Chapter 680 Tariff Confrontation and Secret Strategies

The first entry of the Grand Duchy of Finland not only sounded the death knell of the gold standard, but also made the British lose face. ♦♤♗

It was obviously a currency bloc first proposed by the British, but the first small and medium-sized country to join was actually the little brother of Australasia.

This not only represents the extraordinary relationship between the Grand Duchy of Finland and Australasia, but also shows that the relationship between Britain's younger brothers is not that good.

How could the British allow such a loss of face? Almost at the same time, the British government began to contact those younger brothers and put enough pressure on itself.

With the pressure from the British, countries that had been slow to abandon the gold standard suddenly made progress faster.

In one month, Sweden, Norway, Denmark, Portugal, Argentina, Brazil, Colombia, Paraguay, Bolivia, Thailand, Iran, Egypt and Greece all chose to join the British pound-Australian dollar currency bloc, instantly triggering the whole world to abandon the gold standard.

With so many countries joining the new currency system, the pound and Australian dollar have naturally remained relatively stable.

Of course, such stability is only relative after all. Compared with the previous strength of the gold standard, the pound and the Australian dollar have begun to depreciate significantly.

In terms of actual purchasing power, the previous purchasing power of one pound was basically equivalent to 7.3 grams of gold. Now the purchasing power of one pound has been reduced to 5.7 grams of gold, and is still depreciating.

If there are no accidents, the actual purchasing power of the pound should have depreciated by at least half compared to before the abandonment of the gold standard.

After all, compared to trustworthy gold, the value of banknotes that cannot be exchanged for gold and only rely on the government's credibility will be greatly reduced.

However, compared with the monetary system of the gold standard, this paper currency system under control is obviously more suitable for the development of the country.

After all, the country can more easily control the issuance of banknotes and achieve its own means and goals by controlling the depreciation and appreciation of the currency.

Because previous currencies were highly linked to gold, it was difficult to depreciate or appreciate significantly.

But now, currency depreciation and appreciation can basically be determined by the amount of currency printed, as well as the interest rates of various banks and so on. ☜

To put it simply, if the amount of currency circulating in the social system is relatively large, the currency will depreciate.

If there is less currency circulating in the social system, the currency will appreciate.

At present, in order to calmly deal with this economic crisis, what the Sterling Group must do is to depreciate the currency.

After all, the entire pound-Australian dollar group also has more than ten countries, and there is a lot of power created by joining forces. It is still possible to control the currency depreciation in an orderly manner. At least the currency depreciation will not be as chaotic as in France, which will become almost impossible. control.

As the pound and Australian dollar gradually weaken, the benefits of currency depreciation are almost clearly visible.

The first is the gradual increase in exports. After all, countries around the world now only need to spend less than usual to import materials from sterling system countries, which is naturally more profitable for those non-sterling system countries.

To put it bluntly, you can temporarily give up purchasing some industrial products, but it is impossible not to consume more important raw materials and mineral materials.

There is also food and meat. As long as there is a population, there will be food and meat consumption. This is a fact that cannot be changed no matter how much technology develops.

Relying on the dividends brought by currency depreciation, Australasia's grain and meat exports have risen in a short period of time, which has also made Australasia's economy gradually begin to prosper.

After the United Kingdom abandoned the gold standard, the French government naturally stopped pretending. It announced in a high-profile manner that it would abandon the gold standard and formed its own franc group.

But the franc group has a fatal flaw, that is, the depreciation of the franc has become uncontrollable, and the purchasing power has been much lower than before World War I.

Even if France has its own little brother and vast colonies, it is impossible for the franc to compete with the pound.

At present, the dollar that can barely compete with the pound should be the US dollar. After all, the US dollar relies on the huge US market, and its value is relatively stable.

But it is a pity that the current President Hoover obviously does not focus on currency. President Hoover had not undertaken any major initiatives since becoming president.

This has also caused some voices of dissatisfaction among the American people, and some people even doubt whether President Hoover, who was originally boasted, is that good.

In fact, there is no need for the American people to put pressure on President Hoover. The rising number of unemployed people in the United States has put a lot of pressure on the president who took office with great success.

In order to restore his reputation among the people, President Hoover decided to temporarily abandon the laissez-faire policy and provide some relief to the people, at least to make the unemployed people less angry.

However, unlike other countries' measures to directly relieve the unemployed, President Hoover began to hold frequent meetings with some giants in the American business, labor and political circles, and finally determined a plan that was completely different from the policies of other countries, that is, through public works projects and loans to states to facilitate indirect relief programs.

At the same time, President Hoover also signed the "Smoot-Hawley Act", a promise that gained the trust of countless American voters at that time. In this way, he told the Americans that President Hoover would really do things.

In order to express his concern for Americans and his firm attitude in dealing with the economic crisis, President Hoover immediately launched a plan he had written before, which was to build dams in Colorado.

Long before the Great War broke out, President Hoover personally visited the Colorado area and investigated its problems and development potential.

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A long time later, President Hoover proposed building a dam on the Colorado River, which, in addition to being used for flood control and irrigation, would also provide reliable water supply to Los Angeles and Southern California.

More importantly, after the dam is built, the cost of dam construction can be recovered by selling the hydroelectric power it produces.

However, President Hoover at the time was only speaking lightly, and this proposal was repeatedly rejected by Congress, even after many revisions.

Fortunately, Hoover has now become the President of the United States. Except for a few financial groups and capitalists, no one can say no to Hoover's proposal.

Under the initiative of President Hoover, the construction of the dam was quickly passed, and it is expected that the resolution will be passed as early as 1, and construction will begin in 1.

This dam, whose construction plan was drafted by President Hoover, was openly named Hoover Dam by President Hoover.

The entire dam costs approximately $140 million to build, and the cost of the dam minus the power plant and generators is approximately $55 million.

The passage of the Hoover Dam Act did give Americans a glimmer of hope. After all, this was a major project costing up to $140 million, which also represented the determination of the Hoover administration to manage the economic crisis, which was different from the Coolidge administration.

Of course, there is another important reason why Congress was able to pass the construction of dams so easily, and that is to repair the rifts caused on the east and west coasts of the United States.

A large number of unemployed people from the east coast of the United States moved to the west coast, but many state governments on the west coast expressed dissatisfaction with the country.

The current Hoover Dam can take care of Los Angeles and Southern California, which is actually equivalent to Congress showing favor to the states on the West Coast to maintain stability in the entire United States.

From a historical perspective, the role of the Hoover Dam is relatively obvious to the United States.

In later generations, the electricity generated by the Hoover Dam not only fully repaid the cost and interest of building the dam, but also irrigated more than 1.5 million acres of land and provided water by controlling floods in the Colorado River.

However, whether this dam, which will be built in more than half a year, can bring improvements to the United States, which is currently suffering from the economic crisis, is a question worth thinking about.

Naturally, Arthur also learned about the continuous actions of the US government and expressed concern about them.

Among other things, the Hoover Dam does have a positive impact on the United States, and it is also likely to improve the current economic crisis in the United States.

After thinking for a moment, Arthur decided to make the United States more chaotic to prevent President Hoover from doing some major things that are not recorded in history.

You know, although President Hoover has suffered considerable infamy in American history, the evaluation of President Hoover is almost at two extremes.

While being rated as almost the worst president in the United States, some of President Hoover's political actions were quite useful.

The current development is different from history. If President Hoover is allowed to do something that only a good president can do and maintain the unity and stability of the United States, then all the trump cards that Arthur has prepared for the war with the United States will be in vain.

However, compared to the Hoover Dam, a major project that will start construction next year, the U.S. government’s monetary response is currently more worthy of attention.

What does the Smoot-Hawley Act signed by President Hoover mean?

The simplest explanation is to increase import tariffs on agricultural products to help American farmers increase their incomes.

However, this is not just the import tariffs on agricultural products, but also includes tariffs on more than 2,000 imported goods, all of which have been raised to the highest level in history.

This immediately angered those countries that did not join in raising tariffs on the United States. After all, it was the European countries led by the United Kingdom that raised tariffs on the United States, and a large number of other countries did not participate.

Even the Americans did not spare their island allies this time and also raised tariffs on agricultural products.

This also caused the farmers of the island countries who already had relatively low incomes to lose part of their income, and also caused the island countries to start protesting against the United States.

What's more serious is that compared to the impact of increasing tariffs on imports and exports, the beggar-thy-neighbor attitude unleashed by the U.S. government on this bill is what dissatisfies those originally neutral countries.

After all, everyone's original attitude was neutral. Isn't this a way of forcing all countries to go to the British side?

Naturally, Britain would not miss this good opportunity and immediately began to win over these neutral countries.

Perhaps they really couldn't stand the attitude of the Americans. Countries have launched retaliations against the United States, individually raising tariffs on all imported and exported products from the United States, and also joining the customs union against the United States established by the British.

Such an outcome was not expected by the U.S. government and President Hoover, but it is now clearly irreversible.

If the US government wants to sacrifice the interests of other countries in order to save its own domestic situation, then other countries will definitely not agree.

Australasia is naturally happy to see this. After all, Australasia is among those targeted by the United States to increase tariffs. Who makes Australasia's grain and meat the focus of exports?

However, Arthur did not focus on increasing tariffs on the United States. After all, they had already been raised to a very high number before.

Rather than messing with the Americans on tariffs, Arthur did it more decisively, using some companies in the United States to attract the unemployed people in the United States. By providing jobs and housing, he attracted a large number of Americans in a short period of time. Unemployed population.

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