1928: The rise of giant merchants

U.S. Steel issued a statement that day saying that in order to alleviate the shortage of funds, the company would sell its headquarters building in Manhattan, New York, to raise US$8 million to tide over the crisis.

Not long after the statement was released, YB Bank, which had just opened its doors, came to visit and reached an agreement with the president of U.S. Steel as quickly as possible.

Early the next morning, U.S. Steel officially issued a statement, announcing that it had sold the headquarters building to YB Bank for US$8.2 million. The two parties had completed a 20-year sale and leaseback agreement.

According to the agreement, in the next 20 years, U.S. Steel can still use this headquarters building, but it must pay a certain amount of rent to YB Bank every year. It is reported that the rent in the first year is about US$240,000; and U.S. Steel can also choose The building was repurchased for $25 million 10 years after the sale.

As soon as the agreement between the two parties was announced, the New York Times reported the matter and claimed that it had confirmed that the reason for the sale of the headquarters building was that the steel industry was facing a bankruptcy crisis due to a sharp decline in earnings.

As of the end of October this year, U.S. Steel's total debt has exceeded US$100 million, of which approximately US$35 million of debt must be repaid within the next two years.

Most of this money was lost during the bursting of the US stock market bubble.

On the same day, McClatchy Newspapers, the third largest newspaper group in the United States, also issued a statement announcing the layoff of 1,600 jobs, with the layoff ratio as high as 15%.

The statement said that the layoffs will be implemented from November and will be implemented through layoffs, natural attrition, department mergers, business outsourcing, etc., and are expected to cost US$30 million. However, this move is expected to save the company US$3 million in unnecessary expenses every year.

In addition to layoffs, McClatchy Newspapers also plans to reduce top management salaries to reduce expenses and cope with reduced advertising revenue.

In fact, McClatchy Newspapers' layoff plan began in October. In less than a month, McClatchy Newspapers announced large-scale layoffs several times, with a total of 4,150 positions cut, and the layoff ratio has exceeded one third.

This is one of the former newspaper giants, a high-quality, high-priced stock on the New York Stock Exchange.

The New York Times and many other newspapers and magazines were severely impacted by the U.S. stock market bubble, and past advertisers also went bankrupt due to the crisis.

Last month, a report showed that the New York Times' non-weekend circulation fell by 3.1%.

In addition, the impact of the financial crisis on the traditional publishing industry has made these media giants even more miserable.

This is just the tip of the iceberg of the chain reaction caused by the U.S. stock bubble.

The economic crisis Ye Luo mentioned is not groundless.

In the first month after the U.S. stock bubble burst, the U.S. industry was indeed in unprecedented difficulty.

U.S. Steel thought it could raise funds to deal with the crisis as long as it sold its headquarters building. In fact, the real crisis has just begun.

The heavy industry and light industry that were hit to pieces were Ye Luo's first target.

After leaving the YB Bank building in the car, Ye Luo and others walked all the way to Albany.

Albany was once a small city in the eastern United States. It was originally a trading post established by the Dutch and is now the capital of New York State.

The State Government Building is a Western palace-style building with a very majestic shape. Unfortunately, many parts have not been fully constructed. It is actually an unfinished building.

It is said that because the cost of building the building was too high, Franklin ordered the construction to stop, so that many of the carvings on the walls were not finished.

The original design was a circular dome, but it was later hastily changed to an ordinary roof, which did not match the overall architectural style.

New York State is the richest and most prosperous state in the United States. Many large companies are headquartered here. Wall Street, which was most severely damaged by the stock market crash, is also located in New York City.

Compared with the prosperity of New York State, this state government building seems unremarkable.

When Ye Luo and others entered the building, Franklin had already prepared to greet them in advance. He had a smooth journey and soon arrived at the reception room.

Franklin and Yelo sat alone in the reception room. Franklin added wood himself and lit a roaring fire in the fireplace.

After becoming the president, this boss invited many scholars to be his private think tank. When he asked experts for advice, it was not in a formal meeting, but in the form of a few people sitting in front of the fireplace chatting.

It turns out that this habit has been around since then.

Ye Luo understood that this also meant that Franklin treated him as a "smart man" and a "scholar", rather than a fat-bellied capitalist who only knew about profit and money.

"The current situation, the economy is in a mess, what do you think the government can do?" Franklin got straight to the point.

Even if the U.S. stock market bubble bursts, Hoover cannot step down immediately. As long as he is still president, Franklin can only continue to hide his capabilities and bide his time.

The economic crisis is a national and even global issue. As the governor of New York State, he naturally has to deal with it well.

"If you are referring to the New York State government, there is actually no good way to respond. Your decree needs to be approved by the federal government. If the opinions and the Hoover Cabinet in the White House move to the left, do you think they will adopt it?"

Ye Luo shrugged and said he was helpless.

Franklin had already thought of this problem. He sighed and said calmly: "Indeed. So you are not optimistic about the anti-crisis measures taken by the federal government?"

Hoover was still using his usual simple response mode, letting the top management control public opinion and protect the interests of big capitalists and politicians. At the same time, he used relatively mild means to control the workers, and then let various consortiums inject funds. He felt that as long as he got through During this time, the economy will recover.

As he said to the outside world, the U.S. economy would rebound in early 1930.

"No, I'm quite optimistic about his anti-crisis measures." Ye Luo shook his head and smiled, "Actually, from various angles, what he did is right, very right. In this way, the momentum of the economic crisis will be curbed. As long as the interests of capitalists are not damaged on a large scale, the overall economy of the United States will remain relatively stable. After all, 90% of the wealth is in the hands of 5% of the people, right?”

Regarding this, Franklin remained silent and did not answer.

This is a situation that the United States had to face after World War I. He is also one of the beneficiaries. How should he respond?

"But such behavior will only happen in one situation when his first term expires. The Great Depression caused by the economic crisis has been slowed down, but the economy has never been able to recover. He will have to take responsibility for this crisis."

Ye Luo spread his hands, this is the result they want.

Let Hoover take the blame.

Franklin shrugged and laughed: "He may be the most unlucky president in the history of the United States."

"Haha, yes, but whoever becomes president after him will be the luckiest president in the history of the United States, right?"

Ye Luo laughed and said,

"Governor Franklin. You know, Hoover can't be re-elected. His behavior during his term will make people disappointed in him. When he leaves, the next president just needs to campaign with optimism and a positive attitude and implement the right economy." policy, it would have been easy to end the Great Depression and thus become an American hero."

Franklin thought so.

He had not been so ambitious before, but as things happened with Ye Luo and the others, and after seeing the possible results of Hoover, his once extinguished hope began to rekindle.

After Ye Luo made his words clear, the two looked at each other and smiled, finally clarifying their future action strategy.

"Before the election, we should add fuel to the fire for Hoover's cabinet, right?" Ye Luo smiled wantonly.

This is the purpose of his trip.