Chapter 504: Destroyed America

"It's not that we are heading towards the abyss, but that one foot of America has already stepped into the abyss." Vanderbilt frowned.

Including speculative capital, domestic capital in the United States and even international hot money in Europe, the hot money invested in the American railway industry is not measured in tens of millions of dollars, but in hundreds of millions.

The economy of the entire United States is highly tied to the railway carriage that is rushing towards the abyss, and there is no possibility of turning around.

What his son-in-law Liang Yao is doing now is to jump off the carriage before it falls into the abyss.

Jumping off the carriage is definitely necessary, but the timing of jumping off the carriage is very critical.

Vanderbilt is not sure whether it is a wise decision to jump off the carriage with Liang Yao now.

Jumping too late will be doomed, and jumping too early, the American railway industry is still thriving, and he will make a lot less money.

Capitalists are greedy. For capitalists, making less money is a loss. Making less money is an acceptable choice for ordinary people, but not necessarily for capitalists.

Vanderbilt took out some data he had collected. The first data was the gold production in California in the past two years, as well as the capital withdrawn from the American market to Europe this year.

"Since 1850, the contribution of California's gold to the American economy is unquestionable. If the American economy is a high-speed train, California's gold is the locomotive of this train.

Since 1855, the growth rate of California's gold production has slowed down significantly, which is equivalent to the locomotive slowing down. If the locomotive slows down, the speed of the train will naturally slow down.

In addition, look at these. Since the end of the Crimean War, European and American capital has quickly returned to Europe. European capitalists have always had a keen sense of smell, which shows that their judgment is consistent with Liang Yao, and they are not optimistic about the prospects of the American railway industry."

William flipped through these data, and the more he looked at them, the more frightened he became.

The international hot money in Europe can leave after making enough money in the United States, but it is difficult for them, the American capitalists, to stay out of it.

"Father."

While Vanderbilt and his son were talking, Clark, Vanderbilt's son-in-law, came in with a stack of papers in his hand, and he slapped the stack of papers on the table.

"Look, what I found on Wall Street, these are the latest financial products RMFB issued by those wild railway companies. I think it is necessary to show you these things, so I came here in a hurry."

RMFB stands for the rail rebonds (railway farm mortgage bonds).

Vanderbilt sat down at his desk and carefully read the financial product that had just been issued on Wall Street.

As an old capitalist, after reading this financial product carefully, he saw through the tricks in it.

In the capital market of the United States, according to the order of financing, the railway company first borrows from large banks. If the large banks cannot lend money, they will borrow from small and medium-sized banks.

If the bank loan route is not feasible, they will go to Wall Street to raise funds. If they cannot raise funds on the Wall Street stock market by conventional methods, then they can only take wild ways.

RMFB is one of the wild ways.

The so-called RMFB is that the railway companies that can no longer raise funds through normal channels make big promises to farmers who own land, and exchange the company's shares for the farmers' land.

Then, they use the land obtained from farmers as collateral to package it into a financial product such as RMFB to raise funds from the Wall Street capital market.

During the whole process, these railway companies do not have to pay any other costs except printing a few railway company stocks for farmers.

To put it bluntly, the railway companies in the middle are making money out of nothing, using farmers' land to prolong the life of their own companies.

"No annual interest rate is lower than 10%. They really dare to give such a high interest rate! They will destroy the entire railway industry! Even the country!"

Vanderbilt was suffocated by these people's shameless operations. He threw these so-called financial products into the trash can like waste paper.

Such a high interest rate means that those garbage railway companies can no longer sell RMFB at normal interest rates, and can only raise interest rates to attract greedy and stubborn speculators to enter the market to take over.

The fact that the railway company began to raise funds in such a shameless way shows that this game of passing the parcel has come to an end, and the collapse of the railway industry and the arrival of the economic crisis are not far away.

The current situation is no longer a problem that the railway industry is rushing towards the abyss, but that there is a bunch of explosives tied to the carriage that will be detonated at any time, and the carriage may be blown to pieces by the explosives on the carriage before falling into the abyss.

The fuse that ignited the explosives on the carriage, if nothing unexpected happens, is the rmfb thunder.

"Except for the projects under construction, from now on, the Central Railway Company will stop all construction of any railway projects, and all planned projects will be cancelled. In addition, all bonds and shares held by the Vanderbilt family related to the railway company will be sold in a low-key manner."

After recovering from suffocation, Vanderbilt made a decisive decision.

"The consequences are so serious? The economic crisis 10 years ago is going to happen again?"

Vanderbilt's decisive attitude made William feel uneasy. It seems that the actual situation is more serious than he expected.

At the same time, William also admired Liang Yao very much. Things that he didn't see through in New York, Liang Yao who was far away in California had already seen through and left early.

"If the economic crisis of ten years ago reappears, it's God's fault for America." Vanderbilt said with a wry smile.

In the 1850s, America had not yet completed industrialization and was still an agricultural country.

The primary industry (agriculture) accounted for as high as 77%, and although the secondary industry (industry) accounted for a certain increase in recent years, it only accounted for 21%, and the remaining 2% was the tertiary industry, which was almost negligible.

RMFB has already involved agriculture. If nothing unexpected happens, many companies will follow suit with this so-called financial product, and the interest rate will be raised higher.

Once a crisis occurs in the railway industry, it will not only affect industry, but also agriculture. Farmers who exchanged land for a pile of waste paper will also become a factor of social instability.

Moreover, the North-South crisis has not been completely resolved, and now there is another crisis.

Such a mess, let alone Buchanan, who is in sight of the presidency, even if Washington and Jefferson are alive, they may not be able to resolve this crisis and rescue America from the crisis.

"Withdraw all the capital, how to arrange the money?"

William roughly estimated that if all the capital was cashed out and only the Central Railroad Company was left, the Vanderbilt family would have as much as 23 million US dollars in liquidity.

How to arrange this astronomical amount of money will be a big problem.

"Don't move for the time being, I will go to California to investigate in person. Liang Yao's petrochemical industry has been very prosperous in recent years, but I don't know enough about this industry. I need to go to Los Angeles to investigate in person before making a decision." Vanderbilt said after thinking for a moment, and he did not forget to emphasize to William.

"You must be low-key when selling stocks, understand?"

"I understand, father." William nodded.

"Father, did I help you a lot?"

After the conversation between Vanderbilt and his son ended, Clark took credit for it to Vanderbilt.

"As soon as this financial product came on the market, I noticed something was wrong, and I immediately spent $8,000 to buy it for you to review!"

"Got it." Vanderbilt nodded calmly, then issued a $30,000 Bank of America check to Clark and handed it to Clark, praising him.

"You did a good job."

With Liang Yao as an example, and William and Connie showing their business talents, Vanderbilt's attitude towards this son-in-law who wanted to win the daughter of the Vanderbilt family for money has always been lukewarm.

Clark happily took the check from Vanderbilt, and before leaving, he did not forget to pick up all the RMFB that Vanderbilt threw into the trash can.

These things that Vanderbilt sneered at will be waste paper in the future, but now they are not waste paper, and they can still be sold at a loss.

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Liang Yao and Connie's employment contract has expired. After Zeiss came back, Connie handed over his work to Zeiss and Carnegie.

After signing the confidentiality agreement, Coney and Liang Yao officially settled the employment relationship.

"Young man, work hard. Working with the boss is not only promising, but also allows you to learn a lot of things you can't learn." Coney patted Zeiss on the shoulder and said earnestly.

Coney and Zeiss graduated from the same business school, and he had a good impression of this junior.

"Thank you, Mr. Coney, I will work hard." Zeiss smiled and thanked Coney.

"Zeiss, although your godfather and I are good friends, one thing is one thing. I don't support idle people, especially such an important position." Before signing the employment contract, Liang Yao said some ugly words to give Zeiss a shot of prevention.

"During the six-month probation period, if you can meet my expectations, I will provide you with a long-term contract. If not, you will find another way out."

Although Zeiss was cultivated by himself, Garrett also had a high opinion of Zeiss during his probation at the Atlantic Railway Company.

But the business of the American Group is much more complicated than that of the Atlantic Railway Company, and Liang Yao's assistant is not something that ordinary people can handle.

Since 1850, his three assistants: Coney, Hu Jinchen, and Carnegie, except for Hu Jinchen, Coney and Carnegie are very outstanding and have very high business talents.

Liang Yao has no idea whether Zeiss can be competent as an assistant.

Zeiss's excellent grades in business school do not mean that he can be a good assistant.

"Yes, sir, I will try my best to pass your test." Zeiss said confidently.

Zeiss has been waiting for six years to work for Liang Yao.

If it were not for Liang Yao and Cai Mingsheng, Zeiss would not know whether his family could survive in California, where the law of the jungle prevailed and there were no laws, and successfully study in the business school in New York.

Zeiss is grateful to Liang Yao and Cai Mingsheng for being able to come this far.

Liang Yao looked at Zeiss, the son of a former grocery store owner and a newsboy on the streets of San Francisco, who had grown from a twelve or thirteen-year-old child to an eighteen or nineteen-year-old boy.

Zeiss has changed a lot, and this change is not only reflected in his appearance, but more in his eyes and demeanor.

Six years ago, Zeiss could only be described as a smart kid, but now he is full of confidence and calmness in his every move. This kind of confidence and calmness requires something inside to support it.

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Anyway, this is a positive change, and Liang Yao also hopes that Zeiss can be competent for this position.

It is not easy to find a capable assistant, and it is even harder to find a capable and loyal assistant.

"My father sent a telegram saying that he would come to California."

Yin Lizabeth came to Liang Yao's office with a slightly bulging belly.

Liang Yao walked up to Yin Lizabeth and said with some distress: "The environment in San Francisco is not good, you should go to the small house in Sacramento to take care of the baby first."

Since the environment in San Francisco is getting worse day by day, Liang Yao is ready to move to Sacramento, but his manor in Sacramento has not been completed yet.

However, Liang Yao's parents have already disliked the bad environment in San Francisco and have moved to the small house Liang Yao once built in San Francisco.

After discovering that Yin Lizabeth was pregnant, Liang Yao repeatedly persuaded Yin Lizabeth to move to Sacramento, but Yin Lizabeth insisted on staying in San Francisco on the grounds that it was more convenient to handle the affairs of the group in San Francisco.

"Connie just completed the handover with Zeiss, and you usually have to deal with state affairs. Can you handle so many things within the American Group by yourself?" Yin Lisabeth shook her head.

Liang Yao and his father are the same kind of people. When his father was young, he often stayed away from home for months because of work problems. Before marrying Liang Yao, Yin Lisabeth had been mentally prepared.

Compared with his father, Liang Yao's work is more arduous. Vanderbilt is obsessed with business and doesn't participate much in political affairs.

Liang Yao, not only participates in politics, but also serves as the military commander of the entire western region. God knows how Liang Yao has survived all these years.

If she can share some affairs with Liang Yao, the burden on Liang Yao's shoulders can be lighter.

Liang Yao knew that he couldn't persuade Yin Lisabeth, so he tried a look at Connie.

Connie is a smart man and quickly understood.

Connie supported Yin Lisabeth and said, "Sister, who are we, my brother-in-law and I? It's just a contract. We are family. It's okay for me to work for him for a few more months."

"Okay, okay, don't you want me to move to Sacramento? I will move to Sacramento in the next two days to save you from nagging me." Yin Lisabeth gave in.

After promising to move to Sacramento, Yin Lisabeth talked about work again: "The American Group has too many and too complicated businesses. It is involved in almost all industries. The management cost and difficulty have exceeded the limit that the group can bear. A few months ago, I visited many branches under the group, and the management was very chaotic.

Our competitiveness in some industries has become smaller and smaller, such as Xiangshan Gold Mining Company in Nevada. I think if the group wants to go further, we need to clarify the development direction of the group and focus on developing our more advantageous areas."

In this era, there are no telephones, no faxes, and no Internet. The management cost of companies, especially large comprehensive group companies, is very high.

The American Group is involved in so many industries, with businesses all over the country, and even touching the European continent, the Qing Dynasty, and Japan. The management difficulty and cost can be imagined.

If the telegraph had not gradually become popular during this period, Liang Yao's American Group would never have survived until now.

However, the ability and efficiency of telegraphs to spread information are still very limited after all.

This is also why most of the giants of this era only focus on one industry, such as Vanderbilt's focus on the railway industry, the Rothschild family's focus on the financial industry, and Liang Yao's steel tycoon Carnegie in the history of the United States in the future. Focus on the steel industry, Rockefeller's focus on the petrochemical industry, etc.

A very objective and realistic reason is the limitation of information dissemination efficiency and management costs.

In this case, focusing on a certain industry can maximize management cost savings and improve competitiveness.

The ceiling of modern companies is constantly breaking through with the information dissemination technology.

The emergence of the telegraph in the mid-to-late 19th century gave birth to a large number of large companies with a value of tens of millions of dollars. The emergence of the telephone further raised the ceiling of these companies, raising the upper limit of the company to hundreds of millions of dollars and billions of dollars.

The emergence and popularization of fax and the Internet after World War II have greatly reduced the cost of conducting business across borders, and the ceiling of modern companies has also reached a trillion-dollar level.

At present, the total asset value of the American Group has exceeded 100 million, making it the first giant in the United States with assets exceeding 100 million. It is already the ceiling of comprehensive group companies in this era.

If the American Group wants to go further, it should indeed clarify the future development direction, divest some businesses with gradually declining competitiveness, and focus on developing the group's existing advantageous industries.