Church Financial status

Henry Brown wrote:I've never had a lot of faith in the theory that the CoG is going to go bankrupt and the war effort will collapse. I remember the early books of the Honorverse series, where the initial version of Haven was supposed to be near bankruptcy at the beginning of the war. In fact, their whole reason for starting the war was to gain plunder through military gains.

Of course this did not work out and they ended up in a protracted, expensive war. However, despite their dire economic straits, the war continued for nearly 20 years. In fact, Haven managed to not only maintain the war effort without interruption, they also managed to overhaul their economy at the same time. Given this prior example, I am skeptical that the Safehold series is going to end due to the CoG going bankrupt.

The Honorverse example may be apt. Reform of corruption and invigorating a stagnant economy is well underway in Harchong and the Temple Lands. An armed, disciplined, motivated serfdom in Harchong is expected to come home with ideas that won't brook return to being draft animals for the aristocracy - and that's the kind of work ethic and pride that led to a restored Havenite economy and constitution.

The war ending with (among other things) a Harchongese revolution is more likely than it ending primarily due to a Temple bankruptcy, especially since it's running now at least as much on Inquisitional (StateSec) terror as it is payment for services.

Delurking

Wars are complicated activities with multiple components affecting actions, capabilities and status. Economics is a significant factor in any war and, ultimately, the war on Safehold is (IMHO) going to be resolved by the church's financial status.

Don't forget - Charis and Co. don't have the manpower to conquer the rest of the world or even a large chunk of it. It's debatable whether they have the ability to do much more than stabilize their southern, south-western and western fronts let alone push through a march to Zion. And there's no way they're going to take the temple via "conventional" means.

The church has been spending far more than their income for years now. They've exhausted their financial reserves. That's why Duchairn had to start selling off church properties and extending his tax base - so they could fund continuing operations through cash flow instead of reserves. But they're still running a deficit. And as other posters have noted, the cash is drying up. [There's lots of textev for this but I'm at work so can't quote.]

The most tax-productive countries on Safehold are the ones they're fighting, along with the Desnairian gold mines. Except that the church may be about to lose access to much of the south, including Despair's gold. Regardless, their income has shrunken drastically and is going to continue to shrink. Expenses haven't. In fact with the need to support such huge armies in the field they've probably increased.

Further the huge drain in funds over the course of the war hasn't been in the form of investment. It's primarily been to fund war operations and fighting capabilities; i.e. capital in the form of ships and weapons and the movement and support of fleets and armies. They haven't even been trying to conquer for tribute / plunder, they've been conquering to destroy. All that money is just gone. Sunk. All they have to show for it are a few inefficient foundries and ship-construction facilities they've built; and they're not going to have the resources, or markets, to make those financially productive.

The church needs to rein in expenses and get out of the red but they can't - not if they're going to keep fighting the war. Consequently they're getting close to the tipping point where they're simply going to run out of money. It's going to happen suddenly and it's possible that even Duchairn won't see it hit - though he undoubtedly knows it's looming.

When that happens the church will drop their bankrupt servants and turtle to survive off their protected core, the Temple Lands. At that point the Temple Lands will probably be the only part of the CoGA alliance with even the vestiges of a viable economy and all they'll be able to do is guard their borders.

That's when rfc will resolve things. There may be coup with Duchairn (or someone else) suing for peace. There may be a high tech strike to decapitate the Go4. Or rfc may surprise us all. Again.

Big brain dump. YMMV of course. And no doubt rfc will have ideas of his own. It will be fun to see it all come crashing down.

Lurk mode back on.

I think the church could potentially limp along being effectively broke for a long time. Once the jihad is declared they can basically say if you are not willing to work for free then you are a traitor to god subject to all the punishments of schueler. In the long run that would be the death of the church but they could maintain that for a long period of time before the wheels fully fall off the wagon.

I always figured at some point, merlin would use counterfieting the church currency. IT would be discovered and shatter the church ability to buy. One church dollar would be penies/cents or less of any other currency, potnetially even worse exchange rate. There is a kind of fake that can only be proven if they burn the notes right, real is one color, fake is another. One burned red, the other blue.
How much of the money is coinage, and what is paper?
Fake coind are coins made out of cheap metals, made to loo like a perfect copy of valuable coins, then overlaid by a thin layer of the valuablemetal it is supposed to be, say silver of gold.
The thing is the church is big in the traditional publishing and printing business. So they could be framed for the fake papers.

SYED wrote:I always figured at some point, merlin would use counterfieting the church currency. IT would be discovered and shatter the church ability to buy. One church dollar would be penies/cents or less of any other currency, potnetially even worse exchange rate. There is a kind of fake that can only be proven if they burn the notes right, real is one color, fake is another. One burned red, the other blue.
How much of the money is coinage, and what is paper?
Fake coind are coins made out of cheap metals, made to loo like a perfect copy of valuable coins, then overlaid by a thin layer of the valuablemetal it is supposed to be, say silver of gold.
The thing is the church is big in the traditional publishing and printing business. So they could be framed for the fake papers.

As I have said, I believe that virtually all of the money in circulation is coinage, not paper. What paper in circulation is effectively IOUs, with very limited transfer value. Therefore counterfeiting is not really possible except for the base metal coated by value. Unfortunately that requires electroplating, which requires electricity which is a big NO-NO for both sides.

I suppose you could use batteries, but finding that out would involve dabbling in forbidden knowledge, so I can't see the church doing it, and there is no need for EoC to do so. Besides which, if the EoC does do into electroplating, there are much better uses for it than counterfeiting church coinage.

fallsfromtrees wrote:

SYED wrote:I always figured at some point, merlin would use counterfieting the church currency. IT would be discovered and shatter the church ability to buy. One church dollar would be penies/cents or less of any other currency, potnetially even worse exchange rate. There is a kind of fake that can only be proven if they burn the notes right, real is one color, fake is another. One burned red, the other blue.
How much of the money is coinage, and what is paper?
Fake coind are coins made out of cheap metals, made to loo like a perfect copy of valuable coins, then overlaid by a thin layer of the valuablemetal it is supposed to be, say silver of gold.
The thing is the church is big in the traditional publishing and printing business. So they could be framed for the fake papers.

As I have said, I believe that virtually all of the money in circulation is coinage, not paper. What paper in circulation is effectively IOUs, with very limited transfer value. Therefore counterfeiting is not really possible except for the base metal coated by value. Unfortunately that requires electroplating, which requires electricity which is a big NO-NO for both sides.

I suppose you could use batteries, but finding that out would involve dabbling in forbidden knowledge, so I can't see the church doing it, and there is no need for EoC to do so. Besides which, if the EoC does do into electroplating, there are much better uses for it than counterfeiting church coinage.

Towards the end of the US Civil War (rumor), US silver dollars were counterfeited using a silverlike alloy of nickel and platinum smelted together. It's one of the lost treasures in the southwest.

Money isn't an issue. This is a holy war with a fully committed population. If the church runs out of money it can issue IOUs(Already is). What happens when you run a deficit for a long time is you accumulate debt(See WWII and WWI) but you don't 'run out' of money. What happens after the war is a different question, and could be very painful(if the church won). But, if nothing else the church start using slave labor(not necessarily real slaves). What I mean is pay people in kind. You work at the church foundry you get food and shelter, nothing more. Basically turn everything into a giant factory for producing war goods and consider the necessities for keeping the workers alive to be raw material inputs, this can be done(See WWII). But running out of money isn't a problem, painful later but not a problem.

There is joker in the deck though. Safehold does not have a banking system for states(or the church). It used to be that the GoGA was that system(to some extent). So it might be that it is impossible to borrow money so the necessary transactions cannot be conducted. While the church could get the money if there was a system, the system doesn't exist so the 'paper transaction' ie "We pay you then tax the money back" cannot happen.

A partial equivalent to this might be when states didn't have the precious metals to make the necessary coinage and so couldn't provide a currency to use for payments.


Note for Americans: States means countries in this context.(I use state because country can have implications of nationality/ethnicity)

Highjohn wrote:Money isn't an issue. This is a holy war with a fully committed population. If the church runs out of money it can issue IOUs(Already is). What happens when you run a deficit for a long time is you accumulate debt(See WWII and WWI) but you don't 'run out' of money. What happens after the war is a different question, and could be very painful(if the church won). But, if nothing else the church start using slave labor(not necessarily real slaves). What I mean is pay people in kind. You work at the church foundry you get food and shelter, nothing more. Basically turn everything into a giant factory for producing war goods and consider the necessities for keeping the workers alive to be raw material inputs, this can be done(See WWII). But running out of money isn't a problem, painful later but not a problem.

There is joker in the deck though. Safehold does not have a banking system for states(or the church). It used to be that the GoGA was that system(to some extent). So it might be that it is impossible to borrow money so the necessary transactions cannot be conducted. While the church could get the money if there was a system, the system doesn't exist so the 'paper transaction' ie "We pay you then tax the money back" cannot happen.

A partial equivalent to this might be when states didn't have the precious metals to make the necessary coinage and so couldn't provide a currency to use for payments.


Note for Americans: States means countries in this context.(I use state because country can have implications of nationality/ethnicity)

This is not quite right. The Quentens in Siddamark, for example were involved in large scale trade and business endeavors. Nynian established her accounts with them by courior when she was still in Zion. It could be that there were bank notes issued, lines of credit established. But however it worked, these people weren't constantly hauling aroun huge bags of gold coin.

Don

fallsfromtrees wrote:As I have said, I believe that virtually all of the money in circulation is coinage, not paper. What paper in circulation is effectively IOUs, with very limited transfer value. Therefore counterfeiting is not really possible except for the base metal coated by value. Unfortunately that requires electroplating, which requires electricity which is a big NO-NO for both sides.

I suppose you could use batteries, but finding that out would involve dabbling in forbidden knowledge, so I can't see the church doing it, and there is no need for EoC to do so. Besides which, if the EoC does do into electroplating, there are much better uses for it than counterfeiting church coinage.

Except Duchairn talks about Church IOUs "trading well below their stated value". Which suggests trading IOUs is a common and accepted practice.

Heck, even Charisian IOUs (in Corisande) were being traded until Cayleb took specific steps to stop it.

And think about it. The people the Church pays with IOUs needs to pay THEIR bills as well. If they can't trade away their IOU for the resources they need to survive and keep working, then those IOUs are effectively worthless. And the people who supply those people doing things for the Church need to pay THEIR bills...

What good is an IOU to a Saint Kilsman shop worker if they can't use that IOU to buy food? Is he supposed to make his own IOU for the food vender? Is the food vender supposed to use home-made IOUs to pay his bills? Wouldn't having a tons of home-made, non-standard IOUs floating around and being used to pay for goods be just begging for abuse? At least with Church IOUs, you know who to go to for your money and have a reasonable expectation of being able to get it.

evilauthor wrote:
What good is an IOU to a Saint Kilsman shop worker if they can't use that IOU to buy food? Is he supposed to make his own IOU for the food vender? Is the food vender supposed to use home-made IOUs to pay his bills? Wouldn't having a tons of home-made, non-standard IOUs floating around and being used to pay for goods be just begging for abuse? At least with Church IOUs, you know who to go to for your money and have a reasonable expectation of being able to get it.

Or if you're worried about being told that you don't seem to be a loyal member of Mother Church, forgive the debt. I know what Clyntahn does to people of little faith.