Gold Wins Wars

by Verlax

Chapter II - Trade Agreement

“...I cannot agree with Tough Smith on several matters. While his argument that the Horseatic League was going to play an incredibly important part of the history of economy is sound, he tends to avoid the issue of politics, as well as just how strenuous on the government his decisions were. I on the other hoof, as a longtime deputy in the Equestrian Parliament as well as a member of the economic commission, recognized those issues. His idea of lowering the taxes in several large cities across the nation in hopes of increasing internal consumption was a commendable one, and Parliament was seriously considering undergoing similar changes in other parts of Equestria; in the end, however, it was decided against doing so. At that time the nation was too unstable to safely pass such reforms, and the administration and legislation was too inefficient to properly handle such transformations. The same inefficiencies could be attributed to the Equestrian Codex, which Suderhoof was aware of while issuing his plan of partial secession from the main governing body and the forming of the Horseatic League. It took an entire decade to stabilize the situation enough to pass the needed reforms by the Parliament, as well as to sign the new Codex, devoid of loopholes such as the one mentioned above. However, even with such an inefficient system it would take much more than simply the Hansa to “bring Equestria into an age of prosperity” as Tough Smith was so keen to suggest. Or at the very least not the Hansa alone.

The Gem Inflation Crisis could not be counteracted by a simple administrative decision, unfortunately. The Unicorn Faction was far too numerous to allow that, especially since they were lobbying against anything that could force them to stop or lower the amount of gems mined by their mining companies. Despite the best efforts of the Financial Commission to persuade them otherwise or work out an agreement, it seemed that it was going to be a lost cause. In the end it was thanks to the idea of an earth pony deputy of forming a central bank that the negotiations did not end in a catastrophe. The institution he proposed, today known as the Equestrian Central Bank, was in essence an effort to, if not stop the mining issue, at least limit the amount of gems flowing in the Equestrian economic system. The ECB itself was introduced seven years later during the emergency session of the government regarding the sudden increase of inflation in 11 A.o.E.

However, as much as I would like to criticize the Hansa, it is undoubtedly thanks to the decisions made during the First Hanstag that the government has noted a positive export value of Equestrian goods, a slow rise of the GDP, and an increase of income from tariffs from overseas colonies such as Danzig. Although begrudgingly, several new trade agreements have been signed with the Hansa, and the mayors of the cities belonging to the League were trying to use this new situation to further the wealth of their respective estates and withstand the economical crisis, which they did admirably.”

- “The General History of Employment, Interest, and Money” by Keynes

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Chapter II - Trade Agreement

Grainwood yawned as she slowly opened her eyes. She was greeted by the familiar sight of the wooden roof of her shop. Feeling dizzy due to the lack of sleep, she sluggishly gotten off her bed and stretched. With mostly closed eyes, manuevering by memory, she reached the door. She knew every plank here; she could operate on autopilot as long as she needed to fully wake herself.

Grainwood reached the ground floor, finally managing to open her eyes and letting them fall on her products, or at the very least, samples of them. Several planks from different types of wood were on display, as well as axes and saws dedicated to deal with certain type of grains under the walls, and some other tools used in the processing of wood. Her true stock, however, was being kept in the storehouse behind her shop or in the basement. And, because she was the owner of several lumber mills in the region, most of her wood was located in storehouses outside of the Lubuck.

It took her several moments to realise there was a soft sound in the air. The sound of snoring, to be exact. She smiled as she turned towards the counter. There, on the desk, lie the head of a small filly, her light red mane sprawled over the desktop.

“Zzz… zzz…”

Grainwood couldn’t help but smile at the cute sight of her “assistant” during her casual “duties”. The earth pony filly was laying on the chair curled into a ball, with only her head resting on the desk. Grainwood had no idea how she was able to do it; the position looked incredibly uncomfortable. A half-opened book of bills was laying on the desk, serving the filly as a pillow.

“Blank Slate, come on.” Grainwood whispered, nudging her slightly. “The shop was supposed to be open half an hour earlier.”

“Whaa… holy!” the filly suddenly gasped as she raised from the chair, startled into the waking world. “Ehm… sorry.” she smiled embarrassedly.

“It’s okay.” Grainwood assured her as she walked to the main entrance. “It’s not like there are any customers anyway,” she mumbled under her breath.

Grainwood took the key from her coat and opened the door. She cast a glance outside, noting that the streets were more or less empty. Maybe she really was opening her shop too early. “Birch Atelier” never really was a popular shop to begin with, but Grainwood knew that if somepony would actually come here, he would usually spend a lot of money or maybe even sign a contract. The sun was still low, casting long shadows from the high roofs of merchants’ shops.

Blank Slate yawned behind her.

“Ehm… I don’t think there is a huge…” she paused for a moment to come up with the correct word, “demand, for our products.”

Grainwood sighed as she looked at the street through the window. What she saw was clearly confirming Blank Slate’s words.

“I guess there isn’t…” she nodded. “But at the other hoof, it gives us some time.” Grainwood smirked towards Blank Slate, who suddenly made a face.

“Now that I’m thinking about it, suddenly I’m feeling incredibly tired.” She yawned in an exaggerated fashion, feigning exhaustion from… sleeping?

“Sorry kid, but I need to hammer some knowledge into that head of yours. Wasn’t that why your parents sent you here in the first place?”

After that little declarion, Blank Slate’s eyes lit up with excitement.

“Yes! They sent me because I want to be merchant just like my grandpa!” she cried, jumping in the place. “And then I will have shops and ships and I will be rich, and I will pouch the Mayor, so I will buy my own palace, and…”

“Okay, let’s stop it at that before you crown yourself Queen of Equestria.” Grainwood rolled her eyes. “Have you been reading from the book I gave you yesterday?”

“Yup!” The filly nodded with an innocent smile.

Grainwood sighed. It was obvious that Blank Slate really hadn’t read any of it. The little monster just couldn’t sit in one place and concentrate. One part hyperactive filly and one part scatterbrain, that’s what she was. Nonetheless, she gestured Blank Slate to sit down and took a seat opposite of her.

“Let’s make this a game, shall we?” Grainwood proposed in hopes of keeping the filly’s attention. Judging from Blank Slate’s eager nod, it was working. “The rules are simple: I’ll ask you question, and you’ll answer them. For every question you get wrong, you’ll have to help around the shop for an hour longer. For every good answer, I’ll cut your workload by an hour. If you get them all right, you’ll have the whole day free. Sound good?”

The filly nodded eagerly, determined to get as much free time as she could.

“Okay now, first question: imagine a freshly built shop. What wares can you sell only with permission from the government?” Grainwood asked, smirking.

“Ehm…, well…” Blank Slate was thinking fast, scratching her head with a hoof. “Weapons?”

“Good.”

“Alcohol?”

“A little more confidence in your words. Don’t ask, say it,” Grainwood ordered.

“Alcohol,” Blink Mind repeated with conviction.

“Good.”

“Ehm… medicine?”

“Correct.” she nodded.

“Explosive materials?” Okay, this is getting disturbing. What is she, trying to start a cartel or something?

“Yes.” Grainwood answered slowly, now looking at the filly more attentively.

“Wait a second.” Blank Slate furrowed her brow suspiciously. “How many do I need to count out?”

Grainwood only smiled. “Think about it. It’s a tricky one.”

“Not fair!” Blink Mind grumbled, but still tried to come up with the answer. Grainwood meanwhile was checking her account book. It didn’t take her long to realise that while her shop was paying off, she was barely making any money, and even with the lowered taxes introduced by the Hansa that wouldn’t change anytime soon.

There was no sound in the shop as Grainwood was silently leafing through the pages and her assistant was trying to come up with the answer.

“Everything!” Blank Slate suddenly cried out in triumph.

Grainwood blinked, a bit startled by the sudden outburst. “Oh, and why so?”

“Because no matter what you’re selling, you need to pay taxes for it. That means you need to send a petition to the Mayor, which means you need permission from the goverment.” Blank Slate said eagerly.

Grainwood was truly surprised. She didn’t expect Blank Slate to actually answer the question correctly. Truth be told, she purposely chose the most tricky question in the book, hoping to get an excuse to scold the filly for treating her studies too lightly. In all honesty, the filly wasn’t learning anything at all. Blink Slate simply had natural talent. It wouldn’t surprise Grainwood if her cutie mark would have something to do with trade...

“Well, point for you I guess.” Grainwood finally admitted.

“Yay!” Blank Slate squeaked.

“How much do planks from Novigrad cost? Remember to add the due taxes and tolls.” she suddenly counter-attacked with another task.

“Well, one full wagon of wood should cost 50 bits more or less. City tax of Novigrad is 18% of the total product price right now, which means that after paying the toll for passing Everfree Strait, which would be exactly 5 bits per wagon of wood, it would rise to 64 bits. So for example, three wagons of oak tree would cost somewhere around 192 bits.”

“Wrong.” Grainwood smiled triumphantly.

“Buh?”

“City tax in Novigrad is now 14%.” she explained to the confused filly. “But you weren’t supposed to know this, it wasn’t written in the book. It was changed three days ago. Hansa legislation.” she winked.

“Oh. But then what is the Hansa?” Blank Slate asked with a curious look.

And now she had a problem. Grainwood never admitted this to anypony, but she wasn’t exactly a good teacher. She had broad knowledge of economy, because she had inborn knack for it, not because she learned it by heart. It was rare, but sometimes Blank Slate was able to ask her a question that she wasn’t able to answer, simply because it wasn’t written down in her textbook. In such situations Grainwood was always pretending to be “suddenly occupied with something really important that couldn’t wait so go bother somepony else”. It was simply teacher’s pride; she couldn’t admit that she didn’t know something.

Now, she knew what Hansa is, but knowing it and being able to explain it were two different things.

“Well. In short,” she started, “Hansa is a merchant confederation of seven big cities: Lubuck, Mareggen, Hayburg, Novigrad, Coltland, Ridge, and these strange ponies from Danzig. We had a meeting three days earlier and we decided that the tax should be lowered.”

“Oh.” the filly scratched her head in confusion. “But isn’t it the government that is responsible for setting up taxes?”

Grainwood rolled her eyes at the obviousness of the question.

“Hmm. Yes.” she nodded.

“So isn’t it like… ehm… illegal?” Blank Slate asked carefully.

“Hmm… not exactly…” Grainwood murmured.

“So they will put you into prison?” the filly asked with curiosity.

“No!” Grainwood facehooved at that.

“Because if you will go to prison, there will be no pony to sell your wood, and if there’s no pony to sell your wood, it’ll be bad for business,” Blank State said.

Grainwood looked blankly at her assistant for a few seconds, speechless.

“Ignore the fact I’m in jail and worry about business loss, why don’t you,” she muttered while shaking her head. “You have some priorities kid.”

“Thank you,” Blank Slate replied, completely oblivious to Grainwood’s sarcasm. “But look at the bright side! I’ll take care of your business while you’ll be serving your sentence. Totally, you can trust me.”

Grainwood rolled her eyes yet again, but before she could continue her lecture about Hansa there was a knock on the door. Soon after, the first customer of the day entered the shop.

She never expected to see this gem-studded coat so soon, especially in her own humble shop. The Mayor of Ridge was curiously looking through her wares, his blue eyes slowly scanning the shelves. His long, red mane was cut by a barber with remarkable skill, and Grainwood could tell he was rich just by looking at his immaculate hair. He was also carrying a golden rode with an oak finish by his side.

“Okay, lesson’s over. You can have your free time now,” she whispered silently to Slate. “Just before you go dabbling in the mud, make us two cups of tea. And throw in some sugar.”

“Oki doki!” The filly nodded and bolted out of the room.

Shabby Rich’s eyes finally locked on Grainwood. He was wearing a small smile on his face, but from Grainwood’s experience, it was his casual expression.

“Good morning Grainwood,” he greeted her rigidly.

“Good morning sir. What can I help you with?” she asked, wearing her casual ‘I’m a supportive shopkeeper, you need only ask for my help’ face. Grainwood had been practicing this expression for several years now; she knew that she had to wear it all the time if she wanted to sell any of her goods, and she had gotten proficient at it. There were three parts to this face that she had to include: cheerfulness, simply because ponies liked smiling shopkeepers; innocence, because it was harder to refuse somepony like that; and finally - a bit of personal charm. Being a mare, the last part was rather easy to pull off, not to mention it made negotiations considerably easier.

Shabby Rich pretended to think the question over before he spoke again.

“Well, I’m looking to invest in the infrastructure of Ridge, and one of my projects would certainly benefit from having access to your wares,” the mayor said slowly. “Your cooperation would be much appreciated, but I fear it could take some time to go over every detail before you make your decision.”

Grainwood quickly caught the suggestion hidden in his words.

“Hmm. Maybe we should discuss it in a more private setting, like my personal study, sir?” she proposed, still softly smiling.

“Good idea. And please, do not call me “sir”. We are not nobles, after all,” Shabby Rich replied with a slight nod as he followed Grainwood into her study.

---

“Let’s start from the basics.” The mayor said as he sat down. “As you know, Ridge is the biggest mining community in Equestria, as well as an important trading depot. Because of its localisation, all the transport ships in the area are forced to cross Ridge in one way or another.” he sipped his tea from the cup delivered earlier by Grainwood’s assistant. ”Thank you.” Rich nodded towards Blank Slate.

“No problem! Are you like, super-duper, as-rich-as-can-be rich?” the filly asked , her wide, curious eyes staring in awe at the stallion.

Both the merchant and the mayor rolled their eyes.

“No, I’m not exactly the richest, if that’s what you’re asking,” Shabby Rich stated.

“Of course not, you silly. Shabby Rich is not really rich, he is just…” Grainwood said when she realised the connection with the name. “You know what, why don’t you go outside and play some games with your friends, hm?.”

“Okay!” Blank Slate cheered and bolted out of the room. Grainwood winced as Blank Slate slammed the door shut in her haste.

With the distraction out of the picture, Shabby Rich continued on as if nothing happened.

“My city has an incredibly big budget and I’m concerned that once they realise just how much money is earned through the mining industry they’ll rise the taxes even more.”

“By ‘they’ you mean who, exactly?” she asked, taking another sip.

“Parliament, of course.”

Grainwood nodded. It made sense that the moment Parliament realized there was a huge amount of money to earn from taxes they’d try to pass appropriate legislations to squeeze whatever money they could out of it. She recalled a similar incident when her good friend from Mareggen discovered a layer of iron in his local area. Just after he set up a proper mine, Parliament increased the tax on iron in the area to the point where it was almost unprofitable to keep mining at all.

“Seeing as that is a possibility, I need to spend my money somehow, and try to mask just how we’re earning that way. The bureaucrats in the capital tend to look only at the end profits and glance through the investment part, making this little plan of mine that much easier. I decided then that it would be a good idea to invest in the local infrastructure of Ridge and create several more settlements. However, for new villages and towns to be built I need absurd amounts of supplies, mostly well-crafted planks and a large supply of wood.” Shabby Rich explained calmly, sipping at his tea. “I allowed myself to prepare a preliminary contract.”

The mayor used his magic to remove a small piece of paper from his coat’s pocket. He passed it to Grainwood, who immediately started to read through it. It was a typical trade agreement, with dates of transports, amounts of money for each delivery, anticipated costs of toll payments and city taxes, and so on. However, the moment she read just how much wood she was expected to provide Grainwood made her spit-take.

“One hundred thousand tons of wood!? What do you need that much wood for, building a new capital or something?” she gasped as she re-read that line again, just to make sure.

“I really did mean that I intend to make “huge investments in the infrastructure” Shabby Rich’s lips curled into a small smile as he took another sip.

Grainwood took a moment to look through the contract once again, trying to find anything that could be considered a loophole usable against her. It seemed just too good for it not to have one. However, try as she might, everything seemed perfectly fine, nothing truly suspicious at all. And that made it all the more suspicious.

“Well… it looks good for me, but I need some answers first.” she spoke slowly.

“Go ahead. I’ll try to answer them to the best of my abilities.” Shabby Rich replied, sitting more comfortably in his chair.

“Why me?” Grainwood asked bluntly. “If memory serves me right, I have quite a competition in Hayburg, one which is a serious threat to my own trade.”

What Grainwood didn’t mention was that the company from Hayburg, owned by a stallion by the name of Wood Cut, was bigger, had a wider assortment of goods, and their prices were far smaller than hers. In fact, they were the main reason why her own shop was barely afloat as it was. She was just a little fish in a sea full of great sharks.

“Not anymore.” the mayor replied, shaking his head slowly. “Wood Cut was found guilty of tax evasion.”

“Oh,” was the only response to leave Grainwood’s mouth.

That changed the situation quite a lot. With each second the offer look more and more tempting: first an incredibly important figure from Hansa wanted to sign a contract with her, then her biggest rival on market is down… She had to force herself to sit in her chair and slowly sip the tea, because with each passing second she was closer to jumping from her seat and doing a wild jig.

Well… she shouldn’t exactly be happy that her rival was rotting in the jail, but this was the brutal reality of free market. Only the strong survive.

“Truth be told, Grainwood, is that I chose you mostly because of your speech during the Hanstag.” Shabby Rich continued. “I fully agree with what you said back then. To see a pony that didn’t lose hope in social solidarity in times as dark as these is truly remarkable. And as you said, money is one thing, prosperity is something different altogether. I just felt that such views shouldn’t go unrewarded.”

“Ehm, thank you,” Grainwood responded, a bit abashed by the sudden declaration.

Shabby Rich drank the rest of his tea and put the cup back on the table. He looked at the mare before him and folded his hooves.

“So, are you willing to take up my offer?”

This was it.

One hundred thousand tons of wood. She had only one trading barque and six lumber mills. If she wanted to finish the contract in decent time, she had to spend some money to expand her trading fleet and build more magazines and workshops to ensure the quality of wood was adequate, not to mention build additional sawmills. But even with all those investments it would still take several years to finish. The price was worth it, however, and she could cover all these expenses with the money from Shabby Rich and still have a decent income. Maybe she could even build a proper home, instead of constantly sleeping in her own shop.

She opened the drawer of her desk and pulled out a white feather and inkwell. She dipped the tip of the quill in the black liquid and signed up the contract without hesitance.

“Thank you.” The mayor nodded as he examined the curvy signature.

“No, I thank you.” Grainwood smiled. “We have a deal. Just let me make a copy of this agreement and I’ll send it back to you as soon as possible.”

“Of course, of course,” he waved his hoof nonchalantly. “Just send it to my office back in Ridge once you’re done. It’ll be that much easier on the both of us,” Rich added as he stood from his seat.

The mayor and the merchant shook their hooves and the unicorn turned towards the exit. As he left, Grainwood read the agreement one more time, just because she could. It was still amazing just how good a deal this was. It would take care of all of her financial problems and guarantee her stability for years to come. This agreement was a dream come true.

Soon after Shabby Rich left, the little devil in the guise of a filly walked inside and curiously checked the room.

“Hey Grainy.” the filly greeted her.

“Back already?” Grainwood asked. “I thought you were supposed to play hoofball or whatever you call it with other kids.”

“Nah.” Blank Slate shook her head. “Curious Wink got ill and it’s no fun without her.”

“If you say so.”

Grainwood cleaned up the empty cups and was about to go downstairs towards the kitchen, but a little squeak from her assistant stopped her in the tracks.

“Slate?” she asked as she turned towards the filly.

“Do you know when exactly uncle Winterspell is coming back?” Blank Slate asked, holding the same white feather Grainwood signed the contract with.

There was a brief moment of dead silence.

“I’m not sure.” she finally answered.

Comments

[FancyFan]

And there's the connection with Winterspell!