Herald of Steel

Chapter 1449: Loans and Collateral

".... if we are truly out of money, well we can use the taxes. Either directly move the money into the accounts or just forgive their payments for a few years in exchange."

As Lady Nanazin chimed this reply, Alexander’s eyes instinctively flickered as he had to try very hard to maintain his current facade.

This was an insane idea even he did not dare have, and figured Lady Nanazin must have picked up these unscrupulous techniques while trying to keep Ptolomy afloat.

Her salt regarding lending to merchants certainly painted such a negative picture.

However just as Alexander was about to offer an addendum, he instantly thought back to how governments bailed out banks and found it almost a one to one simile.

It was just the practice was never explicitly laid out like that, nor did he know of any governments that actually gave anyone tax relief as compensation for losing their money.

It was usually facilitated by money printing, thus debt.

But all in all, Lady Nanazin’s main idea was mostly correct- give the bank some sort of external aid, such as money from the state treasuries to make up the short fall in the immediate term and then deal with the mess later.

This was a very basic example of quantitative easing.

And it showed Lady Nanazin too knew how to keep the books in the black- through hook or crook.

"Mmm... indeed Your Highness Nananzin is truly experienced in such matters. I am reassured." Thus Alexander frankly gave a light smile towards the curly haired lady, slouching back in his chair with a relaxed posture.

While Lady Nanazin gave a small smirk, amused at Alexander’s use of her full title, it usually meant either he was very angry with her or very pleased.

"What do you think Lady Parthia?" Alexander then posed the same question to Lady Parthia and straightening herself up, the elegant queen crispily suggested,

"Indeed, this could be one way. I would also consider taking collateral, such as their land or family when giving out the loan."

"That is obvious." Lady Nanazin almost instinctively retorted the answer from the side as soon as the answer drifted into her ear as if she was a bit offended.

She did not bring such an obvious example because she thought this was a given.

Taking the land and house, and selling the debtors and even their whole family into slavery if they could not pay the loans back... all this she thought was already implied.

After all, this was the most natural form of compensation for creditors should borrowers fail to meet their payments.

Thus Lady Nanazin figured Alexander was really asking her was- ’What would happen if somehow those collaterals were unable to meet her financial obligations?’

Hence, Lady Parthia giving such an ’easy’ answer appeared slightly disingenuous to the Adhanian queen. Explore stories on novelhall.Côm

While Alexander had also not brought up the matter of collateral because he did not know how effective such a condition would be.

For one, in this time period, it was quite hard to vet the value of land, especially if it was far away.

So Alexander would need to spend considerable manpower to send realtors all the way there to verify them. This could take weeks if not months.

Not to mention Alexander was currently in a civil war- so who could guarantee whether that land would even be there when the debtors defaulted?

It took almost all the guesswork and uncertainty about lending from before.

Sadly for Alexander, he did not have access to such 21st century sci-fi technology out here in the boonies.

Of course he still had an alternative- the easiest way to solve this dilemma would be to offer the interest free, profit based type loans, thus sharing some of the risks with brilliant but poor entrepreneurs.

However as mentioned earlier, the logistics of the loan made it difficult for Alexander to implement it right now.

.....

The pasha would keep all these extraneous thoughts to himself now. There was little point in saying them out aloud anyway.

It was not like either the ladies were going to understand him much anyway. No matter how smart they were, they simply lacked the educational foundation.

Hence flashing a satisfied smile, Alexander turned to give both of them an agreeing nod-

"Mmmm, indeed, there are a few ways we can tackle this. Good! We can discuss the exact details if ever such a problem rise. Hopefully it will not."

Then making this auspicious prediction, Alexander suddenly turned his gaze towards the Adhanian queen, and started in a flat, simple tone-

"Tell me Lady Nanazin, suppose one day I go to the market. There I decide to buy some bread for 1 ropal, a basket of apples for 1.5, a few feet of cloth for 30 ropals, a comb for 3 ropals....."

In this way Alexander listed seven items and their prices, before finally asking, "So how much did I spend?"

"77.5 ropals" Lady Nanazin managed to give the answer in an instant, somewhat surprising Alexander with her speed.

Especially as there was not even a hint of doubt in her voice- the answer was contained in an ultra crisp, ’damn sure’ tone.

The Adhanian queen had started taking note of the items the moment Alexander went past number three, quickly starting to add the numbers.

So the answer was already loaded by the time Alexander posed his question.

And as if that was not enough, in a show of even greater wit, when Alexander asked her if she could name the listed items, Lady Nanazin was well able to recite them in perfect order along with their mentioned price.

"Excellent, excellent. Having a good memory and quick math skills is vital for any good business. Truly excellent. Hahaha, indeed I chose wisely."

Alexander thus let out a genuinely pleased grin, giving the lady a hundred out of hundred on the test.

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