The True Owners of Stocks

Now that Nathan Rothschild had adopted the same stance Chiang Kai-shek took during the September 18 Incident, things became simple: it was basically a matter of everyone agreeing on how to swindle people. The two quickly reached an agreement on various operations, and Jerome was dumbfounded by the series of outrageous schemes they devised.

The two sides quickly reached a basic agreement on the operation and then agreed on a rough time to start. Rothschild and Mr. Bovan then left the small living room and returned to the back garden to continue chatting and laughing with the other guests.

"Look, this is Rothschild." Watching Rothschild chatting and laughing as if nothing had happened, Bovan said to Jerome, "He's so calm and rational, it's inhuman. What a terrifying fellow."

"Really?" Jerome said. "I think he seems like he could give in very easily."

"No," Bovan said, "He only knows what he can do and when. That's the most terrifying thing. If I didn't have your brother behind me, if I didn't have all of France behind me, I might not be able to compare to him."

"Mr. Bovan, you are rarely so modest," Jerome said with a smile.

"That's because there are very few people who deserve humility," Bovan replied.

After the meeting, Rothschild returned home and immediately began making arrangements. His first stop was to visit Metternich was packing his bags to return to Vienna. Given his outstanding performance as ambassador to France over the years, Metternich should have been promoted long ago. However, Austria worried that his successor might not be up to Metternich task, and Metternich was also reluctant to give up his position as ambassador to France, as it brought him considerable wealth. Compared to the foreign exchange he could earn in Paris, the salary Austria paid him was barely enough for Mrs. Metternich to buy handbags.

But such a lucrative position was the envy of everyone in Austria. Even His Majesty Franz was somewhat envious. Others, of course, surrounded Franz Majesty, telling him that Metternich possessed the talent of a prime minister, and using him as a mere ambassador was a gross waste of his abilities. It would also give the impression that Austria lacked the ability to recognize and utilize talent. Therefore, they hoped His Majesty would recall Ambassador Metternich as soon as possible and entrust him with important responsibilities...

Metternich, though reluctant to part with the money, knew that if he continued to hold onto the position, anything could happen. So he reluctantly accepted the domestic arrangements and prepared to return home to serve as Foreign Minister. Moreover, His Majesty had privately told him that he would definitely become the Prime Minister of the Empire in the future.

Metternich has relented, but problems have arisen in Vienna. Several influential nobles are vying for the lucrative position, making it difficult to select a new ambassador for the time being. However, a new ambassador is certain to arrive by the end of the month.

Upon hearing of Rothschild's visit, Metternich received him in his reception room. Rothschild Rothschild, without much pleasantries, went straight to the point, explaining the potential collapse of railroad stocks. He then told Metternich, "The collapse of railroad stocks is inevitable, but it's not necessarily a bad thing. If we plan ahead, we can make a fortune. Hmm, Bovan Metternich that the Great Depression isn't necessarily a bad thing; only during a Great Depression will truly valuable stocks return to their rightful owners." (This quote is historically attributed to the United States tycoon J. P. Morgan.)

But Metternich had more to consider Rothschild. Rothschild wasn't worried about the blame being pinned on the Jews, but Metternich needed to consider whether Austria would be implicated. He knew that if this situation escalated into a major recession, it could very well trigger war, and no one wanted to become a target of the France military machine.

"We must proceed cautiously, at least until after the Roman Bank has acted," Metternich said.

"In that case, we'll make far less money," Rothschild said. "Once the Roman Bank gets involved, given their appetite, there won't be much left for us to gain."

"Nathan, we are different from you; we have to consider more political factors," Metternich said. "These are truly chaotic times. You know, even a speck of dust in this era can become a mountain on the head of anyone, even a country like Austria. We can't afford to be careless. However, the portion of my personal wealth that you're handling for me is entirely yours to manage."

Rothschild then took his leave.

A few days later, just as the Paris stock market opened, news broke that Titan Railway Company was preparing to lower freight rates. Immediately, people began dumping large amounts of railway stocks, causing price fluctuations. However, by the afternoon, railway stocks had rebounded, and although they had fallen slightly by the close, the drop was not particularly significant.

However, right after the market closed, new rumors emerged: because some banks began to tighten lending to railway companies, for example, Rothschild Bank had sold off its railway company debt a few days earlier and had stopped providing loans to railway companies, more railway companies had to lower freight rates in order to gain a larger market share.

The following day, before the market opened, the * Businessman's Daily published another article. This article pointed out that railway stocks faced systemic risks. It also noted that some railway companies were engaging in vicious price wars, which would further lead to an overall market contraction.

The impact of this article was immediately apparent after the market opened. Despite the bulls' best efforts, railway stocks fell by about 10% by the close of trading that day.

However, the situation reversed the following day when Le Businessman's Daily interviewed Mr. Cissé, the general manager of SNCF (France French Railway Company), who stated that Henri had no intention of lowering prices. Mr. Cissé said, "We will not do anything that would be despicable to ourselves and our industry."

With this responsible statement from "French Railway Company," the market received a strong boost, and railway stocks surged on that day, almost completely recovering the ground lost in the previous two days.

However, people soon noticed something strange: a large number of shares of "French Railway Company" were being dumped, so much so that while the prices of all railway stocks were rising, the price of "French Railway Company" even declined slightly. If any railway company was in the best shape, it would undoubtedly be "French Railway Company." This situation was naturally very unusual. Various rumors began to circulate, with many saying that railway stocks were in serious trouble and that the major shareholders were preparing to exit.

Businessman's Daily interviewed several major shareholders of SNCF (French Railway Company) again, and they all stated that they had not sold off a large amount of French Railway Company stock. However, this time, the report only had the opposite effect. After all, people aren't fools; if these guys didn't sell in large quantities, then were all those French Railway Company shares on the market sold off by retail investors?

The situation then reversed again, with the French Railway Company) stock leading the plunge. In just one day, French Railway Company stock fell by 60%. This triggered a sharp decline in all railway stocks. By the end of the day, all railway stocks had fallen by nearly half.

The following day was even more disastrous, as SNCF (French Railway Company) announced its intention to lower prices and expand market share. Perhaps they intended to boost their stock price, but this move backfired. Other railway companies simply couldn't win a price war against French Railway Company; once French Railway Company joined the price war, it was practically a death sentence for them. The entire railway sector plummeted. By noon, most railway stocks were worth less than a tenth of their opening price.

By the afternoon, the panic intensified, and people began irrationally dumping their stocks. Many railway companies, based on stock value, were already severely insolvent. The panic then spread from the railways to the banks, and the stock prices of some banks holding large amounts of railway debt also began to plummet.

By the end of the day, most railway company stocks had become worthless, even less valuable than the old Assignat. They could practically be sold by weight. Bank stocks also experienced fluctuations of around 20%.

This fluctuation escalated into a bank run the following day on banks that were rumored to hold large amounts of railway stock or debt. Some banks suddenly faced a cash shortage and were forced to close down. At this point, in order to save their banks, some bankers had to borrow from the Roman Bank or any other bank that had cash on hand. Naturally, their equity and debt were then pledged to banks like the Roman Bank at shockingly low prices.

"A market crash isn't necessarily a bad thing," Bovan said to Jerome. "Your elder brother, Academician Bonaparte, once told me that during the Great Depression, only those stocks with real value will return to their rightful owners. That's so true!" As he said this, Mr. Bovan had just used one-tenth of the money he received from selling his shares in the French Railway Company (SNCF) to buy back nearly twice the number of French Railway Company shares.