Industrial Revolution of the Mage Lords

Chapter 650 The Emperor's Credibility

Three days later, huge bulletin boards were erected in various public squares throughout Starfire City, officially posting the royal decree on abolishing the old currency and replacing it with the new one. As usual, the Ministry of State sent government officials to explain the policy, attracting large crowds of onlookers.

On the same day, the Spark Weekly also published this newly issued law on its front page, detailing the law's rules in a prominent poster format.

The people of the capital, who were already used to the old gold dollar banknotes, didn't react much. Instead, they were quite excited about the new "half gold dollar" and "quarter gold dollar" coins. The high purchasing power of the old gold dollar made it difficult for them to match the face value of the banknotes with the value of the goods when buying cheap imported goods. The smallest denomination, one gold dollar, almost became the bottom line for low prices in the capital, which drew criticism from many frugal people.

A pound of freshly baked white bread selling for one gold dollar is certainly cheap and affordable, but half a bundle of long-stemmed beets transported from Sancha Town also selling for one gold dollar is somewhat unacceptable.

On the day the law was promulgated, many people lined up outside the National Bank early in the morning to exchange their old banknotes for a large number of small-denomination coins for daily use. For a time, the streets and alleys of the entire capital could be heard with great enthusiasm for these shiny little coins.

Count Hines, who was still lingering in the inn, naturally received the news and immediately ordered his attendant to go out and buy him a newspaper.

He had originally planned to visit his old friend Dickinson and then try to use his connections to get a ticket to the Royal Capital Trade Fair... But Dickinson was a stubborn and inflexible man who didn't mind using the official car for personal purposes, but refused to help the Earl with his connections.

Fortunately, although he refused to help with official business, he still took good care of his former colleague in private... When inviting the Earl to dine at a high-end restaurant, he also brought along Baron Ross, who was currently working with him in the General Staff.

Ross Ralph, like Hines, had a sensitive identity as a "remnant" of the Ralph family, but he was recruited into the military by the emperor for the first time ever. Hines was truly impressed by this magnanimous kingly spirit.

With these repeated banquets and the sheer number of novel and magnificent buildings in Starfire City, a powerful city in the north, enough to broaden the Earl's horizons and make him linger, the return journey was thus indefinitely postponed.

Unexpectedly, he actually lived to see the day the currency abolition order was officially issued.

He took the newspaper from his attendant, and looked up to see a huge headline: [Breaking News! New Currency Law Officially Promulgated!]

The next item reads: "The United Kingdom of Saint Valentine and the North will issue new gold-denominated banknotes, effective immediately, to replace the old gold, silver, and bronze coins, and simultaneously replace the old banknotes… The new currency is protected by the Kingdom's highest laws and is legal tender within the Kingdom!"

Sure enough! For ordinary people working in state-owned factories and farms, the only difference was that their wages were paid in new banknotes instead of the old ones, with almost no difference in face value or purchasing power.

However, for nobles who rely on their family influence to do business in the country, as well as large and small merchant guilds that frequently travel between multiple countries, this decree is somewhat intriguing... Once this condition is accepted, it means that the emperor can arbitrarily and forcibly purchase any private goods appearing within the kingdom's borders simply by using the "paper scraps" continuously printed in his own mint. In other words, it is no different from tyrannical conscription and robbery.

The National Bank will permanently provide currency exchange services. All residents can exchange their gold, silver, and copper coins for new currency at any time, according to the prescribed ratio… Foreign chambers of commerce or trade organizations can also exchange their earned new currency for old currency, but the bank will charge an additional 10% currency tax to maintain and protect the country's favorable business environment. *Hiss—*

This means that foreign merchants who want to take the money they earn in Saint Valen back with them must pay 10% of their earnings as taxes to the emperor. Otherwise, they can only leave the country with a stack of colorful paper money, which they cannot spend in other countries!

This has many benefits for merchants whose business is limited to their own country... They not only enjoy the privilege of being exempt from commercial taxes, but also have a slight advantage over foreign merchants in price competition!
Hines gradually realized that this monetary decree, personally issued by His Majesty the Emperor, seemed to contain many profound hidden meanings.

While it appears to be a forced issuance of new currency with the intention of plundering the industries and wealth operated by nobles and wealthy merchants, upon closer examination, it is actually an open trade protection movement using the powerful real authority wielded by the emperor himself.

After all, the emperor himself was not worried at all that such a brutal approach would cause foreign merchant guilds to never set foot in Saint Valen again... Just having the two trump cards of magic-powered machines and ironclad ships was enough to make those large merchant guilds with influence all over the southern territory flock to it.

Not to mention the large quantities of monopolized epidemic medicines and various high-end goods from Xinghuo City... all of which were transported to the southern kingdoms and became highly sought-after items by the local wealthy gentry and nobles.

Thinking of this, Dickinson's words about "changing direction and starting afresh" came to mind again... Perhaps giving up the meager profits from sea salt trading and instead securing an export monopoly for a specialty product from His Majesty would be the key opportunity for the Hines Trading Company to rise to prominence.

If you export goods from Xinghuo City abroad and earn gold and silver coins, you can then use those coins to buy other countries' specialty products and sell them back in China. This cycle of import and export eliminates the hassle of repeatedly exchanging paper money for gold and silver coins, and you won't lose the 10% currency tax. Given the popularity of Xinghuo City's specialty products, it's practically a sure-fire way to make a profit!

Of course, the Earl also kept in mind the key point that Dickinson had repeatedly emphasized to him—never to compete with the people for profit!

The ban on the sale of grain, price controls on various agricultural products, and the dumping of essential daily necessities by state-run chambers of commerce at low prices by profit-driven private businesses completely squeezed out the cheap market.

Moreover, once a trade trend is established, many foreign merchants will inevitably keep a certain amount of gold coins to save on currency taxes and use as payment for their next purchase. With the Emperor's power and credit, they will surely understand that these pieces of paper can indeed buy goods of equivalent value, and at the same time, they are waterproof, moisture-proof, and easy to carry. As this develops, these special currencies, which are only circulated within Saint Valen, will probably spread to the entire Southern Territory.

As long as the goods produced by Starfire City become irreplaceable, gold-denominated paper money will gradually erode the authority of traditional gold and silver coins. At that time, His Majesty the Emperor, who holds the right to mint coins, will undoubtedly become the richest and most supreme being among the southern kingdoms.

His wealth was also nearly limitless...

(End of this chapter)