Chapter 725: Real Gold and Silver

Being constantly addressed as “Ancestor, Ancestor” somehow nudged his mindset into a subtle, elder-like mode.

But looking at it from another angle… seeing the usually composed and elegant Heddy wear such a stunned expression was oddly amusing.

Watching Heddy’s face shift from dumbfounded to flustered, High King felt an inexplicable lift in his spirits. The pressure from the mountain of documents before him suddenly eased by more than half. Before his eldest granddaughter’s expression could crumble further, he waved his hand dismissively. “It’s nothing—I was just speaking offhand. What are these documents?”

Though unsure what had just happened, Heddy felt as if she’d narrowly escaped a crisis and quietly exhaled. She placed the files on the old ancestor’s desk. “They’re preliminary reports on the construction of the Imperial Academy and the new-style schools on the Holy Spirit Plains, as well as documents related to the western railway project. The Administration Office has processed them according to protocol, but the key parts still require your personal review.”

High King pondered for a moment, then suddenly felt a fleeting urge to inquire about Heddy’s own future plans…

Two seconds later, he pushed those wandering thoughts aside, reached for the thick files, and casually asked, “Have the mages and scholars who relocated from Saint Suniel last week settled in? What do you think of them?”

“They’ve all been properly settled,” Heddy nodded. “As for my assessment… in terms of personal knowledge and ability, those loyal to the royal family or admitted to the Capital Scholars’ Association are all top-tier masters. Their skills are unquestionable. But to integrate into Cecil’s new order, each of them still has a long way to go, and many will face elimination.”

“…An inevitable process,” High King said, flipping through the papers. “But we must transform and win them over as much as possible. Anyone who can be converted should be converted—we still lack intellectuals. However, the standards for admitting personnel into all educational departments must not be relaxed. The two-stage review and two exams must remain unchanged. Those old-school intellectuals who pass the initial transformation but fail the reviews and exams can be assigned to research or factory technical roles, but under no circumstances allowed into schools. That must not be forgotten.”

Heddy lowered her head. “Understood.”

The empire had been established. The lands ruled by Cecil had transformed from a cramped, barren territory into a vast realm. Unprecedented resources and manpower flowed across Heddy’s and the Administration Office’s desks. Yet after the initial excitement, Heddy realized that beneath this apparent abundance lay many shortages. The ancestor was building a brand-new nation, not inheriting a decayed kingdom to rule comfortably. The heritage from the old Ansu kingdom needed to be filtered and transformed before it could be useful again.

The influx of northern intellectuals would solve the critical talent shortage in magical technology development. But before that, these scholars had to build a new knowledge system and undergo ideological transformation. The so-called two-stage review and two exams were High King’s strict standards for talent admission: thorough background checks for major blemishes, personal information verification, academic ability tests, and ideological transformation assessments. Only those who passed all these could enter the empire’s new academies.

This strict admission system was also a key reason for the severe shortage of teachers in new-style schools. But the ancestor’s standards allowed no compromise. Fortunately, graduates from the first phase of the old Cecil General Academy and some early struggling intellectuals who followed the southern border’s development had grown over the years. Their return was gradually easing the talent shortage across schools. Though the gap remained large, it was no longer hopeless.

Heddy understood why the ancestor placed such importance on this.

Because early on, when the system was still flawed and enforcement lax, she had witnessed how a teacher from a collateral noble branch taught children to perform crawling and earth-kissing rituals in school. This teacher was just a minor noble with no inheritance rights, no title or fief, and his only link to the “noble society” was a thin bloodline. Yet for that tenuous connection, for his belief in the “correct and sole law” and his family’s “honor,” he risked imprisonment to make children remember the rules of kneeling again.

From that day, she knew some rotten things would never be eradicated by a single bombardment at Shattered Stone Ridge or a signing ceremony. They wouldn’t cleanse themselves either. The remnants would lurk in every corner, and given even a one-in-ten-thousand chance, they would surge out like sludge through cracks.

Perhaps even with strict admission standards, some of that sludge would still seep in—almost certainly. After all, the newly formed Administration Office’s control over the empire’s remote regions was still weak, relying temporarily on the other two Grand Regents and their vassal systems. But perfection doesn’t exist. As the ancestor once said, this would be a long-term endeavor, possibly requiring more than one or two generations…

Lost in thought, Heddy was snapped back as High King quickly skimmed to the end of the documents and placed them to his right. “I’ve roughly reviewed them. No issues. I’ll take a closer look tomorrow morning and get back to you. Is Padrick at the Administration Office now?”

Heddy nodded, shaking off her reverie. “Yes, he just returned from Carol yesterday and is back this morning.”

“Send him to see me—I want to hear about the currency pilot program.”

“Yes, Ancestor.”

…

Before High King lay several temporary currencies of varying denominations, alongside coins minted by the Cecil Royal Mint.

The coins included standard copper, silver, and gold pieces. The paper money consisted of “silver notes” in denominations of one and five fenams, and “gold notes” in one and five gold pounds. Fenam was a common term meaning “thinly beaten silver leaf.” The gold pound here differed from the Earth’s historical currency of the same name; it was akin to the smallest thin gold coin once circulated in Ansu, roughly the highest denomination accessible to commoners.

The banknotes were beautifully printed, with textured patterns that shimmered mysteriously in sunlight.

From the denominations and names alone, it was clear this was a rudimentary attempt to reform precious metal currency into paper money.

“After about six months of trial, the pilot regions have successfully replaced over 70% of precious metal circulation with temporary currency, maintaining normal commerce and local financial settlements,” Padrick wiped his gradually broadening forehead and reported meticulously. “People initially distrusted and didn’t understand paper money, but later found it could indeed be used to purchase goods. Now they’ve gradually grown accustomed to it. From the perspective of simply promoting paper money and forming habits, the pilot is a success.

“But its flaws are obvious. As you can see, we haven’t fundamentally escaped the essence of gold and silver settlement. The currency circulating in the pilot areas is still essentially gold and silver. Because of this, the coexistence of ‘gold notes’ and ‘silver notes’ means the exchange between paper denominations is still influenced by precious metal prices, causing a ‘bad money drives out good’ phenomenon. However, we recently succeeded in decoupling silver notes from actual silver, making them only exchangeable for gold notes, not directly for silver. This effectively turned silver notes into a ‘subunit’ of gold notes, solving the problems caused by the bimetallic standard…”

High King frowned at the coins on the table, flipping through Padrick’s detailed report, muttering softly, “A mess…”

Padrick immediately wiped cold sweat from his brow. “…Your Majesty, I deeply apologize…”

“No, I’m not blaming you,” High King quickly waved his hand. “You’ve done well, conducting all tests and samplings as I requested. This chaos is just the inevitable result of introducing something new… It’s natural law, not your fault.”

Padrick finally relaxed. “Yes, Your Majesty.”

“The empire’s gold and silver reserves are fairly balanced. Issuing currency based on either silver or gold standards is feasible. But the real question is whether we should continue issuing currency based on precious metals,” High King said thoughtfully. “Padrick, I’m sure you’ve realized the hidden dangers of directly linking gold or silver to paper money.”

“…Yes, Your Majesty. And after hearing your theory about the currency trap, I’m convinced those dangers are real and extremely serious,” Padrick nodded immediately. “From both a long-term and practical perspective, I believe the ‘credit currency’ you mentioned before is the better choice.”

“…Credit currency…” High King furrowed his brow again. “Padrick, you know that issuing credit currency requires a much stronger foundation than issuing substitute currency—because essentially, we’re declaring that worthless paper is ‘money.’ The biggest premise for people to use this ‘paper’ to buy goods and settle accounts is their belief that the empire can redeem all the value represented by these notes. This ‘trust’ must be as reliable as real gold and silver.”

Meeting High King’s gaze, Padrick sat firmly despite his slightly plump frame. He nodded, answering succinctly, “Yes, I understand.”

He had thought about this long before arriving here.

If Cecil wanted to advance to a higher social stage, it had to complete currency reform quickly. Even ignoring the distant future, the chaotic currency system inherited from old Ansu had already reached its limit—

During the feudal era, various nobles minted coins privately. Coupled with the kingdom’s political turmoil causing frequent recoinage, the old currency system was a mess. In the Holy Spirit Plains and parts of the western regions alone, dozens of metal currencies circulated officially: silver shields, long silver coins, short silver coins, gold shields, royal diagonal gold coins, round copper coins, small round copper coins, and more, with uneven quality and confusing exchange rates.

This tangled web of currencies and exchange ratios not only frustrated merchants but also made large-scale transactions difficult for ordinary people. It even gave rise to a profession of “money exchangers,” who, backed by local nobles, acted as de facto extra tax collectors, squeezing what little money commoners and small traders had.

The chaotic currency also hindered commerce nationwide. Due to inconvenient exchange and high settlement risks, trade between regions was often monopolized by specific groups. In the worst-hit areas, where bad money saturated the market, commercial activity was nearly impossible…

Even with trains and new economic policies, as long as this swamp of “currency garbage” remained, Cecil’s reconstruction and development would be severely hampered.

Therefore, when High King stripped the nobles of their power, one of the most important measures was to revoke all noble minting rights, centralizing them under the Imperial Mint (formerly the Cecil Mint). All private currencies in circulation were declared illegal and would be gradually recalled, reminted, and exchanged by the Administration Office over a set cycle.

Since the old coins were all made of precious metals, as long as their purity met the standard, their value wouldn’t diminish through recycling and reminting (assuming no loss in the process). Because of this, the policy of unifying the currency proceeded relatively smoothly.

But under the overarching goal of currency unification, promoting paper money was an inevitable next step.

In this era of magical industry, the growth and abundance of goods far exceeded anything anyone from the old days could have imagined. Precious metal coins, with their limited unit value, inconvenient transport, and complicated settlements, would soon fall behind the times. The neighboring Typhon Empire had already begun issuing new currency, so Cecil had no choice but to immediately move into the next phase of monetary reform.

This was a sweeping, radical transformation. And Patrick believed that since they were going to make such a bold move, it was necessary to complete the reform all at once.

Nothing in the world is perfect. Credit currency had its inherent flaws, but at least in the long run, it could avoid the greatest risks of substitute money. Patrick had thought through the prerequisites for issuing credit currency—it required a highly centralized, sole authoritative government; the people’s trust in the state system; the supreme administrative office’s strong execution capabilities; and effective measures and early warnings to prevent unlimited currency issuance. No matter how daunting these challenges were, Cecil had to issue credit currency.

He had his reasons, and he believed that once His Majesty the Emperor heard them, he would support the plan.

Gawain, meanwhile, kept his brow tightly furrowed.

He knew well the pros and cons of credit currency, and the fatal flaws of substitute money. Yet he also understood that moving too fast could backfire spectacularly.

His greatest hesitation was the fear that directly issuing credit currency might trigger all sorts of chaos.

He looked at Patrick before him.

This Kantian scholar, gifted in economics, was not one to speak recklessly.

“Tell me your reasons, Patrick,” he said.

(End of chapter)