Industrial Revolution of the Mage Lords

Chapter 648 Currency Reform
"Your Majesty, please look... these are newly printed coins, and the alchemical beasts haven't been assigned to cut them yet!"

As soon as Harvey and his officials entered the heavily guarded mint, the supervisor, who had been waiting at the gate, eagerly presented them with his achievements.

Back when the kingdom was still a frontier territory, Harvey began to independently issue paper money called "Gold Dollars" in his territory by controlling the circulation of currency. He then distributed these paper currencies to the people, soldiers, and officers under his rule as wages. Due to the limitations of the territory's own output and resource deficiencies, this paper currency could only circulate in the North. Once it crossed the Divine Ridge Mountains, it was as worthless as a piece of waste paper.

Whether it's trading and purchasing with the major merchant guilds in the Southern Territory, or "online shopping" with other superhuman organizations through the Magic Network Forum, Harvey can only pay with gold, silver, and copper coins whenever money is involved.

This means that this paper money always needs physical gold or silver as its value anchor, and it cannot be used as a standalone credit currency in the Southern Territory in the short term.

But now the situation is completely different... Since Harvey officially ascended the throne, Saint Valen, a populous country located in the central part of the South, has been completely under his control. With a town population of nearly 500,000 and a rural county population that has doubled in number, under the unified accounting and management of the city halls that have been spread throughout the country, it has fully met the conditions for issuing legal tender.

Besides the kingdom's abundant resources ensuring internal supply, its export trade, spearheaded by the capital Starfire City, was also booming. Various magically powered machines from the North and specialty products popular with the Southern Kingdoms... After signing monopoly sales agreements with major merchant guilds, Harvey could practically start counting money the moment he opened his eyes every day.

Frequent resource-plundering wars waged against nobles within and around the kingdom have led to a steady increase in the kingdom's profits. Leiner even ordered the construction of an underground vault between the palace and the mint to store the gold and silver they had plundered from others.

Although a squadron of bloodline warriors were assigned to guard the treasury in shifts, and even some vigilant alchemical beasts took turns on duty day and night, the emperor himself never went there... He was clearly more interested in the newly arriving population than in the heavy gold coins.

Only a few high-ranking officials in the kingdom, such as Leiner and Asdaren, knew that in the emperor's eyes, money was just a string of numbers that people often heard about. As long as it was beneficial to the development of the kingdom, any official could walk into his office with his head held high, obtain his personal approval, and legally and compliantly withdraw funds from the treasury for external procurement.

It doesn't matter whether the gold reserves in the treasury increase or decrease on ordinary days, as long as the financial statements submitted by Leiner show that the government revenue of Starfire City and even the entire kingdom exceeds its expenditures... Everyone knows that the emperor only gets a little anxious when he sees a red deficit on the statements.

"Hmm... the printing process of the new banknotes has been improved again, very good." Harvey took the banknote plate presented by the mint supervisor and squinted at it for a moment.

Leiner, who was standing by his side, quickly added: "The denominations of the new coins will remain the same as before, with one hundred as the largest denomination, followed by fifty, twenty, ten, five, one... Considering the possibility of encountering low-value goods when they are officially issued throughout the kingdom later, we have also added coins such as half-gold coins."

The banknotes printed in Starfire City are virtually impossible to counterfeit in the Southern Kingdoms. The fact that they contain the same strange magical plant used to make resident identity cards makes it easy for national banks in major cities across the country to distinguish between genuine and counterfeit currency.

A thin layer of rubber coating, coupled with precise, standardized assembly line printing by mechanical alchemists… ensured that every banknote of the same denomination was virtually identical. Furthermore, the material was flexible, moisture-proof, and mold-resistant, making it impossible for even the most skilled craftsmen employed by nobles to easily counterfeit. In contrast, this new metal currency, the half-gold coin, was much easier to replicate—so the alchemy laboratory developed a separate casting formula, melting discarded silver and copper coins into an alloy to create this "cheap currency" with a massive issuance but complex casting process.

“The city halls and official institutions throughout the kingdom have been using the old gold coins to pay salaries since the beginning. So much time has passed... the public’s resistance to this kind of paper money should have diminished considerably, right?”

Asdaren quickly responded, "Last autumn, the intelligence department, in conjunction with the Ministry of State Affairs, secretly spread the news that His Majesty was about to implement the decree to abolish currency. At first, it did indeed cause a great deal of controversy... Most of the nobles who had surrendered their land to you and lost their right to be granted fiefdoms were in possession of a large amount of gold and silver old coins, so it was naturally difficult for them to accept this decree."

Merchants skilled in buying low and selling high for speculation also complained about this... After all, outside of Saint Valencia, no other country would accept these colorful banknotes, which would greatly restrict their business and trade.

On the contrary, the hardworking ordinary people did not care much. Apart from the capital, most of the factories and farms built by the government in other cities of Saint Valen paid wages in a form that was half paper money and half currency. People could freely go to the national bank and exchange their currency at the legal ratio. When they found that the agricultural products and goods sold by state-run stores were significantly better than those sold by private merchants in terms of both price and quality, people gradually began to exchange all their currency for paper money.

Harvey chuckled and shrugged. "It won't be long before they go to the major cities of the kingdom with those moldy, damp gold and silver coins they've been holding, only to find they can't even buy a sack of wheat... then they'll know to obediently go to the bank and exchange them all."

As long as the amount of currency issued by the government is strictly controlled and the price of grain is always used as a benchmark to maintain the stability of the gold dollar's value, inflation can be prevented to a great extent. Gradually, the people in the country will accept this paper money that is not easily worn out and is easy to carry.

Pierce, who had come with Harvey to inspect the mint, was puzzled. He picked up the half-pound yuan note from the banknotes being printed, frowned, and said with some dissatisfaction, "It doesn't make sense. Why is His Majesty's portrait engraved on the lowest denomination banknote, while the twenty and ten yuan banknotes are printed with silhouettes of farmers, soldiers, and workers?"

His Majesty the Emperor's image is actually lower than that of his subjects... This is simply a reversal of the natural order!
“The design of the new currency is entirely in accordance with my instructions…” Harvey had anticipated that this “troublemaker” would raise questions, and explained with a smile, “The highest denomination banknote is printed with the castle emblem representing the kingdom, and below it should be the people who have worked hard for the country’s development and construction, without a doubt.”

There was another point he didn't intend to explain to a rough man like Pierce... Printing the emperor's portrait on the smallest denomination coins, which had the largest circulation volume, would maximize the public's trust in the legitimacy of the new currency. This would not only demonstrate the ruler's political authority but also subtly establish a deep connection between imperial power and the national currency.

The emperor's personal reputation serves as the anchor of the value of the currency issued by the country.

(End of this chapter)