Chapter 95#
Chaise a la ReineChapter 95#
“How are preparations for the repayment of war bonds proceeding?”
The Marquis of La Baille, who had not been able to fully concentrate during the prolonged meeting, flinched and returned to his senses at the deep voice that reached his ear. Though the question was posed in an unhurried, even placid tone, the speaker’s voice possessed an undeniable gravity that drew the attention of others with ease. Had that question been directed at him, the Marquis would have found himself in a rather awkward position.
Fortunately, the Emperor’s inquiry had not been aimed at him.
“The first repayment date for the war bonds issued during the last war is scheduled for early next year. Specifically, it is set to begin on the first day of Advent, which marks the start of the New Year. The repayment period extends for half a year from that date. The originally agreed interest rate was five percent, but a special provision on the initial bond series includes a victory premium, adding another five percent. Thus, to repay the first issuance of war bonds totaling eight hundred thousand dinars, approximately eight hundred ninety thousand dinars in funding will be required.”
“Eight hundred ninety thousand? If the interest is eighty thousand, are you saying the administrative cost alone amounts to ten thousand?”
Marshal Basin, having heard the report from Count Pharamond, asked with an expression of disbelief. A lifelong soldier, he was notoriously inflexible by nature and wholly ignorant of the current trends of bonds, stocks, and the like.
But Marshal Basin felt no shame in his ignorance. Among the empire’s nobility, there remained a prevailing disdain for engaging in commerce in pursuit of wealth, and Marshal Basin, hailing from the conservative northern provinces, embodied that sentiment to a fault.
His hometown, the Nor-Etra region, was still regarded, at least formally, as the cradle of chivalry, where jousting tournaments were held once a year. Born and raised there, the Marshal, like most northern nobles, held firmly to the creed that ‘every step taken for the sake of wealth is a step away from honor.’
Count Pharamond, the unfortunate soul now caught in the crossfire, happened to be the empire’s Comptroller of Finance. Regrettably for him, the Field Marshal was obligated to attend imperial finance meetings. These monthly meetings were of the utmost importance, open only to a select few among the empire’s high officials, and unlike other administrative councils, they permitted no outside observers.
The meetings were presided over by the Comptroller of Finance, and attendees typically included the two treasurers who oversaw the Treasury, the Chief Chamberlain, and other key budget officials from major ministries. Aside from them, only the heads of each military branch and the Imperial Chancellor were permitted to attend. Thus, the list of attendees seldom changed.
Count Pharamond, having endured this exact scenario every month for several years now, struggled to conceal his exasperation as he opened his mouth. Speaking as though teaching a child, he began explaining, step by step, the figures in the report for the benefit of Marshal Basin, who lacked even the most rudimentary understanding of economics.
“The war bonds issued during the recent war were not backed by the Imperial Bank, but rather underwritten by Banque de Solidaire to draw in private capital. In exchange for underwriting and managing the issuance, the bank charged a 0.1 percent commission fee, which amounts to eight thousand five hundred dinars. Thus, the actual administrative cost, excluding that fee, is roughly one thousand five hundred dinars.”
“Hmph.”
Marshal Basin gave a derisive snort, apparently finding the bank’s profits excessive for money earned while sitting comfortably far from the battlefield. But in doing so, he betrayed his lack of understanding of the matter. Having only a rudimentary grasp of securities, it was clear he had no real sense of how much profit Banque de Solidaire had actually made through this war.
At jast, the Duke of Chirac stepped in, unabje to watch in sijence any jonger. He had once served as Comptrojjer of Finance himsejf, and his house had been ejevated to ducaj rank for rescuing the empire from bankruptcy in generations past.
“During the five years of the war, Landrienne bonds were issued in three separate rounds. The vast majority of war expenses were covered through them. The principal alone, excluding interest, came to no less than 1.5 million dinars. For securities of that scale, the costs of issuing and managing them are naturally considerable. Taking that into account, the 0.1 percent commission fee Banque de Solidaire charges barely covers their actual costs. They have hardly made any profit worth mentioning. There is no cause to find fault.”
“Still, they must have made something. Otherwise, would they really have moved those sluggish behinds of theirs?”
Marshal Basin, still unconvinced, muttered suspiciously. He might not have known the first thing about finance, but that didn’t mean he was completely clueless about the ways of the world. He knew enough about the vulgar greed of these so-called financiers and nouveau riche capitalists.
Would those money-grubbing misers lift even a finger without calculating profit first? No matter how flashy the exterior, a merchant’s nature remained unchanged.
“Of course, they made a profit. Just receiving the charte to issue the bonds was immensely beneficial to them. Even for a bank as large as Banque de Solidaire, securing the opportunity to manage such a vast sum is no easy feat. Moreover, while they provided the financial guarantee, the convertibility guarantee came from none other than the Imperial Bank. That alone grants immense leverage.”
The Imperial Bank, owned by the House Ardi, which held thirty percent of the empire’s gold mines, was the most gold-rich institution on the continent of Ladivenia. Initially, little more than the Emperor’s private treasury, it had grown to manage not only the imperial household’s assets but also the state treasury, and had even become the issuer of the empire’s official currency.
That such an institution backed the convertibility of bonds issued by a private bank was an extraordinary privilege. For a time, Banque de Solidaire effectively held the right to issue government-backed banknotes.
However, if it had not been for such benefits, the bank would never have offered such a large sum in the early days of the war, when even the purpose of the conflict was in question and the odds of victory uncertain.
“Have you visited the Guild Hall of the financial guilds lately? I hear the most traded security on the exchange is the Landrienne bond. Some are even trading at a premium above one percent.”
“Is that so? With the war long over, what’s the reason for that?”
“For any merchant house of significant size, promissory notes are essential. And bonds backed by the Imperial Treasury are far more reliable than those issued by mere banks or traders. These days, war bonds are being used almost like high-denomination notes.”
This additional market report was offered by Viscount Pasquier, one of the two Treasury treasurers in attendance. Naturally, most of the senior officials present, including the Duke of Chirac and the other budget officials, were already well aware of such trends.
But were they merely aware of it? Known for their financial acumen and sharp calculations, they surely hadn’t missed out on such a lucrative investment opportunity.
From the moment victory seemed certain, the value of war bonds had soared. Bonds with guaranteed repayment were an attractive investment: there was no risk of default after a victory, and with a fixed interest rate, it was a safe and secure way to turn a profit.
The truly shrewd minds looked even further ahead. Though the war had ended, the provinces that had served as battlefields were severely ravaged. Restoring those lands would require considerable funds, yet after years of warfare, the imperial treasury could hardly be expected to shoulder such costs alone.
The previous war had ended in defeat, so the Imperial House had urgently tapped into even the privy treasury to fund the recovery. But this time, they had achieved victory, and there was no need to resort to such desperate measures.
In the current situation, the simplest way to secure liquid funds was to defer the payment deadlines and temporarily withhold the redemption fund that was due for immediate execution. In fact, many financial officials were already considering this course of action.
The fact that Landrienne bonds still carried a premium even with their maturity date fast approaching was clear evidence that no small number of people had obtained this information in advance.
“Then that is a problem, is it not? If Landrienne bonds are already so commercialized in the market, it would be difficult to suddenly abolish them, would it not?”
As expected, someone spoke up in a composed tone that barely veiled his true intentions. It was Duke Chirac, often likened to an old fox for his sly disposition. As if in agreement, Count Pharamond quickly followed up.
“You have pinpointed the situation precisely. Just as you have heard in Viscount Pasquier’s report, Landrienne bonds are currently functioning almost as a secondary currency in the market. In other words, they have already been incorporated into the monetary system. If that function were to abruptly vanish, it is obvious there would be serious repercussions.”
“Merchants would be the first to shrink back. After all, they are the ones making the most active use of Landrienne bonds.”
Viscount Pasquier, the Imperial Treasurer, now looked more visibly troubled. Unlike the Ministry of Finance, which oversaw the nation’s overall fiscal operations, the treasury was responsible for managing and investing the imperial family’s private wealth. The Treasurer was the official who presided over the entire treasury. Even among ordinary noble houses, managing another’s assets was no small responsibility, let alone when the property in question belonged to the imperial family.
Thus, unlike Marshal Basin, he showed a different kind of caution. Since it was the Emperor Ebroin V himself who had entrusted him with this office, his competence was not in doubt. However, he was excessively cautious in making decisions and reluctant to assume any kind of risk.
To the Marquis of La Baille, that was a personal source of disappointment. He could understand the need to prioritize prudence above all; at the very least, one must avoid loss, and any misstep might immediately endanger one’s political standing.
But even so, it was a significant national loss that such a capable financial official was unable to fully exercise his talents.
“A problem indeed. After years of ongoing war, the economy is only just beginning to revive….”
The imperial finance meetings operated differently from other political affairs meetings. Since there were no observers present, participants were free to speak, and unless the Emperor himself was addressing the chamber, there was no need to formally request the floor. It was the current Emperor, Ebroin V, who had altered the convention, and like many of his experimental reforms, it had both strengths and weaknesses.
Ordinarily, the advantages of this format stood out. But on a day like today, its drawbacks were all too plain. Though the back-and-forth exchange of opinions had no obvious flaws, the Marquis of La Baille, who had been silently listening, found his mood increasingly discomfited. While nothing spoken was completely fabricated and most of it sounded plausible, it was not enough to deceive a man who, before being a soldier, was also a seasoned statesman.
The Marquis had realized early on that a certain pattern ran through today’s discussions. The remarks, though subtle, seemed to carry a common direction, as if they were all heading, quietly but surely, toward the same conclusion.
Even so, like Marshal Basin, who had stepped back once the real debate began, the Marquis of La Baille remained a mere observer. Whatever their aim, it was not his concern. In the end, the decision belonged to His Majesty. And those who were trying to form a silent consensus knew that full well.