Chapter 468 Stock Market Crash
Carnegie-Standard Union Steel Company and U.S. Steel Corporation seem to be the two steel giants in the United States today, but in fact they are very different internally. Even if the one-tenth of the shares left by Carnegie were removed, the remaining shares of Sheffield and Rockefeller in Carnegie-Standard Union Steel Company are still able to firmly hold the controlling stake and will not be impacted.
The situation on the U.S. Steel Corporation is more complicated. Morgan, as the largest banker, led numerous financial institutions and investors to build such a steel giant. Morgan himself owns less than one-tenth of the shares, and there are countless other shareholders, large and small, so internal management is not a problem.
Morgan's ability to stabilize the situation does not mean that other shareholders will be able to remain calm in the face of the upcoming stock market crash. Moreover, Morgan is not in China now. Even if Morgan Jr. takes action, it will definitely be to put out fires in the banking sector. So while Morgan Jr. is putting out fires in the banking sector, it is just right for him to open up a second battlefield at this time.
Since he started out, Sheffield was almost taught a lesson by Morgan. If he had not raced against time under the Chinese Exclusion Act, the first Southern Electric would have failed and there would be no such thing today. Twelve years have passed since 1895, and the slave owner should always repay Morgan for his kindness in teaching him.
As for Carnegie Standard Union Steel Company, since it is a listed company, it is inevitable that it will be affected. It is impossible for the stock market to plummet and its own company will not be affected. In just the past few days, the slave owner's net worth has dropped by eight figures, and now he is still alive and kicking and continuing to operate. With the industries under his control, if the stock value falls, only retail investors will jump off the building.
Given the different living habits and contacts between the North and the South, the Yankees among these individual investors certainly wanted much more than the Dixies. The slave owner never thought that there would be zero casualties, and he was willing to give it his all.
The newspapers of Sheffield Media are speaking to all citizens of the country with unprecedented enthusiasm, first of all confirming one thing, that is, the cause of this financial crisis is the civil war among a group of Wall Street bankers, who, for their own selfish interests, exposed the crisis-ridden contradictions in the banking industry to everyone.
While major bankers in New York were doing their best to deal with the bank run, this kind of public opinion had already swept the country. This time the slave owner was even more serious than the general election. When the Democratic and Republican parties started the national election, he did not let all his newspapers fight the public opinion war, but this time he did it without reservation.
Sheffield is a major supporter of the Democratic Party, but that is a matter between parties after all. He cannot charge into battle like he did in his own campaign, but this time is different. If he can make good use of this crisis, he will really benefit greatly. The two are incomparable.
Even if Wall Street calmed down the bank run, it would find that Sheffield had exposed the internal battle on Wall Street to the world. The Chicago Daily Times reported the origin of the crisis every day, with unprecedented harsh words: "Greedy bankers caused the vast majority of citizens to lose their money. In every bank that went bankrupt, most of the depositors lost their savings."
To be fair, at this special time when a bank run broke out, the newspapers making such reports seemed to be adding fuel to the fire, but adding fuel to the fire is also because the fire has already started. Even if the newspapers under the slave owners now call for calm, it is too late, because everyone knows that the reserves of many banks are less than 5%. In other words, if others are queuing up to withdraw money and you don't go, your deposit will 100% disappear with the bankruptcy of the bank. If you also go to queue up, there is still a 5% chance of getting your deposit back.
Now this bank run has swept all the banks. When the run began, major trust companies faced a surging crowd of people, and their funds were disappearing at an alarming rate. Many depositors whose cash were withdrawn believed that banks would be safer. At least in New York, the reserves of many banks began to increase, even reaching 40% of the accounts.
But then the bank run got out of control and the banks were treated the same way as the trust companies before, especially after Morse and Heinze told the newspapers that the banks' reserve requirements were only 25%, and most of them had only 5%. All banks were listed as untrustworthy by citizens.
The bank's speculation against the trust company became known to everyone after Morse and Heinze fell out and exposed the industry's inside story. It spread across the country in two days.
Although young Morgan thought his father had already boarded the ship, the evolution of the situation had exceeded his imagination. He could not wait for Morgan to return, so he directly called the members of the Morgan Alliance to ask what they thought about the emergence of this crisis.
Naturally, many members complained during this period that this was not a controllable crisis, but was in danger of quickly getting out of control. Moreover, because Heinze and Morse spoke out to the media, many people believed that it was an infighting in the financial sector that caused this crisis.
These members of the Morgan Alliance didn't know that, to be precise, many citizens in New York thought so, but outside of New York? Almost all citizens in the country thought so, and banks everywhere were going bankrupt.
It took a long time for young Morgan to calm the members of the Morgan Alliance. After all, they were still the most professional group of people in the financial field and should not panic about the current situation. He said that he would come forward tomorrow to represent his father and calm the market.
It was not until late at night that Morgan Jr. fell asleep with exhausted steps. However, there was a man who was faster than him. That was Morse, who rushed from Chicago overnight. Early the next morning, the stocks of Tennessee Mining and Iron Company were sold off. Then the explosive news about the stocks of Tennessee Mining and Iron Company spread throughout the entire exchange. The owner of Tennessee Mining and Iron Company was Morse, a banker whose all the banks he owned had gone bankrupt.
Once this news spread, it immediately caused panic in the stock market. On the other hand, Blair closely watched the movements of the stock market and implemented Sheffield's "long killing long" deployment. He bought shares of Tennessee Mining and Iron Company at a low point, and once someone took over, he immediately released the remaining shares and killed all speculators who dared to take over.
After several such incidents, no one dared to take over the shares of Tennessee Mining and Iron Company. Steel stocks began to fluctuate violently, and soon there was an unconfirmed news from the stock exchange that there were voices of layoffs within Carnegie Standard Union Steel Company.
This unconfirmed news was about one of the two giants in the steel industry, but it had a more significant impact on another company, U.S. Steel. The stock issuance volume of U.S. Steel far exceeded that of Carnegie Standard Union Steel. U.S. Steel was originally a carrier found by Morgan for the financial industry, and its importance to the stock market far exceeded that of the companies controlled by Sheffield and Rockefeller.
Within three hours, the stock price of Tennessee Mining and Iron Company had been cut in half, the stock price of U.S. Steel had fallen by a quarter, all steel stocks had fallen, and the exchange was filled with grief.
"Let William answer the phone!" Rockefeller Jr. said to Edith Rockefeller in a stiff tone, "What on earth is he going to do? Is he so rich that he wants to use his left hand to fight his right hand? Do you know how much the steel company's stock has fallen? Who will bear this loss?"
Little Rockefeller didn't know that Morse had obtained the Seven Wounds Fist secrets from the slave owner and had stepped forward to use the Tennessee Mining and Iron Company to lead the steel stocks to plummet. But Little Rockefeller knew another thing: if Carnegie Standard Union Steel Company wanted to lay off employees, Sheffield happened to be in Chicago.
"How dare you talk to me!" Edith Rockefeller shouted angrily, "You obviously noticed Heinze and Morse's copper speculation a long time ago, but you deliberately led them into the market. Since you have already concealed it, what did William do wrong? Tell me about it?"
"Honey, don't talk to John like that. He's your brother." Sheffield was sitting next to Edith Rockefeller. She stretched out her finger and tapped Edith Rockefeller's shoulder. The woman turned around and hooked her finger again, indicating that she should sit aside. Then she moved her butt and sat in Edith Rockefeller's seat and said, "John, Edith didn't mean it. I will discipline her. What can I do for you?"
Little Rockefeller was interrupted by his sister and felt stars in his head. He felt better after hearing Sheffield's voice. He calmed down and asked, "Do you know that the market value of the steel company has dropped by more than 20 million?"
"The company's total market value is over 400 million, and 20 million is only 6%." Sheffield said with a relaxed look, "My subordinates haven't told me yet, but now I have a rough idea in my mind."
"You're going too far. Even if I concealed the fact that I had a feud with Heinze, you shouldn't have failed to communicate with me. After all, I'm also a member of the Rockefeller family. We invested in Carnegie Steel together, not just you. We spent a lot of money to invest in it." Rockefeller Jr. said, "What is your purpose? At least tell me. This is not the attitude of a partner."
"John?" Sheffield was about to speak when his free hand was pulled over by Edith Rockefeller, who was helping Sheffield trim his nails. He was stunned by the woman's action before continuing, "Didn't I communicate with Edith? Isn't she a member of the Rockefeller family? As for my purpose, tell me your purpose first. Are you calling just to question me?"
(End of this chapter)
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