(Author's Note: I forgot to upload yesterday, so here are two chapters at once.)
[London, England – 5:08 am, 29th of Feburary, 1930]
I had been awake since somewhere around two in the morning, and by the time I had reached London, I was running almost entirely on coffee, adrenaline, and the increasingly desperate hope that whatever was happening in New York could be fixed before I had to think about it too much.
It couldn't.
I had driven all the way down from Cardiff because one of the American banks I'd been dealing with had apparently decided that my short positions were considerably less convenient for them than they had been when they'd first agreed to them.
They were doing everything they possibly could to prevent me from calling them. So now I was sitting in an office in London, still wearing the same clothes I'd been wearing when I'd left Wales, listening to a telephone conversation with a lawyer in New York while members of my financial team stood around the room trying to follow what was happening.
The telephone crackled.
"No, I understand what you're saying," I said while rubbing my eyes. "But that's not what the agreement says."
They all leaned in further as I paused to listen. "No. I'm not interested in what your bank believes the agreement says." Another pause. "Then read the contract."
The lawyer on the other end started talking again.
I barely registered half of it. Something about collateral. Something about settlement. Something about the bank's interpretation of its obligations. I closed my eyes. "Then we will pursue this legally."
Another pause. "Yes… No, I don't care if your client believes that would be unfortunate."
I opened my eyes and took in a deep breath before speaking, "I believe it would be considerably more unfortunate for your client if they continued refusing to honour a legally binding position."
Silence. Then the lawyer started speaking again, and I listened for another few seconds before interrupting. "Good. Then you know what needs to happen."
I put the receiver down almost delicately as I deliberately tried not to break either it or the desk underneath it.
For a moment, nobody spoke; I stared at the telephone and then looked up at the people around me before I said, "Everyone out, please. I need to think."
Eventually, I was alone.
I leaned back in my chair and stared at the ceiling. We told ourselves lots of things. We always did. We told ourselves it wasn't that bad. We told ourselves the market would recover. We told ourselves that the banks were sound. We told ourselves that people were simply nervous. We told ourselves that if we were in their position, we wouldn't do anything irrational.
And perhaps we wouldn't.
That was the problem.
Everyone was thinking exactly the same thing.
Nobody wanted to be the person left holding the worthless asset or lend money to someone who might not be able to repay it or invest when they thought prices might fall further or spend when they were worried about their income, and because everyone was afraid of losing money, everyone started behaving in ways that made losing money more likely.
It was a vicious circle.
The terrifying thing was that, as far as Britain was concerned, hardly anyone understood that it had really started yet. The crash had happened, and the consequences were already manifesting.
America was going to be hit first and hardest.
But Britain wasn't America. So our crisis would look different because, in truth, Britain had problems before Wall Street ever crashed.
We had been struggling throughout much of the 1920s. The industries that had made Britain rich were increasingly becoming the industries that Britain was struggling to keep alive. Whether that be coal, cotton, shipbuilding, steel or heavy engineering.
These were the foundations upon which Britain's industrial power had been built, and they were all facing problems.
Foreign competition had improved. Markets had changed. Demand had shifted. Factories needed investment and modernisation, and far too many businesses didn't have enough of either. British coal was expensive. British textiles were struggling against foreign competitors. British shipyards were competing in a world that had far more capacity than it needed.
And the problem wasn't simply that British workers weren't productive.
That was the lazy explanation.
The reality was considerably more complicated. It was an incredibly convoluted mixture of industries being technologically behind, poor management, chronic underinvestment, producing goods for markets that simply weren't there anymore and getting trapped by costs that made competing internationally increasingly difficult.
The return to the gold standard had made that problem worse. The nation had returned to gold in 1925 at the old pre-war parity.
That meant maintaining the value of sterling became a priority, which, to say the least, heavily constrained monetary policy. Interest rates could not simply be lowered whenever British industry needed cheaper credit. The Bank of England had to worry about maintaining confidence in sterling and protecting Britain's gold reserves.
That meant monetary policy could be tighter than the domestic economy actually wanted, and that was before the rest of the world started falling apart.
The problem with an international financial crisis was that nobody existed in isolation. America had been lending enormous amounts of money internationally, and they were now becoming considerably more cautious.
Investment dried up.
Credit contracted.
Businesses that had depended upon foreign capital suddenly found themselves without it.
Countries that depended upon exporting goods to earn foreign currency found their customers disappearing, and once exports fell, the problem became self-reinforcing.
A country needed foreign currency to pay for imports, so if exports collapsed, its foreign-exchange position deteriorated.
So governments had to find ways of reducing imports.
Tariffs were one obvious answer.
Make foreign goods more expensive.
Discourage people from buying them.
Protect domestic producers.
It sounded perfectly sensible when considered individually.
But if everyone did it at once?
Then British exporters lost foreign markets at precisely the moment they needed them most since we were extraordinarily dependent upon foreign trade.
You didn't need to be an economist to understand what happened when a country built around exporting coal, textiles, steel, machinery and ships suddenly found fewer people willing or able to buy them.
Factories cut production.
Workers lost hours.
Workers lost jobs.
Those workers stopped spending money.
Businesses lost customers.
Those businesses cut production.
More workers lost their jobs.
And around and around it went.
That was the part people never seemed to understand about depressions.
There didn't have to be some fundamental physical shortage.
There didn't have to be some great natural disaster destroying everything.
Sometimes people simply became afraid.
Afraid to invest.
Afraid to lend.
Afraid to hire.
Afraid to spend.
And because everyone became afraid to spend, businesses earned less.
Because businesses earned less, they laid people off.
Because people lost their jobs, they spent even less.
And because they spent less, businesses became even more frightened.
It was a feedback loop.
Fear is creating the conditions that justify more fear.
And Britain had an additional problem.
The people being thrown into this crisis weren't starting from some comfortable modern welfare state. There was no universal system waiting to catch them, no modern unemployment insurance system, no comprehensive pension system, and no guarantee that losing your job meant you would still have enough money to feed your family.
People could already be poor while working. They could already be living from one pay packet to the next, and now the economy was going to start removing those pay packets.
I looked down at the papers on my desk.
The numbers weren't frightening yet.
That was the worst part.
Not yet.
But the newspapers were beginning to get nervous, markets were becoming less confident and people were beginning to talk.
But if I showed someone a set of statistics from February 1930 and told them that the country was about to experience one of the worst economic crises of the twentieth century, they might not believe me.
The Great Depression hadn't arrived in Britain in the form people would eventually remember.
It was approaching…politely, almost.
A few fewer orders.
A few fewer ships.
A factory working another shift fewer.
A bank refusing another loan.
A businessman deciding to wait another month before investing.
A consumer deciding that perhaps they could do without something after all.
Then another person did the same.
Then another and eventually, you looked around and realised that the economy had stopped moving.
The government was going to try to defend the gold standard, and I understood why. From their perspective, abandoning gold was almost unthinkable. Britain had spent years restoring sterling's international credibility. The gold standard represented stability, discipline and confidence. Abandoning it would be admitting that the policy had failed.
But maintaining it meant accepting constraints that were going to become increasingly painful. Interest rates would remain higher than the domestic economy wanted. Deflationary pressure would continue. And the pound would remain expensive relative to what British exporters desperately needed.
The Bank of England would be forced to worry about defending sterling when British industry desperately needed cheaper credit and stronger demand.
It was going to hit us from both directions.
Falling foreign demand and the current monetary policy made it harder for Britain to respond or soak up excess supply with its internal markets.
What happened to ordinary people in this situation, one may ask?
They got fucked…like royally. I'd seen poverty. Everyone had, but there was a difference between knowing poverty existed and imagining millions more people being pushed into it.
The British economy had spent much of the previous decade struggling to employ people properly. Contemporary discussions already identified coal, iron and steel, shipbuilding, engineering and textiles as major centres of unemployment.
And now the world economy was about to give them another reason to stop hiring.
I leaned forward and put my head in my hands before muffling a shout, "Fuck."
There was no elegant way of putting it. I'd spent years preparing for wars, technological upheavals, financial opportunities and political changes. I'd built companies. I'd made investments. I'd developed machines. I'd planned for contingencies that most people thought were ridiculous.
And I'd kind of dehumanised it, this depression, the coming war. I'd justified not thinking about it by telling myself there was nothing I could do. Up until this point I had simply wanted to make money, prepare British industry and make sure we win the war in a better state so that we at least keep the bits of the empire that wanted to stay. Maybe accelerate technology a bit; make sure the space race continues long enough that it starts funding itself, and heavily fund research into things like climate change, ecology, sociology, economics and psychology to give the people of the future more tools to actually decide where the future goes while just enjoying life.
But is that enough?
I'd wanted to stay out of the unethical decisions, the ones I would have judged myself for if I was looking at a historical figure from the modern day and just say I'd done everything I could.
People, we're probably going to hate me for this, but my mind's been stuck on this decision for months.
To what extent can I actually go if I ignore not morality but decorum and legality?
"I'm going to have to do something drastic, aren't I?" The room, naturally, had no answer to my question
I needed sleep; that was becoming increasingly obvious.
After all, I'd had tonnes of ideas for things I could do that I'd written off as too risky. And I doubted if I was of sound enough mind to make this decision right now.
It would be funny, really, if I ever told Kitty what was going through my head right now; she'd slap me. Tell me that this is my insecurities. But I knew the truth. I'd lied to myself because it was easier. I wanted the safe option. Keep the timeline intact for the most part.
Yeah, I definitely have issues. A part of me was yelling and saying that if I didn't count literally running myself ragged as doing enough, that was just my insecurity. Shut up.
Fuck it. Utopia or Bust.
I stepped outside, and the cold air hit me in the face. I had taken perhaps three steps when I heard shouting. "Mr Sullivan! Mr Sullivan!"
I stopped, and ever so slowly, I turned around.
A man was hurrying towards me, notebook in hand. "Mr Sullivan!"
I stared at him.
He stared back.
I was suddenly very aware that I had been awake for approximately thirty-seven hours, had driven from Cardiff to London in the middle of the night, had spent hours arguing with an American bank and its lawyers, and was now being shouted at by a journalist at five in the morning.
For one beautiful moment, I genuinely considered punching him.
Instead, I took a breath.
"Sir," I said, with considerably more restraint than I was feeling, "it is five o'clock in the morning. How can I help you?"
The reporter hesitated. "It's about the markets."
Of course it was. I closed my eyes for half a second before speaking, "Go on."
He opened his notebook. "There's been considerable concern regarding the recent instability in America, and some investors are suggesting that…"
And then something clicked. I opened my eyes.
Oh.
I looked at him properly for the first time. A reporter. A reporter who was already thinking about the economy and looking for someone to say something. Someone whose words would be printed and could put an idea into the heads of thousands of people without any obvious connection to me.
I almost smiled.
Now I'd decided to go do the whole meglomaniac stick. I'd been wondering how I was going to get this started.
I'd been considering buying advertising space or perhaps approaching a newspaper editor. Hell, even just buying a whole paper. All of those options had complications. But here was a journalist standing in front of me at five o'clock in the morning, asking me about the economy. I almost felt guilty.
Well, if fate exists and wants me to just make up my mind, I'll take this as a sign.
"What exactly are you concerned about?" I asked.
He blinked. "Well… the American markets, primarily…and whether what's happening there could spread here."
"Markets aren't isolated things." I paused. "Neither are banks."
The reporter nodded rapidly.
I could practically hear the headline forming in his head. "The American financial system is already under considerable strain," I continued. "And if American investors become unwilling to lend abroad, countries that depend upon foreign capital are going to feel the consequences. They are naturally going to stop buying things from us.
"Sterling's value is ultimately tied to our ability to maintain confidence in its convertibility. That means the Bank of England has to be able to defend the pound, which currently implies high interest rates.
"The question investors should be asking isn't merely whether Britain can maintain the gold standard. It's whether Britain can afford to do so and continue to suppress domestic demand all while foreign demand dries up.
"Suppose confidence begins to deteriorate. Suppose foreign investors begin withdrawing their money. Suppose people decide they would rather hold gold than sterling."
The reporter was watching me intently now and asked. "What happens then?"
I wanted Britain off the gold standard before defending it became catastrophic, but governments rarely abandoned policies because someone explained politely that they were making a mistake.
Sometimes you had to make the consequences of continuing the policy impossible to ignore. But what if they already knew and continued anyway because they had spent a decade saying otherwise? They couldn't possibly admit they were wrong now, could they?
Well, in those circumstances, the only option left was one I hadn't wanted to use until now since it would piss the entirety of the British establishment off.
I simply point a gun at their head and make them. So thank you for becoming my minion, random reporter number twelve. Now it's time to bullshit my way into holding the government hostage.
I thought over my words before speaking, "I keep gold-denominated bonds here deliberately. It's capital I can draw upon should something happen to my businesses. It's there so that, whatever happens, I can continue paying my workers and suppliers."
"But I'm becoming less confident by the day that those securities will be worth what they're worth when I actually need them. Between you and me, if nothing changes, we will probably begin converting them into gold around the beginning of April."
He seemed to think about something for a moment before asking, "How much would that be exactly?"
I smirked slightly and said, "Oh…anywhere from twenty to thirty million."