "However, this also requires at least more than 50 million US dollars, and it seems that it is still difficult to take over......."

"Since the road is only being built in the eastern section. We can also make use of the existing railway network in the Tohoku region. Just dock with them. "In this way, we can save another 500 miles of financing, and as long as we issue shares for the 1,000-mile railroad, we will absorb 36 million dollars in social capital." ”

"$36 million in stock isn't easy to sell. ”

"It's a bit difficult for the Americans to take over, so we can sell to the Europeans. ”

"Europeans?"

"Finance is an open field, and the United States is a fast-growing industrial country. Naturally, European capital is happy to come over and buy bonds and shares in the fruits of the US economy. "Ji Ao Kendo. "In particular, the popular canal and railway stocks were once controlled by European capital. ”

"Was it once controlled?" Ji Mengying was curious, "Isn't it controlled now?"

"Capitalism is characterized by periodic economic crises. Ji Aojian sighed, "Every time there is an economic crisis, the U.S. stock market falls into a depression, and the prices of various securities fall sharply, and the Europeans panic and quickly sell the U.S. stocks in their hands, and the Americans buy them back at a low price and regain control of their own companies." ”

“......”

"So the Americans borrowed European capital to develop their own industries, and when the financial crash cycle occurred, they took the securities back into their hands. Ji Aojian pushed open the window, "After several economic cycles, the economic achievements of the United States are booming, just like Japan and China." ”

The most striking thing about New York's streetscape from the window is an 84-meter-high cathedral, all made of brown bricks and stones. The church is a new landmark after the last Great Depression and is symbolizing the next boom cycle.

"This church looks pretty tall. ”

"Yes, taller than your idol, not counting the pedestal. ”

"What did you just say?" Ji Mengying turned back to the topic, "Europeans are really stupid, they are too unsuccessful in financial play in the American market, it seems that they have been used in vain. ”

"Because, making money from finance has never been a long-term and reliable way. Ji Ao Kendao, "After Great Britain, it changed its career to play finance, resulting in the decline of the real industry, and the second round of industrial revolution was surpassed by the United States and Germany, and since then it has lost its world hegemony." ”

"You don't care if Great Britain's transformation is successful or not, how will our stock be marketed, sell to the Americans or the Europeans first?"

"The first thing to look for is, of course, the lovely United Kingdom, as long as the British on the other side of the Atlantic are willing to buy our stocks, how can the native Americans not buy them?" Ji Aojian stood up, "Let's go to the Bank of Bahrain's branch in New York." ”

The Bank of Bahrain was once the hegemon of the whole of Europe, pioneering the modern multinational banking network model. After the end of the Napoleonic Wars in 1815, the Bank of Bahrain provided loans to France for huge reparations. At that time, Louis XVIII's prime minister, Richelieu, lamented helplessly: "There are now six great powers in Europe: England, France, Prussia, Austria, Tsarist Russia, and the Bahrain Brothers Bank." ”

"Dear Mr. Thomas, a big bull market on Wall Street is approaching, and the more valuable the railway, the more popular it will be. Ji Ao's sword mouth was like a river, gushing endlessly, "The importance of the company's construction of this transcontinental railway has been fully introduced to you just now, and now is the best time to buy the company's shares." ”

"Because of the strategic value of this railroad and its important role in connecting the United States to the western territories, I don't see why I should support the construction of this railway. ”

"With this railroad, Americans would be able to drive us out of Oregon very easily, even if we don't have a foothold in North America in the future," said Thomas, head of the Bank of Baring's New York branch. ”

Ji Aojian was surprised, "You still care about whether the United Kingdom has a sphere of influence in North America, it doesn't seem to have anything to do with your business, right?"

"How can it be that it doesn't matter, I'm an Englishman, I love my country, how can I let the United Kingdom's colonial interests in North America be damaged. ”

"But as a banker, aren't you supposed to be in business?"

"Bankers also have a state. Those who have no borders are shameless Jews, like Rothschild or something. "Our Bank of Bahrain is a bank of devout Christians, with five hereditary titles, and we are eternally loyal to the Kingdom of Great Britain!"

"I see, it turns out that you are a patriot, why didn't you say it earlier?"

Ji Aojian quickly opened the briefcase and took out another stack of documents, "Look at these, they are the authorization certificates for the construction of another North American railroad." ”

Thomas was also surprised, "How many transcontinental railways do you want to build?" and then reacted and told him solemnly, "No matter how many you want to build, we will not invest." ”

"This railroad was not built for the Americans, it was built for the British. Ji Aojian said with a grin, "You see, this railroad starts from Canada, passes through Oregon, passes through California, and ends in Mexico City, which can connect Canada with the entire Central American region, not only promote the economic prosperity of the West Coast, but also jointly resist the westward expansion of the Americans." ”

The governor was stunned for a moment, and hurriedly went to look through the documents in front of him.

"Here is the signature of the Governor General of Canada, the signature of the Governor General of California, and the signature of the Government of Mexico, all formalities and completely legal. ”

"Wait. Thomas was already confused, "What are you doing to build a transcontinental railroad for the Americans and a north-south railroad for Mexico?"

"Of course I'm working for Mexico. Ji Aojian said, "You see, this is a letter of introduction from the Governor of Canada, which can prove that I am a trusted friend of the United Kingdom." Also, this is a letter of introduction from the Emperor of Mexico, which proves that I am a trusted friend of the Mexican and European royal families. If you are not completely convinced, I can ask the Mexican consulate in New York to prove it for me. ”

"If you're serving Mexico, why did you come to New York to finance Americans' transcontinental railroad?"

"It's a huge cost to build the Canada-Mexico Railroad, so I'm thinking about borrowing money from Americans to ease the financial pressure. Ji Aojian said calmly, "After I raised funds on the New York Stock Exchange, I moved to the West Coast as capital for the construction of the Canada-Mexico Railway. ”

"I see!" Thomas suddenly realized, "you're a financial liar, come here to cheat Americans out of their money." ”

"Don't say it so directly, how can this be called fraud, it should be called capital transfer. (To be continued......)