American industrial growth and social wealth redistribution are extremely uneven. Industrial growth is mainly concentrated in some emerging industrial sectors, while old industrial sectors such as mining and shipbuilding are under-operated. Textile, leather and other industries have also experienced production reduction crises, and a large number of workers have become unemployed as a result. During this period, mergers and acquisitions were prevalent, and social wealth was increasingly concentrated in the hands of a few people. The 16 largest chaebols in the United States control 53% of the country's gross national product, and one-third of the country's national income is owned by the richest 5% of the population; on the other hand, the living standards of about 60% of American families are still poor. They are struggling to make ends meet at the level of US$2,000 per year, which is just enough for food and clothing. What is even more serious is that 21% of families have an annual income of less than US$1,000. In addition, the potential crisis in the balance of payments also deepens the potential crisis in the US economy. The growing economic power and supply of the United States greatly exceed domestic and foreign demand that can afford to pay. All this heralds the coming of a big crisis.
The Juncker consortium has quietly begun to withdraw its capital. At the same time, the intensity of deception is increasing at the same time. False news comes one after another. On behalf of the coal mine, Köldof, the steel trust, Krupp Military Industries, Rheinmetall, etc. have made public statements more than once. The occasion expressed confidence in the U.S. stock market and released information that it seemed that these companies were about to enter the U.S. market.
The Juncker consortium tried their best to suppress the stock market and let it explode later. The Junckers did it. On November 1, the U.S. stock market began to cool down and sporadic stock selling began. On November 1, 1929, Sunday, Thursday. After the market opened, the stock index followed the trend of the day and rose firmly, but the trading volume increased significantly. Suddenly, the stock index turned downward and the stock price began to fall. By 11 a.m., the stock index dived, the stock market fell into a crazy state, and people rushed to sell. By 11:30, the stock market was completely at the mercy of relentless panic and was plunging. Within an hour, 11 well-known stock investors committed suicide. Stock prices fell like an avalanche on the New York Stock Exchange, people sold their stocks hysterically, and screams of despair echoed throughout the exchange hall.
On November 5, 1929, the headline in the Wall Street Journal read "Industrial Stocks Down 38.33 Points." The next day, industrial stocks fell another 30.57 points (the declines in these two days were 12.82% and 11.73% respectively, ranking second and third in the history of the Dow Jones Industrial Average, second only to the Black Monday on October 19, 1987). 22.61% of one). In six days, the Dow fell more than 96 points, or nearly 30%. A week later, Americans lost $10 billion on the stock exchange.
Farmers dumped milk into the Mississippi River to destroy their "surplus" product. There is a popular children's song in New York: "Melon blew the whistle, Hoover rang the bell. Wall Street sent a signal, and America rushed to hell!"
In a manor in Berlin, Germany, no one would have thought that this inconspicuous manor would now be home to the capitalists who control the entire German economy, and they were celebrating.
"Haha! The Americans are suffering this time. Now that we have converted all the marks into gold, we should be able to guarantee Germany's economy." Vincent & Stark's voice was a bit gloating.
"Mellon sounded the whistle, Hoover rang the bell. Wall Street sent out a signal, and the United States rushed to hell! Haha, Gustav, your son's subordinates did a really good job in the United States. They provoked it in a short period of time. Americans are so panicked, I wonder who can save the United States," Thiessen said fiercely.
"Yes, to prevent the United States from turning around, notify the surveillance personnel in the United States and see how the big families in the United States react, especially Morgan and Rockefeller. These two families must be monitored intensively," the scheming Koldoff said viciously. said.
"Well! We also need to strengthen the measures and means of our German trade protection. After all, Germany is not stable yet, so we can do something for Germany," Gustav replied. These people would never have thought that the United States had no intention of bailing out the market at all.
"We still need to continue to exchange gold and collect all the gold and precious metals on the market. Old guys, the time has come to avenge our shame. Before Britain, France and the United States can react, exchange all the gold in their countries, and then ask the government to announce The mark is devalued," Thyssen concluded, standing up.
After the New York stock market collapsed, Western bankers, entrepreneurs, politicians and economists did not realize the seriousness of the problem. Many people believe that this is just caused by psychological panic and that the stock market will soon return to normal. U.S. Treasury Secretary Andrew Mellon has repeatedly claimed that the stock market's problems will soon be cured and back on track. Statements from experts and governments reassured the public that there was nothing to be alarmed about. But they couldn't be more wrong.
Only a coalition of banks moved quickly to control the situation, but that was only a temporary delay. The stock price soon began its ruthless decline again. Various financial bankers in the United States sat together and actively discussed rescue plans. As a result, any rescue plan launched was of no avail and was attacked by an unknown financial force. The unknown financial force is the Juncker consortium.
On the afternoon of November 4, 1929, the Morgan consortium teamed up with other banking giants to use US$240 million in joint funds to protect the market and purchase stocks at a price higher than the market price. In the next few days, the stock market gradually stabilized. The U.S. Treasury Department, some economists, bankers, and big city newspapers assured the public that the decline in stock prices was not a big problem, and more money should be spent on investment. , which is good for the national economy. On October 25, President Hoover also issued a proclamation: "The basic enterprises of the United States, namely the production and distribution of commodities, are based on soundness and prosperity." In an attempt to stimulate a new round of investment. But this could not stabilize investors' panic. At this time, people's nerves were already extremely fragile. After a short-lived rise, the stock market began a nightmare plunge.
But the collapse of the U.S. stock market was the crater in which such an economic crisis erupted. With the collapse of the stock market, the U.S. economy immediately fell into a devastating disaster.
The economic stability and development of other Western countries depend to a large extent on the inflow of funds and the export of goods to the United States. Once these countries lose U.S. funds and markets, they will be involved in an economic crisis. Then, the Western industrial countries spread the economic crisis to colonial and semi-colonial countries.
The protracted crisis in industry, agriculture, and commerce finally led to financial chaos. Austria's largest bank, Creditbank Austria, declared bankruptcy in May 1931 because it was unable to collect loans to companies in the country and Eastern Europe. This immediately triggered a run on deposits by bank depositors in Germany, and major banks such as the National Bank collapsed. There has also been a wave of withdrawals of gold from banks in the UK, with an outflow of gold worth 200 million pounds from mid-July to October. In late September, the United Kingdom announced the abolition of the gold standard and the Bank of England stopped redeeming gold. Then, other countries also abolished the gold standard, and Europe's monetary system began to collapse.
Gustav Stresemann, Foreign Minister of the Republic, died on October 3, 1929. Three weeks later, the Wall Street stock market suddenly collapsed. Germany was immediately deeply affected by the disaster. Germany's "prosperity" is mainly maintained by foreign debt borrowed from the United States and foreign trade. Once loans are cut off and old debt matures, Germany's financial structure will be unable to bear this burden. Once world trade collapsed after the general depression, Germany was unable to export sufficient quantities to purchase the necessary raw materials and food imports. Without exports, German industry could not operate, and its output fell by almost half from 1929 to 1932. Foreign trade decreased by 2/3. More than 60% of Germany's industrial production capacity is idle, and thousands of small businesses have gone bankrupt. National income dropped from 76 billion marks in 1929 to 45 billion marks in 1932, the national debt reached 14 billion marks, and the number of unemployed exceeded the 8 million mark. The income of workers and employees has dropped by almost half.
The agricultural crisis was also serious. Prices of agricultural products plummeted, and a large number of farmers went bankrupt and were forced to sell their land. The ruling class shifts the consequences of the economic crisis onto working people. In order to save monopoly capitalists and landowners from bankruptcy, the government provided them with more than 10 billion marks in subsidies and loans. At the same time, the taxes of working people were raised by billions of marks, and wages, benefits and pensions were massively cut. Heavy taxes and cruel oppression forced the exploited and oppressed working class and the working people to rise up and resist. From 1930 to 1932, more than 1,000 strikes broke out, forming a wave of vigorous mass struggle.