Chapter 680 Tariff Confrontation and Covert Strategy

The Grand Duchy of Finland’s first joining not only sounded the death knell of the gold standard, but also made the British lose face.

It was the British who first proposed the currency group, but the first small and medium-sized country to join was actually the younger 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 so 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, those countries that had been slow to abandon the gold standard also made faster progress in an instant.

In the second half of June 1927, Sweden, Norway, Denmark, Portugal, Argentina, Brazil, Colombia, Paraguay, Bolivia, Thailand, Iran, Egypt and Greece chose to join the British-Australian dollar currency group, instantly firing the gun to abandon the gold standard around the world.

So many countries joining the new monetary system naturally kept the British pound and the Australian dollar relatively stable.

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

According to actual purchasing power, the purchasing power of one pound was basically equivalent to 7.3 grams of gold before. The purchasing power of one pound has now dropped to 5.7 grams of gold, and it is still depreciating.

If there is no accident, the actual purchasing power of the pound should be depreciated by at least half compared to before the abandonment of the gold standard.

After all, compared with trustworthy gold, the value of this kind of paper money that cannot be exchanged for gold and only relies on the credibility of the government will be greatly discounted.

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

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

Because the previous currency was highly linked to gold, it was difficult to depreciate or appreciate significantly.

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

Simply put, if there is a large amount of currency circulating in the social system, the currency will depreciate.

If there is a small amount of currency circulating in the social system, the currency will appreciate.

At present, if the British pound group wants to calmly deal with this economic crisis, it must devalue the currency.

After all, the entire British pound-Australian dollar group also has more than a dozen countries, and the power created by the union is not small. It is still possible to control the orderly depreciation of the currency. At least the depreciation of the currency will not be as chaotic as in France, and it will become almost uncontrollable.

With the gradual depreciation of the British pound and the Australian dollar, the benefits of currency depreciation are almost clearly visible.

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

To put it bluntly, some industrial products can be temporarily abandoned, but it is impossible not to consume more important raw materials and mineral resources.

There are 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 food and meat exports have risen in a short period of time, which has also made Australasia's economy gradually prosper.

After Britain abandoned the gold standard, the French government naturally did not pretend, and announced in a high-profile manner that it would abandon the gold standard and form its own franc group.

But the franc group has a fatal flaw, that is, the depreciation of the franc has become uncontrollable, and its purchasing power has dropped too much compared to before World War I.

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

At present, the only thing that can barely compete with the pound should be the US dollar. After all, the value of the US dollar is relatively stable based on the huge US market.

But unfortunately, the current President Hoover's eyes are obviously not on currency. President Hoover has not made any major moves since he became president.

This also caused some dissatisfaction among the American people, and some people even doubted whether the President Hoover who was boasted at the beginning was so good.

In fact, there was no need for the American people to put pressure on President Hoover. The surging number of unemployed people in the United States made this president who came to office in glory feel a lot of pressure.

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.

But unlike other countries' measures to directly provide relief to 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 various countries, that is, to promote indirect relief plans through public works projects and loans to states.

At the same time, President Hoover also signed the promise that made him gain the trust of countless American voters at the time-the Smoot-Hawley Act, telling Americans in this way that he, President Hoover, would really do things.

In order to express his concern for Americans and his firm attitude to deal with the economic crisis, President Hoover immediately launched his plan, which was to build a dam in Colorado.

Long before the outbreak of the global war, President Hoover personally visited Colorado and investigated the problems and development potential there.

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After becoming Secretary of Commerce in 1921, President Hoover proposed to build a dam on the Colorado River, which would not only be used for flood control and irrigation, but also provide a reliable water supply for Los Angeles and Southern California.

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

However, President Hoover at the time was just a minor figure, and the proposal was rejected by Congress many times, even after it was revised many times.

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

Under President Hoover's insistence, the construction of the dam was quickly approved, and it was expected that the resolution would be signed and passed in the second half of 1927, and construction could begin in the first half of 1928.

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

The construction cost of the entire dam was about $140 million, and the cost of the dam without the power plant and generator was about $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 government to govern the economic crisis differently from the Coolidge government.

Of course, there was another important reason why Congress could pass the construction of the dam so easily, which was to make up for the rift between the east and west coasts of the United States.

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

The current Hoover Dam can be responsible for Los Angeles and Southern California, which is actually equivalent to Congress showing goodwill to the states on the west coast to maintain the stability of the entire United States.

From a historical perspective, the role of the Hoover Dam for the United States is still quite obvious.

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 by controlling the floods of the Colorado River, providing water for 16 million Americans.

However, whether this dam, which can only 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.

Arthur naturally learned about the continuous actions of the US government and expressed his concern about it.

Apart from anything else, the Hoover Dam does have a positive impact on the United States, and it is also very likely to improve the current economic crisis in the United States.

After thinking for a while, Arthur decided to make the United States more chaotic, so as to prevent President Hoover from doing some major events 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 two extremes.

While being rated as almost the worst president of the United States, some of President Hoover's political measures are still quite useful.

The current development is different from history. If President Hoover does something that only a good president can do and maintains the unity and stability of the United States, then all the cards that Arthur prepared for the war with the United States will be wasted.

However, compared with the Hoover Dam, a major project that will not be started until next year, the US government's response to currency is more worthy of attention at present.

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 income.

However, this is not just import tariffs on agricultural products, but also 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 Britain that raised tariffs on the United States, and a large number of other countries did not participate.

Even the Americans did not let go of their ally island countries this time, and also raised tariffs on agricultural products on island countries.

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

What's more serious is that compared with the impact of increasing tariffs on imports and exports, the US government's attitude of harming neighbors released by this bill is what makes those originally neutral countries dissatisfied.

After all, everyone's original attitude is neutral. Isn't this a way to force all countries to the UK?

Britain will naturally not miss this good opportunity and immediately started to win over these neutral countries.

Perhaps they really can't stand the attitude of the Americans. Countries have launched retaliation against the United States, raising tariffs on all US imports and exports alone, and joining the customs alliance formed by the British against the United States.

Such an outcome was not expected by the US government and President Hoover, but now it is obviously 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, the United States has increased tariffs on Australasia, who has always been the focus of Australasia's grain and meat exports.

However, Arthur's eyes are not on raising tariffs on the United States, after all, it has been raised to a very high number before.

Compared with the Americans' tampering with tariffs, Arthur is more decisive, using some companies in the United States to attract unemployed people in the United States, and by providing jobs and housing conditions, a large number of unemployed people in the United States have been attracted in a short period of time.

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