Sword of Dawnbreaker

Chapter 727 - 726: Open the Door, Free Trade

"State your reasons, Patrick," Gawain looked at the Empire’s commercial and financial chief before him, his expression serious and earnest, "You should know that implementing Credit Currency is quite an aggressive measure, and the greater the pace of reform, the more the difficulty and risk will increase exponentially."

"Yes, Your Majesty," Patrick adjusted the collar of his black short coat, took a deep breath and slowly began to speak, "The main reason I propose such a suggestion is... Typhon."

"Typhon..." Gawain mused slightly, "Go on."

"Your Majesty, you’ve said before that there will inevitably be a war between us and Typhon, and in my opinion, this war has actually begun — you must also think so. We have just avoided a war with real swords and guns, but economically, our contest has just started, and at this stage, the essence of this contest... is about the gold settlement."

Gawain gazed into Patrick’s eyes. He did not hide the approval in his gaze and gestured for him to continue.

"Typhon’s Substitute Currency is based on gold; their banks issue banknotes that can be exchanged for gold on demand. However, when it comes to orders from Cecil, since we have not yet established a new currency interface, we still settle directly in gold. We purchase a large amount of textiles and other primary industrial products from Typhon, meanwhile exporting magical components and trains, and railroads. Although the latter’s orders are fewer, they are of great value, resulting in Typhon’s gold flowing to Cecil slowly and unnoticed.

"Your Majesty, you should know that Typhon’s aristocratic reform is far more ’moderate’ than ours. They retained a large number of old aristocrats, and these old nobles, apart from losing privileges, still have a substantial amount of personal private property.

"Simply put, Typhon still has a large number of aristocratic treasuries that are not under the control of the royal family. Many of the golds paid to us are actually gathered by countless nobles of all sizes in Typhon through private investment, fundraising, and financing, with less than half directly coming from the treasury of the Typhon Empire Bank. Therefore, for a long time, the Typhon people will not realize that their gold is flowing out — this involves very extensive and long-term statistical work, and a large number of nobles are trying every way to bypass Rosetta Augustus’s railway investment restrictions, hiding those fragmented but massive gold flows..."

Listening to Patrick’s words, Gawain couldn’t help but think of the situation Daniel reported to him:

To seize a share of the interests in the railway system, Typhon’s middle and lower nobility are finding every possible way to get involved. To bypass the series of obstacles set by Rosetta Augustus, their most common method is to borrow from the banks through family guarantees and joint guarantees, then "cooperate" with the banks (after all, half of the Typhon banking system is also controlled by the aristocratic group), transferring the debt to the Cecil Railway Investment Company. Subsequently, they use their family treasuries to repay Cecil’s debts in batches in the form of repaying debts, thereby obtaining shares and sharing railway operating profits through various encapsulated methods...

This complex and "brilliant" operation has circumvented their regulatory system.

Rosetta Augustus may be a strong emperor with iron-fisted policies; he successfully controls the upper powerful aristocrats of Typhon Empire through court struggles, deterring and suppressing the nation’s middle and lower nobles. Yet, in the obscure corners he can’t attend to, within those small aristocratic groups gradually transforming from old nobles to capitalists, the "creativity" and "entrepreneurial spirit" shown by people in the face of interests evidently exceed this Typhon Emperor’s imagination.

Typhon’s gold is secretly, fragmentedly flowing out.

"To maintain this trend, the most important point is to maintain the current state of gold settlement," Gawain followed Patrick’s thoughts and slowly continued, "and if we establish a Substitute Currency system, based on the laws of economic development, it is only a matter of time before the two countries establish a new currency interface, mutually guaranteeing and settling with the new currency. Once the currency used for settlement becomes a completely bank-controlled new currency, Rosetta Augustus would be able to effectively control the trend of gold outflow — he might even timely discover those traps in the process of domestic industrial and economic development, discover those things we carefully arranged, and with his intelligence, he might quickly eliminate these hidden dangers."

Issuing Credit Currency, creating new currency settlement obstacles between Typhon and Cecil, is a means to maintain the gold settlement between the two countries and delay Rosetta Augustus’s reaction time.

"Yes — we need to ’help’ those investors in Typhon keep this ’golden shortcut,’" Patrick nodded, "Of course, even if we choose a Substitute Currency, we can still insist on gold settlement — I support Credit Currency for another reason.

"The Typhon people will not only do business with us — they know that the products produced by factories need to be sold to generate value, and Cecil, as a country also developing magical industry, will certainly not sit silently accepting their output. Therefore, they will definitely look for new markets..."

Just as Patrick said this, Amber, who seemed to be spacing out, suddenly spoke, "Typhon might be in contact with the Highmountain Kingdom, perhaps negotiating a dispute targeting the Blue Rock region. If this is indeed the case, then the negotiation should be nearing completion."

"...They are preparing to trade with the Highmountain Kingdom and may even be eyeing the Silver Empire’s market," Gawain instantly thought of the answer, but then, somewhat puzzled, looked at Amber, "This is intelligence from the southern continent; the Intelligence Agency shouldn’t have infiltrated that area yet?"

"I saw Sonia this morning; she casually mentioned that the Silver Empire is recently re-measuring the disputed logging area in the Blue Rock, and three days ago, a technical exchange document between the Silver Empire and the Magical Technology Department also mentioned a sentence — that Typhon’s Magic Web Unit can also be used in a standard operating environment. Besides the triangular area of the Blue Rock disputed zone, Typhon does not have direct contact or communication with the Silver Empire; their ability to access Typhon’s Magic Web Unit most likely is through indirect circulation from the Highmountain Kingdom, which might be a ’trade sample’ that Typhon provided to the Highmountain Kingdom. These three nations have had constant grudges and friction over the years, mostly revolving around the Blue Rock disputed area, and I just connected these matters just now..."

Amber spoke as if it was all just something she casually deduced in her idle time.

However, Gawain’s eyes had already widened.

After a moment, he withdrew his gaze, smiled, and nodded slightly, "Very good, you’ve done well."

Amber folded her arms, her pointed ears twitching, "That’s right, I am, after all, a chosen one..."

"Your Majesty, the situation seems to be as I expected," Patrick said with his head lowered, "Typhon is establishing a market in the southern continent. The Highmountain Kingdom should have already opened its doors to them, and the Silver Empire will certainly establish trade relations with Typhon to a certain extent — although we have good relations and technical cooperation with the Silver Empire, this does not prevent the elves from purchasing Typhon’s products. On this basis, the smaller city-states dependent on the Silver Empire and the Highmountain Kingdom certainly won’t be an exception; they will all become Typhon’s market.

"Typhon will establish broad commercial activities in parts of the western and southern continents, and in these areas, trade participants will use Typhon’s currency for settlement — except for the Silver Empire, which has the strength to compete against Typhon, facing other countries, Typhon should maintain a dominant position in economic activities.

"I call it the ’Typhon Settlement Area.’

"And what we are doing is similar to Typhon; we are expanding our trade scale with the tribal country of Augari. You have already planned to extend the railway to Augari. Meanwhile, in the north, High Chancellor Victoria is establishing exchanges with the Violet Kingdom and attempting to contact the Sacred Dragon Kingdom.

"The numerous city-states in the northern wilderness region have already started purchasing our alchemical potions. Although the individual city-states are not large, the entire city-state union still represents a huge market.

"Undoubtedly, the Cecil Empire will become the ’economic leader’ of these regions, and these regions will settle with our currency.

"Referring to the ’Typhon Settlement Area,’ most parts of the northern and western continent will become the ’Cecil Settlement Area.’"

Patrick spoke all this in one breath, his face had flushed with a rosy glow at some unknown moment, and his somewhat plump body trembled slightly with breathlessness. In the eyes of this business and economic official, some kind of inexplicable light flickered.

Gawain stared intently into Patrick’s eyes, his body unconsciously leaning slightly forward.

"So... this is no longer just a problem between Cecil and Typhon," he said in a pensive tone.

"Yes, Your Majesty, it’s not just a problem between Cecil and Typhon anymore. Typhon is establishing their settlement area, and we will surely establish our own as well. This is a contest between two settlement areas, two monetary systems. From a long-term perspective, in large-scale, fast-moving commercial activities that span the continent and will experience rapid growth, credit currency... has a higher ’capacity’ than substitute currency and can better withstand disasters."

At this point, Patrick stopped, and Gawain spoke softly in a deep tone: "When the day of a run arrives, substitute currency will collapse faster."

Amber looked at Gawain, then at Patrick.

To be honest, although she had outstanding talent in intelligence, she was completely lost in the field that Gawain and Patrick were discussing.

However, she suddenly felt a chill.

"As long as the Cecil Empire doesn’t collapse, as long as there’s no international credit collapse, as long as our industrial and economic systems continue to develop steadily, the great walls remain standing, and we don’t engage in any reckless acts of unlimited issuance, then credit currency is nearly equivalent to having near-unlimited solvency," Gawain continued, "And the gold reserves of Typhon and its commercial partners will eventually encounter bottlenecks. The larger the market they build and the faster they develop, the sooner this bottleneck will come. The gears of the factory are wheels so heavy they cannot stop—these wheels will force them to over-issue currency. All we have to do is exhaust every possible way to bring Typhon Settlement Area’s gold over to our side before Emperor Rosetta Augustus reacts, before the Typhon Empire plugs their breaches..."

"May their noble investors continue their diligent work," Patrick laughed.

Gawain also smiled: "May the current ’peaceful situation’ maintain for a few more years."

He stood up and walked over to the spot beside the bookshelf where a map was hanging.

Here, the entire map of Anzu used to hang, but now the old map has been taken down and replaced by a map depicting the entire continent.

The Gondor wasteland occupies a prominent place on the map. Around the wasteland, countries like Cecil, Typhon, the tribal country of Augari, Highmountain Kingdom, Silver Empire... interlock like teeth, occupying pieces of ancient ancestral lands.

For hundreds of years, these countries have each been developing in a peaceful and quiet manner, with some exchanges but more often an invisible barrier seemed to separate all nations.

For hundreds of years, the protagonists of the stories have been knights, princesses, castles, and fields.

Quiet, harmonious, pastoral.

But the era has changed.

Open doors, free trade.

His gaze slowly swept across the map of the entire continent, which he personally drew referencing satellite imagery. Between those precise lines, his gaze gradually moved beyond the Gondor wasteland, settling among the jungles and cities of the Silver Empire.

"If only we could realize transportation from the south to the north of the continent..."

"Your Majesty?" Patrick asked curiously, not having heard clearly.

"No, it’s nothing," Gawain shook his head. What he was considering was not something that Patrick, this business and economic official, could solve. "Let’s talk about currency issuance. No matter how necessary credit currency is, issuing it... is not so easy."

"Yes, Your Majesty."