The Commander Elric contract flooded the Arren Industrial Syndicate with more coin than the Fief had seen in a century. Silver and gold piled up in the manor vaults, creating a dangerous and inefficient problem.
"We have too much cash, Hemlock," Alex announced, looking at the mountain of metal.
"It's heavy, it requires guards, and it's vulnerable to fire and theft. Cash is an inefficient store of value."
Hemlock, now the Syndicate's Chief Financial Officer, protested. "But My Lord, gold is secure! It is real! What is more trustworthy than actual coin?"
"A trusted promise, Hemlock," Alex countered.
"We need to create a system where wealth can be transferred without physically moving a ton of metal. We need to introduce fractional-reserve banking and negotiable paper currency."
**
Alex's first step was to separate the money-management function from the production function.
* The Vault as a Bank: He designated the most secure, fire-proof section of the manor vault as the Arren Deposit & Trust (AD&T). This was legally distinct from the Syndicate's production assets.
* The Deposit System: Alex offered the wealthy clients of the Syndicate (Commander Elric, Baron Tarsus, and the few successful independent merchants) a service: they could deposit their excess gold and silver into the AD&T for a small, secure-keeping fee. In return, they received a Certificate of Deposit—a clean piece of Syndicate-marked parchment stating the exact value of the metal held.
* The Trust Factor: The trust was simple: the Syndicate was now the primary supplier of the kingdom's military and its most efficient producer of food and steel. Its promise (backed by its assets) was more reliable than most local minor noble houses.
The service was immediately popular. Wealthy individuals preferred the security of the Arren vault and the convenience of a piece of paper to physically transporting massive amounts of coin.
***
The Certificate of Deposit quickly evolved into a medium of exchange.
Alex instructed Hemlock to begin issuing two types of standardized notes:
* Demand Notes: These were redeemable for the full amount of gold or silver on demand at the AD&T vault. They were essential for large, safe transfers of wealth.
* Fractional Notes: Recognizing that not everyone would demand their coin back at once, Alex used the deposited reserves to issue smaller-denomination notes—early paper currency—which were used to pay Syndicate workers and suppliers. These notes could be used to buy goods at the Arren sales office or exchanged for small amounts of hard currency.
This was the risky part. Alex was only keeping about 20% of the deposited gold in the vault; the rest was being lent out at a controlled, low-interest rate to the same farmers who bought the plows on credit.
"We are creating money, Hemlock," Alex explained, the genius of the system dawning on the clerk. "The wealth is not the gold; the wealth is the productivity the gold enables.
Every one of those notes circulating outside is a record of debt that will be repaid with interest, generating new profit without having to produce a single extra pike head."
The Fractional Notes, backed by the Syndicate's reputation for guaranteed yield (thanks to the Three-Field System) and superior tools, became the most stable, reliable currency in the region.
***
The ultimate power move came when Alex used his banking power to control the local economy:
* Financial Leverage: Baron Tarsus and a few minor nobles who were still struggling with debt were "encouraged" to use the AD&T's low-interest refinancing services. In exchange for the favorable terms, they were required to pay the Syndicate in Arren Fractional Notes. This forced local markets to accept Alex's paper currency, expanding its reach exponentially.
* Data Control: Every transaction, loan, and deposit was recorded in the AD&T's master ledger, giving Alex real-time data on the region's overall economic health, capital flight, and consumption trends—an economic oversight no king had ever possessed.
The Syndicate was no longer just selling steel and food; it was controlling the flow of money itself. Alex had secured his company not just with assets and legal protection, but with the very currency that ran the regional economy. He had invented the central bank.
Next priority: The sheer volume of raw materials and finished goods is outstripping the capacity of the Efficiency Carts. To dominate the kingdom, the Syndicate needs to master mass transport.