Building an empire which the sun never set-Chapter 59: Paper Currency 3

Arthur left the palace with the plans in hand and, accompanied by his guards, set off towards the industrial district. Upon arriving, he made his way to the building where William's office was located. What had once been a small industrial area had expanded significantly over the years. Many entrepreneurs had chosen to establish their factories there due to its strategic location—being connected to the port by a railway, positioned near the river for easy transportation of raw materials such as coal and iron, and most importantly, because Arthur had ensured the necessary infrastructure, including a sewer system, was in place when he developed the district. This had made the area an ideal location for industrialists, and as a result, the district had undergone multiple expansions over time.

Arthur's journey through the industrial district to reach William's office took approximately half an hour. Along the way, he observed the smoking chimneys of numerous active factories, a testament to the nation's growing industrialization. Inspired by the capital's well-planned industrial infrastructure, other major cities had begun establishing similar production hubs. As Arthur recalled, two of the kingdom's largest cities outside the capital had already developed industrial districts of comparable scale. Each visit to this area reaffirmed the success of his industrialization efforts, bringing a proud smile to his face.

Upon arriving at William's office, Arthur instructed the attendant at the entrance to inform William of his arrival. The attendant proceeded to William's door, knocked, and upon receiving permission, entered to deliver the message. Knowing that Arthur's visits always involved new inventions or technological advancements, William quickly gathered the documents he had been working on and placed them in his desk drawer. With a smile, he hurried to the building's entrance to welcome Arthur. Upon seeing him, William gave a formal salute and said, "Welcome, Your Highness."

"Hello, William," Arthur replied before accepting the invitation to step inside. As they made their way through the building, Arthur observed the workers. Compared to his last visit, the workforce had visibly increased, and the office was bustling with activity. Soon, they reached William's office, where he offered Arthur a cup of milk tea before they sat down on opposite couches with a small table between them.

With a smile, William asked, "What can I do for you, Your Highness?" He was well aware that Arthur's visits always involved the introduction of new technology, and as a passionate engineer, he was eager to discuss the next innovation.

Arthur, not wanting to delay, reached into his leather briefcase and pulled out several documents detailing the designs for machines used in the production of paper currency, along with information on the process itself. He placed them on the table between them. William picked up the plans and began examining them carefully. As he did so, Arthur explained, "These plans pertain to the production of paper money. The government has decided to transition to a paper currency system to facilitate trade and speed up large financial transactions."

William's eyebrows rose in surprise at the term "paper currency." He lifted his gaze from the documents, looking at Arthur with an expression of curiosity and intrigue. Arthur proceeded to explain the paper currency system, detailing how banknotes would be backed by gold reserves, how they would be made durable, and the security measures implemented in their design to prevent counterfeiting. He specified that the banknotes would be composed of 75% cotton and 25% linen for durability, along with other intricate features to make counterfeiting exceedingly difficult.

Once William had understood the concept and had all his questions answered, he asked, "I understand, Your Highness, but what exactly do you need from me?"

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Arthur smiled. "William, I need you to develop the necessary printing techniques and machinery required to produce these banknotes at the level of detail and security specified in these plans. I also need you to establish a production facility for printing the currency. Once the facility is operational, the government will take over its management. Your role is simply to design and build the machinery and set up the facility."

Arthur then proceeded to explain the pantograph and intaglio printing processes, emphasizing how they made counterfeiting more difficult. The pantograph allowed for precise engraving and scaling of intricate designs, while intaglio printing created raised ink patterns that could be felt by touch, making replication challenging. These techniques, combined with specialized inks and watermarking methods, would ensure that the new currency remained secure against forgery.

William listened intently and, after fully grasping the requirements, nodded. "Understood, Your Highness." He then discussed other necessary machines, such as steam-powered printing presses, and their functions. The conversation continued for an hour, with Arthur addressing all of William's inquiries. After a bit more casual discussion, Arthur left the industrial district.

Instead of returning directly to the palace, he decided to take a brief stroll through the city. As he entered a bustling street, crowded with workers finishing their shifts, he purchased a newspaper from a street vendor. He then stepped into one of the newly popular tea houses, finding a seat by a large window where he could observe the street outside. His guards sat nearby. A waiter approached and asked, "What would you like to order, sir?"

Arthur inquired, "What is your finest tea?"

Recognizing Arthur as a wealthy patron, the waiter smiled and said, "Sir, our finest tea is Darjeeling, known as the 'Champagne of Teas.' It is grown in the high-altitude mountains of Indoria and is quite rare. In Indoria, it is highly sought after among the upper class, and because production is limited, it is rarely available outside the country. However, we were fortunate to acquire a small supply recently."

Arthur, with a slight smile, replied, "Then I'll have the Darjeeling tea." As the waiter left, Arthur thought to himself, In a few years, this tea will become even more accessible.

A few minutes later, his tea arrived. As he sipped it, he unfolded his newspaper and skimmed through articles concerning the nobility—gossip about social events, fashion trends, and scandals. Losing interest, he turned to economic news. One particular article caught his eye—it discussed the recent price reductions in steam-powered industrial equipment, such as rolling mills and steam hammers, along with steam-powered agricultural tools and textile machinery. The article noted that in just six months, prices had nearly halved.

Arthur, having invented many of these machines himself and licensed their production to entrepreneurs for a reasonable fee, had expected prices to decline. However, he had not anticipated such a rapid decrease. While the price of steel had fallen due to the navy's continuous demand for new ships, it had not dropped enough to account for such a dramatic reduction in machinery costs. This signaled a potential economic issue.

As an industrialist himself, Arthur understood that if prices continued to fall at this rate, many manufacturers would struggle to stay profitable. Such a trend could even lead to deflation, a phenomenon where declining prices reduce business revenues, leading to lower wages, unemployment, and a slowdown in economic growth.

Arthur returned to the palace, determined to investigate further and uncover the underlying causes of the economic shift. After consuming a quick yet nourishing meal and indulging in a warm, refreshing bath to clear his mind, he proceeded to his study. Settling at his well-organized desk, he methodically retrieved a stack of reports from the Ministry of Finance and the Bureau of Statistics. As he meticulously sifted through the documents, he paid close attention to tax revenues from machine manufacturers and was struck by a significant and concerning decline. In stark contrast, the tax revenues from other sectors, particularly textiles and light manufacturing, exhibited a stable trend and, in some cases, even showed modest increases. This discrepancy piqued his curiosity, prompting him to delve deeper into the data for further insights.

Further examination of statistical reports revealed the cause—Pendrallis's domestic market for industrial machinery was approaching saturation. The rapid expansion of factories had significantly slowed, reducing the demand for new equipment.

Arthur recalled that when he had first introduced steam engines and industrial machinery, the government had imposed strict export bans, fearing that foreign nations might use these innovations to compete with Pendrallis. As a result, neighboring countries like the Frankish Kingdom and Aragon had resorted to industrial espionage, managing to acquire some technological secrets. However, unlike Pendrallis, these nations lacked the mining, coal, and steel industries necessary to support large-scale industrialization. Their attempts at manufacturing had been inefficient and costly.

Arthur realized that if the export restrictions were not lifted, many machine manufacturers would soon face bankruptcy. The deflationary pressure could spread to other sectors, harming the economy. It was time to remove these outdated restrictions. Pendrallis had already begun exerting economic and military influence over foreign regions, securing both resources and markets. Even if other nations acquired Pendrallis's machines, their inability to implement the necessary social, economic, and political reforms would hinder their progress for years.

Determined to act, Arthur drafted a plan to lift the export bans on select industries. As he finished, he noticed how late it had become. He decided to present his proposal to his father the next day, convinced that the time had come for Pendrallis to expand its industrial dominance beyond its borders.