The Confusion

“Of course not! For that, we are competing against every other foreign merchant in Lyon who does not share the belief, common here, that entries in a ledger are the same as money,” said Samuel.

“What kind of person would believe such a thing, though?” Abraham asked.

Jacob Gold answered, “The kinds of people who have been here for so long and who make a comfortable living off of those ledgers.”

Eliza said, “But the only reason this system works is that these people know and trust each other so well. Which is fine for them. But if you are on the outside, as we are, you can’t take part in the Depot, as this system is called, and it is difficult to realize profits.”

Jacob Gold added, “It is fine for those who have the houses here, the land, the servants. They transact an enormous amount of business and they find ways to live well. The lack of hard money is only felt when one wants to cash out and move somewhere else. But if that is the kind of person you are-”

“Then you don’t live in Lyon and you are not a member of the Depot,” Eliza said.

“We can talk about this all day, going in circles like the Uroburos,” said Samuel, clapping his hands, “but the fact is that we’re here and we want to buy some timber for the King. And we don’t have any money. But we have credit from Monsieur Castan who in turn has credit because he lives here and is very much a member of the Depot.”

“Thank you, Samuel,” Eliza said. “You are correct: people trust Monsieur Castan; when one of the other members of this Depot writes in his ledger ‘M. Castan owes me such-and-such number of ecus,’ to them that’s as good as gold. And what we need to do is turn that ‘gold’ into some timber arriving at Nantes.”

“Thanks to Monsieur Wachsmann,” said Jacob Gold, referring to our host, “we have some ideas as to where we might go and make inquiries about who has timber, and might be willing to sell it to us; but how do we actually transfer the money to them from the King’s Treasury?”

“We need to find someone who is a member of this Depot and who is willing to write in his ledger that the King owes him the money,” Eliza said.

“But that still doesn’t get the money into the hands of him who sells us the timber, unless he is a member of the Depot, and I do not phant’sy that lumberjacks are invited,” said Samuel.

“And it provides no way for us to realize a profit,” Abraham, the ever-vigilant, reminded them.

Eliza reached out and pinched him on the nose to shut him up while she pointed out, “True, and yet wax, silk and other commodities are sold here in immense quantities, so there must be some way of doing it! And some do realize hard money profits, as is proved by the covert transfers of bullion to Geneva!”

Monsieur Wachsmann was therefore brought in. He was a stolid gray-headed Pomeranian of about threescore years. They explained their puzzlement to him and asked how he sold his goods, given that he was not a member of the Depot. He replied that he had a sort of relationship with an important businessman in town, with whom he kept a running account; and whenever the account stood in Monsieur Wachsmann’s favor, he could leverage that to get what he needed. The same would be true, he assured his visitors, of any timber wholesaler big enough for them to consider doing business with.

“So a plan begins to take shape,” said Samuel. “We will negotiate terms with a timber-wholesaler, denominated in ecus au soleil, never mind that they are a wholly fictitious currency, and then take the matter to the Depot and allow them to clear it on their ledgers. We end up with the timber; but is is possible for us to extract any profit?”

Monsieur Wachsmann shrugged as if this was not something he paid much attention to; and yet his estate showed that he had profited abundantly. “If you would like, you can route the profits to my account, and I will owe them to you, and we may plow these into later trades within the Depot, which may eventually turn into some material form, such as casks of honey, that you could sell for gold in Amsterdam.”

“This is how people move to Lyon, and never leave,” muttered Jacob Gold, combining in this one remark the Amsterdammer’s amazement at Lyon’s business practices with the Parisian’s disdain for its culture.

Monsieur Wachsmannn shrugged, and looked at his chateau. “Worse fates can be imagined. Do you have any idea what Stettin is like at this time of year?”

“What about getting some bullion and running it to Geneva for a bill of exchange?” Abraham demanded. “Much quicker, and easier to carry to Amsterdam than casks of honey.”

“There is a lot of competition for the small amount of bullion that exists here, and so you will have to accept a large discount,” Monsieur Wachsmann warned him, “but if that is really what you want, the house that specializes in such transactions is that of Hacklheber. They are at the Sign of the Golden Mercury, cater-corner from the Place au Change.”