Chapter 49: If We Don’t Live Together, We Must Die Together

In other words, it was actually the individual territories that were dragging down the efficiency of the trading process at this stage. Therefore, standardizing weights and measures was the easiest proposal to reach a consensus on.

However, unifying the currency was not nearly as simple. After all, given their astronomical trade volume with Fafnir, if they all used currency issued by the Fafnir Joint Bank—replacing metallic coins and promissory notes with a new type of paper money—wouldn’t their money simply turn into a pile of paper?

Where would the actual precious metals be? In the Fafnir territory. This was essentially the de facto confiscation of every territory’s wealth reserves. It would be strange if they agreed to it easily.

Don’t talk to me about holding shares or receiving dividends; if the money isn’t kept in my vaults, I’m not agreeing to it.

But funnily enough, that was exactly what Su Na was aiming for.

If this goal was successfully pushed forward and implemented, then unless they wanted the value and credit of the issued currency to collapse, all alliance members would be forced to voluntarily protect the interests of the entire alliance. Otherwise, they would truly lose everything they had invested.

Thus, the third proposal—a mutual defense and offense alliance where everyone advanced and retreated together—would naturally be achieved. Everyone would prosper together, and everyone would suffer together.

Furthermore, issuing paper currency offered a benefit that almost no lord could refuse: even paper money on a gold standard possessed the capacity for over-issuance. Through various financial operations, they could overdraw future funds to be used in the present.

For example, they could issue a miniature version of national bonds based on the estimated future revenues of the various territories, using the funds for various infrastructure investments. This way, they wouldn’t need to touch their own principal investments; they would only need to pay a certain amount of interest as a return.

If they encountered difficulties, the Joint Bank could also issue mortgage loans directly based on a territory’s credit. The profits embedded in this were enough to make many lords brave the potential risks and make decisions that went against the ways of their ancestors.

As for whether the kingdom would object? That didn’t matter. The currency they were about to introduce would be a secondary, local currency operating under the kingdom’s currency, using the kingdom’s metallic coins as its credit anchor.

Moreover, in the early stages, its scope of application would essentially not extend to ordinary commoners. It would serve as the circulating currency for large-scale internal transactions within the Customs Union. From the outside, its impact on the kingdom would actually appear quite small.

At least, whether you believed it or not, that was what they would tell the outside world.

Even taking a step back, if the kingdom refused to allow them to launch such a currency system, Su Na could easily just change the name. She could substitute the word “currency” with “vouchers” or “promissory notes.” As long as the internal territories recognized and subscribed to it, that was all that mattered.

The Regent currently in power could not completely restrict the nobles’ actions legally. This was also the soil upon which the Royalists survived; if he didn’t give them face, plenty of people could ensure he lost even more face.

To put it bluntly, the Fafnir territory’s approach was to use the kingdom’s metallic currency, combined with their own existing industrial output, as the credit backing for their currency. One could only use the Joint Bank’s currency to buy the equipment and products they wanted. Anyone wanting to do business with the Customs Union would inevitably have to hoard a portion of paper money for transactions.

As long as this currency could circulate, all other problems would cease to be problems.

“Furthermore, even setting aside other benefits, I trust that all of you are currently facing many thorny issues regarding capacity expansion. For instance, the skyrocketing prices of raw materials, the shortage of workers, and the inability of surrounding markets to absorb your produced goods…”

“If one day the market becomes saturated and our goods can’t sell, what do we do? Where will the workers’ wages come from? Where will we earn the money to purchase raw materials? If we aren’t making money, how will we recover our investment in the machinery? Do we just abandon it?”

These were words aimed straight at the heart. From the very beginning, Su Na had chosen to completely remove all restrictions on the production of steam engines. Essentially, whatever was produced was sold, and she continuously expanded production capacity. During a period where demand exceeded supply, she basically fulfilled the dreams of striking it rich for the vast majority of buyers.

It wasn’t just noble merchants; many small vendors also earned their first bucket of gold in life during this period of savage growth.

She didn’t do this to play the role of a wealth-distributing child. Did she not know what the consequences would be when market supply exceeded demand? She knew all too well.

When everyone’s productivity leaped forward to varying degrees, and they realized that even using a steam engine to grind flour could yield highly considerable profits, who would rationally purchase steam engines based on their own absorption capacity? They all demanded as many as they could get.

Making quick money is highly addictive, especially when one could simply purchase, process, flip the goods, and turn it into cash. If they didn’t have the raw materials themselves, they just bought them from someone else.

But because everyone thought this way, the massive market demand simply could not be met, simultaneously causing severe price premiums.

Rising procurement costs were one thing—whether they earned more or less, it was still a profit. But the goods they produced, when accumulated, had long since begun to flood the kingdom. In the future, who would be left to buy them?

In the past, everyone playing in their own sandbox was fine; they each had their own markets to dump goods into. Now that a few years had passed, whatever was going to saturate had already saturated. Even if it hadn’t fully saturated, those individual merchants were frantically devouring the remaining market share. Therefore, besides expanding outward, there was no second path.

Baron Kaibuli looked at the various noble lords, who all wore different expressions, and continued slowly: “Aside from the Royalist faction, we are the only ones left in the kingdom who still retain a considerable degree of territorial autonomy. And this is a right we bought in exchange for exceptionally high taxes.”

“Our greatest challenge now is how to open up more markets. If we cannot achieve this goal, then all our rights will gradually be dismantled alongside the reduction of our profits. This is a monumental choice concerning our survival.”

“We need larger ships to open up markets in farther regions and acquire cheaper raw materials. We need more efficient road transport, simpler border-crossing procedures, and a more united front. When necessary, we also need a more powerful army.”

“The Customs Union, currency unification, and advancing and retreating together are all for the purpose of fully combining everyone’s strength. We have the technology, and we have the money; all we need is thoroughly mobilized organizational power.”

The meeting was adjourned for a day of rest, allowing them to brainstorm with their subordinates. Baron Kaibuli returned home, stripped off his complex noble formal attire with the help of a maid, and hummed an unknown tune in high spirits.

Today had truly been satisfying for him, or rather, he had been living very comfortably in recent years. In the past, those noble scions of his age had looked down on his bloodline, frequently raising their voices at him to flaunt the superiority of the old nobility. Now, he didn’t care what your ancestors did; if you wanted goods, you had to put on a smiling face.

Getting tough with him was impossible. Fafnir didn’t just produce industrial goods; the resource territories they had preemptively secured and integrated had also begun providing raw materials. He was now the largest supplier of raw materials in the western kingdom.

The Church and Fafnir provided at least seventy percent of the raw material supply for these lords.

Controlling the narrative for both upstream and downstream supply made him the veritable “Daddy Client.”

Now, seeing that the Customs Union was a nailed-down certainty, he would be able to maintain his dominant position in the circle moving forward. How could he not be happy?

He was getting on in years and looking toward retirement; all he wanted was for things to go smoothly and according to his wishes.