Chapter 32: Tumbling Down
On June 21st 1928, a Friday the Stock Markets in Antwerp would open to a panic not yet seen before. Less than Four Hours later a similar event would occur in New Antwerp an Ocean away in America and within weeks the entire world would be gripped by the worst economic collapse in history.
But the disaster that would be the great depression had it roots and causes traceable as far back as the Great War.
In Order to afford Mobilization Costs and Pay War Debts the Economy of Europe, based upon the Agreed Gold Standard. With the War in full swing Japan, The United States and California had become the Primary creditor nations while the war was fought in Europe with the Central Powers borrowing Millions. When the War ended and new constitutions were imposed upon Italy and Bohemia, their debts would have gone into default, however in order to negotiate peace with Japan and the United States the Khitan Empire had agreed to refinance all the War debts owed to the Americas and Japan under the same Transnational body formed to enforce reparation payments.
This had already lead to a rather unstable foundation but the Khitan and British Empires who had escaped the war without massive destruction or War Debt still held the financial confidence of investors across the world in their grasp. This Changed with the 1920 Election as the Liberals swept into office regulations were removed a frenzy of Borrowing both at the Stock Exchange and on level closer to the citizenry exploded. The Reality however was that as Europe was rebuilding, the actual productivity of both American and Khitan industry and construction had been steadily falling.
In 1925 the Liberals had won again on the high feelings on the decade citing good financial policy as a reason for the good economy. In America, the Pro Business Federalists won a majority in the Senate leading to a Federalist Prime Minister who made similar changes across the Pond.
A Few years later however cracks had begun to form in the growing Bubble. With economic growth slowing far more than realized the Economy grew more and more unstable as lower class citizens across both America and Europe had begun to pay large percentages towards interest payments while Stock prices continued to climb.
In 1927 the GMF or Government Monetary Fund, the Khitan Sphere Economic Oversight agency warned against margin trading and gave several recommendations for Government intervention in regards to the Economy. News articles of the time however criticized the GMF as being too cautious and many others saw simply fat bureaucrats attempting to stifle investment. With no real resistance the speculation continued, with optimism and recklessness only growing over time.
The illusion had begun to come apart by June however, and by the Wendsday before the disaster the Market had dipped a total of 4%, On Thursday it had dropped 8% and by Friday, the 21st the Market was in freefall.
With the stock market in a panic news sensationalized the issue and soon the chaos spread to the banks. However action could not be reasonably taken as at least in the Khitan Empire the so called Banking Crash was blamed by the Establishment Liberal party on Socialist interference. As it was an election year the entire crisis had begun intermixed with the Election even as the economy continued to plummet.
Sensing Panic major banks and investors attempted to stop the bleed from the market, publicly investing to stop the selling freezing that had overcome the market. Between efforts from the Government and the Banks the Run at least publicly appeared to be over for a brief moment before the selling frenzy returned in full force.
The Full consequences of the Crash of 1928 would take almost 2 years to be felt across the world, where Japan would receive its own Stock Market Crash in the Autumn of 1930. The Effects of the Crash across the world however would begun being felt as specifically those who had screamed in public squares about the evils of both the rich, bankers and others had been given not firewood, but pure gasoiline.
In the Socialist Balkan Union chaos within the leadership had led to the ousting of the Revenge and Agrarian Focused Decentralists came at a heavy cost. A Veritable second civil war between the Red Vanguard loyalists, Decentralizes and a Third Faction, the Unionists was fought on the streets of the capital and the back rooms of the Communist leadership eventually resulting in a Unionist 'Victory' in Early 1931.
The Unionists were a far more 'moderate' party within the SBU, agreeing with Marxist and collectivist tendencies and principles but rallied around the idea of internationalism and interventionism. Instead of focusing on Class alone Unionists wanted to not only erase class but ethnicity into a singular proletariat. However their hard line stance in regards to centralization and foreign relations brought many into their ranks with differing views. The name Unionist, is a western term referring to the group's syndicalist allies particularly Teamsters Unions as well as Steel and Coal workers.
The Leader of the Unionists would be Mikhail Komnemnos, A Great War Vetrean, who served with the Cavalry. After the War Mikhail served with the Young Balkan Revolutionaries in Polish Avaria aiming to create a Unified Socialist state from the Carpathians to the Dardanelles. After several high profile assassinations within the Unionist party following their ascent, Mikhail was placed as a figurehead for other members within the party. He was not expected to last long within the position only expected to hold it until his death or when the Unionists had properly prepared ground to oust Decentralist and Vanguard loyalties within the administration.
In America the Annexation of California had been completed, however the unrest in the region had not ended. Communist Rebellion had spread down into the USCA festering due to a poor postwar policy as well as economic collapse and general unrest following the Great War. The United States however was forbidden by the Treaty of Yucatan to intervene in the USCA without yet another provision given by the Khitan Empire.
With the US administration reeling from the coming economic recession the thought had occured to continue the war, and fighting the Communists in the USCA even in clear violation of the treaty could provide some amount of stimulus to the US war economy. As Such the US military invaded New Mexico in clear violation of the Yucatan Treaty.
President Alexander Dumonte back in Antwerp made gestures implying that Khitan Empire would intervene publicly but silently the Liberal party was agreement that an Americans could be trusted to bring order to the region and stop the Red Tide in America before it swelled into a Hurricane. Nothing would be done for the Centro-Americans as the country's own civil war worsened and American troops pushed in from the north.
In 1932 Elections had been held in Krakow. Following Economic Downturn turned to depression the Unified National Socialist Front , a Union of several individual national populist and peoples parties from across the country had won a significant portion of seats. The Presidency however was more contested, and would constitutionally was deemed to be decided in Runoffs by the courts.
With the Runoffs scheduled for 1933, It was expected the relatively Moderate Conservatives would retain their president. This changed however when the Krakow Parliamentary Building was set ablaze only two months after the election. With the Populists and other right wing groups blaming the Communists, another major and influential party in the country. What had made matters worse is the only surviving records of the Dresden Plebicite were held within the Krakow Parliamentary building at the time following a demanded recount by the Bavarian Republic.
Expecting the Recount to die with the Fire the Bavarian Republic demanded Dresden and Saxony formally withdrawn from the Krakow republic and invaded the region, occupying it in the Summer of 1933. With support promised from the British in the event of escalation the Krakow Government with the old Conservative president met in the Government building in Prague to surrender the region to Bavaria. That however had been the final straw, The military both current and former within the Krakow Republic swiftly abandoned the Conservative led government for the Nationalists and together marched on Prague to put the nation under martial law.
The Krakow republic was abolished in favor of what was being called the Slavic Hegemony by the Nationalists. The Nationalist Coalition meanwhile was formalized into the National Socialist Slavic Unitary Party (Or NSSUP) where a single party state was formed with the aims of furthering the advancement of the true Slavic Peoples, the reclamation of the Economy from the Bankers and other subversive influences and the rejection of the Failed Treaty of Antwerp and the reclamation of lost territories.
The New State quickly set about the nationalization of almost everything under a new, Corporatism model. Taking out excessive amounts of State debt in order to alleviate the Depression. The new national priority was first on self sufficiency and industrial prestige. The new policy showed promise and State run media reinforced this message making it appear at least on the surface that this new 'Third Way' government could do what liberal democracies in Europe could not, cure the Depression and meet Communists on Open ground, as the only nations to have been spared the depression were Greece and India.
Two years later, following a major socialist uprising within the Po Valley, the Military and Nationalist parties, with the aid of Nationalists within the Khitan Empire and the new Slavic Hegemony seized the apparatus of state in both Rome and Ferrara ending the Latin Republic under a declared state of emergency. When the Communists had been put down however the Emergency state was never removed and the Italian Fascists party quickly enforced 'The Emergency Appropriations act' which disallowed any other parties from holding seats that would result in a Hung Senate. Effectively constitutionally guaranteeing at least 51% of seats in Roma would be held by Fascists or Caucus with the Fascists.
In Asia things were also heating up, Unsettled by the growing presence of Nationalist movements in the Pegu, China and Japan, the Indian People's Republic seized several major territories in the East, a precursor to a full invasion of Persia in conjunction with the Greeks a year later.
The War was an absolute slaughter, Still under restrictions from Antwerp the Persian army in its weakened state was unable to handle a two front war and quickly folded, pulling back to the Central mountains and sueing for peace. India and Greece were happy to oblige, linking the newfound Internationale for the first time.
Arabia meanwhile hunkered down. With British Marines backing them the Arabian Military seized power and banned Socialist and later nationalist parties from participating in Government. A Similar act the British would repeat at home and in her colonies. Iran in the aftermath would not so much as fall to a Fascist uprising as embrace them and welcome them into government. A Revanchist fever would take hold over the country as she looked desperately for allies for help against a growing Indian and Greek hegemony all around her.
In Western Europe, Aquitaine had meanwhile also fallen to communist takeover. A Revolution so close to her own borders and in a culturally sensitive region demanded an immediate response. There however was a major blockage to any interventionalism in the south, the Anti War Liberal party who refused to back any military actions in Europe, end of story. Only when Aquitaine communists mistakenly exploded a Khitan train crossing through the country from Barcelona did Public perception turn against the government and President Dumonte was left with no choice but to invade.
The Khitan MIlitary for the first time was mobilized to march on Aquitaine and together with Spanish aid from the South, and Italians from the West the upstart communist state was killed in the Cradle and put under military occupation. It would be a short and bloodless war, but also won with overwhelming force,
In February 1934, Spain and the Khitan Republic both agreed to hold a Plebiscite for the region under military supervision to go with the Spanish Crown, citing ancient Toulousian ties to the Barcelona Monarchy, or with the Khitan Republic. Italy also laid claim to the region citing her royal ties but was instead was ordered by both powers to hold its own referendum between the Khitan and Spanish Empires.
However even this was too much to swallow, as Labour and the Communists within the Empire petitioned firmly against such a move. The Economy was in shambles, People were lining up for bread and the Liberal Government was more interested in defying the integrity of a sovereign nation than helping its own people. On the Opposite spectrum the Divine socialists wanted further action done, particularly regarding Communists strongholds in Africa and Asia and pointed towards Italy and Bohemia as evidence of a proper way to pull the nation from the depression, renewed militarism, self sufficiency and Fascist principles. Unfortunately all this criticism was tied up within the 1935 Election set to be held later that year.
The Result was as many had feared, Inconclusive. With the Great Depression Ravaging the country and only growing worse the Liberals were ousted from power but only just. However the Socialists had predictably been weakened by the entry of the Divine Socialists in politics. The Monarchists with another 8% of the seats were equal to them in popularity and had agreed not to coalition with the conservatives at the insistence of Geoffrey Malliard.
The Liberals, meanwhile refused to coalition until the results of the Runoff election of 1936 was held. In the Meantime, as per the constitution, Conservative party chair, Catherine Brycewell would serve as interim President, becoming the first Female President in Khitan History, though not through an election. Brycewell would promise to ensure the stability of the 1936 Runoff and then return to her Seat in the Senate to represent her party no matter the result.
However the Socialists despised the woman as she had served to effectively block any and all co-operation over the course of Seven Years, Conservatives meanwhile blamed her for losing the Monarchists, The Divine Socialists meanwhile had a mixed opinion as part of the Ancient Regime narrative did include Conquerers such as Xiao Caetye who were female, in stark contrast to the Fascist Narrative elsewhere in Europe. She was also, famous for being a conservative from the Burgundian Lowlands, a Region that had been exceedingly trending towards voting towards the Divine Socialists, and whos Local Senatorial seat censused as 43% Divine Socialists 40% Conservative with the remainder being other. The Liberals of course had thier own bone to pick, attempting to lay most of the blame for the Depression at Brycewell's feet staying the last seven years were 'The Brycewell Administration' as Brycewell actively blocked efforts to Liberal austerity efforts due to a lack of support from the Liberals to empower the welfare state during the disaster.
Japan meanwhile underwent its own constitutional crisis. Following a Hung parliament the Japanese Emperor had rescinded his democratic privileges and had at least attempted to rule once again as an absolute monarch for the duration of the crisis. However the Liberal and Conservative parties of Japan did not allow this and consorted with the military to attempt a coup.
This however had backfired as Nationalists also had been planning a coup. Ironically enough both efforts had undermined one another and the Emperor quickly purged his own officer corp to prevent the act. In little over a Year Japan had went from a great power in the world to going silent as the Monarch reasserted itself through a mixture of dumb luck and sheer force of will. The Emperor's supporters immediately attributing it to the Empire's divine will saving the country in its darkest hour.
With leaders of both plots behind bars, the Japanese would break the silence in 1935 Reaffirming treaties with the Khitan and British Empires and making open statements supporting the new North America Movement, and signing an alliance for the Return of Unlawful Territories with the new Government of the USCA.
In the USCA, anger against both the Communists and being left for dead by the Khitan Republic had meant as expected, the utter collapse of the government, as had been fashionable at the time. With No alternatives a Hyper Militaristic and Nationalist coalition formed within the House and Senate under the so called 'Walker Party' after William Walker, the movement's head. This would come alongside the so called 'North American' movement popular in the Northern and Midwestern US where anti immigrant, natist and unionist sentiment was growing powerful.due to Canadian support from Newfoundland.
Walker, had widely credited himself and been credited as the Savior of Centro-America, having rebuilt the country from the ground up following the Red Tide and American Invasion. Under Walker the Central American army had been restored to working order and the Economy was humming along, though as massive deficit mimicking the economy policy of a Fascist Government in Europe. As an American however the Fascist circles in Europe wanted no part with Walker's 'City on a Hill' Brand of Populism that was common on the Sunset Continents.However much of this power came not with a legitimate election, but a bloody coup'deat.
Walker's Policy regarding his rival in the united states was simple, The reclamation of the Northern Frontiers, The partition of Paraguay back along Ethnic Lines and the release of California as a friendly state with a restored Monarchy, a surprisingly moderate policy for Nationalists of the day. Walker's supporters however were anything but, going so far as to publicly harass, beat and execute 'Unamericans' in the streets, particularly those of Union, Communists of Socialist affiliation.
His environmental policy was also clear, stating plainly in his 1934 Election Address that 'Mother Nature has no claim to rightful American land, Jungle is best left to
over there (In reference to the Congo and Amazon)" Walker would outside of his political leanings would be permanently remembered for his economic policy of deforestation as a result turning large swaths of Central American Jungle into lands thought at the time more 'suitable' for human settlement, and as such still bears the name 'Walker's Scars'.
The United States Meanwhile was under command of George III at least Nominally. One of the last sitting constitutional monarchs in the world George had remained a symbol of American exceptionalism even in this trying time representing the country and holding it together while others floundered. Having intervened directly following the great depression George removed the Federalists from power and instead appointed the Republicans in Parliament who promised aid packages and infrastructure in order to 'Prime the Pump'. As had been set by his predecessors, George then resigned from politics to his his ministers and government repair the country.
Many within the United States, Particularly the Fascists and Communists saw this aggressive interventionism as running counter to their goals. A Monarchy after all was the worst kind of oppression for the Communists, it represented generational systemic influence whereas for the Fascists it represented a force in government that was effectively sacred by law, and thus could intervene at will without reprisal, legal reprisal anyway. George III would suffer from assassination attempts across his entire life, a price paid for a constitutional monarch intervening in the Politics of his time.
In The Caribbean things had remained much as they had for decades, Haiti remained a closed off Communist State funding and encouraging communist activity across the Americas. Cuba meanwhile remained divided between the Communist East and Capitalist West, with USCA and US influence ensuring that the Western half of the island stayed under military government to deny the communists a true base of operations off of Florida or Yucatan.
Paraguay meanwhile would collapse, Unable to sustain its sheer size in the face of growing divisions in both ethnicity and ideology the country Unofficially split into the Republic of Columbia, Republic of Brazil, the Incan Empire and the Socialist Republic of Argentina with neither country recognizing the others.
The Inca would be the first to receive recognition, from America of all places with Brazil receiving backing from the Khitan Republic. Columbia meanwhile fell into William Walker's Sphere of Influence leaving Socialist Argentina as a natural ally to both Haiti and the SBU in America.
In Asia as 1936 approached, the Indians would once against assert themselves over the Pegu, seizing not only the border territories in the West but the South Bengali Coastline, An Effective Red Dagger pointed at the Khitan Empire's Eastern Possessions. In Response Khitan Malaya would be given more autonomy for its self defense as the region was not only considered Vital for the Empire but also Capitalist democracies at large due to one key resource, Rubber.
Isolated from Vietnam via the Pegu Empire, Khitan Malaya would be reorganized into a Dominion proper in the early 1930's with the Terms of Dominion being officiated in 1935 by Catherine Brycewell. The new Satelite would hold its own elections, Participate in the Imperial level elections of the Empire and also be largly responsible for its own administration and defense both internal and external. A Preemptive maneuver to offset growing support for independence within the region.
In South Africa, a similar situation would be negotiated with Native South Africans being granted nominal autonomy under the Khitan Imperial System. For many in the region this was sold as a 'First Step' by local collaborators towards independence though at this time there was little to no intent of allowing South Africa to go its own way outside of the Imperial system as its own raw materials were considered vital to the survival of the Republic.
Similarly, Catherine Brycewell, being Interim president took to enforcing a court decision made earlier in the decade that due to the draft, all Khitan citizens were members of the armed services, and as such were allowed participation in the Veterans healthcare system. While a Minor change, with many out of work and the economy recovering slowly, it would allow further burders to be shifted off the poor and unemployed and onto the Government. Unfortunately it would become a major issue in the Runoff election due to the Fascists wanted to deny healthcare to Germans, Dutchmen and French while the Liberals wanted to abolish the entire system entirely.
Further North, Scandinavia had decided to copy the British Position on extremism, Instead of allowing participation in government, the Parties were banned entirely. Fascists were expelled from Government alongside Communists, those that stayed were arrested or otherwise put onto watch lists. While considered a harsh response at the time and arguably unconstitutional under Scandinavian law, the growing popularity of such parties elsewhere in Europe was ultimately abides by the Socialists, Conservatives and Liberals who all hesitantly pulled thier own policies more towards the center as a result of the bannings.
And as 1935 Came to a close, Bohemia would once again rise to the world Stage. With most of the Liberal democracies of the world still suffering from the Great Depression and unwilling to enforce the Treaty of Antwerp, it had now looked that the opportunity had come to avenge past wrongs, and reevaluate the true balance of power in Europe.
The Country had re-militarized in clear defiance of the Treaty of Antwerp, Italy another defeated power had done so in short order as well under the pretenses of containing communists. The SBU's internal issues were being resolved and rapidly as India surged as well to the status of a great power. For the wise, there was no denying what was coming, but none could agree who would be fighting and where. Only that when War Came again, it would be horrid and that it would be deadly
but none could predict it would be the worst Conflict Mankind would ever face.
Tune in Next time when we Venture,
Through Light And Shadow.
Minor world update still to follow at some point. There will also be one in Hoi.