“Didn’t the banks issue money way back when?” Vicky asked. “Back in colonial days?”
“I knew someone would bring that up,” Sarah muttered, feeling cross. “Yes, and that’s more like what the local shopkeepers Trudi was talking about were doing. Acting as local banks with their own money, just without the cash. Just the accounts on their books. People will always find a way around the lack of money. The trouble is they generally don’t work that well. And usually the problem is that the pseudo money ties people down in some way. Bank money worked fine locally, as long as the bank was solid, but the money lost value as you got farther from the bank.”
“Heck, Sarah,” Judy said, “American dollars lost value once you got out of the area right around the Ring of Fire. At first, anyway. USE dollars lose value outside the USE and in some places inside it.” Judy grinned. “I learned as little as humanly possible from you, Mom and Dad arguing about economics around the dinner table, but no one could avoid learning something.”
“What are you suggesting, Trudi?” Karl asked.
“I think we should use AEC to issue preferred stock, maybe participating preferred stock, then trade that stock for the licenses we need to do a project. Maybe build a big building here in Vienna. Maybe several projects, sort of like your LIC. When it makes a profit, the profit gets shared out among all the people holding the preferred stock, then the people with common stock,” Trudi said, bouncing in her seat.
“Wait a minute!” Susan looked shocked. “A lot of our money is tied up in AEC. I don’t want it diluted to pay a bunch of people bribes just to be able to use stuff we brought back with us in the Ring of Fire.”
“We’re going to have to pay licensing fees,” Trudi said. “I just think it’s better to pay them in stock than in reichsthaler.”
“And that’s just the wrong attitude, Trudi,” Sarah said tartly. “The same attitude that Moses Abrabanel and company were talking about at the party. What if you don’t trust the stock like you trust the reichsthaler? Why should anyone else?”
Trudi flushed. “That’s not what I meant.” Then she paused, clearly trying to figure out how to express what she did mean.
Judy came to the rescue. “Sarah, you said we didn’t have enough money to do much good, not all of us put together. You also said that Austria-Hungary was broke. All Trudi is talking about is the fact that we’ll run out of reichsthaler but not stock, because we can print up as much as we need.”
“That’s almost worse. You can’t go around printing up money just because you feel like it. Or just because you need it. Mr. Walker is right about that. There has to be something to back it.”
“So we let people starve?” Karl asked.
“No, but. .” Sarah stopped and looked at her betrothed. She didn’t want Karl to see her as cold or cruel, but there were limits on what they could do. “Karl, I understand that you want to help. But if we just start printing money, no one will trust it. Or worse, they will trust it for a little while, then lose faith in it. That’s what happened in France, later in this century in our timeline. It put the introduction of paper money back a hundred years.”
“And we’ll be left with loads of AEC that we have to take at face value. I’m not going to be poor again to rescue what’s left of the Holy Roman Empire,” Susan said.
“Susan, I grew up here,” Karl said. “There are a lot of decent people in Austria-Hungary. And many of them are going to end up in something as close to serfdom as makes no difference if we don’t do something. More than a few will starve in the next few years.”
“That’s right,” Hayley said. “Good people, who just want work. I’ve met a lot of them. And we’ve barely scratched the surface out at Race Track City. There were ten people looking for work for every one that we could find a job for.”
“Fine,” Susan said. “I’m not saying I won’t help, but not with AEC. We all have too much invested in it. And by now it’s turning a really nice profit.”
“Well, AEC still owns Up-time Financial,” Karl offered. “We could use that.”
“It won’t work.” Vicky tossed her head in a gesture reminiscent of Veronica Lake. “People will have to see that we have some skin in the game or they won’t buy in.” It was clear from her posture that Vicky wasn’t thrilled with the idea, but from conversations with Judy, Sarah knew that if the others decided to do it, Vicky would go along.
“Vicky’s right,” Judy said. “The up-timer rep is not nearly as strong here as it is in the USE. And sorry, Karl, but your family’s rep sort of sucks.”
Karl grimaced. “I know. One of the sticks that Ferdinand III is using to try to get money from me is threatening to come down on the other side in the lawsuits. It’s not as big a stick as it would be without King Albrecht holding Bohemia and a lot of our family’s money quietly shifted to the USE, but it’s still a pretty good-sized stick.”
“And it gets bigger with every dime you invest in Austria-Hungary,” Sarah pointed out.
“Which makes it a pretty counterproductive stick,” Susan said. “Because it almost forces your family to move as much of your money out of Austria-Hungary as it can.”
Karl nodded. “That’s one of the reasons that money keeps flowing into the USE. A constitutional monarchy is less likely to, ah, insist on loans. Which, oddly enough, makes it easier for Gustav to get loans.”
“Back to the point,” Sarah said. “Anything Karl invests in Austria-Hungary is potentially subject to seizure. For that matter once, we’re married, anything I invest here is potentially subject to seizure. Unless we are real careful, anyway. If Judy and Vicky both think it won’t work without heavy investment from us, then it won’t work without that investment. So I don’t see a way of doing it.”
“Keep your money in the USE, darling,” Karl said. “We may need it if we end up having to run for our lives.” He grinned. “Besides, I sort of like the idea of being a kept man.”
“That’s right, Sis,” Judy said. “That way if you get bored, you can trade the Ken Doll here in on a more anatomically correct model.”
“Don’t call him that,” Sarah said. “Besides he’s fully anatomically correct.”
“Do tell!” Hayley said, “and I want all the juicy details.”
Sarah felt herself turn bright red.
“Help me, Trudi!” Karl put his hands to his cheeks in an overdone imitation of a melodrama ingenue. “These lascivious up-timer girls are treating me like a piece of meat.”
Trudi snorted. “Up-timers are prudes.”
“The point is, Vienna needs this,” Trudi said, clearly trying to bring the discussion back on the track that Sarah realized the down-time girl had been pushing for since the first question. Trudi, Sarah realized, was a very bright young woman, probably brighter than she was. “Vienna needs it bad. Not Emperor Ferdinand, not the upper-crust of Vienna, whatever they call themselves, although they will benefit too. But Vienna needs it. The small crafters. The people coming in from the farms, the tailors, the bakers. All of those need this. They need work. We can provide work.”
“All right. Trudi’s right,” Karl said. “And if it requires me to put skin in the game, as you girls call it, I’ll put skin in the game.”
Sarah saw that Trudi had won the point. “All right. If you’re going to do this, you’re at least going to do it right. Susan, I’m going to need your computer and I’m going to need price points. .”
Sarah went through what she was going to need to determine how much stock they could issue, money they could create, based on what they were going to have to sell. In a number of ways it was like figuring out how much you could afford to borrow for a capital investment like a house or a tractor. But it also had to involve how much of an influx of money the local economy could absorb. Over the next days and weeks, that second assessment would increase by an order of magnitude. It wasn’t the Viennese economy that was a constraining factor. Vienna was on the Danube and a major north/south trade route. New cash introduced in Vienna would be absorbed by the greater economy, just as had happened around the Ring of Fire in 1632 and 1633. . but faster. All that would come later, though.