Herald of Steel

Chapter 1427: Counting Houses

The way Alexander explained how to use loans was not that complicated in his eyes.

These had been in use for quite some time, with its latest iteration even having a fancy name- blitz scaling.

The name took inspiration from the German blitz, where the Wehrmacht raced ahead of their supply lines to cover ground at the fastest speed possible, risking encirclement, in order to not give the Soviets any time to breathe.

The goal for a business was similar- to spend a ton of money to get control of as much of the market as quickly as possible, such as through aggressive marketing campaigns, opening shops at every corner, and generally building a brand image.

Profit was not the main concern at this stage. In fact that concern might not even exist.

The only thing that mattered was growth! Growth, growth, and more growth... until the company took up such a large of the market pie that it became too big to fail.

Only then, once the company became established and had a majority or even a monopoly, did come the question of profit and repaying its investors, which usually involved jacking up the prices.

Now, this tactic was invented due to a special set of circumstances.

Namely in the age of information and technology, it was too easy for others to copy you.

For instance, the moment someone makes a novel product, you can bet good money that there will be a cheaper, knockoff version within the week, perhaps from a huge local conglomerate or more likely an international competitor.

This was simply a by product of living in an interconnected world.

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And one of the tactics used to try and get around this was to simply see who had the deeper pockets, the original or the fakes.

So the one who could raise more funding, who could create more hype, and who could get more in the red without sinking, and then use this money to drive out all the others would be the winner.

This was how most recent tech giants grew.

....

Now to be fair, comparing such an advanced technique to Alexander’s current case was disingenuous. Such fierce business competition did not exist here, as society as a whole was just not that advanced enough.

Hence he guessed most loans will be just used to expand the business and employ economies of scale.... not price gauge the competition.@@@@

He had only brought up the topic to show off his business knowledge to the two queens, letting them see paths they did not even know existed.

And this worked... to some extent.

If Alexander’s goal was to stun the pair, he certainly succeeded. However, if he had wanted to impress them, well...

’As expected, she did not survive the Royal court just by enduring the bullying,’ Alexander mused with a tone of satisfaction.

While Lady Nanazin’s words also managed to cool down the overheating Lady Parthia, who began to realize perhaps she too had stepped out of line. Hence her eyes visibly dimmed.

This let Alexander clear the air with a frank chuckle, "Hahaha, well this is the fun of talking with people. You get a lot of different perspectives."

Then turning to Lady Parthia, gently posed, "Now my lady since you are so opposed to money lending, perhaps you can tell me how your country does this? If I learn how the trading guilds do this, perhaps I can adjust my ideas... have them be a part of it."

Alexander’s gentle and diplomatic approach made the belligerent Lady Parthia even more docile, and even slightly flush over her ’unbecoming’ behaviour.

She truly disliked moneylenders, so when the topic was brought up, she let her emotions get the better of her.

To quickly cover her embarrassment, she hurriedly answered,

"To learn how loans in Tibias work, my lord you need to understand how the Tibian guilds manage their money... through the use of counting houses."

"These ’houses’ can vary greatly in size... from a single poor man for a small guild to dozens of accountants for the largest and powerful ones, all recording every transaction ever made- be it a sale, purchase, loan or repayment and from who, when and why, they will keep it all in neat ledgers. These men are the wheels that keep those guilds moving."

"I know so much about them because they are the ones who pay the guild’s taxes. So whenever there is an audit...."

It took some time for the Tibian Queen to describe the intricate mechanism of a counting house and how it was used to loan money to people.

But the cut version was this.

These houses were mainly used for legitimate purposes.

So necessary things like recording all transactions for tax purposes, balancing books to ensure there was no theft or loss, inventory management of remaining stocks, and the worker’s payroll.

Many counting houses also specialized in currency exchanges where they served another important purpose- verifying the integrity of the coins being used.

They had a small army of specialists with touchstones every day checking every type of coin that came their way. They would rub various types of coins against the stone and then deduce the gold or silver content from the residue left on the stone.

This meant if Ptolomy decided to devalue the ropals by say mixing in some copper with the gold, but wanted to sell it for the same value, well it would be up to these expert men to catch him.

Let us say no to piracy! Don’t take part in a crime! Don’t patronize thieves!

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