CHAPTER 7
A Trip to Bohemia
September 1634
Prague
As it happened, Karl’s wait for the king’s pleasure wasn’t long at all. In fact, the king’s call came as soon as they arrived at the palace. Karl was escorted to a small throne room, not the big one, more of an office really. And before he could even finish his bow, Wallenstein asked him, “Was your father a thief?”
“I don’t think so, Your Majesty,” Karl answered carefully. “Though I am aware that others hold a different view. I prefer to think he was simply a practical man.”
“Not exactly a ringing endorsement from a son.” Wallenstein snorted. “I take it you don’t think I’m a thief, either.”
“No, Your Majesty.”
“Then you would accept paper money issued by the crown of Bohemia. That is, by me!”
Karl had apparently landed in the middle of a rather heated debate. He noted the presence of Morris Roth, Uriel Abrabanel, and a few other people that he suspected were counselors to the king or money lenders. Bankers, as the up-timers would have it. He began to get an inkling of what was going on. King Albrecht was setting up his national bank. The timing seemed about right. And the king had just been told that there were problems.
Karl had a decision to make and he had to make it fast. Telling truth to power wasn’t a safe thing to do, but if what the family said about Wallenstein was true, lying about this could be incredibly costly. He hesitated, saw the expression on King Albrecht’s face, and blurted out, “Not if I could safely avoid it, Your Majesty.”
“You acknowledge that I’m not a thief, but wouldn’t accept my money?” King Al gave Karl a hard look. “Which time were you lying?”
“Neither, Your Majesty. But just because I trust your money’s value, doesn’t mean I can spend it. That would require that the person I’m buying from trust it. Sarah Wendell is the person you should be talking to about this.”
“Who is Sarah Wendell?” King Albrecht looked around the room as though she might be hiding in a corner.
“She’s the daughter of the USE Treasury Secretary,” Morris Roth explained.
“She’s his girlfriend.” Pappenheim jerked a thumb at Karl. “I read it in the National Inquisitor.”
“She was the chief financial officer for OPM before she resigned to take a post with the USE Federal Reserve,” explained Uriel Abrabanel.
“She’s just outside,” Karl said, all of them speaking pretty much simultaneously.
King Albrecht took it all in, or at least he seemed to. He motioned to the soldier waiting by the door, “Invite the young lady in.”
* * *
Sarah entered the room to see the king in a chair only a little grander than the chairs of the others in the room. Except for Karl, they were all sitting. Pappenheim was on the king’s right, Morris Roth and Uriel Abrabanel on his left. There were three other men she didn’t recognize. She did an awkward curtsey and went to stand beside Karl.
She wanted to take his hand but doubted that would be appropriate. She wondered when taking his hand had become such a natural first response.
The king looked at her and at him, and waved them to chairs. “Miss Wendell, Prince Karl here says you’re the person I should be talking to about introducing Bohemian paper money. That you can explain to me why my money will be no good in spite of the fact that Karl says he trusts me?”
Suddenly she didn’t want to hold Karl’s hand. She wanted to hit him in the head. Hard!
Karl saw her expression and, risking royal displeasure, hastened to explain. “His Majesty asked me if I trusted him, then if I would take his money. I remembered how you had explained the situation regarding me issuing money on my lands.”
“Who gave you permission to issue money?” King Albrecht asked.
“No one, Your Majesty, and I hadn’t brought up the subject. It was a preemptive lecture, lest I should fail to consult them before doing anything so foolish.”
“So my issuing money is foolish?”
“No, Your Majesty. My issuing money would be foolish.”
Sarah was not by nature a pushy person—at least, she didn’t think she was. But she didn’t like being bullied nor did she like those around her being bullied. “Actually, Your Majesty, your issuing money would be equally foolish. No, it would be more foolish! Karl wasn’t personally involved in Kipper and Wipper, only his family was. You, on the other hand, were one of the major beneficiaries.
“Holy Roman Empire money is the next best thing to waste paper in the USE, in large part because Karl’s Uncle Gundaker is Emperor Ferdinand’s finance minister and he, like Karl, wasn’t involved.”
“Actually, Gundaker was instrumental in getting us the deal.”
Sarah stopped and took a deep breath. “I didn’t know that, Your Majesty, and it’s really beside the point. If the name Gundaker von Liechtenstein was enough to ruin the credibility of HRE paper, what do you think Albrecht von Wallenstein is going to do to Bohemian paper?”
“She is right, Your Majesty,” Morris said.
“Maybe so, but it doesn’t make me like being called a thief.”
“I didn’t call you a thief, Your Majesty,” Sarah said. “If you and the others had known in 1618 what we know now, it would have been different. You could have introduced silver-backed paper money, used a partial reserve system with a guarantee of silver on demand and added more money without ill effect. But you didn’t have the knowledge. It was acquired bit by bit over centuries. No one knew. But, however noble your motives, today the names Liechtenstein and Wallenstein are not names to instill confidence in monetary policy.”
“What name is then?”
“Up-timer,” Karl said quickly. “Perhaps Abrabanel, but ‘Someone von Up-time’ would be best. Preferably someone who worked at the Grantville Bank or the Credit Union. In fact—” He waved at Sarah. “—Sarah would be among the best choices, if she were interested in the job.”
“I’m too young,” Sarah said.
“I disagree,” said Uriel Abrabanel. “Sarah’s paper on comparative economics and the effect of the American dollar is read all over Europe. As are several others.”
“And I’m not looking for a job,” Sarah added. “Besides, what you really need is the bank to be independent of the crown, even if you got me to head it. It wouldn’t matter unless it was made clear that you couldn’t order me to create money because you wanted a new palace.”
“I’m not so sure of that,” said Uriel Abrabanel. “‘Up-timer’ is a word to conjure with, especially in financial matters.”
“Remember all the fights between Coleman Walker and the President, ah, Mike Stearns—” Sarah corrected herself. She thought of Mike Stearns as the President of the USE because he had been the leader of her nation in a couple of very formative years. But, in truth, his fights with Coleman Walker had been as much when he was the Chairman of the Emergency Committee as when he was the President of the New U.S. “Those fights were a lot of what gave the American dollar its credibility. It was clear that the government couldn’t just create money, that the money had to represent something real. Even if almost no one knew what GDP meant, everyone was convinced it meant something.”
Uriel nodded. “I agree. But that was then, and this is now. Now everyone knows that up-timers can create money and that money is good. I think as long as you didn’t increase the money supply too much, just Sarah Wendell von Up-time would be enough to provide credibility.”
“I hate that expression,” Sarah said, referring to the “von Up-time.” It was a tag that the Daily News had put on up-timers with an op-ed piece that claimed that they were the true nobility. And it was becoming fairly popular with some up-timers and a lot of down-timers. “And, like I said before, I am not looking for a job. Besides, even if the person you get to head your bank were an up-timer, even if it was Coleman Walker or my dad, it wouldn’t make any difference if everyone thought the king could order them to print more money.”
Uriel and Morris were both nodding. Uriel said, “It must be arranged so that the continued value of the money is given precedence over the short-term gain from just adding more.”
“And it must be seen that that is the case,” Sarah said. “Your Majesty, you need someone that people will trust and who will argue with you. Publicly.”
By now King Albrecht was looking at Morris Roth. Don Morris shook his head. “I’m too closely associated with you, Your Majesty. I’m not sure people would accept my independence.”
“What about Dame Judith?” Uriel Abrabanel was grinning like a Cheshire cat.
“Fine. But you tell her!” Morris Roth snorted in return.
“Actually, that’s not a bad idea.” Karl looked Morris Roth in the eye. “She is both an up-timer and Jewish. And prejudice works for us here. Everyone knows that the up-timer money is better than silver and everyone knows that Jews are tight with money. If none of the money goes to her, and if the Abrabanels support her, the rest of the Jewish community will, too. It could work quite well. Especially if Don Morris were to publicly complain about the appointment, because he doesn’t want to be caught in the middle when Your Majesty and his stubborn wife butt heads.”
“You’re crazy. I don’t know a thing about monetary policy and Judith knows even less. Well, not much more, anyway.”
“What she doesn’t know, she can learn,” Uriel said. He wasn’t laughing now. “And she will have excellent advisors. What we have learned about monetary theory from the up-timers’ books is valuable, but the truth is that no true economists came back in the Ring of Fire, with all due respect to Sarah here. By now members of my extended family know as much or more about how money works as any up-timer does. What we need is the belief in money, and that your wife can provide simply because she is an up-timer. Prince Karl is quite correct, and it has other advantages as well. A Jewish woman with a position of great authority will be another assurance that Your Majesty means it when you say that Jews will be treated equally in your kingdom. Both for the Jews and for the Gentiles, and it will set a valuable precedent for women in the Jewish community.”
Morris Roth was clearly looking for a good reason to squash the idea, but it was equally clear that he wasn’t finding one that would hold water. “Fine. You tell her,” he said again.
“I’ll tell her,” King Albrecht said. “In the meantime, Prince, tell us about this Liechtenstein Industrialization Corporation of yours.”
* * *
Over the next few days they talked about what railroads, even wooden railroads, and other bits of advanced tech would do for the Liechtenstein lands in Bohemia, Moravia and Silesia. As Karl had expected, Wallenstein didn’t really have a problem with what Karl wanted to do. What he wanted was a public swearing of fealty that included Gundaker von Liechtenstein’s domains of Kromau and Ostra. Which is sure to thrill Uncle Gundaker, Karl thought sardonically. “Why Ostra, Your Majesty?”
“If Ferdinand insists that he can grant Kromau in Moravia, I can grant Ostra in Hungary.” King Albrecht gave Karl a cold little smile. “I imagine that when it’s finally settled, your uncle will end up with Ostra and you’ll keep Kromau.” As it worked out, the part about Ostra was mumbled a bit in the swearing and buried in the fine print in the documents, but that was at King Albrecht’s insistence. “I don’t want to make a big thing of it. It’s just a negotiating ploy to let Ferdinand save a bit of face when he finally acknowledges that I rule Bohemia and Moravia.”
Roth House, Prague
“He wants me to do what?” Judith Roth looked stunned, and Sarah tried not to smile. They were in the Roth’s huge salon. There were etchings on the walls and conversation nooks scattered around the walls.
“It wasn’t my idea.” Morris walked over to a down-time-made recliner. “On the other hand, their reasoning was fairly sound.”
“I don’t know anything about running a federal reserve.”
“You probably don’t want a federal reserve system.” Sarah looked around, trying to figure out where to sit. “We have a modified one in the USE, because we got it from the SoTF, which got it from the New U.S., which got it from the USA up-time. And the up-time Fed was a disorganized mess that was developed out of a compromise between a whole bunch of people with very strong opinions about monetary policy and not a lot of understanding of it. It’s a mare’s nest of conflicting regulations. You probably want something closer to a Bank of England system, with the government owning a lot of nonvoting interest in the bank. Interest that can’t be sold or borrowed against, but just pays dividends when the bank makes a profit.”
“So why aren’t you . . . ?” Mrs. Roth waved Sarah to a couch.
“I don’t live here, Mrs. Roth,” Sarah said. “I can help you set it up while I’m here, but not do it for you.”
“I don’t even know what we should call our money.”
“Dollars or thalers is probably simplest. I wouldn’t call them Albrechts or Wallensteins,” Sarah said, then she grinned. “You could go all science fictiony and call them credits.”
Judith shuddered. “Not the way the Catholic church feels about usury. I think just ‘Bohemian dollars’ will be best.”
“So how many dollars to a HRE thaler?” Sarah asked.
“Shouldn’t we just let it float?” Judith Roth asked.
“Yes, certainly. But a big part of your job will be to help set the value by controlling how many Bohem—” Sarah grinned. “—‘boys’ are in circulation.”
Judith Roth wasn’t pleased to be appointed to head the Bohemian National Bank, but Bohemia did need money that people would have faith in.
As it turned out, Sarah had plenty of time to work with Judith Roth and Uriel Abrabanel on designing the structure of the new national bank of Bohemia. Enough time for King Albrecht von Wallenstein to yield his right to create money to the bank, in the interest of a stable and prosperous nation. She had the time, because it took a while for Karl to arrange the visit to his aunt in Cieszyn.