SWM wrote:Yes, I do remember that, but what I remember of it does not imply that the Solarian League takes out bonds. I believe it just meant that the League would take responsibility for paying off the bonds if necessary. I will check on it again, though.
But what I was asking about was your reference to the League needing to take out bonds for infrastructure at "Hiawatha". I don't recall anything about the League building up infrastructure.
I do have access to ToF, and a couple of quotes to hopefully help.
First, regarding Hiawatha, it appears that was a Commercial venture with the Government offering some 'protection'...
"First, no matter who fronted the cash—Manpower or Technodyne—the fact remains that very few corporations in history have ever thrown such huge resources into speculative endeavors as risky as the Monica project. Oh, there've probably been at least a few private venture operations with this kind of price tag, given the scale the big transtellars operate on. All those battlecruisers together didn't cost much more than a couple of superdreadnoughts all by themselves, after all, even if they had to pay full price for them. And when you stack that up against something like, say, TranStar of Terra's infrastructure project in Hiawatha, it starts looking downright picayune. But the risk factor in this case was way outside any standard operation. Especially one that was unsecured. TranStar got a huge chunk of its expenses guaranteed upfront by the League before it ever sent the first survey crew into Hiawatha, and that sure as hell didn't happen here! If everything had worked, they'd have made a fortune. But if anything went wrong—which, after all, it did—they were going to get exactly zilch back on whatever they put into the effort. That's what's so far outside the standard models."
Regarding Erewhon and Investments/Bonds:
"Trust me, Brent. When I get done writing my evaluation as Frontier Fleet's senior officer here in the Sector, everybody back on Old Earth's going to understand that we're critically short of the sort of light units—destroyers, maybe the occasional light cruiser—you need for commerce protection. Unfortunately, everyone's always short of light units like that. Most systems with the kind of economic clout we have are full members of the League, which means they can raise their own system-defense forces to provide that sort of protection. We can't; we're officially a protectorate. That means the only place we can get the escorts we need is from Frontier Fleet, but Frontier Fleet doesn't have them to spare. So, what I'll be doing is using discretionary funds, plus additional 'special subscriptions' the governor is going to screw out of the local merchants and manufacturers, to buy a few extra destroyers, which will then become the property of Frontier Fleet. They'll be integrated into my own squadrons out here, they won't cost the Navy (or any of the other bureaucracies back home) a single centicredit, and when the situation out here finally calms down, Frontier Fleet will cheerfully transfer them somewhere else.
"Or that's what they think will happen, anyway."
Stephens could have shaved with Rozsak's smile.
"And they're also going to think that what we're building are only destroyers," Watanapongse added. "The 'light cruisers' are officially going to be Erewhonese units, not ours. We'll be 'borrowing' a few of them from Admiral McAvoy once the piracy situation starts getting out of hand out here. It'll be another example of how those silly neobarbs built more ships than they had the cash and manpower to keep operational, so in the interests of getting the League's hooks even more deeply into the Republic of Erewhon, we'll be providing naval assistance in the form of experienced officers to help the poor neobarbs find their way around. In the meantime, no one back home's going to realize that our new 'destroyers' are going to be the next best thing to the same size as our Morrigan-class light cruisers."
"There's actually turned out to be even more cash in the till than I'd expected," he replied. "I don't think we can siphon any more out of our official budget without risking questions from Permanent Senior Undersecretary Wodoslawski's minions at Treasury, but it's rather impressive how much some of the transstellars' local management has been willing to kick into my 'discretionary fund' for those 'subscription ships' of yours. And even better, Donald's managed to arrange things so that a good seventy percent of our total costs look like—and are, for that matter—good, sound investment opportunities." He shrugged. "We're still racking up a pretty impressive debt, but Donald and Brent are both confident we'll be able to service the interest and pay down the Sector's own public debt within no more than five to ten T-years."
"At any rate, right now, and not wanting to wish any additional unhappiness on our newfound friends in Maytag, it's offering us quite a few interesting opportunities we probably wouldn't have had otherwise. Among other things, CIG ended up needing a lot more capital investment from our side to get it up and running. That's why we floated that new bond issue back on Old Earth, which is also one of the reasons we're in better economic shape—and in a much better strategic position in Erewhon—at this point than we'd expected to be. Financially, the fact that the Sector was already so heavily invested in Erewhon gave us plenty of cover when the resumption of hostilities meant we had to raise additional capital from sources outside our immediate area. And Treasury was perfectly willing to sign off on the bonds—for the bureaucrats' usual cut, of course."
He smiled evilly, and Rozsak raised both eyebrows in silent question.
"Well," Barregos told him cheerfully, "those same bureaucrats back on Old Earth insisted—positively insisted—that the bond issue in question be underwritten directly by the Treasury instead of the Sector administration. I think it had something to do with . . . bookkeeping issues."
Rozsak snorted harshly in amused understanding. He wasn't at all surprised that the Treasury Department personnel in question wanted to handle the accounting as much in-house as possible, since it was so much easier to cook their own books (and hide their inevitable peculation) than it was to skim off of someone else's cash flow without detection. But that was merely the Solarian League's basic SOP, and he was still a bit puzzled by the governor's obvious amusement.
"And having them do the bookkeeping helps us exactly how?" the admiral asked after a moment. "Obviously it does, somehow, but I would've thought that having their fingers directly in the pie would be more likely to sound alarms at their end as we get further down the road."
"As long as the graft keeps rolling in, they aren't going to care what we're really doing with the money at this end," Barregos pointed out. "That's a given, and it's been part of our strategy from the very beginning. But what else it does for us is to make the debt a charge on the Solarian League, not the Maya Sector, and it never occurred to me or Donald that we might be able to get away with that!"
"And?" Rozsak asked.
"And, Luiz, if the day should ever come—perish the thought—when we good, loyal Solarians out here in the Sector should find ourselves in less than full accord with Frontier Security HQ or the Interior Department in general, we won't be the ones responsible for paying the bondholders off. As far as we're concerned, all that dreadful debt—close to sixty percent of our total investment in CIG, will be owed to Solarian citizens, not anyone out here. And the obligation to pay off those bonds, Donald tells me, will also belong to the League Treasury. Which means that as far as we're concerned it will just . . . go away. Poof."
Press On.