When the news that Haarlem had fallen and Amsterdam would be under siege inside a week reached Henry Dreeson, the first thing he did was insist that the news not be leaked for as long as possible. The second thing he did was call in Horace Bolender of the Department of Economic Resources, Treasury Secretary Tony Adducci and Coleman Walker at the Fed to ask them what they thought the effect would be.
"The guilder will go through the floor," Tony answered. "The dollar will go through the roof. Remember the bubble in February? Well, this will be worse. We could hit a dollar per guilder. If that happens, we can just kiss the boom goodbye, because no one in Germany will have enough money to buy anything we sell."
"So we put more dollars out," Horace said. "Besides, the dollar rising isn't all bad. Imports would be a lot cheaper that way."
"Until something happens to threaten the faith the down-time Germans have in the miraculous American dollar," Coleman answered, coming to his feet. "Damn it, Horace, we have to have at least something approaching enough product to support the dollar or we're just another corrupt principality minting money to pay our debts. The Germans aren't dumb, for God's sake. They give us some trust because of the Ring of Fire, but that trust won't last through even slight inflation of the dollar. You can measure the amount of silver in a German coin, but you can't measure faith. It's either there or it ain't."
"All right, Coleman," Dreeson said, trying to calm everyone. "We'll get though this. What do we need to keep the worst from happening?"
"Someone is going to have to buy guilders, a whole lot of guilders. It will have to be enough guilders to keep the price up, and it can't be the bank that does it," Coleman answered, falling back into his chair. "Under these circumstances, if the bank started buying them, people would assume that we're trying to hold the price up and the selling frenzy would just increase. People would be afraid they would still have guilders when I put on the brakes and let the guilder fall. They'd be right, too. We can't buy all the guilders in Grantville and we certainly can't buy all the guilders in Germany. It has to be someone, preferably several people, we can trust. They have to have the money, and they need to be people known for doing well. Other people need to believe that they're buying guilders because they believe that the guilder will come back."
"Fine," Henry answered. "Who do you think it should be?"
"I can think of maybe fifty people that either have enough money or have control of enough money. Unfortunately, I don't trust most of them."
Horace snorted at that. It was a well known fact that Coleman Walker didn't trust anyone.
"Get David Bartley to do it," Tony suggested. "Sarah Wendell would work too, 'cept her dad works for us. The down-timers think the Sewing Circle have some sort of a magic touch."
"He won't do it," Coleman said. "The Bartley boy refused to use OPM funds to bail out his grandma and every one knows it. There is no way he would use OPM funds for this. It's too risky. I can't fault his fiduciary responsibility, but in this case it makes him useless."
"What about having him use our money?" Henry asked.
"Maybe, but if we do that, the Fed will probably take a loss this year," Coleman answered. "Can the government afford the loss of thirty million or more dollars? For this? Especially considering that it may not work."
Henry Dreeson was silent for almost a minute. Then he said, "I'll set it up. Expect a call this evening with the details."
The guilder was falling from the opening bell. That was expected but it was falling a bit faster than it should have. David wondered if the news had leaked to certain people ahead of time. He spent the morning watching the market, doing school assignments at a table near the trading floor, and quietly drinking cocoa. He hadn't developed a taste for coffee. When the guilder hit $45, he would start buying. He had to wait to make it look like he was buying guilders because he wanted them, not because he was trying to save them. He had to sell people on the idea that guilders were still worth something.
The news hit the floor around noon. Amsterdam was either under siege now, or would be within days. The evidence was fairly good that, at least for the present, Amsterdam was unlikely to be taken. On the other hand, who would have believed a month ago that the Dutch fleet would be routed and mostly destroyed? The money on deposit in the Wisselbank was safe, for the moment, but how long would it remain safe?
The guilder started to drop faster. Just a little at first, as the news filtered onto the floor. Then, it really started to fall. $53 to the guilder was not followed by $52.90 but by $52.00. Next, the price was $50 to the guilder.
Then a surprising thing happened. Prince Karl Eusebius von Liechtenstein started buying guilders. True, he was buying them with Ferdinand's new silver-backed bank notes, but considering that Amsterdam was under siege, those notes were starting to look like a good deal to a lot of people.
The price of the guilders started to drop a little slower and, oddly enough, the Holy Roman notes started to rise a bit. There was something the notes could buy outside of the Holy Roman Empire, after all. This would have been fine with David, except that the guilder was still dropping against the dollar.
When the guilder hit $45, David stood up. Over the last couple of years David Bartley had gone from short and skinny to tall and skinny. His new height made him noticeable, but he still felt like he looked like a geek. Here in this room, though, people were judged by their bank balances more than by anything else. Here, David Bartley was imposing.
Trading continued. The guilder continued to drop, but people were watching him. He could see and feel it. As he stepped to the floor he made a "come here" gesture. The gesture meant "I'm buying at the last offer." The last offer had been $39 to the guilder. David was mobbed, but he kept making the gesture.
For almost an hour people sold guilders and he and Karl bought them. The price hit $37.50 to the guilder. Finally, slowly, people began to hesitate.
Why were they buying? What did they know? David could hear the murmurs. The price was holding.
David made a bid on some of the Wisselbank notes that Karl had bought, but he shook his head. David was buying, but Karl wasn't selling. Some of the players noticed. The price of guilders started to rise. David kept buying, so did Karl.
David Bartley spent twenty-seven million dollars in the space of about two hours. It was twenty-seven million dollars that wasn't his, but very few people knew that. Still, the guilder closed at $47.50 to the dollar. Smiling like he knew something no one else knew, David went back to his table and finished his cocoa.
Karl walked over to David and asked, "I know why I was buying, but why were you?"
"Maybe we ought to have a talk," said David, and led Karl to the room Sarah was using to watch the show. They had not wanted people to think that the government was exerting influence through Sarah's parents. From the prince's expression, keeping Sarah out of sight had been the right move.
Sarah grinned like a Cheshire cat when she noticed his expression. "No, you've read it at least partially wrong," she said. "Neither I nor my parents attempted to exert any influence on David. It wouldn't have worked anyway. You've forgotten that I am the CFO of OPM. While we do want to avoid the collapse of the guilder, David wouldn't have put OPM resources into it unless it was a good risk."
"So what do you know? What makes it a good risk?"
"We're gambling," David answered. "Did you know that Brent Partow is a student of military history, and his brother Caleb even more of one?" This was a total bluff. Brent Partow had been interested in all things military for about a month after the Ring of Fire. David had no real idea how deep Brent's older brother's interest went.
"You don't think Don Fernando can take Amsterdam, do you?"
"No, we don't. If he takes Amsterdam at all, it certainly won't happen very quickly. Unfortunately, that may not matter that much. The issue with the bank money is going to be availability, not silver, which will hurt you as much as us." David had dealt with Prince Karl before and knew that the prince was bright, capable and conscientious, but he had a weakness, one that David was prepared to use. Karl believed in taking care of number one, and he preferred to assume everyone else felt the same way. David was pretty sure that Karl wasn't truly incapable of non-self-centered acts, but his bias did color his vision a bit.
"So, I ask again, why?" Karl wasn't thrown off that easily.
Sarah came to the rescue. "Why did you? If Don Fernando doesn't win quickly, you're looking at having that money tied up in Amsterdam behind siege lines. That's going to make it rather harder to get to than the HRE gilders you traded for them. Unless something is done, they are going to lose more and more value. The trade through Amsterdam will die. It will take years to grow back elsewhere. Why did you buy guilders?"
Karl discovered suddenly that he was sitting in one of the chairs in the conference room. He must have sat down, he was clearly seated. He just didn't remember moving. He had had several reasons for buying guilders. First, he figured that with his connections, they were worth more to him than to a German merchant. He had also wanted to bring up the price of the Holy Roman Empire guilder in the Grantville market, largely because that's what much of his money was. He had some financial obligations that were best handled in bank money, or would have been, before the siege.
The real reason, though, was that he had seen a bargain and gotten carried away. He had been buying, David started buying and, well, face it . . . he had been caught up in the moment. He didn't really need that much bank money. At this point, that didn't matter much. If he, or David, started selling, the guilder would collapse in the Grantville market. Karl was so stunned that he didn't notice that David never answered his question.
"Well, it's stopped for now, Tony," Coleman Walker said on the phone that night to Tony Adducci.
"You think it will hold?"
"I'm not sure. The way I heard it, David Bartley and that prince from the HRE were cooperating to corner the market in Dutch guilders. I'm starting to wonder if we got took."
"The way I got it from Fletcher Wendell is that Prince Karl was trying to get Wisselbank notes because he figured that Don Fernando would honor them for him even if he wouldn't for a bunch of Dutch merchants. He is an allied prince, after all, or at least his uncles are. David saw an opportunity to make it look like they were trying to sew up the market and took it," Tony defended David. "So how much is the bank out?"
"Nothing yet," Tony could hear the dissatisfaction in Coleman's voice. "The Bartley boy pointed out that if he just acted as an agent for the bank there would be another run as soon as the word got out. To make it work, the guilders would have to appear on the OPM books. So he proposed that we give OPM a low interest loan and a guarantee to buy the guilders at cost. He got Franz Kunze to go along with it. We probably should have gone to Herr Kunze in the first place. Anyway, for now, OPM is sitting on the guilders and the bank is just showing a loan. We won't have a loss on the books till the loan comes due and we have to take Amsterdam's waste paper at cost."
"That's great, isn't it? From what I hear, Frederik Hendrik figures that he can hold. We may come out of this all right."
"Maybe, but the longer the siege goes on the worse it's going to get."
Tony was convinced that Coleman Walker made pessimism into an art form. "The dollar has been going up against the guilder right along. By the time the siege is over, confidence in the guilder could be so low that they won't be worth what the Bartley boy paid for them during today's panic. The only way that we could prevent that from happening would be to increase the number of American dollars. We could probably manage that, but while the dollar has deflated over the last two years there has been inflation in German currencies to compensate."
"You've mentioned that before, Coleman," Tony Adducci agreed, while thinking Over and over again, you've mentioned it.
"Why would the up-timers want to save the guilder? It makes no sense. If the guilder collapses their American dollars will be worth more and they will be richer," Josef Gandelmo, Prince Karl's tutor, wondered aloud later that evening. A little more than a year earlier, Karl had called Richelieu a dotard in this room. Josef looked at financial matters in terms of what they accomplished. What David had done was stop the Dutch guilder from collapsing. To Josef, that probably meant that David had meant to prevent the Dutch guilder from collapsing. The question became: why a strong guilder? It seemed to him to be to the up-timers' disadvantage.
"It does make sense in a way, Josef. Remember the lecture series we attended. One was about exchange rates. Having an overpriced currency can price you out of the export market. High value money makes import cheaper but export more difficult. If most of your spending is local, you want a low value currency because the people you buying from are using the same money, so the lower the value of your money, the less you're paying.
"If you're buying more stuff from far away, then you want a high value so that less of your money buys more of theirs. The up-timers have been running a trade surplus since the day they arrived. They apparently wish to keep doing so. Wait . . ." Karl had apparently just realized what Josef was getting at. "Do you think that David was trying to prop up the Dutch guilder?"
"It seems so. He certainly, with your help, managed to do so," Josef offered. "Now you've provided a reason for it."
"No. If he had gotten a personal loan, then that would be a possibility, but to use OPM funds? I don't think so." Karl shook his head. "Some of the up-timers are fanatical about their reputations, you know, and David more than most. Fiduciary responsibility and all that, they take it very seriously. If David used OPM funds to save the guilder at the expense of the fund stockholders, it would destroy his reputation." Karl paused in thought. "Could he have some arrangement that protected the stockholders?"
"That's possible. If he does, then we should not bandy it about. OPM has a bit over half a million Dutch guilders. As of now, Your Highness, we have more invested in saving the Dutch guilder than OPM does. Almost twice as much."
Karl and Josef paused to listen to the evening news on the up-time radio. Radio, in Karl's opinion, was a marvelous thing, as important to him as indoor plumbing, frankly. The nightly news program helped him project what might or might not happen in the surrounding area, keep up with events, and determine where to place his investments. He was shocked, though, to hear his own name mentioned.
"This is Hans Günter, reporting for Voice of America. Today was an interesting day in the money market here in Grantville. With the siege closing in around Amsterdam, the famed bank money of Amsterdam started what at first appeared to be a fatal plunge. Then Prince Karl Eusebius von Liechtenstein and Master David Bartley unaccountably began buying. The Wisselbank money finished the day at an impressive $47.50 to the dollar. The market is asking itself: what do these two young men know? We have with us tonight Karl Gottlieb, of the Street.
"Karl is an expert in the histories and psychology of the financial movers and shakers who affect the market. Karl, just how much of a surprise was today's play by these two relatively young men?"
"Very," the financial expert answered. "Neither one of them has a reputation for this sort of risk taking, though for very different reasons . . ."
Karl was a bit miffed to hear this Gottlieb person discuss his motivations for all to hear. Publicity was rapidly becoming extremely distasteful to him. Private business shouldn't be dispersed over the airways for anyone to hear, in his opinion.
The news program, had he only known, went farther and faster than he expected. It was heard in cities and hamlets within a footprint of over thirty thousand square miles. The effect of the interview was to prop up the bank money of Amsterdam throughout the CPE, an effect he was grateful for over the coming weeks.
Franz Kunze, director of OPM, first suggested it in the Exchange Coffee Shop. "Perhaps a visit to the cardinal-infante might help. Don Fernando seems to be dealing with his conquered territory gently." Quite a number of financial movers and shakers found the Exchange Coffee Shop to be a convenient place to grab a quick bite to eat. It was often full of people who played the markets and seemed to be becoming an adjunct to the stock exchange.
"That's a possibility. What should we ask of him though?" Prince Karl asked.
"Perhaps a public statement that he won't loot the Wisselbank," suggested Sarah Wendell.
"Do you think he would actually agree to something like that?" Kaspar Heesters asked, caught between hope and doubt. His father was in Amsterdam. Herr David Heesters had apparently had an opportunity to get out of the city. Kaspar had chosen to stay in order to watch over the family's business interests there.
"It's possible," Don Alfredo de Aguilera said. "He's not obligated to, you understand. Wisselbank silver would clearly be the just spoils of war and the campaign has to be stretching his finances to the limit. He might do it though, if given adequate reason."
"To keep every market in Europe from collapsing! To keep millions of people from losing everything, that's a reason," Kaspar replied, exaggerating more than a little. "You know as well as I do what will happen if the Wisselbank is looted by Don Fernando and the Dutch guilder is rendered valueless."
"Don't overstate the case," Don Alfredo corrected, waving to the waiter for another cup of coffee. "The economy of Europe is not dependent on the Dutch guilder. At most there will be a minor correction in the money markets. Some will lose, some will gain." Don Alfredo was understating the case just as much as Kaspar had overstated it.
"Don't make light of either," Prince Karl said in turn. "Yes, the markets will correct themselves but not that quickly and not without damage."
David considered the suggestions for a moment. "I think Herr Kunze and Sarah have come up with an excellent approach. We go see Don Fernando and explain what the consequences of his looting the bank would be and ask for his public assurance that he won't. How would we arrange a visit?"
"However we arrange it, David," Karl Schmidt, his stepfather, interrupted. "You won't be going. Amsterdam is still a war zone. I doubt Delia would agree and I know your mother wouldn't. I prefer a reasonable amount of peace and quiet in my household. Besides, if you plan on graduating with your class there is only so much school you can afford to miss."
David got a stubborn look on his face. "Karl, I decided to invest in the guilders. I'm obligated to see it through. And I'm far enough ahead that a couple of months away wouldn't hurt me at school. If anyone goes, I'm going."
Don Alfredo accepted a glass of wine from one of the von Liechtenstein servants. "I do not know if it will help or not. But, I think we must try to speak to him," Don Alfredo finally agreed. "A delegation, do you think? You, me, some of the others, Franz Kunze, particularly, I think."
Prince Karl nodded in agreement, pleased by this development. It had taken some days to get Don Alfredo on board. "Yes. I also believe we must. David will be coming, you know. Having invested OPM's money, he will insist on it. We need an adult up-timer, though."
"Why?" Don Alfredo asked. "Are we not men of substance ourselves? up-timers are not the only people of knowledge in the world."
"To look after David." Karl grinned. "Sarah Wendell suggested it. No, Alfredo, I am not seriously suggesting we take along a nanny for David Bartley or that we lack substance. Still an up-timer will add weight to our arguments and answer technical points that are still new to us."
For the second time in less than three years Mike Stearns was busy forging a new government out of bits and pieces of whatever he could find. This time it was in Magdeburg. He had more pieces now, but it was a bigger government. "What is it now, Francisco?" he asked, with a tired-sounding sigh.
"Apparently Horace Bolender wants to send Fletcher Wendell to Amsterdam. A bunch of merchants want to have a little chat with the cardinal-infante and they want him to go along. Prince Karl Eusebius thinks Fletcher, with his knowledge of the way economies work, will be a good addition to their delegation."
"Why do a bunch of merchants want to talk to Don Fernando?" Mike asked. "What good will that do?"
"There was an aborted panic about the Dutch guilder when the siege of Amsterdam was closing in, Mike," Don Francisco explained. "It seems like these people think they can talk the cardinal-infante out of looting the Wisselbank. They think, and I stress think, that if he promises not to loot the bank it will help keep the economy stable. Anyway, Horace has Tony and Coleman signing off on the request. It seems Mr. Wendell is fairly good at economic theory and making it understandable to others."
Normally, Mike would have paid a bit more attention to such a plan. Now; however, he was in the process of forcing the USE down the throats of a whole bunch of nobles. Most of these nobles wouldn't have agreed to the measures Gustav had planned for the CPE two weeks earlier, much less the program Mike had in mind.
The relatively minor matter of several merchants going to have a chat with Don Fernando of Spain was given about five minutes of his time. Then, he turned the matter over to Francisco Nasi.
"Fine, if Fletcher's willing to go and you think it's wise. Make sure they don't do anything to upset Rebecca's apple cart, Francisco. Very sure! Oh, and try to keep them from getting themselves killed."
Francisco Nasi was rather busy himself these days. Still, he was a bit more involved with the markets in Grantville than Mike was. For now he tentatively approved the plan. He would leave whether Fletcher Wendell went up to Mr. Wendell. If Fletcher did decide to go, Francisco would have a chat with him when they came through Magdeburg on their way to Amsterdam. He sent a message to that effect and turned his attention to the many other matters he was concerned with. One of those concerns was to send notification to the Amsterdam diplomatic mission, and prepare Rebecca Stearns for the arrival of the trade delegation.
In the Wendell kitchen, back in Grantville, the trip was of more immediate concern. "Judy, I really think I ought to go." Fletcher went to give her a hug. "I don't think I'll be gone more than a couple of months at the most."
"I wish I could go," Sarah muttered, flopping down into her favorite chair. "It was my idea, partly, anyway."
"I know the school is being fairly understanding about absences due to work, Sarah," Fletcher responded. "But your education is more important, as far as I'm concerned. David's going, that's all the teenager I want to have to deal with."
"Sarah, you'll get your chance to travel," Judy the Elder noted. "Just not right now. It's bad enough that your dad is going. Yes, Fletcher, I know you need to do it. I'm not that crazy about it, considering you're going to be traveling through a war zone, but I understand. Just try not to get hurt."
Fletcher circled Judy the Elder with his arms and placed a kiss on her cheek. "Have I ever mentioned what a good little wife you are?"
Fletcher hadn't thought it out. He'd hugged Judy from behind. Her elbow met his midriff with some force. "Omff."
Judy the Elder turned around and frowned at him. "Don't get any ideas, buster. I'm not that happy about being left to deal with two girls on my own. Still, I understand. If you can keep the European economy stable, well, you need to."
Outside Amsterdam, in Vredenhof, the villa Don Fernando was using for a headquarters, Miguel de Manrique held up a sheet of paper. "I have an interesting letter here, Your Highness."
"Yes?"
"It's from Prince Karl Eusebius von Liechtenstein and a group of merchants. They would like to visit to discuss the economic effects of the siege. They request 'a little of your time if it would be convenient.' A Spaniard, Don Alfredo de Aguilera, will be coming, too, as well as several German merchants of generally good reputations and large purses, and an up-timer financial expert."
"Well, merchants generally show up at a siege. This is a rather unusual group, though. What do we know about the prince and the up-timer?"
"I'll find out."
Some days later Miguel had an answer. "Your Highness," Miguel spoke quietly, "I have that report you asked for."
Don Fernando looked up with a sigh, "Which report, Miguel? I seem to fill my days with one report after another. Please tell me this one is at least amusing."
Miguel shrugged. "Not amusing, then, Miguel?" Don Fernando asked. "What is it then? More supply problems? The fleet wants to move a few more miles out to sea just to be safe? The Inquisition has gone on a rampage?"
"I doubt the inquisitors would dare, Your Highness. I believe we were fairly firm with them. No, this is about the people who want to visit you, Prince von Liechtenstein and his party of merchants."
"Ah, yes . . . that report. I don't suppose the up-timers are here to sell me a marvelous siege engine, one that will reduce Amsterdam's walls to gravel?"
"Not at this time, I fear. I have quite a bit of information, though. One visitor is the 'chairman of the board of directors' of a very wealthy entity called 'Other People's Money.' It is a mutual fund, I'm told. Another is called a 'financial expert' from up-time. I have a prospectus here, and an annual report from this OPM, as well." Miguel passed the papers over to Don Fernando and waited patiently as the prince read through them.
"Is this true, Miguel? Does this OPM truly have this kind of money?"
"Of that, I am not sure, Your Highness. It will take some time to confirm. I do have some information on Prince Karl, also. It seems that his father was in business with the traitor, Wallenstein, a number of years ago. A bit later in their lives, he tried to have Wallenstein executed for treason, which, you must admit, is fairly standard for Ferdinand's court. A very wealthy young man, and, unlike his uncles, Gundaker and Maximilian, who support His Majesty, Ferdinand II, it appears that young Karl is making certain overtures to Wallenstein."
"Yet another traitor, Miguel?"
Miguel shifted a bit uncomfortably. "His lands, many of them, are now in the territory claimed by Wallenstein. I'm forced to admit, were I in his position, I might have to do the same."
"All right, set up a meeting. It might prove to be amusing after all."
They had arrived at the siege of Amsterdam almost a week before. Now they were seated around a large table in the dining room of the estate Don Fernando was using as his headquarters. It was the third day of talks between Don Fernando and the Grantville merchants. The group had made their request and Don Fernando had agreed to it without hesitation. However, simply assuring the world that he would not loot the Wisselbank didn't strike him as all that good a solution. He wanted more information on effects of the siege. Now, finally, they were getting down to the reasons the merchants felt this action had been necessary.
"If the Dutch guilder disappears or is drastically devalued, more money must be introduced into the economies of the nations that that use the guilder as currency for large-scale transactions," Fletcher Wendell explained. He knew he was being too technical, but he didn't want to sound like he was talking down to Don Fernando. "In the United States of Europe, the guilder represents a small but significant percentage of the money supply because of its consistent value. New United States dollars were initially set at a price in guilders. After their introduction, the dollars have been allowed to float, but we still use the guilder as the primary currency they are compared to. The sudden . . ."
"I am interested in how your American money works," Don Fernando interrupted. "This dollar, it is not backed by anything, no gold, no silver. You seem to print it at need. Yet, from what I'm told, it is generally accepted in the German states. Why?"
"The dollar is backed by the full faith and credit of the New United States, Your Highness," Fletcher said, "And we don't print it as we need it. We print just enough to keep the economy running."
" 'Full faith and credit'? Those are just words. Why could I not start printing money?" Don Fernando demanded.
It was immediately apparent to Don Fernando that he had said something silly or perhaps offensive. The clear desire of everyone in the room was to have someone else explain his gaffe to him, just so they wouldn't have to. People were looking at one another with that "you tell him" look that he had occasionally seen in his tutors when he brought up an indelicate subject. "Prince Karl, it appears I am in need of correction and my other guests are not anxious to provide it. Would you kindly explain?"
"Ah, it is a somewhat delicate subject, Your Highness. Forgive me, please, for being blunt. The question becomes 'whose words can be believed'? The Spanish crown has found it necessary some three times in the last century to default on its loans. That experience has . . . ah, weakened the faith placed in the Spanish crown and somewhat limited its credit."
Don Fernando nearly asked what printing money had to do with getting credit, but the up-timer, Fletcher Wendell, stepped in. "At heart, at the most basic level, money is a loan. It's a loan from the people who use the money. The same things that cause a government to default on a loan cause them to inflate the currency. If a country defaults on a loan, people lose faith in that currency."
Don Fernando looked at Karl and Fletcher, somewhat startled. The prince had indeed been blunt. On the other hand, Don Fernando had not himself been involved in those defaults, so was prepared to listen. "Very well, you have explained why I can't but not why the up-timers can. Why can they print money and have it accepted?"
"Not once in the history of the United States has it ever defaulted on a loan. Not once. Not back in the up-time U.S., and not here in the down-time," Fletcher answered. "Not through revolution, economic boom or bust, wars and world wars, and not even now, after having a small part of the nation transported through time to the middle of a war."
"More than that," Karl added, "you can't look at the cliffs left by the Ring of Fire and not know that it must be the work of God. That gives the up-timers, ah, well, a certain amount of credence to start with. They arrived with good references." He held up his hand when it looked like Don Fernando was about to explain why the origins of the Ring of Fire didn't matter.
"I am no theologian, and I make no pretense of knowing God's intent in placing them amongst us. Still, after seeing the Ring Wall, as it's called, the question isn't why should we trust them, but why shouldn't we. So far they have not given anyone reason to doubt the value of their currency. Nor do I think it likely that they will."
"Yet, what you ask me for is simply my public word, my word, that I will not loot the Wisselbank. I won't break my word if I give it, but why do you believe that I won't?"
"The guilder has not collapsed, not yet," Franz Kunze answered. "It's fallen but not collapsed. How far it falls depends in part on how likely most observers think you are to actually take Amsterdam. If you give your public word not to loot the Wisselbank, that is one more bit of assurance that the money is safe, still good. Some people will trust the guilder because they don't think you'll take Amsterdam. Others will trust the guilder because you have given your word and they believe it. Some of the trust will be partly for one reason and partly for the other.
"It really isn't a question of whether we," Franz waved to include the delegation in his statement and continued, "trust you. It's a question of whether merchants all over Europe trust you. To be quite blunt, some will and some won't. We are hoping that enough will to restore some of the confidence in the guilder.
"If you, having publicly given your word not to loot the Wisselbank, break your pledge, it will be like Spain has again defaulted on your loans. Quite frankly, if Spain defaults on its loans for a fourth time, it's unlikely, maybe even impossible that it will ever get another one. There are just too many other places for people to put their money; places where they can invest it and watch it grow. They'll put their money in those safer places, places that offer more profit, like Amsterdam was, before the siege. Places like Grantville, Magdeburg or Hamburg."
Don Fernando gazed out over the bay. He had never wanted to be a cardinal. He had certainly never wanted to deal with the sort of religious complications brought up by the Ring of Fire. What did God mean by placing a small piece of a future in the middle of the Germanies? Don Fernando didn't know, and wasn't sure that he wanted to.
It was evening and he was tired after the day's meetings. The sun was setting red across the bay. The sleeping garden was tinted by the evening light. Don Fernando knew what Richelieu claimed was the reason for the Ring of Fire. He also knew why Richelieu had said it. The up-timers, on the other hand, didn't claim to know why the Ring of Fire happened. They said, by their actions and in their words "you must decide for yourself." There were quite a few things the up-timers could have said that would have been greatly to their advantage. They hadn't said those things. Why not? Don Fernando wondered.
Miguel de Manrique interrupted his thoughts. "How did your meeting go, Your Highness?"
"I'm honestly not sure, Miguel," Don Fernando said. "We got onto the subject of why the American dollars are accepted in the Germanies. From there we went on to discuss the Ring of Fire and what it means."
"Did the up-timers claim the authority of God then?"
"The up-timers were unwilling to say what the Ring of Fire means. That, in itself, says something about them. How many princes do you know, Miguel, who, having such miraculous origins, would not claim divine authority? Cortez claimed to be a god, but these people don't even claim to speak for Him.
"Prince Karl pointed out that, whatever the good Lord intended, one effect was to at least start the up-timers out with a good reputation. A truly monumental understatement, I suspect. I have been standing here looking out at the sunset wondering what it means." Don Fernando shook himself. "One thing is clear; I am a better soldier than I am a cardinal."
"They are right about one thing, Your Highness," Don Alfredo said. "There will be real consequences to the economies of several states if the Wisselbank is looted." They were in Don Fernando's private study, going over the day's discussions.
"You have used that term, economy, several times. You use it in what seems to me an unusual way. How would gaining the silver in the Wisselbank damage the Spanish crown's household management?"
"It's an up-timer usage of the word, Your Highness. Their idea of the economy is somewhat larger than even the broadest sense we have for that word. To an up-timer, the economy of Spain includes every peasant gathering wood, every merchant, every item he buys or sells, every housewife buying needles, all of it, summed up together. The economy of Spain is a part of the economy of Europe. The Spanish economy affects, and is affected by, the economies of France and the CPE, ah—United States of Europe, as well as by every little state in Italy. They are all interconnected and each one affects all the others, to one degree or another.
"It is the economy of the Netherlands that would be most affected by the looting of the Wisselbank, but it would spread from there to every nation in Europe. Merchants who found some part of their money worthless would no longer be in a position to buy cork or Spanish wool. That inability, in turn, would bring down the price of that wool or cork. Then, if the price is lower, that would decrease the taxes paid to the crown. The point is—it's all interconnected."
"The point is," His Highness, Don Fernando, corrected in a cool voice, "if this siege lasts as long as it looks to, I won't gain a rich province but a broken one. The Netherlands are rich, but from what you and your friends have said, they won't stay that way if trade is interrupted for long. What can be done about that, I wonder? The wealth of Amsterdam is trade and an interruption of that trade could well destroy it.
"When I take Amsterdam I want a city of wealth, a jewel to add to the Spanish crown, not a broken wreck. So tell me, Don Alfredo, with your friends and your up-timer expert, how am I to do that?"
De Aguilera looked at him in shock. "I don't know, Your Highness."
"Well, go find out." Don Fernando waved him out.
* * *
"Don Fernando wants his omelet with out as much as a cracked egg. Now all we need is a transporter to move . . ." Fletcher paused. "Move the bank. For that matter, move as much as we can of the bank's auxiliary institutions to some other city. It would work if we could do it." Fletcher gazed, unseeing, at the lovely wall hangings the room was furnished with.
"I don't see how we can," Franz said. "Why would Frederik Hendrik agree? Or the Amsterdam city council, for that matter. The Wisselbank is a city-owned institution."
"We simply need to find something that they want in exchange," Karl said.
"And what would that be?" Don Alfredo asked. "Remember that it must be something that Don Fernando is willing to give."
"I have no idea," Karl answered. "Perhaps we should ask them? First we will need to get Don Fernando's agreement in principle."
"I think Brussels would be an excellent place for the Wisselbank," Miguel suggested with a sly grin. "It's your capital, after all, and the Wisselbank deserves a prestigious location."
"I quite agree, Miguel. Brussels would be an ideal location." Don Fernando laughed. "But I suspect that Frederik Hendrik will disagree."
"Actually, I tend to agree with Don Miguel's suggestion, Highness, at least as an opening position," Don Alfredo remarked. He was getting almost used to being in the prince's private study. "Start with Brussels, at any rate. He must have some room to negotiate, after all. There will be a problem, though. The Wisselbank managers and the Amsterdam city council, they are the ones that chartered the bank, not Frederik Hendrik or the states general. The managers and the city council will not want the bank moved out of Amsterdam. They will especially not want it put under Spain's control."
"Then you and your friends will have some negotiating to do, will you not?" Don Fernando smiled.
Don Alfredo shrugged with the arrogance of a hidalgo born. "We'll try, Your Highness."
Frederik Hendrik was waiting as Rebecca was ushered into his private chambers. He had heard about the delegation from Grantville. He had been halfway hoping that Don Fernando would clap them in irons and perhaps offend the USE enough to produce a relieving force. Then Rebecca outlined the Spanish prince's proposal. Apparently, it was to be Spanish cleverness, not Spanish arrogance that would rule the day.
"They want me to give the Wisselbank to Don Fernando? That is ridiculous. Besides, I can't do it. The Wisselbank, the Lombard Bank and the exchange are chartered by the city of Amsterdam, not by me."
Rebecca just looked at him. They had gotten to know each other a bit over the last month or so. Rebecca knew full well that the offer wasn't ridiculous, but rather a first offer to begin the bargaining. She knew that he knew it, too. Rebecca also knew that even though the Wisselbank was chartered by the city of Amsterdam, under the current circumstances whatever Frederik Hendrik agreed to was going to happen.
"All right, Rebecca," Frederik muttered unhappily. "So Don Fernando is proving to be clever. I had almost hoped . . . Well, no matter."
"I understand how you feel, but it's still better this way. Just as things are better without another Alva," Rebecca commented. "Now, we must counteroffer, as well you know. What would Don Fernando agree to?"
"He's not getting the Wisselbank in Brussels. I'll not agree to that. Neither will the members of the city council who are still in town. In fact, getting them to agree to move it at all will not be easy. They will have to get something for it, something substantial."
"That seems like a reasonable assumption. I'm sure we can eventually find a compromise," Rebecca agreed.
Rebecca had performed the introductions and Frederik Hendrik had been very gracious, offering everyone a seat in the meeting room and listening carefully to their explanations. Andries Bicker, the representative of the city council, was obviously disturbed. Bicker wanted the bank open, but he wanted it kept in Amsterdam. His attitude came across as a sort of groveling resentment.
"What brings you through a siege to visit Amsterdam?" Frederik Hendrik asked. "I know the outline of what you have done but not really the why of it."
Looks were passed among the group and ended up on Fletcher. "We want the Dutch guilder to survive as a viable currency, especially the bank money. It facilitates trade and allows a fairly constant money for other currencies, including the New U.S. dollar and probably soon the USE dollar, to trade against."
"Why? The failure of the Wisselbank and the loss of bank money would seem to be an advantage to you."
"We want to limit the number of New U.S. dollars to those supported by the product of New U.S. industry. On the other hand, we want enough good dependable money to allow the economy to grow. If we do the first, we can't do the second, not with our own money. So, we suggest that the Wisselbank be moved. Don Fernando offers Brussels as a suitable location."
"Brussels?" Andries Bicker squeaked. "What good does the Wisselbank do Amsterdam in Brussels? Is this the sort of aid you bring us after all the money the citizens of Amsterdam . . ."
"Calmly, Herr Bicker," Frederik Hendrik instructed. He then turned to Fletcher. "I would likely make the same suggestion if I were Don Fernando. If I agree with this, he can sit back, relax and let the besieged city cart all its wealth to his treasury without having to actually take the city to get it. And, at the same time, he would receive the praise of Europe's merchants. At least, they will praise him until his brother needs some extra cash. Then the merchants of Europe may not be so pleased. The Spanish Habsburgs don't have the best reputation where money is concerned, you understand."
"Yes, sir, that is true," Prince Karl agreed. "However, Don Fernando is not his brother."
"He is his brother's subject," Frederik Hendrik insisted. "To place the Wisselbank in his capital is to place the key to the vault in the hands of King Philip of Spain. Olivares will talk Philip into looting the bank because Gaspar Olivares thinks he can restore the glory of Spain if he hires enough mercenaries. I won't put the Wisselbank into Olivares' control, not even indirectly."
"Yet if the Wisselbank remains here it does neither Europe nor your nation any good," Don Alfredo pointed out. "Not unless you are prepared to loot the Wisselbank yourself. What is the benefit to Europe if you do so, rather than His Majesty, the king of Spain?"
"I would pay it back," was Frederik Hendrik's quick response, "assuming it became necessary to use the funds at all."
"Granted," Franz Kunze gave Frederik Hendrik a respectful nod. "Miss Wendell, the daughter of Herr Wendell here," Franz indicated Fletcher, "had the excellent notion of seeing if things could be settled peacefully through negotiations. When we had the notion of moving the bank, Don Fernando offered Brussels as a possible site. I don't expect you to agree to it, nor do I believe that Don Fernando does. It was an opening bid. The question now is: what is your counter offer?"
Frederik Hendrik sat quietly for a moment. "I see," he finally answered. "I must have some time to consider. Perhaps you will attend me tomorrow?"
As the party left his reception room, Frederik Hendrik motioned for Rebecca to stay behind. When he was sure that no one could overhear his remarks, he turned to Rebecca, with a grin on his face. "That went quite well, I think. What do you think, Rebecca?"
"It went moderately well, yes." Rebecca responded with her own grin. "What will you tell them at tomorrow's meeting?"
"The truth, Rebecca. And the truth is that I will not allow the Wisselbank to be moved to Brussels. Whatever they may say, or even believe, that would be too much of a temptation for Philip, and I cannot trust that Don Fernando will not comply with his wishes. I will suggest Groningen, I think. We won't get an agreement for that, and it's a stupid place to put the Wisselbank, anyway. Still it may encourage my young opponent to make a serious offer."
Frederik Hendrik smiled thoughtfully. "It will do us no harm, in the long run, for Don Fernando to realize that his word is not in question. I do not question his word, myself, even. But, as long he is under his brother's orders and cannot guarantee his brother's actions, any agreement we make with him might be overridden."
"Just how good a point does Frederik Hendrik have about King Philip and Olivares?" Fletcher asked Don Alfredo, when the servants had left the room.
Don Alfredo hesitated. "His Majesty came to the throne when he was very young, just sixteen. His advisors felt that at such a young age he was not ready to assume the duties of the king of Spain." Don Alfredo looked around at his companions, but they were nodding in agreement. "Olivares is an honest man and was chosen to run things until the king came of age. Olivares did, in fact, do a great deal to remove corruption from the court.
"However," he continued, "Philip wasn't encouraged to study or prepare to take on his royal duties. Instead, he was encouraged to enjoy the privileges of his birth. His Majesty is now twenty-eight years old, but Olivares is still mostly running things."
"Sounds like what I've heard," Fletcher agreed. "How are relations between Don Fernando and Philip?"
"Not good," Don Alfredo conceded. "Olivares has encouraged, shall we say, a certain, ah . . . distrust. Don Fernando is generally sent to posts as far from Castile as Olivares can manage. Don Fernando and his brother have never been allowed to become close."
"All of which means that Frederik Hendrik has an excellent point," Prince Karl said.
Franz Kunze nodded his agreement. "Olivares will want the silver and not just because it's a lot of money. He will want it because he won't want Don Fernando to have it. For that matter, the credit rating and popularity that Don Fernando will get out of this if everything goes well will likely give Olivares pause. It's likely to become a test of loyalty."
"Test of loyalty?" David asked, confused. "How could it be a test of loyalty?"
"Perhaps, a surety of loyalty," Karl explained. "Try to look at this situation from Philip's point of view, or the point of view of Olivares. Here is Don Fernando, a successful general and competent administrator. Why should he not want the throne? To turn the silver over weakens Don Fernando and strengthens the king. If they demand the silver and Don Fernando refuses them, they will take it to mean that he is no longer loyal. Even if he's loyal at the moment, they will feel that that could change as Don Fernando falls under the influence of others. Olivares, and Phillip, for that matter, will feel that the only sure safety is to keep Don Fernando weak."
Karl grinned as some of the delegation members looked at him in horror. "Actually, no, my family is not like that, not at all. I have seen this, though, in the court of Ferdinand, in Austria. Anyway, Olivares and Phillip will start with the presumption that Don Fernando is disloyal and look at every thing he does in that light. Anything Don Fernando does that makes him stronger or more popular will be seen as a step toward taking the throne. Putting the bank in Brussels is going to make them almost as nervous as it makes Frederik Hendrik. They will feel that they must get the silver out of there—partly to get the silver, true, but to keep Don Fernando weak as well."
The bargaining began in Don Fernando's headquarters. "No. Not Groningen," Don Fernando mused. "That is not acceptable. Perhaps Rotterdam."
In Amsterdam the next day, Frederik Hendrik laughed without merriment. "Rotterdam would be excellent," he agreed, "once I have forced the prince of Spain from my territory, and control my capitol again. In the mean time; however, there is still the problem of his older brother. Besides, in the event of a peaceful settlement, having the Wisselbank in Rotterdam would make it rather harder for Don Fernando to return my capitol. Not Rotterdam."
Negotiations continued, back and forth for several days.
Karl was beginning to feel like the "rubber ball" in the song he had heard at the coffee shop one day. "Brussels, Groningen, Rotterdam, good grief! Can't these two agree on a location for the Wisselbank?"
"It's not really about the location, and you know it. It's about who controls the location. Neither one wants to cede that control to the other. Do you suppose the two of them would agree to a suggestion from us?" Fletcher asked. "How would they feel about Hamburg? That would be convenient for us, and it would take the bank out of both their territories. I'd like to get home before Christmas, you know. It seems like we've been stuck here forever."
"I don't believe that either one will agree to Hamburg," Karl countered. "And it's nowhere near Christmas. You exaggerate. Still, we can try it. It might even give them the impetus they need to agree on a place."
The Hamburg suggestion received such a resounding no from both parties, that Don Alfredo and Karl felt like their ears were ringing. They sat at the table, resting from the ordeal of dealing with two very clever princes, each determined to get the best deal he could.
"See, David, the concept of 'nobility' is not entirely without merit." Karl grinned. "They are both amazingly clever and capable men." The delegation was staying at the inn in Amsterdam that night.
"Philip." David held up one finger. "Charles." He held up another. "Louis." He held up a third.
"I said 'not entirely,' " Karl muttered.
Fletcher snorted. The on-going discussion, well, friendly argument, over the merits of democracy versus royalty had provided entertainment and some irritation for the rest of the group.
"Okay," Franz mused, bringing everyone back to the point. "What do we have? So far, we've eliminated Brussels, Groningen, Rotterdam, Haarlem and Hamburg. Neither one of them is willing to let loose of the Wisselbank, it seems. What if they split it? Keep part in Amsterdam and part of it in a city controlled by Don Fernando? After the siege is settled, I mean. Until the siege is settled, they'll have to use one of Don Fernando's cities. Frederik Hendrik doesn't have a city that's suitable, and I'm sure he knows it."
Karl and Don Alfredo considered the suggestion for a moment. "That might work," Karl remarked. "It just might. They would both have it that way, at least eventually."
"Wait a minute," David said. "Why wait for the end of the siege to split the bank? What about this . . . the Wisselbank is a full reserve bank, and all the reserves are in one place. About a block and a half over that way." David pointed vaguely, and, Karl noticed with amusement, waved in the wrong direction.
"Suppose the reserves were split now," David continued. "It would remain a full reserve bank. The reserves would simply be split between two locations. Part of the reserves stay in Amsterdam and the rest gets moved to a town controlled by Don Fernando. Say Antwerp. That might solve part of the problem."
"True," Karl said. "If all of the reserve goes to Don Fernando's territory, Philip is going to get greedy and demand the silver. Don Fernando would have to either give him the silver or go into open revolt. If all the reserves stay here, people can't get at their silver. That would cause the guilder to collapse, exactly what we're trying to prevent."
"That's just it," Franz said. "If we only move part of it—if we move, say, a third of the reserve, there will still be two-thirds safe here in Amsterdam. With Don Fernando's promise that he won't loot the Wisselbank if he takes Amsterdam, and Frederik Hendrik's promise that Don Fernando won't take Amsterdam, well, the bank will be protected by two armies for as long as the siege lasts. There will be absolutely no way that Philip can get at the silver that remains in Amsterdam. If he grabs the silver in Don Fernando's territory, he'll hurt himself badly. His reputation will suffer just as much as if he'd grabbed the whole lot, but he'll have a lot less cash to gain."
"In fact," Fletcher added, "if Philip takes the silver in Don Fernando's territory, it's the sort of thing that could push Don Fernando into rebelling. Especially since the whole pile won't be in Philip's hands. The silver that stays in Amsterdam will act as a guarantee of the good faith of Don Fernando and his brother."
"Be careful, gentlemen," Don Alfredo advised. "You're coming perilously close to advocating or accusing or something . . . Well, never mind. But, please, let's keep our speculation to financial matters. For my peace of mind, if for no other reason."
"Certainly," Fletcher agreed and continued. "A chunk of the silver will be in one of Don Fernando's cities and be available for anyone with bank money to withdraw. I think that there should be another part of the agreement, too. There should be an arrangement to move more silver if the Antwerp reserves run low. For that matter, there ought to be an arrangement to shift reserves to Amsterdam if the bank gets a lot of deposits in Antwerp. That would restore most of the confidence in the Dutch guilder, don't you think? The same thing can be done with the lending bank."
"It looks to be the best we can do," Don Alfredo agreed.
Rebecca continued to sit quietly, hands folded in her lap, waiting for Frederik Hendrik to finish thinking. The delegation had made their proposal of a split silver reserve.
Frederik Hendrik looked up, smiling. "I will move the Wisselbank to Antwerp. I'll do it in spite of Herr Gunthor's objections. It is the best choice, given the sureties the merchants suggest. It is a symbolic victory for Don Fernando that doesn't really hurt us, at least not any more than any other city he controls does. Best if I offer it, I think. Your merchants have done a dangerous thing, Rebecca Abrabanel. They have given me a hope to cling to.
"I told you at our first meeting that I would win the siege but lose the war. I wasn't just talking about the war of armies, as you know. Amsterdam can hold out for at least a year. With the warehouses and their contents, we could probably hold out much longer. A year, though, that will be long enough for Don Fernando to see the wisdom of a negotiated settlement. I knew that before the siege closed in. My biggest concern all along has been what would be left of the Dutch Netherlands after the war is over. A siege would not destroy Amsterdam, not really. A year in which all the business that was done in Amsterdam had to be done somewhere else—that would be different. A year in which the bank and the exchange are closed and the merchants have to take their business elsewhere, what effects will that have?
"I'm the leader of a nation of merchants, Rebecca." There was a glistening in Frederik Hendrik's eyes. "Fifty years, at least, is what it would take before Amsterdam recovered, if it ever did. Now, though, if we can reach agreement, it will not be so bad. If the Wisselbank can reopen its doors and the exchange can resume its functions, Amsterdam could recover in a decade, possibly less. For that . . . I'll throw the dice, Rebecca. For that, I will risk it all.
"I will only allow it if I am provided with concessions in return and not all of those concessions will be from Don Fernando. From him, well, raw materials will be running out soon, and a tradesman must have supplies. The tradesmen also need customers. Perhaps Don Fernando would see his way clear to allow the import of certain items.
"I'm sure he won't allow food to be imported, but with the amount of grain that is stored in the city's warehouses, I am not greatly worried about food. Leather, though, leather for the boot makers and saddle makers, perhaps that might be allowed, I hope, as well as a few other requirements."
Rebecca nodded, heart pounding with hope. Maybe the Spanish prince would see reason.
Frederik Hendrik continued. "I will also need some solid assurance that the bank will not be looted. The splitting of the reserves, it will help, but I will need more. So from you, Rebecca, I need your miraculous radio between here and Antwerp, so that the merchants of Amsterdam may keep in contact and arrange deals and do business. The radio, it will also be a way to confirm that any more silver shipped from Amsterdam does indeed represent silver that has been legally withdrawn from the Wisselbank and not a loan coerced by Philip."
Rebecca found herself holding her breath.
"I am serious, Rebecca. I will not let it go, not without this concession." Frederik Hendrik slapped his hand on his thigh for emphasis, the sound causing her to start a bit and begin breathing again. "I will not."
"I shall see what can be arranged," Rebecca agreed. "I cannot make a promise, you understand. There are many things to be considered."
"I understand." Frederik Hendrik nodded. "But I will not allow this move unless I get what I asked for. Without some point of contact with the rest of the world, Amsterdam's business community will die."
Back in the embassy the news was good. "This is so not a problem, Rebecca." Jimmy Andersen laughed.
"It really isn't," Jeff agreed. "Radio isn't a secret. Long distance communications without great, big towers is the secret. We can get radio for Amsterdam and Antwerp, no prob."
"Not even," Jimmy enthused. "We'll set up a station here and one in Antwerp. We'll put great, big, hulking cables in both places. It'll be neat."
"A CW link," Jeff added, "forty or so words a minute . . ."
Rebecca felt her eyes begin to glaze over. Techno-geek was a specialized language, one she didn't understand. She escaped as quickly as she could, and let Jeff and Jimmy indulge their preference without her presence.
"Antwerp?" Don Fernando asked, as they walked along. "That is surprisingly generous of Frederik Hendrik. I agree to Antwerp and I appreciate Frederik Hendrik's offering it. Actually, and just between the two of us, I like the idea of split reserves as well. It has political consequences that could prove useful. Now, about these trading concessions, what does that Dutch merchant want?"
Miguel stifled a guffaw. "Sire, is it really the proper thing to call another prince a merchant? I'm quite sure he would be offended by this." The garden was mostly dormant at this time of year but it was well-arranged. It was a pleasant place to walk and think, even in winter.
"The man deals like a merchant. If he acts like a merchant, I'll call him a merchant. We are not—and you may tell him so—we are absolutely not, going to allow foodstuffs to be transported into the city, if that's what he wants. Nor will we open our lines while he ships in cannon or shot. Gunpowder is out, too."
"He doesn't ask for that, and I don't believe he would think for a moment that you would agree to it, either. However, he does ask that raw materials, like leather for the boot makers, clay for the potters, be allowed through the lines. And he asks that goods, finished goods, be allowed out."
Don Fernando grasped his head between his own hands and pretended to tear his own hair. "Gah! What did I call him? A merchant, wasn't it? This is a military operation, is it not? We are here to take the city, are we not? And yet Frederik Hendrik wants to continue to do business, even through a siege? I am astounded, truly astounded."
Miguel couldn't hold the guffaw back any longer. He broke into laughter, and laughed until the tears ran down his face. Don Fernando, after one amazed look at his usually serious aide, began to laugh also. At first, it was only a small snicker, but it grew and grew, until he, too, was laughing uproariously.
Don Alfredo, who most definitely was a merchant, and quite a good one, waited patiently for the mirth to subside. Eventually, Don Fernando wiped his eyes and calmed down a bit. Still trying to repress more laughter, he said, "Well, Don Alfredo, what do you say to the merchant of Amsterdam's latest proposal?"
"I can't speak to the military effect, Your Highness, but speaking as a merchant, I would think it a very good idea. I will go further, even. What do you want when you have taken Amsterdam? Do you wish a denuded city that will take decades to recover from the siege, like Antwerp? Or would you prefer a prosperous city, one that has not been destroyed?"
"Very well." Don Fernando sighed. "I will allow raw materials through the lines, after the wagons have been thoroughly inspected, and I will allow goods to be exported, as well. However, I will allow export only if my army is allowed to purchase goods as well. After all, equipment does wear out, you know. I, myself, could use a new pair of boots. Why not allow it, after all?"
Don Alfredo looked a bit pained, like he wanted to say something or perhaps use the toilet. "What is it, Don Alfredo? You think I ask too much?"
"You do not ask enough, Your Highness, not nearly enough. Remember . . . taxes. Taxes on everything that goes in," Don Alfredo waved his hand one way, "and taxes on everything that comes out," he waved his hand the other. "You are the rightful prince, Your Highness. It's only your due. And since you are a good and gracious prince, you don't want your subjects to suffer under a harsh or usurious double tax.
"I believe you should suggest that Frederik Hendrik must stop taxing imports and exports from Amsterdam. He will not agree to this, of course, so a compromise must be reached. A compromise that will insure that the taxes are fair and reasonable, I hope. Your Highness will receive some needed revenue. True, Frederik Hendrik will receive some revenue, but he is trapped in Amsterdam."
No one was laughing now, but slowly Don Fernando and Miguel began to smile. Most of Don Fernando's advance into the Dutch Netherlands had been stopped not by lack of arms but by lack of money and supplies.
"I will consider this proposal. Of course, we will have to make some arrangements for the future, after I have succeeded with this siege." Don Fernando nodded. "You have served Spain very well this day, Don Alfredo. Now I want you to tell me what the results of this agreement will be."
"The Wisselbank is still the Wisselbank," Don Alfredo said. "Now, though, it will have offices in Antwerp and an extra army in defense of most of its reserves. Antwerp already has an exchange, true. The addition of the Wisselbank and the lending bank will go a long way toward helping Antwerp in its recovery. With the trade agreements, the small merchants and tradesmen of Amsterdam will stay in business.
"The taxes both to you and to Frederik Hendrik will continue supporting your armies. Eventually, you will take Amsterdam or reach an agreement with Frederik Hendrik and, through it all, business will go on. The people of the Low Countries, Spanish and Dutch, will suffer less than in most wars. Probably much less."
Don Alfredo got a thoughtful look and seemed to be more thinking out loud than speaking to the prince. "I think someday there will be a statue in Amsterdam, of you and Frederik Hendrik shaking hands. Something like that, anyway. I believe that someday the history books will call you 'the wise.' "
* * *
"As I said, Rebecca." Frederik Hendrik smirked. "I knew that Antwerp would be accepted. What is your answer to my requirement?"
"It turns out that it will be no problem at all. We will use 'great, big, hulking cables' as Jimmy Andersen describes them. They will be attached to already standing towers here and in Antwerp. That way, even the presumption that we need obvious means to transmit over long distances will be preserved. It will be expensive and you and Don Fernando will have to bear the cost. On the other hand, you will make back the cost of introduction in no more than a year of regular use. Or so I am compellingly informed by Fletcher Wendell and David Bartley."
Frederik Hendrik smirked some more. "Marvelous." He rubbed his hands together in anticipation. Every agreement he could make now was a step toward the larger agreement that would end the siege. Further, each agreement made the siege less damaging to Amsterdam and the Dutch Netherlands in general.
Then Rebecca told him about the taxes Don Fernando had suggested. "Who is advising that pup, Rebecca? Whoever it is I want him assassinated. No, even better, I want to hire him." He laughed.
The counteroffer was subtle. If he agreed, the siege of Amsterdam would become much less of a drain on Don Fernando's resources, a result that Frederik Hendrik preferred to avoid. Unfortunately, he knew he had to agree to this compromise. It was a good one, and would allow Amsterdam's craftsmen to continue their work. They would be able to keep their shops open, and do more than just survive the siege. The merchants would come out of the siege whole, or at least close to it. Amsterdam produced a lot of finished goods, and would now be able to continue to sell them.
Frederik Hendrik was almost sure now that when the siege of Amsterdam ended it would be through negotiations, not combat. Don Fernando was someone he could negotiate with. "We will be haggling over the amount of tax to go to each prince for some time. We will also haggle over who will collect the taxes and where, I expect. When do you expect the radio equipment from Grantville? The Wisselbank and the lending bank need to reopen their doors to merchants outside of Amsterdam."
"Messages have already been sent to Grantville and the messengers will find the providers unusually prepared, I'm told. All by chance, of course." Rebecca smiled. "There will be supplies that have been collected for other uses available. Fortunately, they'll be ready to go.
"I warn you, this will not be cheap," Rebecca continued. "The radios must be made from expensive up-time parts and involve long steel cables. Then there are the batteries and a generator for power and regular maintenance. All these things will cost money, and a good bit of it. Once it is done; however, communication between Amsterdam and Antwerp will be nearly instantaneous."
"It depends on what you're ordering," David Bartley told David Heesters. He had been meeting regularly with Amsterdam's factor for OPM since the party had first been allowed access to Amsterdam. "If it's local items, you're probably going to have to order it through the Spaniards. Anything else will have to go through Antwerp."
"Antwerp?"
"That's where they've decided to establish a branch of the Wisselbank."
"There will be people who won't like that," Herr Heesters pointed out. "Much of Amsterdam's success was, in a sense, stolen from Antwerp. People will be afraid Antwerp will steal it back." They were sitting in Herr Heesters' office in his townhouse. There was a Van Dyck on the wall, David noticed.
"You see, at the beginning of the war, the Spanish were very hard on anyone who was not Catholic and unpaid Spanish troops sacked the city. Many of the merchants of Antwerp escaped to Amsterdam. They came here, where it was safer to practice their faith and where they could do business without the Spanish inquisition poking its nose where it didn't belong. Later, Antwerp was blockaded by our fleet as part of the war for independence. Our stock exchange was actually copied from theirs, as well.
"Now it looks like things are going full circle. We are besieged and the Wisselbank is opening a branch in Antwerp. God has an interesting sense of humor, don't you think?"
"Yes," David answered, all the while thinking about airplanes, fast food and the Internet. "The Ring of Fire and its consequences are proving to be quite . . . unusual."
"Damn it," Fletcher exploded. "I have a wife and two daughters back in Grantville, not to mention a job. Why is it us that have to go to Antwerp?"
"We're the people they can agree on," Don Alfredo answered. "Frederik Hendrik has few people he can trust and he needs most of them where they are. Most of the city council fled when the siege began. Don Fernando is not allowing just anyone to leave Amsterdam, but we can go. This is only reasonable in a siege, as you know, since the point of a siege is to keep people in. We have freedom of movement, citizens of Amsterdam do not."
"Coleman, have you heard the latest?" Henry Dreeson asked. "The guilder is going up again. It seems like the mission to Amsterdam has been a success, at least so far. We're hearing good things."
"I've heard all sorts of things, Henry," Coleman answered. "I've heard that orders for the Higgins machines are coming in. Trust that group to take care of themselves, all right."
"You're being a little uncharitable, aren't you, Coleman? Of course, David Bartley and Franz Kunze are going to take care of the HSMC and OPM. He's a businessman and that's what people in business do. The guilder is going up, that's the important thing," Henry pointed out. "It was only, what, a few months ago that we were worried about it falling forever?"
"This one will do, I think," Karl remarked. "It's tall enough, and it has the space we need. What do you think, Don Alfredo, Herr Kunze?"
"It will be well enough," Franz answered, looking at the building. "We must see these managers and have a meeting. I wish someone from Amsterdam could have come with us, to make recommendations. How do we know that the men Don Fernando agreed to will actually do their best for the bank, and not merely the best for themselves?"
"I'll have to check my figures," Jimmy Anderson advised. "We'll need to consider structural stress. Also we'll want to talk to whoever knows the most about the building, what it was constructed from, whether the builder took any short cuts. We don't need internal space in the radio tower, so we can rig a wire connection from the tower to the bank and the Antwerp exchange. How is the city council reacting?" Jimmy Anderson had been borrowed from the USE embassy because the merchants had failed to bring a radio-head along.
"Rubbing their hands together and chortling a lot," Don Alfredo answered. "They aren't fond of Amsterdam. I think the biggest problem is going to be that Antwerp will try to 'rip off' Amsterdam rather more than His Majesty."
"I wouldn't count on that," Franz said. "From what I hear Philip is already upset about the way Don Fernando is handling the campaign here. He isn't being the 'defender of the faith' that Philip wanted and he is not nearly unpopular enough to suit either Philip or Frederik Hendrik."
"Do you think the Antwerp city council will be a problem?" Fletcher wondered.
He was answered with an eloquent Gallic shrug.
The building would do, Jimmy decided, after spending a week taking measurements and doing tests. He'd done the same thing in Amsterdam. Sometimes being the designated genius was a pain in the tail, as far as he was concerned.
The radio tower needed a tall building, partly for appearances sake, and one that could take the stress from the cables and the wind blowing through them. It needed to have anchorages for the antenna cables and probably some balancing cables. Even Don Fernando was getting into the act, making an additional request that they find a building where he might make future connections to other cities someday.
Don Alfredo de Aguilera was thinking too. He had come to Grantville from Madrid the first time he visited. He was a subject of the Spanish crown, but now he had met His Highness, Don Fernando, and knew that was where his loyalty lay. More and more it was looking like the Spanish empire was going to break apart in this world before it had in the other one that the up-timer books described.
At first Don Alfredo had hoped that the shock of the future knowledge would weld the empire back together. It didn't look like that was going to happen. Castile was even more set in its ways and more determined to have its own way by force of arms, in spite of the evidence that this method would not work. On the other hand, the people of the provinces were heartened by the knowledge of eventual liberation and anxious to hurry it along.
* * *
It was done. The months spent in Amsterdam had born really big fruit. The guilder was recovering nicely throughout the USE, and OPM's guilders had been spent on products in Amsterdam and Antwerp where they were worth considerably more. David conservatively estimated that those products were worth a bit over a hundred million New U.S. Dollars. "So, David, you never did tell me why you bought the guilders," Karl said.
"No, I didn't." And David said no more. Karl probably knew by now and the option to sell the guilders at cost would not be used now anyway. Still, Fletcher Wendell had some reservations about Prince Karl Eusibus von Liechtenstein. It was true that Karl had been quite helpful, but he had had a lot to lose. How helpful he would have been if he hadn't been heavily invested in the guilders was another question. David didn't exactly disagree with Mr. Wendell's assessment of Karl. He just figured it was the way people were.
"So what are your plans now that you have seen a bit of the world?" Karl let the question of buying guilders drop.
David looked out the window of the train that was taking them the last miles to Grantville and considered. Right after the Ring of Fire he had figured he would be going into the army when he finished high school. He still figured that he would be in the reserves. After OPM got started, he had been told that he would not be accepted into the regular service. He was doing a crucial job, according to the government. He guessed it was, in a way. "I don't know. The factories going up in Magdeburg are impressive as all get out."
"True enough. But most of them are at least partially owned from Grantville and Grantville still has the phones and computers," Karl said. "Unless you're going to settle down to run a single factory, I think Grantville is the place to be, at least, for the next few years."
"Back in a few hours, eh, David?" Fletcher smiled, joining them. "I'm about ready to get back home."
"Same here," David agreed, as Fletcher sat down. "I'm glad things got worked out, but it took a while longer than we planned, didn't it?"
"Yes it did, indeed," Fletcher nodded. "I'll be glad to see all my girls."
"We were discussing the future," Karl said, "I'm going to have to come to some understanding with Wallenstein, somehow. But I'm keeping my place in Grantville. I suspect that much of the business of the USE and Europe will be conducted there for some time to come."
"I don't know about that," Fletcher said politely enough. "Magdeburg is the capital of the USE and rapidly turning into an industrial center. I imagine that the treasury and the USE Fed will be located there, probably sometime soon. A lot of the banking will have to be conducted there. The switch from the New U.S. dollar to the USE dollar is going to keep the bank hopping for a while."
"David, I'm glad you're back," Sarah bubbled. This was kind of unusual for Sarah. She wasn't a bubbly girl, normally. The train station was packed with a welcoming crowd.
Brent and Trent enthusiastically agreed. "Nice to have you back," Trent said. "You've got to tell us all about it."
"I will," David said. "I will. We've got a couple of months before graduation, so there's plenty of time to talk. After that, we're probably not going to have much time."
"Why not?" Brent asked. "We get out of school; we'll have more time to work together."
"That's something we need to think about, you guys. What are we going to do once we get out of school? Sarah's Dad and I talked about this a lot, and Karl joined in those conversations. We really need to think about plans."
"What sort of plans?" Sarah asked.
"The army, for one. We'll be in the reserves, I imagine. And business, for another. Karl thinks Grantville is going to stay the financial center of the USE but your dad isn't so sure, Sarah," David said. "It's certainly going to stay the intellectual and research capital for a while. Brent and Trent will mostly be here, probably, but we need to think about OPM. Is staying in Grantville the right thing for OPM?"
"I hadn't really thought about it," Sarah said. "We're doing okay."
"OPM will do all right this year," David said. "Herr Kunze and I were able to spend the guilders in Amsterdam and Antwerp and made a nice profit. But we may be missing a bet, trying to stay in Grantville when the Fed is probably going to move to Magdeburg. We'll probably need to think about that."
"Large fortunes to be made there?" Trent guessed.
"Seriously large fortunes," David agreed. "Look, we made a lot of money. But Karl made even more; and it's all his."
Sarah thought for a moment. "We probably ought to think about it. I'm not sure I want to, but you're right. We have a responsibility to the shareholders to do the best we can."
"David," Coleman Walker said, "I need to talk to you about paying back that loan. I've been trying to for three days now."
"Well, I've been busy," David answered. "But you're right. We need to talk about a lot of things. You'll be glad to know we won't be exercising our sales option on the guilders."
"I know that. I'm mostly concerned about that loan, David," Coleman said. "The bank would like you to pay it back just as soon as you can."
"Why?"
"Because I had to loan Fed money to the bank of Grantville to issue it."
David thought for a moment. Coleman meant that the Fed had created the money to make the loan and it would disappear again as soon as it was paid back.
"As a citizen of Grantville, one who is now more than ever concerned over the overvaluation of the American dollar in the USE, I really can't see any benefit to that loan being paid off early," David pointed out. "OPM accepted that loan and the condition that it would be used to prevent a dangerous monetary fluctuation. It was used for that."
"Why, you . . ." Coleman began.
"Do you realize how overpriced American dollars are becoming?" David interrupted before Coleman could work up a head of steam. "I'm convinced that the dollar needs to drop against the Dutch guilder, the HRE guilder and the ducat. The reason they're so overpriced is the artificial shortage you've insisted on. You're stifling industrial growth, Mr. Walker. I'm not going to help you do that. OPM has the best part of a year to pay the money back, and we're going to use every minute of it.
"That twenty-seven million is in the economy, Mr. Walker," David insisted. "And that's where it's going to stay. It's barely a drop in the bucket compared to what's needed. Besides, we need the liquidity."
* * *
"Hello, Leonhard," David said as he walked into his office. "How have things been going?"
"Rather slowly," Leonhard admitted. "With most of the officers away in Amsterdam, there was no one to make some of the decisions that needed to be made."
"I figured that." David sighed. With his hand on the door knob to his office, he turned to Leonhard and asked, "Just how high is the stack of paper in my inbox?"
"Quite high," Leonhard answered with an evil gleam in his eyes. "Quite high."
"You enjoyed that, didn't you?" David asked.
"Me? Oh, no, Master David." Leonhard smirked. "I couldn't possibly."
"Right," David said. "I'm sure. Before I get started on it, I've got a little project for you. Herr Kunze says Don Fernando wants to buy a lot of stuff from the USE. We'll need to check with the government on some of it. Here's his wish list. Look into it, will you?"
David felt his own smirk beginning as he watched Leonhard gape at Don Fernando's wish list. David decided to let Leonhard deal with the government's response to Don Fernando's desire for long distance radios. It would keep him busy.
Overloaded inbox or not, David was happy to be back in his office. Even the tower of paper was going to be easier to deal with than the last few months of high school. Latin was giving him fits. Calculus was even worse. He'd managed to stay caught up in his other classes, but those two were a torment. With finals no farther away than they were, it was going to take a lot of work.
David sat down and began to go through all the proposals that had been forwarded to his desk. "Brent, have a look at this," he wrote on one, then reached for the next.
David read through it then read through it again. "Leonhard! What the hell is this?"
Leonhard didn't look up. "Mrs. Simpson has invited OPM to become a corporate sponsor of the Magdeburg Opera House. She points out that corporate sponsorship is a tax deductible charitable contribution. According to our attorney, we may actually save more in taxes than we contribute. Something about corporate tax brackets, he said. We are in the highest one at the moment."
David continued to read while Leonhard spoke and noted the details of the sponsorship request. In addition to the Opera House there were plans to sponsor a library, a museum, a theater and a college. All good causes he thought, and began to calculate the totals.
All together the bill would come to something close to thirty million dollars over the next three years. From the proposal's details, OPM was not the only corporate sponsor being solicited. Several other businesses were already listed as sponsors.
David checked the approved box and tossed the request into his outbox. Business as usual, he thought, and began to smile.