Chapter 1580: Blow Up the Bubble!

Emperor Louis the Great was, of course, a devout believer in God. After becoming Roman Emperor, he had graciously permitted the Roman Church to sell indulgences within the Empire, and had even taken the lead in buying several large crates of them himself — enough to fully absolve him of the sin of selling guns to the Muslims to kill Leopold.

Henry put on an admiring expression and nodded repeatedly. "Your Majesty speaks truly. It seems I misjudged you — you will certainly repay all your debts. However, right now we have an opportunity to raise an enormous sum for you, one that need never be repaid. Does Your Majesty want this money?"

"Never be repaid? Truly? Is there really such a thing?" Emperor Louis the Great's face immediately lit up with delighted surprise.

Though he was a devout believer in God, he could not admit to borrowing without repaying. Being unable to repay was one thing; knowingly borrowing when one knew one could not repay — that was fraud!

Of course, if he could obtain a sum of money that never needed to be repaid, that would naturally be the best of all.

"Truly, truly," Grand Duke Henry nodded repeatedly, "because the entire banking community of Vienna believes in God just as Your Majesty does. As you know, the sale of indulgences in Vienna has always been extraordinarily brisk; every banker has bought a pile of them. That is proof of their devout faith in God."

Emperor Louis the Great nodded approvingly. Only those who believed in God would buy indulgences; those who did not believe in God would not buy them. For example, Mehmed IV, Aurangzeb, and Zhu Cilang would not buy them, even though their sins were greater than anyone's!

Henry continued: "Because all of us are devout believers in God, having foreseen that Your Majesty is about to launch a war aimed at crushing the Ottoman Empire and recovering lost territory, we are all willing to provide funds for your cause. Funds that need never be repaid!"

Louis looked at his son-in-law. "Then what sort of return do the Catholic faithful of Vienna expect to receive?"

"First of all, of course, that their souls may ascend to Heaven after death!" Henry said with a smile. "They trust that God will receive them!"

"That is certain!" Louis nodded. "They have bought so many indulgences, they can surely redeem the sin of usury!"

"You are right," Henry said. "In truth, usury is not such a great sin. Besides seeking the ascent of their souls to Heaven after death, the faithful of Vienna also hope to obtain from you something called stocks."

"Stocks?" Emperor Louis the Great was taken aback. "But I have no stocks. And aren't all of Europe's stocks traded in London and Amsterdam?"

It was entirely normal that Vienna's stock market lagged far behind London and Amsterdam, because Vienna, that financial center of Europe, lacked the support of a real economy — Vienna was simply a place for lending and depositing money. The wealthy of both the Roman Empire and the Ottoman Empire liked to deposit their money in neutral Vienna, and the courts of both Rome and the Ottomans also borrowed from Vienna's bankers.

But apart from banking, the Archduchy of Austria had no industry worth mentioning. Moreover, the Roman and Ottoman Empires, which Vienna's banking industry served, had no particularly thriving industries either. Without thriving industries, there was naturally no way to issue stocks — surely the Church that sold indulgences could not be listed on the exchange?

Behind London and Amsterdam, by contrast, stood the overseas trade and booming manufacturing of England and the Netherlands! With a sound industrial base, the stock markets of London and Amsterdam were naturally more active.

Over the past ten or twenty years, the stocks of trading and colonial companies such as the British East India Company, the British South Sea Company, the Dutch East India Company, and the Dutch India Company, along with a large number of manufactory and mining stocks, had been rising continuously, winning the favor of investors and earning the financiers of London and Amsterdam a fortune.

The God-fearing bankers of Vienna, seeing their counterparts in Amsterdam and London grow rich, were naturally green with envy.

But envy alone was useless! Vienna's bankers could not produce investment targets attractive enough to catch investors' eyes. Then the critical illness of Carlos II gave Vienna's bankers their opportunity.

Because the overseas colonies held by the Kingdom of Spain and the Kingdom of New Spain were all extremely valuable!

These territories were far superior to the New France and New Rome held by the Roman Empire. If they could be packaged and listed, they would surely rake in a vast sum of money!

And Vienna could go a step further and become the center of stock trading for all of Europe!

"Your Majesty," Henry said to Emperor Louis the Great, "you do have stocks. Once you receive the inheritance of Carlos II, you can issue shares in New World colonial companies that investors all over Europe will love. Then Your Majesty can found chartered trading companies similar to the South Sea Company and the East India Company — for example, the Caribbean Company, the South America Company, the Mexico Company. With these joint-stock companies, Vienna's bankers can issue stocks for you. Sell some shares, and you can raise sufficient funds."

The scheme Henry was proposing to his father-in-law was one his own father Zhu Cilang had long since played out — but in the Europe of 1700 it was still highly effective.

For Europe at this moment was in the midst of a stock bubble. Thanks to the generally peaceful state of the world over the previous twenty-odd years, and to the great European market created by the revival of the Roman Empire, the commerce and industry of England and the Netherlands had developed rapidly, and the market was awash with capital seeking investment opportunities. The stocks of the British East India Company, the Dutch East India Company, the Dutch India Company, and the British South Sea Company had all soared to the heavens.

If the Roman Empire swallowed Spain and New Spain, it would possess the most profitable colonies in the world — how enormous a story that would be!

If the gold mines, silver mines, and plantations of New Spain could all be packed into joint-stock colonial companies like the East India Company, managed by shrewd and responsible merchants, they would surely generate extremely rich profits. Whether or not this expectation could actually be realized, all that mattered was that the market believed it.

Henry said with a smile: "Because the rich profits of the Caribbean Company, the South America Company, and the Mexico Company are entirely predictable, the stocks of these companies will certainly soar to the heavens before the profits are ever fully reflected in the financial statements. And stocks — they need never repay principal, and they do not necessarily have to pay interest!"

"Truly?" Emperor Louis the Great's eyes lit up — raising money by issuing stocks seemed a cut above defaulting on debts! And one could avoid repaying principal, avoid paying interest, and still not count as a swindler!

"Can it really swindle —" Emperor Louis the Great looked at his fine son-in-law and said, "not swindle, I mean, can it really sell a great many stocks?"

"It can!" Henry nodded with absolute certainty. "Your Majesty, as long as you trust François and me, we will certainly sell a great many stocks. We can raise at least ten million gold louis for you!"

"Good!" Emperor Louis the Great nodded. "Henry, François, I leave the matter of issuing stocks to the two of you! You may form whatever kind of joint-stock companies you like.

But you must begin as quickly as possible, for Carlos II is already failing. Perhaps within a few weeks he will return to the embrace of the Lord! Once he dies, the Roman Empire must prepare for war, and it will need money badly."

Now wealth would pour in! Henry and François-Eugène were both beaming at the news. What they had obtained was not merely the business of issuing stocks to raise money for Emperor Louis the Great, but also the founding of money-raising joint-stock companies for the Emperor!

These companies were not entirely fictitious, for Emperor Louis the Great truly did possess vast territories in the Caribbean, Mexico, and South America. The only question was how to develop them and extract profit.

"As you wish," Henry said with a smile. "Once François and I return to Vienna, we will immediately begin founding the Caribbean Trading Joint-Stock Company and the Mexico Mining Joint-Stock Company. All the startup capital will be provided by our Archduchy of Austria."

(End of Chapter)