The Folding Knife (54 page)

"The Caecilii bought into the cartel by trading loans to small farmers?"

"And some manufacturers, here in the City. War work, mostly, so quite reliable. And the same with the farmers. Given war demand, the price of grain is high, as you know."

Later, Melsuntha asked Basso what the matter was. She had to ask several times.

"That idiot Caecilius," Basso told her. "He owes us a lot of money, which he's due to pay back. In order to pay us, he's relying on a bunch of loans he's palmed off on the Victory in Scleria."

"Oh," she said.

"Quite," Basso replied. "The loans are farm and small business, which means they're dependent on us--the Treasury--paying the farmers and tent-peg-makers and sword-fittings-wholesalers on time. Which isn't going to happen."

She nodded slowly. "I thought you said..."

"I did. And I was right." Basso scowled, and massaged the bridge of his nose with thumb and forefinger. "The Bank lends to the Treasury, the Treasury buys war supplies, the farmers and tradesmen pay off their loans, the money goes round in a loop, and nobody ever gets to find out it isn't actually there. It's just that the timing's off by a little bit."

"If Caecilius is a little bit late in paying, does it actually matter?"

Basso sighed. "It shouldn't," he said. "So long as he actually does pay--which he will, because the Treasury will pay the farmers and tradesmen, eventually. What makes it a bit awkward is that Tragazes needs money now, to make good our deposits. Otherwise, he's got to report to the commission that our reserves no longer cover our exposure, and once that gets around, the markets will panic and the stock will start to slide. All quite ridiculous, of course, but that's how it works. You can make a fortune out of it if you're on the right side, but it's no fun if you're on the wrong end, like we are at the moment."

"What can you do?"

"Nothing I want to," Basso replied. "What I can't do is put pressure on the Treasury for any of the money we've lent them, because I'm the bloody government. So, if we need to raise money in a hurry, we'd have to go after our private customers--basically, everybody else. And if we start squeezing, that'll cause an even worse panic, and we'll wipe millions of nomismata off the value of perfectly good assets."

"All right," Melsuntha said. "Lie to the commission."

Basso laughed. "That's what we're doing right now," he said. "And if Antigonus was still around, we'd be fine. But Tragazes doesn't seem to get it. I practically had to sit on his head to get him to tell a little white lie. Proper grown-up lying--"

"Get rid of him. Appoint someone else."

Basso smiled at her. "Do you fancy being chief clerk?"

She looked thoughtful. "Probably not," she said. "I could handle the broad sweep of policy, but not the details. I don't have the experience."

"That's the trouble," Basso said. "Right now, the only two men in the City who know how the Bank actually works are Tragazes and me; and I just don't have the time. I'm stuck with him."

She thought some more. "What about the twins? Haven't they been learning the business?"

Not something that had occurred to him, and he paused for a moment to give it serious consideration. "They're not up to it," he said, "even with Tragazes advising them. They're just kids."

"You were their age when you took over."

"They're not me." The force behind the statement took him by surprise. "I really miss Antigonus," he said. "In my life, there've been two men I've been able to rely on, him and Aelius; I mean really rely, so I can turn my back on something and know it'll be done right, as well as I could do it or better. My fault," he added with a grin. "When I dreamed up this scheme, I was sort of assuming Antigonus would still be around. Probably I should have pulled the plug when he died. Just bad luck, really."

"I thought you didn't believe in good and bad luck."

That night he sat up late, even later than usual. He'd sent for the figures on the Caecilius loan. They sat on the table in front of him like a dinner going cold; the longer he left them, the more unpalatable they'd be.

Most of all, he thought, right now I'd like to talk to my sister again, just for a few minutes; about the weather, or something that happened when we were children, Mannerist architecture or the Dulichean heresy or trends in contemporary choral music, anything at all. It did seem faintly ridiculous that the First Citizen of the Vesani Republic, richest man in the City, controller of great armies and decider of the fate of thousands, wasn't allowed to talk to his own sister about the weather. But no; she might as well be dead, except that it was worse than that.

(Come on, Basso, you're a clever man, a remarkably fine orator, a politician. You could find the words, make the promises, arrive at a rapprochement, some kind of deal. He took a sheet of paper and reached for a pen.)

A substantial part of his life, a major component in the mechanism that drove him, was inaccessible, as though a wall had been built right across the City, just to stop him going home. He thought about that. Finally, it occurred to him to wonder who would build such a wall. The answer came as no surprise.

Because I love my sister more than anybody else, he realised, I had to build the wall. A man who faces opposition must either fight or accept. I refuse to fight my own sister, to defeat her by any means necessary. Because I love her, I can't refuse her anything, and what she wants is to hate me. Fight or accept. Accept.

(And it occurred to him that in his life he'd done many things that other people considered admirable, brilliant, wonderful; all of which he placed little value on, just as a conjuror knows he hasn't really performed magic, no matter what the audience may think. There was just one admirable thing he'd done--one
honest
thing--and the only other person who'd ever know about it hated him enough to want to see him dead. And therein, it pleased him to think, lies the true magnificence of Basso the Magnificent; his one honest thing, his only failure, the one thing he wanted and told himself he couldn't have. Basso the Wall-Builder.)

Instead of writing the letter, he dealt with the Caecilius loan. Eventually he managed to tack something together that'd mess up the audit commission just long enough to buy him the time he needed, all things being equal, which they seldom were.

Meeting of the House Treasury sub-committee:

"In the light of General Aelius' recommendations," Basso heard himself say (but he felt far away, as though he was watching himself from the gallery), "I believe we need a fresh look at the currency situation."

Percennius Macer (old-style Optimate, furious with him for agreeing to the war, back in favour after a long time in the cold) raised a hand to interrupt. "Your inspired currency reforms have worked exceptionally well," he said. "Surely the last thing we want to do is mess about with them."

"I'm not proposing any change to the nomisma," Basso said. "What I have in mind is a short-term measure designed to help with procurement of military supplies and war materiel."

Percennius raised an eyebrow (he practises, Basso reckoned, in front of a mirror). "Is there a problem? We haven't heard anything about it before."

"Not yet," Basso said. "And I'd like to keep it that way. But yes, I do see a problem coming." He turned his head and made eye contact with Lollius Vipsanius, Caecilius' uncle. "At the moment, whenever we buy something or order something, payment is--nominally at least--in gold coin. Now, because we've got better things to do than drive cartloads of heavy, stealable money across two continents, when we buy something in Scleria, say, we don't send them actual cash. We write a letter to someone in Scleria who holds money for us, or who owes us money, or who's contracted to pay us money for something they've had from us, and we ask the Sclerian to pay what we owe on our behalf. That, in a nutshell, is the letter-of-credit system, and in peacetime, for everyday commercial transactions between businessmen, it works just fine. Right now, though, in places like Scleria and Auxentia we're paying out a lot more than we're getting paid, so it's getting hard to arrange letters of credit. Result: important war-supplies deals are getting jammed up, suppliers whose good will we need aren't getting paid on time; it's bad for the army, and it's bad for our good name as a commercial nation. Fairly soon, we'll find that if we want to raise letters of credit, we'll have to do it through foreign banks, who'll charge us for the privilege, or else treat the transactions as loans and screw us for interest. Hands up anybody who wants to see that happen."

He used the rhetorical pause to examine key faces. They didn't appear to know what was likely to come next. He sucked in some air and went on: "How'd it be if, instead of letters of credit, we used something else, some other kind of currency; not physical gold, or a promise of gold, or a complex system of balancing debts in gold, but something quite other; as good as gold, but not quite so heavy or so bulky? Good idea?"

Clodius Faber: on his side when it suited him. "What do you have in mind?"

Basso grinned. "Paper," he said. "Actually, it's not a new idea. We considered it just after the Treasury robbery, when we didn't have any gold. I believe the technical term is assignats. Paper notes," he went on, as the faces frowned or looked blank, "bearing a promise to pay, in gold money, on demand; backed by solid assets, such as government land. A man on a fast horse can carry a sackful of them and still be in Tavia or Gonessus in sixty hours. Also," he pressed on, before anyone had a chance to speak, "there's the small matter of money supply. The fact is, we have more wealth than gold. There isn't enough shiny yellow metal in the City, quite possibly in the West, to represent the value of our assets. Right now, we need to draw on the value of our assets to pay for stuff we're actually using, like wheat and wool and timber; but we're hampered by the fact that we don't have enough metal tokens. To get more tokens, we have to buy and import gold, melt it down, hammer it into thin sheets, stamp out a load of small flat discs and bash them between two dies. It takes time, it costs money. We can't afford to waste either. So, instead, we write paper notes. Assignats. People who get paid with them know they're good; it says on them, the Vesani Republic promises to pay, and in the wildly unlikely event that it doesn't, this piece of paper you're holding is as good as a mortgage on the most valuable real estate in the civilised world. What's in it for us? We can spend money that we've got, that we can afford to spend, but which is currently locked up and useless because we haven't got quite enough shiny yellow discs. Think about it. Liquidity problems solved at a stroke. No need to mess with letters of credit, no more relying on foreign intermediaries, so we pay our bills on the nail. If you're worried about hundreds of foreigners turning up on the Treasury steps waving bits of paper and clamouring for gold coin, don't be. Our assignats will be as good as money; in no time flat, they'll be money, a whole new circulating medium--better than gold coin, for the reasons stated, almost certainly changing hands at a premium; a handy windfall for us, just like what happened when we purified the nomisma. Honestly, gentlemen, if there's a drawback I can't see it. Well? Anybody?"

It was just as well he'd thought it through beforehand. But he had, and none of the objections fired at him found him unprepared. Forgery: there was a new kind of paper, the Bank's trading arm had bought the formula and technique for making it direct from the inventor, so the Republic would have a total world monopoly, and forgery would be impossible. What about the debts the Treasury had already incurred; in particular, the huge debts it owed to the Charity & Social Justice? Would the Bank allow the Treasury to buy back those loans, using the new paper? Of course it would, Basso replied, no problem at all. He'd even waive the early-repayment penalties written in to the loan agreements--

"Which means," Basso said (he was exhausted, more tired than he could ever remember being), "that once the Treasury's repaid a couple of the smaller loans, we'll have plenty of cash in hand to cover our deposit requirements, and the problem just melts away."

"I see," Melsuntha said, massaging between his shoulder blades. As always, he found the strength in her fingers disconcerting. "Or at least, I think I see. Won't you lose money?"

Basso shook his head. "We'll only repay a few of the loans," he said, "I'll see to that. It's more a gesture of good faith than anything. And we raise enough to secure our deposit, which means Tragazes won't have to lie to the banking commission."

"How on earth did you manage to get it through?"

Basso laughed. "I needed two enemy votes," he replied. "Lollius Vipsanius was easy; I sent him a note telling him that if he voted in favour, I'd let his nephew off the hook over the payment he's due to make us--you know, the one that caused all this mess in the first place."

"That's one. Who was the other?"

"Laelius Priscus," Basso replied. "Two years ago, he poisoned his wife's lover. Small piece of insurance I've been keeping for a rainy day. I pinned a copy of the poisoner's confession to his copy of the order sheet. He went ever such a funny colour when he saw it."

From Bassano;

...
Victory. Sort of.

I'm writing this in the back of a cart, under a tree, somewhere in the foothills of the Big Pointy Mountains (marked brown on your map; they fill the middle of Mavortis). We've just been round picking up bales of captured enemy shields. Of course, we don't use them as shields. They're just sheets of limewood, the fancy ones with a copper rim. We smash them up and use them for kindling. I say we. The soldiers smash them up. I watch.