Chapter 772: Big Collapse

February 1847, City of London, England.

Four months after Austrian grain was imported into England, the price of grain in England did not fall, but broke a new high, reaching 78 shillings per quarter, and then continued to set new historical highs, breaking 100 shillings per quarter in mid-May.

During this period, due to the lack of restrictions on the Corn Law, Austrian and American grains rushed into the British market, and British industrial products also hit the Austrian and American markets.

However, for the Austrians, British goods are really low-end, but fortunately, Hungarians buy British goods at the bottom.

The Austrian high-level officials also acquiesced to this fact. After all, selling without buying will make the British blacklist.

In fact, British fur products were also popular in Europe during this period, and high-quality coal was also well received.

In particular, anthracite has an irreplaceable role in blast furnace smelting and chemical industry, and it is also the best military fuel at this time, otherwise the navy with black smoke will be easily discovered.

The United States was badly beaten by British goods. Factory owners in the North strongly opposed allowing British goods to continue to enter the US market, while the South hoped that further reductions in tariffs would be beneficial to their exports of grain and cotton.

As the toughest president in American history, James Polk naturally chose to raise tariffs forcefully, and Britain naturally responded immediately with retaliatory tariffs.

There was almost no obstruction for the British Congress to pass this resolution. After all, the entry of American grain into Britain had harmed the interests of too many people.

Although the southern states were dissatisfied, they could only replant those wheat fields with cotton because Austrian grain prices were lower and there were no high tariffs.

Most of the grain exported by Austria to Britain came from colonies, and the difference was made up by Hungarian and Russian grain.

The amount of these exported grains was carefully calculated, so that the amount would not be too much for the British to eat, and the excess would not be sold in the domestic market, but stored.

Therefore, domestic grain prices remained stable and upward, because Prussia suffered a disaster, Prussian grain prices rose, and Austrian grain also rose accordingly.

However, the Austrian government did not choose to bring the exported grain back to the country to stabilize prices, because it was so tempting to make extra money from exports. They had never seen so much money in their lives.

And at present, the price is completely acceptable. In fact, with the increase in national income of the Austrian Empire over the years, the price of grain has been relatively low. Properly raising the price of grain is conducive to mobilizing the enthusiasm of agriculture.

But the time of cutting the leeks of the British was short. In September 1847, the price of grain in Britain was directly cut in half, and some grain merchants, including the bankers behind them, went bankrupt.

Of course, the British government is not a fool. They immediately convened experts from all walks of life to come up with a complete set of plans.

In order to eliminate market panic and save those grain merchants who hold a large amount of goods, what the British government has to do is to prevent the price of grain from falling further.

The action they took was to adjust import tariffs and adjust the import prices of bulk commodities. In fact, in a sense, it can be regarded as a temporary restoration of the Corn Law.

The tariffs levied by the British on foreign grain were directly raised from 4 shillings in June 1847 to 14 shillings, and then soon raised to 21 shillings.

Wheat prices rose rapidly against the market trend, and people had to accept high grain prices and pay for those big merchants and big bankers.

However, the trend of grain merchants going bankrupt continued, because many small and medium-sized grain merchants and those grain merchants who were not so well-informed had sold their assets before the grain price reversed.

Due to the sudden increase in tariffs and the large-scale bankruptcy of grain merchants, other industries were also affected, especially those merchants who mainly engaged in foreign trade with the United States and Austria.

Bankruptcy and bank runs occurred at the same time, and the Bank of England had to raise the discount rate, which directly caused panic in the banking industry.

At the same time, some big merchants with a keen sense of smell began to cash out and leave the market. At this time, the weaknesses of insufficient gold reserves or insufficient bank reserves in the UK were exposed.

The Bank of England could only withdraw funds by selling bonds to deal with the current crisis.

However, as the saying goes, good fortune never comes alone, and misfortune never comes alone. The investment in the previously popular railways increased year by year, but the rate of return continued to decline.

The return rate of railways in the early days was as high as 10%. As more and more railways were built, competition became more and more intense. Because the British railway companies were all private, they lacked coordination and planning, and the problems of repeated routes and low utilization became increasingly prominent, so the return rate became lower and lower.

So this inferior asset naturally became the first target to be abandoned, and then the stock market exploded. The national panic began, and the British government no longer had any means to prevent the outbreak of this economic crisis.

Back to a year ago, Scathach was still leading the three little ones to study how to cook the shelled sorghum rice more rotten, and her sister Ella suddenly ran in and carefully took out a paper bag from her arms.

"Sister! Sister! Look what this is!"

After Scathach opened it, a scent of butter entered her nose, in addition to the smell of milk and sugar, and a faint fragrance that she had never smelled before.

When she came to her senses, the little ghosts around her were already drooling. In fact, even before the famine, they had never eaten this kind of food, let alone now when they were hungry.

"Ella, where did you get these cookies?" Scathach asked suspiciously and angrily.

Because even the bakers in the town can't make such food, it can only be stolen from the Baron's house.

In fact, Franz asked for dry food, and it was required to be dry and hard, but the court baker always had to save face, and he couldn't make it bad even if it was intentional.

And at least the ingredients were top-notch, and the skills were top-notch. At the same time, the baker added spices to the biscuits to highlight the royal style.

Although the price of spices is much cheaper than in the Age of Exploration, it is still a luxury to use them to make biscuits.

However, Ella, who was overly excited about these details, obviously didn't notice.

"I exchanged it for a stone."

"How could you lie to me?"

Scathach was already a little angry. She was afraid that her sister would do something shameful when she couldn't think straight.

However, Scathach didn't notice that her sister had cut her hair and was now almost like a little boy.

"Why would I lie to you? Hurry up and give each of you one piece, and leave four pieces for mom and dad. Come with me."

Scathach didn't understand and asked with a wave of her hand.

"What are you doing?"

"A caravan has come to the village, and I exchanged my biscuits there. Go get your hair cut, you can sell it for a good price."

"Really?"

"Really!"

"Then wait a minute, I'll wash my hair. If I don't wash it clean, I won't get a good price."

"Yes! Washing it can increase the weight, so I can exchange it for more food."

The three little ones didn't quite understand, but they were so happy to see the food that they jumped around.