Shadow of great britain

Lionel sat on the sofa and asked with a smile: "I wonder if you have some basic understanding of the stock and bond markets?"

Arthur recalled that when he first came to London from the Yorkshire countryside, his first stop was to go straight to the London Stock Exchange, the world's financial center in the 19th century.

It's just that his luck was not very good, or that his luck was really good. He witnessed with his own eyes the second major collapse since the formation of the London Stock Exchange, and its last collapse dates back to the London Stock Exchange. The South Sea Company bubble case of 1720 in the last century.

In 1720, the South Sea Company, which monopolized Britain's trade with Spain's South American colonies, relied on various dazzling investment and trade plans and various half-truths and half-false so-called inside information to continuously increase trading enthusiasm on the London Stock Exchange. .

And when the directors of the South China Sea Company discovered that it was much easier to make money from the stock market than the company's hard work of selling slaves, they felt as if they had opened the door to a new world.

Beginning in April 1720, the Nanhai Company began to publish various plans to the outside world and promoted the company's great blueprint in newspapers.

According to subsequent statistics, the Nanhai Company's board of directors announced 11 fishery plans, 10 insurance plans, and the establishment of 2 international exchange companies, 12 American colonial or trading companies, 20 real estate and construction companies, 8 companies specializing in supplying London coal, livestock, feed and road, bridge and canal construction, 12 silk, cotton, hemp, mulberry and other textile companies, 15 mining companies, and more than 60 inexplicable companies, and they even boldly announced that the Nanhai Company would A 60% dividend is paid on Christmas Day.

However, it is precisely these visions that normal people seem to know are unreliable, but they have fooled all the smartest minds in Great Britain.

In the eyes of those investors, the original purpose of the South Sea Company was to form a giant monopoly for the purpose of developing trade in the South Atlantic. To this end, the South Sea Company also took over approximately 10 million pounds of floating public debt from the British government.

This is a giant company endorsed by the British government. How could their promises deceive investors?

As a result, investors who were blinded by the huge benefits completely lost their rationality and judgment. They snapped up the company's shares frantically, and eventually the Nanhai Company's share price quickly rose from 120 pounds to 1,020 pounds in three months.

However, it didn't take long for the South China Sea Company's wealth myth to come to an end.

At the end of July, companies began to take Nanhai Company to court, accusing them of serious debt defaults.

Other companies that had debt relationships with Nanhai Company also gradually discovered that something was wrong. After everyone got angry with each other, they finally realized that, damn, it turned out that these grandsons were playing tricks with empty hands.

In order to stop their losses in time, they finally decided to jointly petition Parliament and request the British Treasury and the Supreme Court to intervene in the audit investigation of the South China Sea Company's accounts.

As soon as the news came out that the Nanhai Company was suspected of falsifying its accounts, the share price of the Nanhai Company plummeted from the opening of the London Stock Exchange on August 25, 1720. In just one month, their stock price dropped from a high of 1,020 pounds. It fell to 190 pounds.

Countless investors went bankrupt as a result, and almost overnight, the rooftops of London were filled with South Sea Company shareholders.

The South Sea Company's fraud case also directly caused political turmoil in London.

King George I issued several Orders in Council demanding a thorough investigation into the South Sea Company case.

Parliament almost immediately arrested all members of the South Sea Company's board of directors and confiscated all property in their names, and imprisoned George Carswell, the director of the South Sea Company who was directly responsible, in the Tower of London. The "Bubble Company Suppression Act" was passed and a 13-member special committee was established to investigate the bankruptcy of the Nanhai Company.

Regardless, the South Sea Company's bankruptcy still caused huge losses of millions of pounds and plunged the London Stock Exchange into long-term malaise for decades to come.

One of its few positive effects may be that it led to the birth of the first substantial prime minister in British history. Robert Walpole, the then First Chancellor of the Exchequer, became firmly established in one fell swoop by virtue of his proper handling of the South Sea Company case. He took the top spot in the cabinet and has since established the British tradition of the First Chancellor of the Exchequer leading the cabinet.

What Arthur encountered this time was the bank bankruptcy crisis of 1825-1826.

The reasons for this crisis are very simple to say the least, and they are no different from the Nanhai Company case in essence.

To put it bluntly, before the Banking Act of 1826 was enacted, all banks established in England could issue bank notes at will.

The so-called bank notes are actually pounds. Any depositor can use the face value of the bank note to go to the bank and request to exchange it for equivalent gold.

However, in the 19th century, the amount of gold mined was far less than the increase in British wealth, so this directly led to large and small banks printing money indiscriminately in order to seize bank share without sufficient gold reserves. Happens repeatedly.

The consequences of printing short banknotes indiscriminately are also obvious. When a customer comes to ask for gold back with bundles of bank notes, the bank teller can only stare at him.

As soon as this news came out, it naturally triggered a frenzy of bank runs among the British people. Everyone rushed to hold the banknotes and asked the banks to cash them as soon as possible. The thresholds of the major banks were almost leveled by them.

Faced with this situation, 70 banks with insufficient gold reserves had to announce that they would stop redemptions.

The government had no choice but to urgently order the dispatch of military and police to maintain order in various places and strictly prevent riots in various places.

In order to fill this hole, the Bank of England, the largest bank in Great Britain, had to use its own gold reserves to help them fill the hole, but it was better not to help, but in this case, the Bank of England almost got itself involved.

At the critical moment, several partners of the Bank of England knelt down directly to Nathan Rothschild and Alexander Baring, two major London bankers with large amounts of gold.

At the time of crisis, Rothschild Bank and Barings Bank, under the persuasion of Tory leaders such as Lord Liverpool, Duke of Wellington and Sir Peel, finally decided to urgently allocate most of their gold reserves to the Bank of England. .

In order to show their loyalty to the Tories, the Rothschild family, the Duke of Wellington's moneybag, used almost all of their gold reserves in their four major branches in Paris, Naples, Frankfurt and Vienna, and also used their own connections to After acquiring a portion of the gold reserves from Russia at a large cost, they managed to scrape together 11 million pounds worth of gold and barely plugged the hole in the Bank of England.

Although the crisis passed slowly, as many as 70 banks still announced bankruptcy and delisting from the London Stock Exchange afterwards.

In this way, the London Stock Exchange, which had finally emerged from the shadow of the South China Sea Company case, fell into a trough again.

At that time, Arthur was just a poor boy who had just come from the country, but even so, he couldn't help but feel happy when he saw the expressions of the capital tycoons in the London Stock Exchange who were mourning for their heirs.

Tens of millions of pounds are lost every minute. Although it is losing money, it is still enjoyable.

It would be even more enjoyable if the compensation was not his.

Arthur picked up the tea cup, thought about it for a moment, and said with care and respect: "I do have some doubts about stock trading."

The words were not long, but they were enough for Lionel to understand Arthur's euphemistic resistance.

Lionel smiled and said: "It's okay. If you don't plan to invest in stocks, I still have many options for you to choose from. Let me first list the pros and cons of several asset allocations, real estate, bonds , stocks, you can judge by yourself which one is more suitable for you.

Moreover, stocks are actually not as scary as the British public thinks. According to our analysis, the London Stock Exchange is at its lowest point in recent years and may rebound at any time. It will really not get lower than this in the future. "

When Arthur heard this, he couldn't help but frowned slightly.

Why did he feel that these words were familiar to him.

The red devil on the side saw that he was still hesitating, and couldn't help but urge: "Arthur, don't hesitate! Mammon is waving to you, buy the bottom quickly, buy the bottom hard for me!"

When Arthur heard this, he finally understood where the key word was.

A simple doubt arose in his mind - Which one is greener, the leeks of the 19th century or the leeks of the 21st century?

But Lionel was so enthusiastic that he became slightly interested.

He asked: "So what direction do you think is better to invest at this time?"

When Lionel saw Arthur finally relenting, the smile on his face grew wider, and he replied.

“Don’t worry, you are not the first client to use Rothschild’s private financial services. Although we usually do not disclose clients’ private information, given that this matter is no longer a secret, I can tell you openly: The Duke of Wellington is also one of our key clients, and your boss, Lord Peel, the Home Secretary, also has some funds managed by us."

After Lionel said this, Arthur was not tempted yet, but Alexandre Dumas couldn't resist it at first.

He asked: “Then I wonder how much personal funds are needed for Rothschild Bank’s private financial services?”

Lionel smiled and said: "I think this mainly depends on whether we have a good trading relationship with our customers. Personal funds will always be our second priority. But if you are Mr. Hastings' As for friends, I think 1,000 pounds is enough."

Alexandre Dumas thought about it after hearing this. The fat Frenchman gritted his teeth and said, "Just wait, I'll work hard."

When Lionel heard this, he couldn't help but smile and asked Arthur: "So, Mr. Hastings, can I start the introduction?"

Arthur nodded and said: "Of course, please."

It’s the third update tonight. I’m a little excited to write this chapter. Readers and friends are waiting for me.