Chapter 294: The Bottoming Out of Rubber Companies
The good news was that the rubber crisis primarily affected the rubber industry, with only minimal impact on other sectors.
Additionally, the strict regulatory oversight of stock markets in other European countries ensured that after the collapse of the rubber market, appropriate policies were quickly put in place to manage the fallout. This prevented significant fluctuations in the stock markets and economies of most regions, including Australia, and helped avoid a global economic crisis.
In order to mitigate the impact on the Sydney Stock Exchange, Arthur had the Royal Consortium publicly announce their plan to purchase all rubber company stocks on the market as soon as the price of rubber stocks fell to less than half of the original offering price.
This move helped stabilize the finances of some Australian rubber companies and allowed stockholders to sell their shares.
For Arthur, this action wasn't too much of a loss. After all, the rubber stocks had already dropped to their lowest point, and they couldn't go much lower.
The Royal Consortium had already earned quite a bit from the rubber boom, so using a small portion of those profits to help save Australia's rubber market seemed justified.
As for the rubber markets and companies in other parts of the world, Arthur could only express his helplessness.
The rubber industry's current crisis was largely due to the greed of small-capital investors.
In fact, Arthur didn't make much money from the rubber crisis. Though he knew that short-selling rubber company stocks could have earned the Royal Consortium substantial profits, he wasn't interested in such ill-gotten gains. After all, for a monarch, reputation was far more important than money.
However, one group did profit greatly from the rubber crisis by engaging in heavy short-selling: the Jews. This, in turn, led to increased hatred towards them in many parts of Europe.
In some regions, anti-Semitic actions erupted, making the lives of lower-class Jews even more difficult.
This could be considered a case of the Jews bringing trouble upon themselves. Greed is fine, but excessive greed is another matter entirely.
Who could have any sympathy for such a greedy group?
After World War I, the infamous phenomenon of hyperinflation in post-defeat Germany, where 500,000 marks couldn't buy a loaf of bread, was largely fueled by the actions of Jews in the background.
This ultimately contributed to the Holocaust under the Third Reich, as the hatred of Jews in the hearts of Germans had become deeply ingrained.
In early May 1911, Kent, Arthur's butler, came to report the Royal Consortium's success during the rubber crisis, his face full of joy.
Since its inception, the Royal Consortium had invested nearly 2 million Australian dollars, creating and investing in over 40 rubber companies and more than 200 rubber production farms.
At the time, the Sydney Stock Exchange had not yet listed, and since Arthur was aware of the damage the rubber crisis had done to the stock exchange and the national economy, these rubber companies established and invested in by the Royal Consortium were mostly listed in foreign regions, including New York, London, and others.
"Your Majesty, during the stock issuance period, we earned over 13 million Australian dollars, and the high-value cashing of stocks brought in a total of 31 million Australian dollars. After deducting various expenses during this period, our total profit should exceed 35 million Australian dollars," Kent reported with a smile.
The Royal Consortium's annual profit was more than 35 million Australian dollars, which is why Kent wasn't too moved by this figure during his report.
But this windfall was certainly something to be happy about.
"How much did we spend to buy back the stocks after the stock market crash?" Arthur asked with interest.
The Royal Consortium's prominent buyback of all the rubber company stocks on the market had won the gratitude of many Australian stockholders.
After all, without the Royal Consortium's purchase, stock prices would have likely fallen even further, perhaps to the point of being worth less than scrap paper.
"There were not many rubber companies listed in Sydney. Up to now, we have acquired almost all of the stocks of rubber companies listed in Sydney, which cost us 590,000 Australian dollars," Kent continued.
There were only a dozen rubber companies listed in Sydney, but before the rubber crisis broke out, acquiring these companies would have cost over 10 million Australian dollars.
Now, however, the cost was only 590,000 Australian dollars, a fraction of the previous amount, allowing the Royal Consortium to purchase all the listed stocks of these companies.
Moreover, the rubber companies listed in Sydney were all relatively high-quality, and these companies would be able to continue production after the rubber crisis, as Arthur understood that even in the future, synthetic rubber would not fully replace natural rubber.
This meant that although these rubber plantations and companies had suffered from the crisis, their overall value and utility remained significant.
The real reason behind the rubber crisis, apart from synthetic rubber and production saturation, was the chaotic state of the rubber market, particularly in Southeast Asia, where a large number of shell companies existed.
After most of the rubber companies and shell companies were eliminated during the crisis, the rubber market would stabilize in a few years.
After discussing with Kent for some time, Arthur decided that once the stocks of rubber plantations and companies in Southeast Asia reached their lowest point, the Royal Consortium would begin a large-scale acquisition of shares in Southeast Asian rubber companies and plantations.
This was likely the best time to acquire, and with just a few million Australian dollars, hundreds of rubber companies could be bought.
More importantly, Southeast Asia was very close to Australia, and Australia still held considerable influence in the region.
After acquiring these rubber companies and plantations, Arthur would be able to fully control them, which would allow Australia to influence the rubber prices in Southeast Asia and around the world.
With Arthur's approval, the Royal Consortium planned to invest at least 8 million Australian dollars to acquire shares in rubber companies and plantations in Southeast Asia.
As for rubber companies in other regions, they were not yet a priority for the Royal Consortium. After all, Australia's reach was still limited, and the rubber market was too large for Arthur to monopolize alone.
Of course, once the shares in these rubber companies were acquired, the necessary delisting procedures would be carried out.
Trying to profit from these rubber companies' stocks was no longer possible. At least for the next decade or so, the rubber market would not return to its pre-crisis boom.
For stockholders at that time, selling off their stocks was their primary goal.
Thus, while the Royal Consortium was aggressively acquiring rubber stocks, many stockholders began to sell off their shares, allowing the Consortium to quickly acquire stocks in more than 100 rubber companies and 200 rubber plantations in Southeast Asia.
The acquisitions lasted for more than half a month, and the Royal Consortium increased its holdings to over 500 rubber companies and more than 1,000 rubber plantations.
At the same time, other rubber companies on the market were also being acquired, bringing the rubber crisis to a close.
The Royal Consortium now owned over 500 rubber companies and more than 1,000 rubber plantations. These rubber companies, when combined, formed a significant enterprise.
After careful consideration, Arthur decided to merge all the Southeast Asian rubber companies and create an independent operation under the name of Australian Rubber Company.
After all, the Royal Consortium's size had grown tremendously. While Arthur could control it now, future monarchs might not be able to keep it under control. It was better to prepare for the eventual split of the Royal Consortium and turn it into giant enterprises in various industries, with the monarchy acting as the behind-the-scenes controller.
This way, Arthur could still receive substantial dividends every year without having to manage a giant group himself.
As May began, a few significant events made headlines worldwide.
The first was that China officially began to implement a responsible cabinet system. However, Arthur was not too optimistic about this change because, in the cabinet, the members were still mostly royal nobility, and ordinary people had little chance of involvement.
In addition to establishing a responsible cabinet, China also nationalized all its railways, which sparked domestic outrage.
In Europe, the Italo-Turkish War was becoming increasingly intense.
On May 1, more than 20,000 Italian troops landed in Tripoli, officially marking the first battle of the Italo-Turkish War.
Compared to the Turkish garrison, the Italian forces had a clear advantage in both equipment and numbers. As one of the great powers, Italy also used its fleet to blockade the Libyan coast, deploying military airships and airplanes for the first time in warfare.
As in history, this marked the first use of aircraft in war.
However, due to Australia's influence, European countries were lagging in their aircraft development, and the Italian aircraft used were more outdated than those used historically.
On the other hand, Italy's airship development had made some progress, and they deployed more airships than aircraft in the battle.
The advantage from the air made life difficult for the Turkish forces, and with Britain directly preventing Turkish reinforcements from passing through Egypt, the Turkish forces in Tripoli found themselves without any backup and were isolated.
Britain's help to Italy angered the Turkish government and people, but at the same time, the conflict between Italy and Turkey deepened. This was one of the reasons why Turkey, despite its animosity toward Britain, still refrained from joining the Central Powers.
Arthur shook his head as he read the reports from Europe. He wondered if the historical event that led to Turkey joining the Central Powers would still take place in this world.
(End of Chapter)
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