Chapter 510: Vanderbilt's Huge Investment

In November 1856, San Francisco had entered the end of autumn, and the bleak scene gradually emerged. 禦

The leaves began to turn yellow and brown, and the fallen leaves fluttered in the wind and fell silently to the ground, dotted the streets, parks and squares of the entire city.

The blue sky of the past has become rare now. The sky of San Francisco seems like a gloomy face, not giving people a good face, always gray.

"My purpose of coming to California this time is the same as six years ago, to come to consider investment and find business opportunities."

Seeing Liang Yao, Vanderbilt did not beat around the bush and directly explained his purpose.

"It's different. This time you come to California, it's better to say that you are here to avoid risks than to invest." Liang Yao personally poured Vanderbilt a cup of his favorite black tea.

Vanderbilt has sold more than 20 million US dollars worth of railway company shares and bonds in the past two months.

Such a big move can be detected by Wall Street retail investors who are slightly sensitive, and naturally it can't be hidden from Liang Yao.禦

Two months ago, Jones, the president of the New York branch of Bank of America, reported this situation to Liang Yao.

Unlike Liang Yao, Liang Yao's American Group is a large comprehensive group with many businesses.

Although the management difficulty and cost are relatively high, the ability to hedge risks is still better than that of Vanderbilt, a railroad tycoon who has only operated railroads in recent years.

In just two months, more than 20 million US dollars worth of railroad company shares and bonds were sold out, leaving only the Central Railroad Company.

It takes a lot of determination to make such a decision. Liang Yao still admires the determination and courage of this father-in-law.

You know, the railroad industry in the United States is still in an upward period.

Vanderbilt was stunned for a moment after his thoughts were exposed by Liang Yao, and then asked with a straight face: "Do you also think that the economic crisis is about to come?" Yao

"When you asked this question, I think you already had the answer in your heart. There is an answer that you are not very willing to accept." Liang Yao said very calmly.

The economic crisis broke out in the American market. It is impossible to say that there is no negative impact on the West Coast. After all, the West Coast market is also part of the American market.

Being far away from the core market in the eastern United States is a very big disadvantage for the West Coast, but at some times, such as when the economic crisis comes, this disadvantage is actually an advantage.

The West Coast market is relatively closed, and its foundation has been relatively solid in the past five years, without much bubble. Liang Yao believes that the economic crisis in the east will not have much impact on the economy of the West Coast.

Of course, the economic crisis has not only negative effects on the West Coast, especially California, but also positive effects.

After all, in the economic crisis of 1848, many residents in the eastern coastal areas chose to go west to make a living, and there were also many wealthy people among these immigrants.

The rapid rise of California at that time was the result of the gold rush in California, the Great Depression caused by the economic crisis in the eastern region, and the cholera epidemic. The first round of siphoning of local immigrants was completed under the dual forces of internal and external forces.

If California can withstand the impact of the economic crisis, it can attract more high-quality immigrants to settle in California and more capital to California for risk aversion.

Therefore, the national economic crisis in the United States is not all bad for California.

"I wonder what you think of the economic situation in France in the next few years?" Vanderbilt asked tentatively.

"Before I came to California, I received an invitation from the French government. In order to attract American businessmen to invest in France, the French government offered relatively generous conditions.

You have always had a good relationship with the French side. I have received an invitation, so I believe you must have received an invitation from the French side. Perhaps the conditions offered by the French side are even more generous."

When Napoleon III participated in the election, he promised to restore the former glory of the French Empire and maintain the stability of French society to the old French aristocracy.

He promised to protect private property and strictly abide by the constitution to the new bourgeoisie.

He promised to solve employment and increase wages and remuneration to the proletariat.

He promised to reduce land taxes and agricultural taxes to farmers.

Now Napoleon III is working to fulfill his promises.

In the next ten years in France, until the outbreak of the Franco-Prussian War, the political situation can be said to be quite stable compared to the first half of the 19th century.

Moreover, France's industrial base is relatively strong. To be fair, France during the reign of Napoleon III was indeed a treasure land for investment.

"I did receive an invitation from the French emperor. From a business perspective, France is worth investing in." Liang Yao thought for a while and said.

"Perhaps I will make some symbolic investments in France for personal friendship and other considerations to maintain the friendship between California and France. But my focus is still on California and the West Coast. After all, this is my home."

Three years ago, the French side once asked whether the production line of the Walter rifle export model could be transferred, but Liang Yao refused at that time.

Now Liang Yao has plans to sell the Walter rifle export model production line.

If possible, Liang Yao also hopes to transfer the Walter rifle export model production line to France through this opportunity of attracting investment in France.

Vanderbilt stared at Liang Yao, and after a moment asked: "I heard that the local petrochemical industry in California is only open to local California consortiums?"

"You are my father-in-law, not an outsider. If you are interested in investing in California's petrochemical industry, I welcome you on behalf of California." Liang Yao replied.

"Can you afford an investment of US$16 million?" Vanderbilt thought for a moment and then continued to ask, "The most important thing is, what is the return on investment?"

The figure of 16 million US dollars couldn't help but make Liang Yao's eyes shine.禦

Liang Yao has invested an additional US$7 million to expand the production capacity of Los Angeles Petrochemical.

If Vanderbilt is willing to invest US$16 million, he can not only continue to expand petrochemical production capacity in Los Angeles, but also directly deploy the petrochemical industry in the east, such as oil in Texas and Pennsylvania.

The money should not go to outsiders, and Vanderbilt will fight for this idle capital no matter what.

“The annual profit rate of Los Angeles Petrochemical has never been less than 50% since its establishment. In 1855, the annual profit rate of Los Angeles Petrochemical was 85%.

In addition, Standard Oil's exploration team is exploring for oil in Texas and Pennsylvania. Once oil fields are discovered in these places, there will be Texas Petrochemical and Pennsylvania Petrochemical in the future. "Liang Yao painted a big picture for Vanderbilt.

Standard Oil was able to achieve such high profit margins because of its monopoly and vertical integration strategies.

Scarce natural resources are relatively easy to monopolize. The monopoly strategy means that Standard Oil controls the only known origin and refining method of crude oil in the world. It has an absolute dominant position in the market and has absolute control over the market prices of petrochemical products.禦

At the same time, Standard Oil adopted a vertical integration strategy, which brought multiple links in the production chain into the company's control.

Controlling oil production, refining, product processing, transportation and sales allows the company to control costs and prices in all aspects and ensures Standard Oil's absolute say in the entire oil industry.

Los Angeles Petrochemical is responsible for the production, refining, and processing of oil, while Standard Oil is responsible for finding new oil fields, transportation, and sales.

Vanderbilt was shocked and pleasantly surprised by the high profit margins in the petrochemical industry.

He had long heard about the huge profits from California's petrochemical industry, but he didn't expect such huge profits.

Liang Yao is now frantically expanding the factory and purchasing machinery. The labor costs in California are also very high. Under such circumstances, he can still maintain such a high annual profit. This shows that the petrochemical industry is even more crazy than the gold mining industry. and.

"Tsk, tsk, no wonder you shut out outsiders." Vanderbilt sighed in admiration. "It's too high. It's almost unreal. Can I look at the financial reports of Los Angeles Petrochemical and Standard Oil?"

US$16 million is almost one-third of the Vanderbilt family's net worth. With such a large investment, Vanderbilt has to be cautious.

"Of course." Liang Yao agreed readily.

"But one thing I must state in advance is that my money is just temporarily with you to avoid the limelight. I don't want to get involved in an area that I am not familiar with for a long time." Vanderbilt emphasized, "If there is no economic crisis, that would be great, I will Get the money back and continue working on my railroad.

If so, after the crisis is over, I will still get the money back and buy bankrupt railway companies at the bottom. "

"To put it bluntly, you still want to do the railway." Liang Yao said with a smile.

Thanks to the Pioneer series locomotives launched by the California Railroad Company, and the courage of Liang Yao and Vanderbilt, they directly dug the rails of their own railway company that did not meet the Pioneer series locomotives, and established track standards for American railways.

Therefore, the railway bubble has returned to normal, but the assets of railway companies are not completely junk assets, and they still have the value of bargain hunting.禦

At this time in history, the width of railroad tracks in the United States varied widely. It was no longer a question of one state's standard, but one company's standard. Seven years of railway boom has left behind a pile of industrial waste, resulting in a huge waste of resources.

The standardization of American railways in later generations was already in 1886.

Since different railway companies use different specifications of track gauge, it has brought a lot of inconvenience to domestic and international trade.

To solve this problem, American Railroads began to explore the possibility of standardizing track gauge, and in 1886 the National Railway Standardization Act was passed to unify railroad gauge to 4 feet 5 inches (about 1435 mm), which is what we call it in modern times. "Standard Gauge".

"Life is short, and it is enough to do one or two things well in a lifetime." Vanderbilt said very seriously, "I can only feel secure if I work in a field that I am familiar with."

The conversation between Liang Yao and Vanderbilt had just ended, and when he was about to send Vanderbilt off to rest, he bumped into an angry Sven.

"General, there is something urgent!" Sven hurriedly handed the two letters to Liang Yao.禦

Liang Yao opened one of the letters, and when he saw the contents of the letter clearly, his expression instantly froze.