Holy Roman Empire

Today is the last Friday of May, and the Vienna Stock Exchange entrance is packed with people.

The Austrian Securities Management Act clearly stipulates that listed companies must publish financial reports every three months, with the release scheduled for the following month.

Because companies went public at different times, the reporting periods vary, and several companies release their financial statements at the end of each month.

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Friday is the preferred day, as the stock market is closed on Saturday and Sunday, allowing the market time to react and preventing investors from impulsively selling everything at once.

If there’s good news, of course, companies don’t wait until the end of the month. They can announce it anytime.

Financial newspapers also publish company reports, but they come out a few hours later than the stock exchange, so it’s usually less crowded.

Today is an exception. Over the past few months, strikes have swept across Europe, and the affected companies’ performance has undoubtedly suffered, so everyone is already braced for bad news.

Maldonado is an investor. Under normal circumstances, he doesn’t check the reports at the stock exchange. It being Friday, even if he did, it wouldn’t make much difference.

But today is different. The company he holds the most shares in, Dekker Textile Factory, is about to release its financial report. Deep down, Maldonado hopes Dekker Textile Factory has minimized its losses.

There’s nothing he can do as his investments are already trapped. Since the strikes began, Dekker Textile Factory’s stock price has been on a steady decline, with far more people selling than buying.

The stock price hasn’t hit rock bottom, as Dekker Textile Factory is a large company with a complete industrial chain, strong risk resistance, and still maintains some investor confidence.

Seeing the crowded scene, Maldonado decisively entered the coffee shop across the street to wait. Just as he reached the third floor, he heard someone calling him.

“Maldonado, over here!”

Maldonado walked over.

“You’re all here. Seems like today’s results aren’t looking too good.”

The few of them were old friends from the stock market who’d been in the industry for years. They only gathered like this to wait for companies to release their financial reports when they had low confidence in the market.

A balding middle-aged man complained, “Damn it, can’t you say something nicer? Even a little sugar-coating would be better than being so blunt.”

Maldonado shrugged, “Come on, Caron. Fooling you isn’t easy. If you were optimistic about today’s market, you wouldn’t be here either.”

Clearly, the two knew each other well and spoke very casually.

As retail investors, they might look glamorous on the surface, but in reality, they live in constant anxiety, not daring to relax over any small change in the market. 𝔯αꞐộＢЕ§

Just looking at their receding hairlines, it was clear they’d been under a lot of stress.

An elderly man nearby pointed to the exchange across the street and then said, “Looks like it’s been announced.”

As seasoned investors, they had their own ways of interpreting market trends. For instance, while others were still pushing through the crowds below, they just observed the crowd’s reaction from here to get a sense of the news.

Caron set down his coffee, sighing, “It’s bad news, as expected. Maldonado, I have to say your mouth brings bad luck!”

Maldonado smiled bitterly and retorted, “It’s not like I wanted this. Now I have to go down there and confirm just how bad it is. Anyone want to join me?”

The group exchanged glances, and the elderly man replied, “Let’s wait a bit longer. The market’s already closed, and it’s crowded down there anyway. A few minutes won’t make much difference.”

Time passed quickly, and by the time their coffee had gone cold, the crowd had mostly dispersed. Only then did they head downstairs.

They soon realized that it wasn’t just small investors like them. Several big players in the industry had shown up as well. Clearly, many people were interested in the company’s financial report.

With a heavy heart, Maldonado looked over Dekker Textile Factory’s report, his eyes freezing on the bold “LOSS: 1.248 MILLION.” He closed his eyes, unable to look any further.

The reason didn’t matter anymore. This astronomical loss had far exceeded his expectations, leaving only one thought in his mind: “Cut my losses.”

For context, Dekker Textile Factory’s entire profit last year didn’t exceed 1.5 million guilders. This single loss essentially wiped out any hope of breaking even this year.

Maldonado could already hear people cursing, angrily condemning Dekker Textile Factory’s management as incompetent and inflexible.

…

If he had a choice, Lanoue Sr. wouldn’t have released the financial report at this time. But there was no alternative. Failing to release the report on schedule would not only result in fines but also trigger an investigation by regulatory authorities.

Few companies could withstand such scrutiny, and Dekker Textile Factory was no exception. Even a minor finding could deal a fatal blow to the business. Too many eyes were on them now, and even the smallest issue could be blown out of proportion so Lanoue Sr. didn’t dare falsify the report.

With over a month of continuous strikes, it would be suspicious if the company didn’t report a loss.

Shipment volumes, transaction totals, and tax payments were all verifiable figures. Attempting to manipulate them wouldn’t be easy.

In theory, a product worth one guilder could be sold for ten thousand guilders legally, but the company would need to pay taxes based on the transaction value.

When items are sold at well above market prices, they’re classified as luxury goods, which are subject to luxury taxes—much higher than standard taxes.

So, in theory, a company could easily achieve positive earnings if it were willing to spend extravagantly to inflate its performance. In practice, however, no sane business would do this as the cost of falsifying records would be far beyond what capitalists were willing to bear.

Following the disastrous news of Dekker Textile Factory’s significant losses, Monday brought a wave of selling on the Vienna Stock Exchange as soon as trading opened.

The market was flooded with sell orders, with virtually no buyers in sight, causing the stock price to plunge. By the afternoon close, Dekker Textile Factory’s stock price had dropped by 14.7%.

It might seem like this drop was manageable, but in reality, this was the nth time Dekker Textile Factory’s stock price had fallen since the onset of the strike. The stock had already hit rock bottom, and with this latest drop, Dekker Textile Factory’s market value was only 63% of its peak.

Dekker Textile Factory wasn’t the only company affected. All businesses saw declines in their stock prices, with those facing strikes experiencing the biggest losses. Investors believed that companies affected by strikes, like Dekker Textile Factory, would suffer severe losses.

In a market economy, everything is interconnected. When a company’s production suffers, so do the suppliers upstream and the sales channels downstream. Not one will get away unscathed.

Stock declines tend to spread, and many companies with good performance records also suffer undeserved losses. By the end of that day’s trading, the Vienna Stock Exchange’s overall index had dropped by 4.2%, with widespread distress across the market.

As the market’s negative factors persisted, Vienna’s stock market continued to hemorrhage value over the next several days. Many companies’ stocks plummeted to mere “bargain prices,” marking the official onset of a stock market crash.

By Friday’s close, the Vienna Stock Exchange’s index had fallen by 11.8%, with Austria’s stock market losing hundreds of millions of guilders in just five days.

The stock market crash had arrived!

With the help of newspapers, news of the stock market crash in Vienna quickly spread across the European continent, and smart investors immediately began selling off their stocks.

With economic growth, the ties between European economies had become ever closer, and Austria’s stock market crash meant that other European nations could not remain unaffected.

A strange scene unfolded: in London and Paris alike, there was a flood of stock sell-offs, yet buyers were few and far between. No matter how much experts and scholars tried to promote optimism, the markets continued to plummet.

“Bailout” became the next big topic after the strikes, yet before it could happen, the strike issue had to be resolved.

If companies couldn’t resume production, how could stock prices be stabilized? The capitalists grew anxious. Only a select few were in a position to benefit from the market crash, while most were simply victims of it.

To restore production quickly, capitalists tried various strategies.

Some chose to negotiate and compromise with workers while others resorted to bribery and divide-and-conquer tactics. Some even had hired thugs to arrest workers’ family members to coerce them back to work, while the most ruthless brought out Gatling guns, firing on strikers and forcing laborers back through bloody violence…

All manner of tactics played out across Europe, bringing both laughter and bloodshed to the public.

Where there is oppression, there is resistance. Bloody repression brought not only reluctant returns to work but also wave after wave of worker uprisings.

It was chaos—total chaos—Europe was like a boiling cauldron. A variety of radical ideologies spread swiftly, creating an atmosphere of frenzy and upheaval.

In the Vienna Palace, Franz was troubled as he observed the turbulent situation. The Austrian government’s early intervention had prevented large-scale worker uprisings in Austria, but the stock market crash was painful enough on its own.

Due to the stock market crash, many companies found themselves in financial difficulty. If this wasn’t resolved, it could lead to a new wave of economic crisis.

If it were merely a cash flow issue, these companies could simply seek bank loans. However, many of these cash-strapped companies also had serious internal problems.

These issues included chaotic management, unresolved strikes, conservative business strategies, outdated machinery, and more.

With all these complications combined, banks naturally concluded that these were high-risk ventures.

When the market is strong, banks don’t mind high-risk ventures as high risk often brings high returns. As long as the potential profit is big enough, banks are willing to take risks.

But with the stock market crash, the situation was different. Many banking operations were already impacted, and most banks were tightening their credit. Even low-risk loans were hard to secure, and loans without collateral were simply out of the question.

Franz was powerless in this situation. He couldn’t just direct banks to issue loans knowing these companies had major problems.

Doing so wouldn’t solve the crisis. It would only delay its eventual eruption.

In the short term, this might benefit economic development, but in the long run, it would drag the entire economy into hell.

Hoping these companies would be reborn from their struggles seemed overly optimistic. Franz felt it might be better to let them collapse and rebuild from scratch. It would at least be cheaper and consume fewer social resources.

Survival of the fittest is a fundamental market principle, and Austria’s market wasn’t limitless. Rescuing these companies also sacrificed the interests of other similar businesses, inherently undermining the principle of fairness.

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