The Rise Of Australasia

Chapter 874 - 652: Stock Market Crash (Requesting Monthly Tickets!)_2

But the question is, is it that easy to exit the stock market now?

Everyone knows that a downturn in the Market isn’t going to end in a short period of time, so naturally, nobody wants to be the sucker taking over someone else’s shares.

Take the well-known Scott Real Estate Company from the US New York Stock Market as an example.

At its peak, Scott Real Estate had over 200,000 shares issued, with a price per share exceeding 77 US dollars, indicating that Scott Real Estate’s market value was as high as 15.4 million dollars.

But as of July 17, the share price of Scott Real Estate had plummeted to below 40 dollars, with the actual selling price even less than 30 dollars.

This means that the enterprise, once valued at 15 million dollars, had lost more than half of its worth within three days; its current market value had dipped below 8 million dollars.

Such a frantic fall in the Stock Market naturally caught the attention of the American Government. Setting aside the actual reasons behind the Market’s insane decline, stabilizing the current New York Stock Market was of the utmost importance.

For this reason, US President Coolidge quickly stepped forward, publicly stating that America’s economy was in excellent condition, calling on the People not to worry about the fluctuations in Stocks, and that nothing could destroy America’s economy and Stock Market.

However, President Coolidge obviously forgot that he had lost the trust of the People and his speech failed to achieve the desired effect. Instead, it only intensified the People’s actions to sell off their Stocks.

The fourth day after Black Thursday, which is July 18, 1926, the New York Stock Market experienced another round of severe drops, with the Wall Street trading index falling by 50 points, breaking the 300-point barrier, and madly charging towards the 200-point threshold.

The continuous plummeting of the Stock Market led to the incessant wailing of many investors, as they suffered the greatest losses, having almost not withdrawn from the Stock Market at all.

The few lucky investors who had managed to exit the Stock Market received funds that were even less than their initial investment.

Because of the initial wave of Stock prosperity, a significant portion of New York and even American citizens had invested all their assets into the booming Stock Market. .Côm@@@@

This brought them unexpected substantial income during the early stages, but during the Stock Market crash, it quickly took away all their assets.

Although the remaining shares they held had some value, as long as they could not be sold, those shares were as good as waste paper.

Many American investors who couldn’t bear the shock chose to end their lives in various ways, which also led to the birth of many criminal incidents, turning New York into chaos.

In stark contrast to the prestige of US President Coolidge in America, Arthur’s authority in Australasia was beyond question.

Arthur’s announcement and statement were published in newspapers nationwide and swiftly calmed the jittery Australasians.

On July 21, 1926, the Australasian stock market maintained relative stability, overall tumbling less than 0.1%—a rather mild figure.

On the second day, fueled by public opinion, the Australasian stock market actually rose by 0.3%, a clear indication that the people had stabilized under Arthur’s reassurance; their absolute faith in the government and in Arthur was unquestionable.

In this round of stock market crashes, not only ordinary investors suffered heavy losses but also those small and medium-sized enterprises and factories that failed to exit the market in time.

Previously, some smaller enterprises, in an effort to earn greater profits, had diverted their corporate funds to the stock market, money that now was essentially irretrievable.

Others hadn’t earned much in the stock market, but after the crash, their company’s market value continued to plummet.

A decrease in the company’s market value naturally eroded public trust. After all, there is a difference between a company valued at ten million and one valued at one million, even if they are technically the same company.

In times of crisis, the most common actions for a company are, naturally, layoffs and forced closures. Nobody wants to shut down their company voluntarily, unless the situation truly becomes dire.

This led to widespread layoffs among enterprises affected by the economic crisis, including those across the United States and Europe, creating several hundred thousand, even millions, of unemployed overnight.

The worst was, of course, the United States. From July 14 to the present, July 24, the US stock market had fallen more than 67.1%, with over 24 billion dollars in wealth vanishing into thin air, amounting to 23% of last year’s Gross National Product of America.

The American Government simply couldn’t delve into the reasons quickly enough because, in just over ten days, thousands of small and medium-sized enterprises went bankrupt, and the remaining businesses announced layoffs one after another.

According to the government’s rough estimates, at least 500,000 unemployed people were created in these ten days, and the number was still increasing.

It may seem like there are only 500,000 unemployed, but could those who hadn’t been laid off guarantee the security of their wages?

Moreover, the current layoffs are just the first wave, hasty cuts by enterprises. There will be a second wave, and a third to follow.

Capitalists, aiming to save their own enterprises, will definitely sacrifice the interests of the public and employees without hesitation.