The Qing Dynasty

Chapter 602 No Way to Run Away

The exchange was established by Aurora Bank. In principle, anyone buying or selling in the stock market cannot escape the eyes of the exchange, especially those seats that they have already targeted.

Teng Yuzao and others understood what the supervisor meant, which was that British and Japanese banks began to sell the shares they had purchased in the bicycle company, electrical company, flour company, as well as the Beiyang Machinery Company and Beiyang United Alkali Company of the Beiyang Group.

Waiting is a very anxious thing. They came here from the back door since the exchange started trading in the morning. Now it was already two o'clock in the afternoon. It was inevitable that everyone felt anxious, especially Zhou Xuexi, Yang Shixiang and Tang Shaoyi, who had been walking back and forth behind Teng Yuzhao, fidgeting.

Although Tang Shaoyi studied in the United States in his early years, he was still young at that time. When he was recalled to China by the Qing court, he was less than 20 years old. Although he knew how the Western stock market operated, he was not clear about the related collective operations, let alone how big funds flowed in and out to speculate on stocks.

I have no idea what a stock market crash is.

Zhou Xuexi, the head of the Beiyang and Aurora factions, was not much better than Tang Shaoyi.

Even though he obtained a large amount of financing through the stock market, he can now easily expand his production capacity without almost any bank loans.

As a result, he could use all the profits from his companies to open many new factories, but he was very ignorant about stock speculation, and waiting quietly like this really made him upset.

Except for lunch, when they listened to Teng Yuzao introducing the war situation outside the Great Wall and talked and laughed, the rest of the time, Teng Yuzao, Xi Ligong and Yang Shixiang just sat in front of the large glass window, quietly watching the changes in stock prices and rarely spoke.

Although Li Yaoting didn't say anything, he was standing in front of the window, looking at the trading hall through a clothes hanger telescope. All these things made Zhou Xuexi even more anxious.

If he had not known that their presence here was related to the foreign merchants maliciously absorbing the stocks of several of his companies, and that there might be a run on the Aurora Bank afterwards, he would have been unable to sit still long ago.

Zhou Xuexi didn't care too much about someone maliciously acquiring the stocks of his companies. He had full confidence in Xi Ligong. What Zhou Xuexi cared about was how to run these companies well.

At this time, they finally saw the other party starting to take action, which made Zhou Xuexi, Tang Shaoyi, and even Teng Yuzao and others secretly breathe a sigh of relief.

Xi Ligong looked at Teng Yuzao, who nodded and said, "Yucheng, let's follow the method we agreed on. You will take charge."

Xi Ligong turned around and simply said to the supervisor holding the microphone who was waiting for his instructions, "Start suppressing these stocks."

After receiving Xi Ligong's instructions, the supervisor immediately relayed Xi Ligong's instructions into the receiver.

Xi Ligong had already explained the relevant operations in detail, and even arranged more than a dozen people at various locations waiting for instructions.

As Xi Ligong's order was issued, the stocks of the Bicycle Company, the Electric Company, the Flour Company, the Machinery Company, and the United Alkali Company all fell sharply.

The magnitude of the drop was not just a halving of the price, it was even 20% lower than the stock price one month ago.

Moreover, there was no process for this decline. In just the blink of an eye, the stock prices of these companies, which had just been bright red, not only turned into a shocking green, but also directly jumped to less than 40% of the price.

What is most frightening is that, at the same time, a large number of buying orders appeared at the same time for the stocks of these sudden and sharp declines. This was true for the stocks of the Bicycle Company, the Electric Company, the Flour Company, as well as the Beiyang Machinery Company and the Beiyang United Alkali Company of the Beiyang Group. At the current price of each company's stock, there was a huge buying order of one million.

It's not just these five stocks. The stocks of these five companies seemed to be a signal. With their sudden and huge drop, the stocks of other Aurora and Beiyang groups all fell as well. Moreover, the stock prices were uniformly 10% to 20% lower than a month ago.

There is another obvious feature. These stocks also saw large buying orders at their falling prices, but the buying orders were not as shocking as the millions of orders from those five companies.

At the current price of these Beiyang or Aurora stocks, there are tens of thousands or hundreds of thousands of buy orders.

This sudden change stunned everyone in the hall.

Through the glass windows, one could clearly see that almost everyone in the hall seemed to have been immobilized. They all froze there for a moment, their mouths wide open in astonishment, staring blankly at the huge display board, which had just been red but now had a large green display light, and the shocking price and huge buying order.

However, this situation only lasted for less than a minute. Some people immediately started running, and some began to scream wildly at the trader behind the counter, while quickly making gestures to indicate the quantity and price of stocks to be sold. Then everyone seemed to react and also started shouting and gesturing to sell.

The entire trading hall seemed to be boiling at this moment.

Although these quick-reacting people are still unclear about what has happened, the huge amount of buying at low prices at least shows one thing, that is, there seem to be problems with the companies of the Aurora and Beiyang systems. Although they can no longer hold the stock prices, they do not want the stocks of these companies to fall below their price bottom line, and they still want to protect the stocks at low prices.

Before figuring out what happened, the natural thing to do is to get your money back first, even if they have almost wiped out all the gains of more than a month in an instant, or even exceeded that by a lot, and many people not only did not make any money but even lost money when selling at the current price, they still have to lock in the profits.

Driven by these people, the prices of stocks that were still flashing red lights also began to fall rapidly, so that not only the stocks of the Beiyang and Aurora companies that had turned green almost at the same time, but all the stocks of companies listed on the Beiyang Stock Exchange were also driven down, and fell rapidly.

What is somewhat different is that although the stock prices of these non-Aurora and Beiyang companies and factories were falling rapidly, there was no obvious buying. Only after their stock prices fell by almost 50%, a small amount of buying began to appear and these stocks began to be absorbed.

Although there have been some buyers, the selling orders have surged out and the small amount of buyers is unable to stop the panic selling orders, so the stocks of these companies continue to fall.

As these non-Aurora and Beiyang stocks continued to fall, the atmosphere of panic in the hall became even more intense, and selling orders had even begun to hit those Aurora and Beiyang stocks that had large bids.

It’s just that the buying power of these stocks is extremely strong. As soon as tens of thousands of sell orders are eliminated, more buy orders will appear again at that price.

The five stocks that fell first, and some that fell the most, were the most resilient thanks to the support of millions of buyers.

As long as tens of thousands of shares are taken over, twice the number that has just been reduced will appear almost immediately to make up for it.

These stocks are like a stabilizing force, standing firmly in that position, neither rising nor allowing the stock price to continue falling.

After only a brief trial, the panic selling in the market began to decrease, and finally, about ten minutes before the closing, no one would continue to sell Beiyang or Aurora stocks.

Looking at the crazy crowd in the hall, some of them were stamping their feet and beating their chests, some were standing there in a daze, and some were even hysterical, Yang Shixiang said with some reluctance.

"Marshal, we have enough funds, why don't we protect other stocks as well! After all, this decline was caused by us."

Yang Shixiang's words made Zhou Xuexi and Tang Shaoyi, who were already stunned by the crazy scene in the hall, look at Teng Yuzao, waiting for Teng Yuzao's explanation. Teng Yuzao smiled bitterly and said, "Lian Mansion, what we call abundant funds only refers to abundant paper money."

"Although there are a lot of gold coins and silver dollars, and even a large amount of gold and silver that have just been exchanged, as well as more than 10 million US dollars left, these funds are to be used to repay the bank runs, so they cannot be moved for the time being."

"If we don't handle it right, all the gold, silver and US dollars will be smashed into paper money and disappear."

Teng Yuzao sighed, "After all, we are just a local bank in Shandong and Zhili provinces. We cannot compare with the Ministry of Revenue Bank, which represents the imperial court and has the imperial court's reputation and taxes as a guarantee."

"What credibility does the court have!" Tang Shaoyi whispered behind Teng Yuzhao.

During the more than one year that he had followed Teng Yuzhao, he had to deal with the soldiers of the Zhi army almost every day. He was accustomed to the soldiers' unscrupulous words slandering the court, so now Tang Shaoyi no longer cared about these disrespectful words.

Seeing that Teng Yuzao did not stop him, Tang Shaoyi continued.

"Although Shandong's tax revenue has not changed much, our Zhili has developed very rapidly in the past two years. Last year's tax revenue exceeded 20 million, and this year's tax revenue will exceed 30 million without any problem. In another three to five years, our province alone will be able to reach the annual tax revenue of the current imperial court."

"They have maintained a level of 80 to 100 million for decades. How much is their reputation worth?"

Tang Shaoyi's words made Yang Shixiang nod with emotion.

"Although the Marshal promoted Westernization with financial support, it was indeed the most effective since the beginning of the Westernization Movement in China. Whether it was Li Zhongtang in the past or Zhang Xiangtao now, they can't be compared with the Marshal."

"only."

Yang Shixiang did not say anything else, but just sighed heavily.

Everyone knew what Yang Shixiang did not say, which was that Teng Yuzao was unwilling to consider promoting constitutional government right now.

There is now basically a consensus within the Beiyang clique on the promotion of constitutionalism, but Teng Yuzhao has remained noncommittal and has never expressed his stance.

Teng Yuzao ignored Yang Shiqi who only spoke half of his words. Instead, he looked at the watch on his wrist. Seeing that the time was approaching three o'clock, he continued to look at the crowd that had gradually quieted down and became confused.

There was no exchange's trading rules, and Teng Yuzao did not formulate them completely according to those of later generations, nor did he even completely refer to the practices of European and American powers, but instead created his own system.

For example, the Beiyang Stock Exchange did not have a short buying and selling mechanism, and the same was true for the hours, which were only from 9:00 to 11:00 in the morning and from 1:00 to 3:00 in the afternoon.

The most important point is that now stocks can only be bought and sold using banknotes issued by Aurora Bank. No other currencies are accepted.

Even the dividends of these companies are in the form of paper money. If you want to exchange them into other currencies, you still have to go to Aurora Bank to exchange them.

"Commander."

Xi Ligong, who had just run over to check the transaction status in person, spoke excitedly to Teng Yuzao while looking at his watch.

"I just checked. Not only the British and Japanese banks, but all other foreign banks, including the shares of our five companies held by the former Capital Commercial Bank and now held by the Ministry of Revenue Bank, have not sold any of them."

Seeing Xi Ligong smiling, Yang Shixiang couldn't help but laugh.

"Yucheng, this means that all the foreign banks that bought large amounts of stocks of these five companies have lost money!"

Xi Ligong smiled and said, "I have calculated the average cost of the stocks of these five companies they purchased, and the average price is more than double the current stock price."

"Their plan to sell at a high price, bring down the stock price and then buy in large amounts has failed, and their goal of holding a sufficient number of shares to achieve a controlling stake has been lost."

"Because foreign banks in the United States, France, Belgium, and the Netherlands started to follow suit and buy stocks of these companies relatively late, the stock prices had already been pushed up by us at that time, so the average cost of the stocks they held was the highest. The average price of stocks held by the Dutch and Belgians was 120% of the current price."

"It can be said that these foreign banks are trapped."

"I guess they didn't react for a while, so they're neither buying nor selling now."

Tang Shaoyi asked anxiously, "What if they start buying now?"

Zhou Xuexi smiled and said, "We have not been idle this month. The shares of these five companies held by Aurora Bank have exceeded 10%. Together with the shares of the companies I have kept, our shares in these companies exceed 50%."

"Even if they add up all the shares they hold, they still won't have more than half. If they want to be shareholders, they can just keep them."

Xi Ligong also smiled and said, "If they still want to continue buying now, since there are not many stocks of these companies on the market, as soon as they start buying, the stock price will immediately rise. Then I don't mind buying them some more."

Teng Yuzao smiled bitterly and said, "In fact, we have no choice but to do this. We are just temporarily locking up the stocks in their hands. As long as the run is over, the stock price will slowly rise, and they will always have a chance to sell."

Because Teng Yuzao had never let Tang Shaoyi participate in how to deal with the bank run before, Tang Shaoyi was not clear about Teng Yuzao's response strategy and asked worriedly.

"Marshal, if they incited the public to panic and drive down stock prices during a bank run, and then bought a large amount of stocks and sold them after they rebounded, wouldn't they still make money?"

Xi Ligong smiled and shook his head, saying, "No, the stock price is at this level. Not to mention that they don't have much money, even if they want to create panic and suppress the stock price, they can't do it."

"At this price, Aurora Bank will buy all the stocks, no matter how many there are."

Xi Ligong smiled slyly and said, "Do you think these foreign banks will exchange our banknotes for silver dollars or foreign currencies at this time?"

(End of this chapter)