"Well, it's stopped for now, Tony," Coleman Walker said on the phone that night to Tony Adducci.
"You think it will hold?"
"I'm not sure. The way I heard it, David Bartley and that prince from the HRE were cooperating to corner the market in Dutch guilders. I'm starting to wonder if we got took."
"The way I got it from Fletcher Wendell is that Prince Karl was trying to get Wisselbank notes because he figured that Don Fernando would honor them for him even if he wouldn't for a bunch of Dutch merchants. He is an allied prince, after all, or at least his uncles are. David saw an opportunity to make it look like they were trying to sew up the market and took it," Tony defended David. "So how much is the bank out?"
"Nothing yet," Tony could hear the dissatisfaction in Coleman's voice. "The Bartley boy pointed out that if he just acted as an agent for the bank there would be another run as soon as the word got out. To make it work, the guilders would have to appear on the OPM books. So he proposed that we give OPM a low interest loan and a guarantee to buy the guilders at cost. He got Franz Kunze to go along with it. We probably should have gone to Herr Kunze in the first place. Anyway, for now, OPM is sitting on the guilders and the bank is just showing a loan. We won't have a loss on the books till the loan comes due and we have to take Amsterdam's waste paper at cost."
"That's great, isn't it? From what I hear, Frederik Hendrik figures that he can hold. We may come out of this all right."
"Maybe, but the longer the siege goes on the worse it's going to get."
Tony was convinced that Coleman Walker made pessimism into an art form. "The dollar has been going up against the guilder right along. By the time the siege is over, confidence in the guilder could be so low that they won't be worth what the Bartley boy paid for them during today's panic. The only way that we could prevent that from happening would be to increase the number of American dollars. We could probably manage that, but while the dollar has deflated over the last two years there has been inflation in German currencies to compensate."
"You've mentioned that before, Coleman," Tony Adducci agreed, while thinking Over and over again, you've mentioned it.
"Why would the up-timers want to save the guilder? It makes no sense. If the guilder collapses their American dollars will be worth more and they will be richer," Josef Gandelmo, Prince Karl's tutor, wondered aloud later that evening. A little more than a year earlier, Karl had called Richelieu a dotard in this room. Josef looked at financial matters in terms of what they accomplished. What David had done was stop the Dutch guilder from collapsing. To Josef, that probably meant that David had meant to prevent the Dutch guilder from collapsing. The question became: why a strong guilder? It seemed to him to be to the up-timers' disadvantage.
"It does make sense in a way, Josef. Remember the lecture series we attended. One was about exchange rates. Having an overpriced currency can price you out of the export market. High value money makes import cheaper but export more difficult. If most of your spending is local, you want a low value currency because the people you buying from are using the same money, so the lower the value of your money, the less you're paying.
"If you're buying more stuff from far away, then you want a high value so that less of your money buys more of theirs. The up-timers have been running a trade surplus since the day they arrived. They apparently wish to keep doing so. Wait . . ." Karl had apparently just realized what Josef was getting at. "Do you think that David was trying to prop up the Dutch guilder?"
"It seems so. He certainly, with your help, managed to do so," Josef offered. "Now you've provided a reason for it."
"No. If he had gotten a personal loan, then that would be a possibility, but to use OPM funds? I don't think so." Karl shook his head. "Some of the up-timers are fanatical about their reputations, you know, and David more than most. Fiduciary responsibility and all that, they take it very seriously. If David used OPM funds to save the guilder at the expense of the fund stockholders, it would destroy his reputation." Karl paused in thought. "Could he have some arrangement that protected the stockholders?"
"That's possible. If he does, then we should not bandy it about. OPM has a bit over half a million Dutch guilders. As of now, Your Highness, we have more invested in saving the Dutch guilder than OPM does. Almost twice as much."
Karl and Josef paused to listen to the evening news on the up-time radio. Radio, in Karl's opinion, was a marvelous thing, as important to him as indoor plumbing, frankly. The nightly news program helped him project what might or might not happen in the surrounding area, keep up with events, and determine where to place his investments. He was shocked, though, to hear his own name mentioned.