Chapter 479: Chapter 347 Exchange and Bank
"Yes, leader!" Everyone focused and responded respectfully.
Maximus then said gently, "After the paper money is made, we need to consider how to distribute it so that the tribesmen are happy to use it. After all, many of them are accustomed to buying things with gold and silver, and some tribesmen from other hills and wild tribes prefer barter. They will inevitably doubt whether such a light piece of paper can really be exchanged for a chicken? A sheep? A cow? ...
The suggestion Capito made before was good. We can first use paper money to replace the wheat previously distributed to tribal officials as their monthly salary. At the same time, we need to tell all the shops in the market that they should allow tribesmen to purchase goods with paper money. I believe that under the guidance of the officials, the ordinary tribesmen will soon discover the benefits of using paper money to buy things—"
"Leader, even if ordinary tribesmen are happy to use paper money, they can’t obtain it through payroll as officials do. Are we supposed to distribute it directly to them?" Pigeris asked.
"Once paper money is made, it is not merely paper; it is money, each piece representing wealth. Of course, it cannot be freely distributed to ordinary tribesmen."
Maximus said sternly, "We can set up exchange offices in each market, managed by the Finance Department. Many city-states around the Mediterranean have exchange offices to convert gold and silver coins, but our exchange offices will allow ordinary tribesmen to exchange their household wheat for paper money issued by the tribe. Then the tribesmen can use the exchanged paper money to buy things in the market."
"The leader’s method is excellent! Our Finance Department will definitely manage the exchange offices well!" Gaius was excited about the new authority his department had gained.
He continued to ask, "When tribesmen pay taxes, can we allow them to use paper money? This could also save our Finance Department a lot of manpower."
"Land taxes absolutely cannot be paid with paper money. They must be paid with grain and other crops!" Maximus said firmly, as he knew in his heart that food is the foundation of a tribe’s survival, and having enough stored grain provides peace of mind in difficult times.
Then Maximus softened his tone, "As for commercial taxes, they can indeed be paid with paper money."
The Nix Tribe has been established for nearly two years, and commerce in the market is quite active. However, the commercial taxes received by the tribe are very low because most shops in the market belong to the tribe, and the wheat obtained from selling goods also belongs to the Finance Department; there is no such thing as commercial taxes.
Gaius dared not dispute and responded obediently, "Yes, leader."
"In addition, we need to establish an important institution—a bank!" Maximus said emphatically, "The bank is crucial. It is the institution responsible for managing currency.
Every year, how much grain our tribe produces, how many goods are manufactured, and the circulation of goods in the market... All these should be statistically analyzed by the bank, and the amount of currency issued is decided based on these statistics.
The bank should also frequently survey the trade situation in the tribe, and if it’s found that there is too much paper money and the price of goods is too high, some paper money needs to be withdrawn; if there is too little paper money and the prices are too low, more currency needs to be issued.
In short, the bank must always monitor the commercial trade within the tribe to ensure that paper money remains valuable and can always buy goods at corresponding prices! I propose that the bank should belong to the Finance Department, with the deputy officer of the Finance Department, Magus, temporarily acting as the bank supervisor!"
Although young, Magus has been diligent and responsible since managing the tribal treasury, without any mistakes, and the work of the Finance Department has pushed him to make time to study harder in school. According to Kefisofon, Magus’s arithmetic skills are top-notch among students.
Because of Magus’s outstanding performance, Maximus decided to give him more responsibility.
The Chief Officers of various departments had no objections. In fact, they were entirely absorbed in the fresh terminology and profound currency theories Maximus proposed, not noticing the bank’s importance to the tribe.
Pigeris couldn’t help but ask, "Leader, there are so many complex issues to consider with using paper money. But when everyone used gold and silver coins before, it seemed like no city-state did these things."
"It’s not that these city-states didn’t do it, but they simply didn’t realize that the use of currency in a city-state or kingdom requires profound monetary knowledge and strict regulation! They believed gold and silver were wealth, and acquiring more of it would increase the city-state’s strength."
Maximus smiled contemptuously, "Is it really like that? The most typical example is Rome! After Rome became powerful, it continued to conquer other city-states and kingdoms, and in these conquered areas, it persistently obtained large amounts of gold and silver, transporting it back to Rome. This led to increasingly more gold and silver in Rome and even throughout Italy, but the amount of agricultural products and diverse goods produced in Italy each year remained almost unchanged. What phenomenon might this lead to?"
Pigeris’s eyes lit up, "... Hmm, it should be that there was too much gold and silver coinage, causing the price of goods in the market to rise!"
"Exactly, as I said before, it means currency devaluation."
Maximus glanced at Quintus and Gaius and said solemnly, "Moreover, since most of the gold and silver obtained by the Roman Army from conquered territories flowed into the hands of the Roman Elders and Nobles, the rise in prices in Italy had little effect on them. However, it made life increasingly difficult for ordinary citizens, inevitably leading to mass bankruptcies among them—"
"So that’s it! I always wondered why the price of farming tools got more expensive by the day, and the cost of buying oxen multiplied several times. It turned out to be the doing of the Roman Senate!" Gaius said angrily.
"Indeed, the high prices in the market exhausted our painstakingly saved money, while the nobles of Rome use cheap agricultural products from their large estates to prevent us from selling our hard-earned grain. Not going bankrupt would be strange!" Quintus was uncharacteristically indignant, still harboring resentment over his repeated failures in farming.
However, Capito remained relatively calm, as the Nix Tribe provided a broad platform for his talents, and he had long since put his miserable past behind him.
"Leader, before the silver mines of Athens were depleted, they once minted a large number of silver coins. Why didn’t they face issues of rising goods prices and citizens struggling due to excessive money?" Kefisofon, as a Greek, asked curiously.
Maximus was surprised by Kefisofon’s question, thought for a moment, and said, "Uh... Athens was once not only the hegemon of the Eastern Mediterranean but also the commercial center of the Mediterranean.
It produced many goods that could be sold to various city-states across the Mediterranean. Other city-states also transported large amounts of goods to Athens to sell. Moreover, the silver coins of Athens were exquisitely made and had high silver content, leading merchants from other city-states to be happy to exchange and use them. Athens’ silver coins were consumed in large amounts in prosperous foreign trade. How could they possibly be excessive?"
Kefisofon fell into thought.
Maximus continued, "The status of Athens as the trade center of the Eastern Mediterranean is enviable. They could circulate however many silver coins they minted without worrying about devaluation, something our Nix Tribe cannot compete with.
For a long time, the issuance and use of our paper money will be limited to our tribe; trade with the Alde Tribe and other tribes will still temporarily use barter or gold and silver coins."
Pigeris opened his mouth but eventually said nothing. He understood that the leader was so cautious about the use of paper money out of concern for the tribe’s security.
Maximus observed everyone’s expressions and said, "Tomorrow, we will hold a special meeting to discuss the issue of paper money. The Chief Officers from the Commerce Department, the Finance Department, and the Legal Department, as well as the responsible person from the Paper Making Workshop, Torimias, must attend.
We will conduct a more detailed discussion on the production of paper money, design of patterns, denomination sizes, issuance quantity, establishment of banks and exchange offices, and regulation of paper money circulation. We will also develop a series of plans related to the making and issuance of paper money, and institutions and decrees to ensure the smooth operation of paper money within the tribe. I believe—"
Maximus suddenly raised his voice, speaking passionately, "In the entire Mediterranean, no city-state or kingdom understands the use of currency as deeply as the Nix Tribe! And no city-state or kingdom can use more lightweight and easier-to-calculate paper money like the Nix Tribe!
As long as all our departments rigorously regulate the operation of paper money, it will certainly greatly promote the prosperity of Nix’s trade, giving the tribe stronger strength to expand. Someday, it will become as wealthy as Athens and as powerful as Rome!"
..........................................
On this day, the sky was clear, the clouds light, and a strong south wind was blowing as a fleet sailed against the current along the Sava River.
Aldean, the Chief Officer of the Commerce Department of the Nix Tribe, stood at the bow of the lead ship, holding onto the railing and gazing towards the shore: Unit after unit of the Nix Infantry Centurion was marching towards the villages on both shores, and behind these troops followed the people of Segestica, old and young in tow. No longer did their faces show the terror of the initial flight; instead, there was a sense of security under armed protection and hope for rebuilding their homes...
This war came quickly, and it ended quickly! ... Aldean sighed in his heart.
A few days ago, a Nix Envoy sent to the Northern Border reported back that, upon receiving the olive branch extended by the Nix Tribe, the defeated Yabod people quickly agreed to a ceasefire and expressed their desire for friendly relations.