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1636: The Kremlin Games: Chapter Fourteen

       Last updated: Wednesday, March 21, 2012 20:25 EDT

 


 

    Ivan Nikitich Odoevskii didn’t look like a book worm. He was tall and as richly dressed as a prince and a member of the boyar Duma ought to be. He rode, he was a skilled falconer, but he did love to read. He read anything. Account books. Treatises. Stories. Anything he could get his hands on. His fierce black beard was twitching and his blue eyes squinted as he thought. “It’s complicated, Patriarch. Yes, the up-timers use paper money, but their system is a tortured mix of the government and . . . well, anarchy.”

    “Anarchy?”

    “They have something called federal reserve banks . . .” Vladimir had sent several tracts on economics — not very detailed or all that complete — back to Moscow, which had arrived about the time Boris had gotten back to Grantville. Along with them had come a very rough outline of what Vladimir thought might work for a banking system in Russia. That outline would have the great families issue money, having bought the right from the Czar’s Bank or the Gorchakov Bank. With some vague limitations based on how much their property was worth. Going from those tracts on up-time economics, Ivan Nikitich explained his understanding of how the future economic system worked.

    Patriarch Filaret was a man of no mean intellect, but his eyes were glazing over within a paragraph. He tried to follow the salient points for a while, but finally gave up. “Enough. Can we use it, Ivan Nikitich? Can we use it?”

    Ivan Nikitich sighed like the wind gusting from the north. “Yes. But it is dangerous. The tracts made that clear, even if I could only understand one word in three without talking to that idiot Bernie.” Ivan Nikitich snorted. “And only one word in two after talking to him. The danger is more than the simple temptation to print ever more and more as it loses its value. That’s a danger, true enough. It is made worse by the fact that failing to print enough can hurt the nation even more. That is one thing the excerpts young Vladimir sent taught me. Half of Russia’s troubles are caused by not enough cash.”

    “You needed a tract from the future to tell you Russia is not a wealthy nation?” Filaret snorted in exasperation.

    “No!” Ivan Nikitich almost shouted, then visibly got hold of himself. “Patriarch, what I needed the writings from the future to tell me was that Russia is a wealthy nation. A wealthy nation with what the up-timers call a ‘cash flow problem.’ That Russia has everything it needs to have a booming economy, except the economy.”

    Filaret glared a bit. “Speak sense!”

    Ivan Nikitich sighed. “We have grain. We have timber. We have pitch, not to mention furs of all sorts. We have rivers that in summer give us clear roads from China and India to the Baltic Sea. In hard winter, the sleighs are more efficient than wagons are. What we lack is a means of tying all those things together. Much of our trade is just that. A peasant trades a bushel of grain to another peasant for bit of cloth. It happens that way because neither peasant has any money. Did you know that over ninety percent of the up-timers’ purchases were made with money? Everything from their homes to a piece of candy for their children. Everyone had money, even the very poor. That — along with their transportation system — made the manufacturing of goods in one place to be sold in another much more practical.”

    Ivan Nikitich spoke with passion. He even stood and began pacing the room. “The raw materials are here. The trade routes are here, mostly. Even the skills are here. Every peasant in Holy Rus spends half the year at some craft because you can’t farm ice.” Ivan Nikitich shook his head. “The only thing really missing is some practical means of letting the people in one place buy the products from the people in another place. Buy them, Patriarch, not trade for them. Because barter simply won’t work for what we need. The things we must have are: Money, ways of transferring money from one place to another without bandits robbing the caravan, banks where bureau men and even peasants can save money or get loans. As I said — everything we need for an economic boom except an economy.”

    “What you’re saying is we’re rich in goods but not in money?”

    Ivan Nikitich nodded. “What we need is money and the writings of the up-timers explain how to do that without silver or gold. The idea, as I understand it, is to have just a little more money available than there is product for it to buy. That encourages the peasants to work harder to get the last bit. It’s like hanging a carrot in front of a mule. Too close and he eats it. Too far and he gives up. Russia’s carrot is hanging off the mule’s ass.”

    “So, you think Vladimir is right.” The Odoevskii didn’t get along all that well with the Gorchakov family. If Ivan Nikitich could find a way to say Vladimir’s report was wrong, he would.

    “No, absolutely not,” Ivan Nikitich said by reflex. Then he laughed. “Well, perhaps a little bit. The way the boy proposes to go about it is all wrong. We are not some barbarous western nation. It will need to be the Czar’s Bank and all the little banks part of the Czar’s Bank. The Gorchakov boy’s proposal will just make the Gorchakov family richer than they already are.”

    Filaret gave the Boyar of the Exchequer a look.

    “Very well. The Gorchakov family and many others,” Ivan Nikitich conceded. “But the czar should reap a greater benefit if the government owns all the banks, not just the Czar’s Bank.”

    Filaret considered. “What bureau would control the Czar’s Bank?” He gave Ivan Nikitich another hard look.

    Ivan Nikitich gave him back look for look. “The bureau of the exchequer is the obvious choice,” he acknowledged.

    In some ways Filaret really preferred Vladimir’s plan. As chaotic as it was, it had the advantage of not putting the power of a central bank in the hands of one of the great families. On the other hand, having the Romanov family in charge of the central bank would strengthen them considerably.

 


 

    The discussion continued for several hours that night and then broadened over the next several days. Eventually, it included every member of the Boyar Duma cabinet and many members of the Assembly of the Land. It was pointed out that the institution of this system would probably mean fewer taxes would be needed, at least for now. Which made it quite popular. There was much support among the great houses and monasteries for Vladimir’s plan but the deti boyars, the service nobility, and the merchants hated it. Both because of the extra power it would give the great houses and monasteries if they could print their own money and because of the difficulty they could see clearly in determining how much this house’s ruble would be worth versus that monastery’s ruble. That pitted the great houses against the service nobility. Not an uncommon occurrence. But while everyone was fighting over which way to do it, the whether to do it got decided by default.

    The czar, at his father’s urging, came down on the side of the service nobility. The money would be issued by the Czar’s Bank. All banks in Russia would be branches of the Czar’s Bank. Which, by the way, would offer nice jobs for lots of the service nobility. Something that didn’t make it into the general discussion was the fact that more money would make it easier for serfs to buy out of their bonds to the land. Not that that mattered much. Every year for the last decade and more had had a decree from the czar that the serfs couldn’t leave that year, even if they had paid off their debt.

 


 

    Fedor Ivanovich Sheremetev, leaned over to his friend and chief henchman, Colonel Leontii Shuvalov, as the debate went on. “It was good that the note from Vladimir arrived in time to prevent the patriarch from dragging us into war with Poland, but the notion that they are truly from the future disturbs me.”

    “I’m not entirely comfortable with it myself, My Lord, but facts are facts and Bernie is real. The stuff he brought from Germany is real.”

    “And the knowledge,” Sheremetev grumbled. “Slavery and serfdom were both banned in their world. It will give our serfs ideas. There are too many new ideas coming out of Germany these days and they will spread faster with this outlander from the future here. The Gorchakovs are really just puffed-up merchants, even if they did hold their land independently before it was absorbed by Muscovy. Why did Filaret give them the patent on these new inventions?”

    He knew why Filaret had done it. It was precisely because the Gorchakovs were just puffed-up merchants with little connection to the factions in the great families. He shrugged. “Who knows? Maybe it won’t amount to much. Games and rumors are all that have come from that dacha of theirs in the months he’s been here.”


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