African Entrepreneurship Records 2

Chapter 1477 Financial Industry Rectification
The United States did not pay enough attention to the initial outbreak of this economic crisis, largely due to their previous experience in dealing with economic crises. From the late 19th century to the early 20th century, the United States also experienced multiple rounds of economic crises. Among them, the economic crisis of 1873 had the greatest impact on the United States. This economic crisis not only dealt a heavy blow to the US economy at the time, but also triggered a long-term economic depression. Its impact did not end until the end of the 19th century.

However, the economic crisis of 1873, due to the special historical period in which it occurred, did not give the US government a profound lesson. After all, the Labor Party had not yet become established at that time, and even if a crisis broke out in a capitalist country, it would not trigger a corresponding political and social crisis.

During the outbreak of the economic crisis in 1873, although the lower classes of the American people did struggle and resist, their activities were like scattered soldiers and headless flies, and did not have a profound impact on the American social order. At the same time, in line with the expansionist trend of the world's imperialist countries at the end of the 19th century, some of the contradictions caused by the crisis were transferred to other countries, such as the Spanish-American War.

Of course, the country that benefited the most from the economic crisis of 1873 was East Africa. This was also the only special period when East Africa absorbed a large number of German immigrants from the United States. It should be noted that East Africa was just a colony with basically no appeal at that time.

In short, the economic crisis of 1873 not only failed to prompt the US government to reflect, but instead made it further underestimate the harm of the economic crisis. The United States did indeed smoothly overcome this economic crisis that year.

But now, times have changed. In the political field, the Labour Party has risen, and its ideas have spread throughout the world. Even those backward countries and regions in Asia, Africa and Latin America may be deeply influenced by it. How could a highly industrialized capitalist empire like the United States avoid the spread of its ideas and speech?

On the economic level, over the past few decades, the United States has become one of the most developed industrial countries in the world. Today, the urbanization level in the United States has exceeded 50%, which also means the growth of the American working group.

In the economic crisis, these American workers who have switched from farming to manufacturing will inevitably become the first wave of victims. The unemployment of millions or even tens of millions of workers, combined with the ideology and speech of the American Labor Party, will inevitably form a huge political group.

Finally, on the international front, the international situation in 1929 was very different from that at the end of the last century. The world had now been basically divided up. If one wanted to divert conflicts abroad, one could only confront other powers or even start a war.

Thirty years ago, Americans could attack Spain, but now the United States' sphere of influence borders countries such as Japan, Britain, and East Africa.

Among them, Japan, the weakest, cannot be compared with Spain, especially in the military field, where Japan can be called a world power.

The conflict of interests between the United States and Japan is mainly in the Far Eastern Empire market, but Japan's objective influence on the Far Eastern Empire at this stage far exceeds that of any third country.

……

While the United States is still pinning its hopes on "market self-correction" and "natural economic recovery," East African governments have already launched some plans to deal with the outbreak of the crisis.

At this time, the economic crisis was still confined to the North American region. Only Canada was highly tied to the U.S. economy. Therefore, at almost the same time as the Wall Street stock market crash in the United States, stocks on the Toronto and Montreal stock exchanges collapsed simultaneously.

Europe has not been affected yet. All countries have received news about the outbreak of the US economic crisis, but except for the Austro-Hungarian Empire, other countries have basically not taken any action. They even gloat over the disaster by watching the fire from the other side of the river.

While Crown Prince Friedrich was methodically preparing various measures, Emperor Ernst finally returned to the Rhine Palace.

As early as on the ship, Ernst had received news of the outbreak of the US economic crisis through radio. At that time, the ship Ernst was on had sailed to the Gulf of Aden.

After receiving the news, he urgently ordered the ship to sail at full speed towards Mogadishu, and finally return to Rhine City by a special train.

Rhine Palace.

After meeting Crown Prince Friedrich, Ernst said with a serious face: "Now the time is ripe. The adjustment of the national economy should also enter the final stage. The national financial industry should be thoroughly rectified immediately. In addition, the formulation of the Seventh Five-Year Plan should also be based on the current domestic and international economic situation. The East African Labour Party should also play a role."

Originally, 1929 was the key year for the implementation of East Africa's Sixth Five-Year Plan. Starting next year, East Africa would have to compile a new round of economic development plans. Because East Africa had already made certain preparations, the outbreak of this round of world economic crisis in East Africa might be delayed relatively, which means that it would coincide with East Africa's Seventh Five-Year Plan.

With this basic judgment, the East African governments can no longer take the formulation and implementation of the Seventh Five-Year Plan lightly, but should formulate various targeted policies to deal with the economic crisis.

At the same time, the so-called East African "Labor Party", this puppet party, also found its place. The Rhine royal family was ready to push the East African Labor Party to the forefront to implement the policies in the new round of economic planning.

Of course, although it is a puppet party, there are quite a few real guys mixed in. However, it is always more reassuring to gather them together and keep them under our noses than to let them hide in the dark.

However, the most important thing for East Africa at this stage is to rectify the domestic financial industry. Previously, although the East African government introduced some restrictive policies to prevent the barbaric development of the financial industry, it did not take drastic measures in order not to affect the country's economy and market activity. Now that the US stock market and banking industry have collapsed, East Africa's concerns no longer exist.

Ernst said: "In the past two decades, our country's financial industry has grown and become strong enough to have a significant impact on the operation of the national economy. Although we have made some adjustments in recent years, they are only temporary measures and have not fundamentally solved the problem."

"Therefore, in order to minimize the subsequent losses, the rectification of the financial industry must also be launched immediately, especially to crack down on those bad financial institutions that engage in speculation, arbitrage and resale, hoarding and walking on the edge of law and morality."

"We need to cool down the stock market, strictly investigate and ban empty-bag companies, overhaul the banking industry, and adjust the empire's monetary policy to deal with inflation during the economic crisis."

A big reason for the outbreak of the economic crisis is the unhealthy development of the financial industry, among which the stock market and some banks are important boosters. In order to arbitrage, they released false information on a large scale, ignored market risks, and encouraged enterprises and the public to blindly invest, start businesses and expand production.

When the US economic crisis broke out this time, the stock market and banks were the first to be exposed, and as many as hundreds of thousands of US banks were affected.

Although East Africa has tightened regulation on the financial industry in recent years, as one of the world's largest economies, it still has problems such as a lack of policies and laws, and chaos in the financial industry continues to occur despite repeated bans.

There is no other way. After all, the history of East African countries is only a few decades old, and the financial market has only started to develop in the past two or three decades. This means that there must be a lot of loopholes in the East African financial industry, and the East African government's experience in dealing with the financial industry may be better than that of the Soviet Union. East Africa cannot directly ban the financial industry like the Soviet Union did. A one-size-fits-all approach is the most effective way. Now, Ernst plans to take up the "knife" and target those companies, institutions and individuals that have been on the edge of the law in the past.

As for those who directly violated East African laws, they have already been punished by the East African government in recent years.

Crown Prince Friedrich asked: "Father, how should we deal with these speculators? Also, how should we deal with foreign-funded enterprises, institutions and individuals?"

Ernst said: "All their illegal gains should be confiscated, and fines should be imposed. Those who should be sent to prison should be sent to prison, and those with particularly serious circumstances should be exiled directly to West Africa. At the same time, in the name of combating crime, some of the pests of the empire over the years should be dealt with, such as the gangs and the umbrellas behind them, and those East African officials with dirty hands should also be taken down."

"Of course, officials must act within the rules. If there are no major problems, we can give them a break and not expand their scope."

Of course, if we understand Ernst's words in reverse, it means that for special social groups such as non-officials and nobles, there is no need to strictly "act in accordance with the law."

For example, some financial practitioners, although they engage in speculation and have caused adverse effects on East African society, they have not violated East African laws. After all, the law itself cannot take into account all issues and give completely reasonable arrangements.

These people are the main targets of the East African government in this round. Now the East African government wants to go beyond the law and catch all these people and organizations that operate outside the law.

As for some officials and upper classes in East Africa, it is indeed difficult to take action now, and we can only kill the chicken to scare the monkey. Of course, Ernst does not intend to let these "worms" go. It will not be too late to make plans after the scapegoat, the East African "Labor Party", comes to power in the future.

The Rhine royal family certainly cannot be in the first line of fire, as that is their stubborn foundation, so the East African "Labor Party" is the knife that Ernst had prepared long ago.

Of course, since it is a knife, there is a possibility that it will bite its master, so the Rhine royal family must make some preparations, including strictly controlling the army to prevent other political forces from infiltrating into the army. The overthrow of Tsarist Russia and the infiltration of the army by the Labor Party are precedents.

Among them, the Guards Division is the key to the Rhine royal family maintaining the stability of the regime, so Ernst will reorganize the Guards Division next to ensure the loyalty of this garrison force in the capital and central provinces to the royal family.

Ernst said: "The army, especially the Guards Division, must be controlled by the royal family. Recently, you have been personally paying attention to this matter and rectifying the Guards Division, removing those parasites and people with ulterior motives from the army. I will also pay personal attention to this matter..."

Following the conspiracy between father and son.

On September 1929, 9, the East African government officially launched a major overhaul of the country's financial industry. This overhaul was completely ruthless, and any group or individual that threatened the security of the financial industry became the target of the East African government.

The major overhaul of the financial industry is accompanied by nationwide "crackdown" and "anti-corruption" measures.

First of all, let’s talk about the stock market. As early as 1925, the East African government passed legislation to establish a regulatory agency for its own stock market, namely the East African Securities Authority. This time, at the instruction of the East African government, its management authority has been further strengthened, and strict audits and accountability have been carried out on internal personnel of the regulatory agency to crack down on insider trading and price manipulation.

At the same time, a comprehensive investigation of listed companies was launched to review their assets, liabilities, profits and other data, and to regulate and warn the behavior of listed companies.

Then there is the banking industry. The East African government announced a comprehensive overhaul of the banking industry, especially small and medium-sized banks, which are the focus of this round of overhaul. Healthy banks will continue to operate after passing the review, while banks with minor problems will be directly suspended for rectification before they can operate again. For those banks with serious problems, they will be directly liquidated and restructured. At the same time, a large number of criminals will be arrested, arrested, liquidated and held accountable in the name of economic crimes.

Strengthen the constraints on the banking industry, especially strictly restrict its speculative activities, excessive lending, illegal fund-raising, etc.

In addition to the stock market and banks, other financial industries, bonds, funds, etc. are all targets of this round of rectification.

Throughout October 1929, the East African financial markets were in turmoil. Every day, government officials and police entered various financial institutions, large and small, to conduct investigations and arrests.

At the same time, many social security and political activities took place on the streets of East Africa, and many officials were arrested. For a time, East African prisons were overcrowded, and there was even a spectacular scene of "shooting in line". Many once-powerful gangsters and criminals, with the authorization of the East African government, became "chickens" to be killed to scare the monkeys, thereby deterring those who were ready to make moves.

This "humanitarian disaster" and "social catastrophe" in East Africa not only caused shock in East Africa, but also caused uproar in the international community, especially those foreign capital "gloves" that were disposed of in this round of liquidation by the East African governments.

This triggered strong protests from many foreign capital forces, including financial organizations in many countries such as Britain, France, Germany, and Austria, or news media strongly condemning the "atrocities" of the East African government, and the title of the East African government as a "police state" was once again mentioned.

European countries' reprimands and criticisms of the actions of East African governments are not over. The US government, which is caught in the shackles of an economic crisis, has not forgotten to express its concern about the "disaster" in East Africa.

President Hoover publicly stated: "A catastrophe is unfolding in East Africa, a man-made catastrophe in which the authority of law is being trampled upon by the powerful, the sanctity of private property is being disregarded, and the people of East Africa..."

US President Hoover hated the government's large-scale intervention in the country's economy the most, let alone the East African government taking such drastic measures. He said bluntly at the end: "The East African government will pay the price for their arrogance, and we in the United States will never go down this path..."

The East African government completely ignored the Americans' remarks. After all, East Africa and the United States have been following different paths since the day they were founded. What really broke East Africa's defenses was the Soviet Union, which actually had the leisure to meddle in East Africa's internal affairs. Of course, in accordance with the Soviet Union's usual style, they described this round of actions in East Africa as "unequal distribution of spoils" and "intensification of internal contradictions within imperialism".

(End of this chapter)