Declare Bankruptcy, Then Sell the Mountains
What? Bankruptcy?
Just as a record-breaking cold wave swept across Europe, the King of Spain was Felipe III.
And the Spanish crown's finances were in terrible shape.
"What do you mean, we have no money?"
"It's true, Your Majesty."
"The bankers won't lend us any more, you say?"
The Dutch War of Independence, the cost of the New World colonies, the war with the Ottomans — and the heaviest blow of all, the Battle of Pyeong-an. Most of Spain's military was hired mercenaries, and feeding that machine had devoured an astronomical sum of money.
"It's all short-term debt at punishing interest, sire. We can barely manage the interest payments alone."
"Isn't that money my father borrowed? Why are you bringing this to me?"
To be fair, most of the debt did belong to his father, Felipe II.
So when he was told that because there was no money, he ought to cut back on his purchases of tobacco, tea, and liquor, it was only natural that he bristled.
"Might I suggest a course of action, Your Majesty?"
"Go on, then."
"For now, simply suspend all interest and principal payments."
"Can we do that?"
Felipe III's pride stung a little. Was this not the talk of an emperor of an empire declaring bankruptcy because he was broke?
"And then we wait a little."
"Hm?"
"In the end, if they want their money, they'll have to come to the negotiating table, won't they? And adjust their terms."
"Ahh. So we're not refusing to pay them entirely?"
That way he could salvage some dignity. After all, the implication was that he would pay — eventually.
"Precisely. So when they come to negotiate, tell them that the current short-term debt at high interest simply cannot be honored, and demand it be converted into long-term debt at lower rates."
"Not bad. Do it that way."
What the Duke of Lerma was proposing, in essence, was that the crown strong-arm the bankers.
Threaten them with bankruptcy rather than keep paying the usurious interest they were charging now.
Spain was the mightiest power on earth, bristling with soldiers, and no banker would dare move against her.
"And when does the gold from Africa arrive?"
"It is being hurried along, sire."
It was being hurried along, all right — mostly straight into the Duke of Lerma's back pocket.
"Has the plague subsided?"
"Hard to say, Your Majesty."
"Well, it's only a few peasants dying. Ugh, such base little creatures…."
Even if the gold did arrive, there would be trouble. Spain's population had been ravaged by the plague, and the cold snap on top of it had slashed domestic crop yields to a fraction of what they had been.
And so, with gold pouring in, the situation within the country was one where even money couldn't buy bread.
The nobles sent merchants to Daehan to fetch luxury goods and grain for themselves, while selling food to the common people at ruinous prices.
"Ah, and Your Majesty — there is a way to raise some money right away."
"Oh? What is it?"
Buying things from Daehan took money after all, and Felipe III had been toying with the idea of borrowing a fortune like his father had and leaving the mess to his son.
"We sell land near the port to Daehan."
"Land? That hardly seems a good idea."
No matter how little interest he took in governance, even Felipe III understood that land mattered. Not a chance, he thought.
"The land of the Union, Your Majesty. Not ours."
"The Union?"
"Portugal, sire."
"Aha! Of course — strictly speaking, that isn't ours at all! Hahaha! Sell it to them at a handsome price, then."
"Yes, Your Majesty! Naturally."
The Duke intended to squeeze out every last coin he could. Half of whatever the sale brought in would be finding its way into his own pocket, after all.
As he strode out of Felipe III's audience chamber, the corners of the Duke of Lerma's mouth were twisted into something truly hideous.
Thanks to nobles who could not spare a thought for the suffering of their starving subjects, the decline of Spain — the great power of Europe — had quietly begun.
Astonishing. These early-modern Europeans really are something else.
"Bankruptcy?"
"Can a country really just do that when it runs out of money?"
Word had come in through the salons: Spain had declared bankruptcy, refused to pay, and the bankers were in an uproar.
"Well. If you can't repay what you borrowed, even a kingdom has no choice."
"But here's the funny part. They won't give up any land either — they're just going to sit there and stonewall."
When a great power stonewalls, there's nothing anyone can do about it.
It was pure dog-thug behavior, but strong nations pulled this trick all the time. Take the money and run, then dare anyone to complain.
But the truly hilarious part was this:
"And in the middle of all that, they're selling us land?"
"And quoting an absolutely outrageous price for it, apparently."
Hmm. The area near the port could stand a little expansion, that much was true. It was just odd — that land sat around their capital, and they'd refused to budge on it before. What had changed?
The weather there was lovely, too. It would make a fine resort.
"In that case… tell them we'll pay even more, and ask what goods they'd like."
People were already streaming in from every direction, and the city was on the verge of bursting at the seams.
Perfect timing. Best to buy up plenty of land while the offer stood.
"It is an honor to meet you. I am Yi Jin-seok, envoy from Pyeong-an Naru."
"And to you. I am the Duke of Lerma, of Spain."
The two men sat down across from each other that day to negotiate the terms of the territorial sale.
The strange part was that the Duke of Lerma had come to Pyeong-an Naru in person. A truly remarkable occurrence.
These European lords, whatever the business, always fancied themselves the ones above, summoning others to their own domains.
The teacup rattled softly against its saucer.
"I've prepared tea and refreshments. I hope they suit your taste."
"Much obliged."
And so the Duke set about the chocolate and yanggaeng with utter abandon, washing it all down with tea.
The snacks he was shoveling away would have fed a commoner's entire family for a year.
He never even noticed Yi Jin-seok's eyes, seated across the table, cooling to ice.
"I take it you find them agreeable? I'll have a portion packed for your journey."
"Haha. I shan't refuse."
The tea and refreshments were the opening skirmish — a chance to take the measure of one's opposite number.
They're treating me well, so if I play this right, I should be able to take a handsome cut.
The Duke was a man who cared far less about the sale price than about how much would land in his personal coffers.
A page of parchment slid across the table.
"Before we begin in earnest, I've had a map drawn up of the lands surrounding Pyeong-an Naru."
"Oh? Rather detailed, this. And extensive."
The map Daehan had prepared showed only the region west of Lisbon in fine detail; everything else was sketched in with a few careless strokes.
By unfurling it, Daehan had made its preference for particular parcels of land abundantly clear.
The Duke's eyes gleamed as he pored over the map, turning it this way and that. Plains, mountains, and more.
"It's bigger than I expected. What say we keep it to the port's immediate surroundings?"
"Of course. That suits us fine."
"Then what price did you have in mind?"
The land the Duke indicated was really quite modest — enough to expand the existing enclave roughly fourfold.
But Yi Jin-seok showed no disappointment. This was only the opening bid.
"Before we discuss price, allow me to mention one thing first. Half of the payment will be delivered to you separately. In absolute secrecy…."
"Gah! Ahem…."
The Duke, startled out of his skin, cleared his throat with an embarrassed cough.
Under the terms just laid out, the more land he sold, the fatter his own take would grow.
"Well then, on to price. How does thirty years' worth of the harvest sound?"
"Hm. Isn't that a bit stingy? The customary rate is fifty years, I'll have you know."
In that era, European land was priced by the agricultural yield it could produce. Mountain terrain, compared to farmland, traded at a pittance.
"We'll calculate the mountain land at the same rate as flat farmland."
"Hck."
This time the Duke didn't even bother hiding his shock. The way he saw it, he wanted Daehan to draw in every unmarked mountain on the map just so he could sell it off.
"Er — then let me take another look at that map."
The scratching of his pen filled the room.
He studied the land Daehan had outlined west of Lisbon with rapt attention, drawing line after line.
There was flat ground, to be sure, but wasn't he fencing off a tremendous amount of territory — mountains included?
Yi Jin-seok simply watched him with an expression of pure disbelief.
"Ahem, ahem."
Perhaps the shape he'd drawn looked awkward, or perhaps his lack of conscience had become too obvious to bear — the Duke straightened out a few sections with clean lines and cleared his throat.
It was his way of asking, how about this much, then?
"Any land suits us. That's grown considerably larger — are you quite sure?"
"For this much, surely the price barely rises?"
Even granting it wasn't the soil beneath his own capital, the man was about to sell off roughly four hundred times the existing port's footprint, conscience apparently not a factor.
"That is quite a lot of land."
"Then we calculate the mountain ground at thirty years' production?"
"Yes, of course."
Thirty years' yield of prime flat farmland was an enormous sum — though frankly, it meant almost nothing to Daehan.
Crops were one thing Daehan had in glutting abundance.
They had so much surplus grain they were turning it into liquor. Enough said.
"In that case, we shall offer forty-five years' worth."
"Mm. Agreed."
Fifteen years' worth of that would be sliding into the Duke's pocket. Possibly more.
"And how shall the payment be made? All at once, or in installments? A single payment would strain even us, so you'd have to come down somewhat."
There was no strain whatsoever. Only the couriers would be tired from hauling it.
"Five years. No — spread it over ten."
The Duke had given it some thought. He wanted the money in hand before he grew old and died.
What use was wealth you couldn't spend? Leave the rest to the children — up to a point, that was.
"Very well. And what form will the goods take? Raw goods? Gold coin? If you take it in goods, we'll calculate it at sixty years' worth."
"Good heavens!"
At this point the Duke wondered if these people had lost their minds. He couldn't understand why they were being so ridiculously generous.
Not a coin off the price, and nothing but gifts heaped on top — he could barely collect his thoughts.
Wait. Have I overlooked something?
The Duke mentally replayed every term of the deal so far.
No, I can't see it. What in the world do they want with all this useless mountain?
However he turned it over, there was nothing to lose. The land was mostly mountain scrub anyway, and they were paying thirty years' yield at flat-farmland rates? And a separate thirty years' worth was his alone, of course.
"G-goods, then. Would Daehan merchandise be acceptable?"
"Of course. As much as you like."
Which suited Daehan beautifully — the volume of cargo that had to be shipped would shrink enormously.
As for the Duke, he would no doubt take the goods and run his own private trading concern with them, angling for another round of profit besides.
"Excellent. In exchange, I'll be taking the serfs with me."
"Yes. By all means."
Now the Duke was certain these people were mad. In an age when serfs were this hard to come by, they were paying through the nose for worthless land — and giving up serfs on top of it?
The fact that they were foreigners had nagged at him, but since it was Portuguese soil, his conscience barely whispered. By any measure, this had been a triumph of a deal.
"Good. I'll return home and draft the accord."
"We shall await it with great pleasure. I've already had your gifts loaded onto your carriage."
"Mm. Much obliged."
"Safe travels, Your Grace."
"Is this the land sale contract?"
"Yes. But isn't it awfully expensive?"
"Why?"
"There's barely any flat ground. It's nothing but land, land, and more land?"
Looks like flat ground to me, all of it.
"None of the mountains are even that tall. Blow them apart with demolition charges and it's all flat, isn't it?"
"…Huh."
Was that a bit dim of me? But it really is nothing but low mountains.
This much was worth developing. And people need mountains to live — it's essential.
I planned to keep gathering the vagrants drifting across Europe, the poor and the desperate, right here.
"Ask them to send plenty of cement to the Eastern Continent."
Why cement, you ask? The recipe for fly ash and the recipe for cement are close enough cousins that they'd figured out how to make it on their own.
All I did was drop a hint about mixing in metal powders and additives to see if they could improve it further.
"We'll drive pilings with the cement and maybe mark out a border with it, too. So nobody gets any funny ideas later."
"Yes, ma'am~"