Financial crisis

After returning to the palace, Crown Prince Edel summoned the palace guards and requested their assistance in bringing Viscount Adri to him. As the chief of palace administration, Adri was perpetually busy with a myriad of tasks, yet a summon from the crown prince was not something one could easily ignore. Hence, it wasn't long before Adri appeared before Crown Prince Edel.

"Your Royal Highness, how may I assist you today?" Adri inquired, maintaining a tone of respectful curiosity.

"I am in need of someone with business acumen," Edel began, outlining his requirement. "Do you know of any such talents?"

Viscount Adri, understanding the gravity of the request—given the prince's substantial investments using half of the royal family's funds—sought further clarification. "Might I inquire as to the specific type of business talent Your Highness is seeking?"

"We need someone capable of promoting new products, specifically bicycles," Edel clarified. Unlike previous ventures, this time they were entering a competitive market, necessitating a particularly skilled individual.

Adri pondered for a moment before responding, "There is one individual who comes to mind, though I must caution that he is known for his difficult temperament."

Curious, Edel encouraged, "Bring him to me. I would like to meet him."

The following day, Adri introduced a rugged man in his thirties with a distinctly cowboy-like demeanor. His piercing eyes, brimming with indefatigable energy, were particularly memorable. "This is Mr. Bielsky. He formerly managed the Vladel bicycle factory in Russia. After a heated disagreement, he assaulted his employer, who was a notable nobleman, and consequently, he was forced to flee Russia."

Intrigued by Bielsky's assertive presence, Edel asked, "What was the reason for your altercation?"

"He insulted me, calling me a 'Polish pig', and in my anger, I struck him," Bielsky responded candidly.

"And what is your business philosophy?" Edel continued, probing deeper into Bielsky's professional ethos.

"To create bicycles that are affordable for everyone. I prefer to earn less if it means more people can benefit from the products I help create," Bielsky declared, his conviction evident.

Edel was impressed. "I admire your vision," he said, turning to Adri. "He's the one."

Just as Edel was about to finalize his decision, Bielsky interjected, "Your Highness, I would agree to take on the role, but I have one condition."

"Please, go on," Edel encouraged, signaling for him to elaborate.

"In this factory, I must have the final say. While I will consider any suggestions, I cannot guarantee I will always agree with them," Bielsky stated firmly.

Amused by his candor, Edel smiled. "I also have a condition. The factory must achieve no less than a 10% profit annually."

After a moment's consideration, Bielsky agreed, "I accept your condition."

"Then it's settled," Edel concluded.

Curious about the scope of his new role, Bielsky inquired, "How large a factory does Your Highness envision?"

"With an investment of 300,000 pounds, I aim to produce 100,000 bicycles annually. What do you think?" Edel replied, a slight smile playing on his lips.

Bielsky's enthusiasm was palpable. "Your Highness, I am confident we will revolutionize the current bicycle market."

"Before we proceed, I'd like you to review a bicycle design I've sketched," Edel said, instructing a guard to fetch the drawing. The design was reminiscent of the popular 28-inch bicycles of a bygone era—durable, capable of carrying heavy loads, and easy to maintain. Ideal for the current market's needs.

Upon reviewing the sketch, Bielsky expressed confusion about some aspects of the design, particularly the dual supports on the rear frame which suggested a heavier build.

Edel, admittedly not an expert in bicycle design, explained, "My primary concern was practicality for everyday use. The frame and rims should be made from manganese steel to minimize wear and tear. I'd like you to build a prototype based on this design so we can see the results."

Bielsky, sensing the prince's reluctance to delve further into technicalities, did not press further. He knew when to pick his battles—a trait that had likely saved him from worse fates in the past.

"Now, regarding the brand name for our bicycles," Bielsky ventured, looking to address another critical aspect of their venture.

"From this point forward, the company will be known as 'Yongheng', and our bicycles will bear the same name," Edel declared, sketching a logo to symbolize the brand's ethos of durability and reliability.

Bielsky repeated the name 'Yongheng' under his breath, appreciating its implication of longevity and durability—key selling points in the early twentieth-century market where bicycles were not just vehicles but valuable assets.

Edel and Bielsky agreed that the factory would be established in Constanta to leverage nearby steel resources and minimize transportation costs. Given the labor-intensive nature of bicycle manufacturing, the enterprise would employ over a thousand workers, making it a significant industrial endeavor.

As they concluded their discussion, the head of the royal guard approached with urgent news. "Your Highness, I have just been informed of a financial crisis unfolding in the United States."

Caught off-guard by this new development, Edel realized the challenges ahead might be greater than anticipated, yet the groundwork laid with Bielsky offered a glimmer of strategic hope in navigating the uncertain economic landscape.

In the early 20th century, the United States witnessed one of its most tumultuous financial periods, marked by the near-collapse of Nick Burke Trust Co., the nation's third-largest trust company. The company had taken on substantial debt to acquire shares in United Copper Corporation, a strategy that disastrously failed, triggering widespread panic on Wall Street. Rumors swirled about the imminent bankruptcy of Nick Burke, causing banks to hastily recall their loans, leading to a steep decline in the stock market. The financial turmoil was so severe that it threatened the stability of several major banks, pushing them to the brink of bankruptcy.

As the crisis unfolded, Eder, a keen observer with foresight from future generations, watched closely. He understood from historical perspective that in times of such financial distress, the lines between state control of capital and capital's influence over the state could blur, as evidenced by later developments in countries like China and the United States. Capital, he knew, was inherently nomadic, always in pursuit of higher profits, ready to shift across borders if one nation's markets faltered.

Recognizing an opportunity, Eder contemplated the situation in Romania, his homeland, which had not yet seen the rise of powerful capitalists. He envisioned a strategic move where the royal family could spearhead economic initiatives, thereby allowing the populace to experience the benefits of royal capital. With a relatively small population of 7.5 million, he believed that the influence of the royal family could foster a sense of gratitude among the people, preventing any potential dominance by foreign capitalist interests.

Meanwhile, the financial crisis in America worsened. New York was rife with rumors that Nick Burke Trust Co. was on the verge of collapse. The panic was palpable, with citizens queuing up all night at trust companies to withdraw their deposits. The situation was dire, with trust companies squeezed from all sides, forced to secure loans at exorbitant interest rates that soared to 150%.

In this chaos, J.P. Morgan emerged as a pivotal figure. When the chairman of the New York Stock Exchange approached him for help, revealing that without $25 million by 3 p.m., at least 50 traders would face bankruptcy, Morgan acted swiftly. By 2 p.m., he had convened an emergency meeting of bankers and, within just 16 minutes, raised the necessary funds. His intervention brought temporary relief to the stock market, but the respite was short-lived as the funds quickly depleted, and the financial strain continued unabated.

Morgan's next significant move was to address the precarious situation of the Morsley Company, which owed $25 million and was a major creditor of the Tennessee Mining and Iron Company. The collapse of Morsley would have devastating effects on the New York stock market. Morgan, understanding the strategic importance of Tennessee Mining and Iron's resources, saw an opportunity to strengthen American Steel's monopoly, a conglomerate he had helped to establish. However, this required navigating the complexities of antitrust laws and securing approval from President Theodore Roosevelt, who was known for his firm stance on antitrust matters.

With the banking crisis spiraling into a political crisis due to widespread public outrage, Roosevelt found himself reliant on Morgan's influence to stabilize the situation. In a dramatic turn of events, just minutes before the stock market opened, Roosevelt conceded, allowing Morgan to proceed with his plans.

Morgan's acquisition of Tennessee Mining and Iron at a fraction of its potential value marked a strategic victory, but it also underscored the manipulative potential of capital in influencing national policy. This episode played a crucial role in the establishment of the Federal Reserve, as the United States recognized the need for a central banking authority to mitigate such financial disruptions in the future. Unfortunately, the Federal Reserve itself came under the control of private bankers, a development that signaled the increasing influence of capitalist interests on American governance.

The crisis had far-reaching effects, severely impacting industrial production and leading to significant layoffs across various sectors. The repercussions were felt worldwide, with countries like Britain and Germany experiencing deep economic downturns. The global nature of the crisis underscored the interconnectedness of international markets and the widespread vulnerability to American economic fluctuations.

Back in Romania, Eder and the king took decisive action to shield their nation from similar turmoil. They established the National Bank of Romania, imposing regulations on foreign and domestic banks to ensure financial stability. This move was aimed at consolidating the banking sector and safeguarding the economic sovereignty of Romania, preventing the kind of capitalist dominance that had wreaked havoc in the United States.

As Eder reflected on these developments, he recognized the delicate balance between capital and control, a theme that would continue to shape economic policies and national destinies well into the future.