Chapter 287: HSBC Run

In the realm of high-stakes business, a transaction involving tens of millions of dollars is never simple. HSBC, a major player in global finance, was in no rush, but the situation changed rapidly.

Within two days, news of the escalating crisis in Hong Kong began to circulate widely, causing significant panic among investors.

Hong Kong

The Global Times ran a headline that read: "The Latest War Situation in China: What Will Become of Hong Kong?"

The article detailed the dire situation, noting that the conflict between the North and South had mobilized over three million troops. Several battles had ended in defeats for the South, and Chiang Kai-shek's rule was increasingly under threat.

"It's almost impossible to receive external aid," the article continued. "Last year, Chiang bribed Dewey, President Johnson's opponent, but Johnson, who despises Chiang, has now publicly condemned the investment in Chiang as corrupt and doomed. Further aid is unlikely."

The article speculated that if the North took Hong Kong, the city might fall under the North's public ownership and property confiscation policies. This possibility stoked fear among residents.

The Global Times' sensational coverage sparked widespread concern. Many Hong Kong families, already anxious, began to evacuate. Foreign firms, also increasingly worried, started to divest their assets. The resulting instability was palpable, with property sales surging as people scrambled to secure their assets.

In the UK, the British Global Times published similar articles, discussing whether Hong Kong could be preserved if the North succeeded. Various commentators weighed in, with the prevailing argument suggesting that Hong Kong would likely be lost. This narrative further fueled anxiety, leading many British investors to withdraw their funds.

The U.S. media echoed these concerns, contributing to a negative narrative about Hong Kong's future. Public opinion was swayed by these reports, triggering a wave of panic and asset liquidation.

As fear spread, HSBC was hit hard. The bank, once a cornerstone of stability, now faced severe repercussions. The run on the bank was inevitable. Assets were quickly shrinking, and HSBC's shareholders were growing increasingly anxious.

Daville Sassoon reached out to David Rockefeller, seeking further negotiation. David, however, was preoccupied with discussions with other companies and advised Sassoon to wait. As the pressure mounted, David maintained a strategic calm.

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**Hong Kong**

Victor received a secret directive from Hardy. Excited by the prospect of significant profit, Victor prepared for a critical transaction.

Victor met with Mr. Kong from the south and Mr. Xu from the north. Mr. Xu, who was in Hong Kong for business, was interested in selling HSBC acceptance drafts. Victor made an offer:

"Mr. Xu, if you have HSBC acceptance drafts or similar foreign bank documents, I can buy them. We can exchange them for medicines, materials, or even weapons."

Mr. Xu was taken aback but intrigued. "What price are you offering?"

"One hundred to one," Victor replied. "No need for legal currency. U.S. dollars, British pounds, Hong Kong dollars—anything to stabilize the National Bank."

Mr. Xu frowned. "That seems too low."

Victor explained, "These drafts are practically worthless in your hands. They're unlikely to be accepted elsewhere, and other banks might refuse to honor them."

Mr. Xu agreed to consult further. After returning with a counteroffer of fifty to one, Victor negotiated up to eighty to one, exceeding Hardy's initial price of ten to one.

Three days later, Mr. Xu delivered a box of bank drafts and other documents to Hardy's Auction Company, along with funds in various currencies totaling $61.25 million.

Victor inspected the documents and confirmed their authenticity. The transaction was completed, and Hardy received a message that over $26 million worth of HSBC drafts had been acquired.

The following day, an American came to HSBC with a large acceptance draft worth $4.5 million. The bank's staff, surprised by the amount, reported the issue to management. The draft, issued by the Beiping branch, was now problematic due to the closure and subsequent bad debt status of that branch.

"Sorry, sir," the manager explained. "Due to the loss of the Beiping account, we cannot redeem this draft at the moment. It can only be cashed after the war and after verifying its authenticity."

The American, infuriated, confronted the manager in the bank lobby. His outrage quickly attracted media attention, and the story was picked up by the Global Times, which condemned HSBC's failure to honor its drafts.

The headline read: "HSBC Breaks Its Trust: A Run on the Bank Leaves Depositors Unable to Access Their Funds."

The report triggered further panic. Crowds gathered at HSBC branches, many of them triads holding faulty savings slips. As the bank struggled to manage the crisis, the scene outside became chaotic, with over 10,000 people demanding their money.

HSBC executives reported the crisis to the board of directors, who realized the gravity of the situation. The bank's reserves were critically low, and an actual run could lead to insolvency.

David Rockefeller, upon reading about the HSBC crisis, turned to Hardy with surprise. "Hardy, did you orchestrate this?"

Hardy smiled. "David, it's time we talk to HSBC."

The stage was set for further negotiations as HSBC faced its most significant challenge yet.