The House of Iron: The Eyes of His Father
Leo’s report explains from where the counterfeits are coming and why they are impossible to distinguish from the real IBCs. The answer is quite simple; there are no counterfeits. All of the IBCs are real, in the sense that they were issued by the Imperial Bank using the official typeface. The Imperial Bank directors had simply decided to ignore the 3:1 fractional reserve ratio and print out more IBCs than were sanctioned.
The reasoning was also not that complicated. The Bank directors had wanted to have a higher ratio in the first place; the 3:1 was the brainchild of Demetrios III, not them. They’d viewed the expansion of IBCs beyond the bullion stock effectively as an opportunity to print money. They could make many more loans than would be supported just by the contents of their vaults and they wanted to maximize the opportunity. They’d kept to the agreed ratio during the war, focusing on financing the war effort, but once peacetime arrive they chose to expand their operations.
There were many opportunities for loans in the post-war atmosphere. Many Romans needed to rebuild and required a cash boost. Others were getting a new start, for example army veterans who’d been landless laborers before but now wished to set up their own farms. Their saved army pay served as good collateral. The Imperial Bank had made thousands of these types of loans, paying these loan amounts out in the form of pieces of paper that the receiver thought was backed by hyperpyra. In exchange for some printings, the Imperial Bank got the collateral (which was always in the form of tangible assets), repayment in actual coinage, and if the payee defaulted, the Bank could and would seize their remaining assets in compensation.
Many of these loans had been deliberately predatory. The Bank directors had been less interested in the trickle of currency that would come from the loans being repaid, particularly in the small amounts that were the case for most of the loans, granted to paroikoi and banausoi. They wanted the more tangible items put up as collateral, the farms and homes or even the livestock and tools. When the common folk defaulted on payments, these were confiscated to make tidy and diverse additions to the directors’ portfolios, with the loans targeted in areas where the directors already possessed holdings that they wished to expand or diversify. And if a family was evicted from their home at the beginning of the winter while the wife is pregnant and due any day, well it’s not personal, just business.
This business had started in late 1636, but at a low level with the bank presses producing IBCs at a rate of 4-5:1 to the coinage stored in the vaults. Given the lack of knowledge regarding the amount of bullion, no alarms were sounded and the loan practices were viewed as business as normal. However in the spring of 1638 the directors were running into their elevated ‘capital cap’, but with the level of personal profit they were gaining they did not wish to stop and they surged ahead, ramping up production as well.
On September 22, the people of Constantinople see a most unusual sight, the 1st Tourma of the Athanatoi in full battle kit led by Odysseus and Athena, both in military uniform, storming the Imperial Bank headquarters. At the same time, squads of Vigla and tzaousiosi launch raids on multiple residences, the Megas Tzaousios personally leading one of them. Twenty eight people are arrested, plus one more who resists. The squad, under orders to show absolutely no mercy if met with noncompliance, literally dismembers the man on the spot and leaves the corpse, taking the head only back to the White Palace as proof. (There are more arrests in nine other cities throughout the Empire over the next week, but the sweep in Constantinople is the largest and most noticeable.)
Much to Demetrios’ anger, the three big fish are not caught by the net. The three are the bank directors, Manuel Blastares, Leo Eugenikos, and the chief director Ioannes Berilas. None had been in the capital on that date and were instead at their country estates in Thrace or Bithynia. By the time squadrons arrive from Constantinople to arrest them, they’d been alerted and fled, with no trace of them found by September 24. On that day Demetrios orders all of their family members to be rounded up. Three days later, a messenger arrives from Ioannes Berilas asking safe conduct for his eldest son Andronikos Berilas, who had also disappeared, to ‘discuss the situation’, a request Demetrios grants.
* * *
The White Palace, Constantinople, October 1, 1638:
Athena was not sure why they were here of all places for this. There was the Audience Hall for events like this, with the great throne and the Emperor seated upon it, the might and majesty of the Vicegerent of God on Earth on full display. Instead they were in a meeting room in an adjacent wing of the White Palace, used by mid-level bureaucrats for conferences on grain quotas or irregularities in fish weir fees collection.
It had been touched up a bit with a fine burgundy carpet on the floor. At one end of the rectangular room, opposite the entrance, Empress Demetrios III and the Empress Jahzara were seated on a couch. Odysseus was seated in a separate armchair on Demetrios’ right, while Athena was in a matching armchair on Jahzara’s left. All three pieces of furniture were a matching set, of good but not great quality.
Demetrios had a battered courier’s bag at his feet while the walls had a few pieces of art on them which she recognized. They were landscape paintings, all from Skammandros, all acquired while her father had been Kephale there. Off to the left side of Athena was a secretary at a portable writing desk, inkpot, paper, quill, and blotting sand already at the ready. In fact, except for the Vigla guards stationed behind the Imperial family and the others at the door, one would think this was, at most, an informal meeting with a mere Kephale of Skammandros, not an audience with the Emperor of the Romans.
The Emperor of the Romans also, to be frank, did not cut an imperial figure. His fine clothes hung loosely on his frame, but they didn’t cover the sunken cheeks and lack of any facial fat. He was slumped tiredly in his seat, his hand shaking slightly as he scratched his leg. “Send him in,” Demetrios III rasped.
The door opened and Andronikos Berilas strode into the chamber. Athena had seen bigger Varangians, but not many. Andronikos was built like a tall barrel, at least a half-head taller than the guards, and it seemed to be mostly muscle, although with a belly that jostled a bit as he walked. His black hair was streaked with silver. He was just seven years younger than the Emperor, yet looked like he could be Demetrios’ son.
Andronikos bowed to the Imperial family and Demetrios gestured at an armchair behind Andronikos, one which matched the furniture being used by the Imperial family. “Please be seated.” Andronikos did so. “What message do you bring from your father?” The Emperor’s voice was raspy, soft.
“Not a message,” Andronikos said, leaning forward and staring Demetrios in the eyes. “A demand.”
“A demand!” Odysseus sputtered.
Andronikos ignored him, his stare hardening into a glare as it bore at Demetrios. “A demand. A demand that you cease this ridiculous and unjust witch hunt of himself, his colleagues, and their families. You have no right and no legal claim for such behavior, and you will cease it immediately.”
“Please explain,” Demetrios replied.
Athena bit her tongue to keep herself from spluttering.
Explain, please! What the flying banana hell!
Andronikos smiled coldly, but his eyes didn’t shift from the Emperor. Athena thought his face merited a musket butt or five. “My father and colleagues have committed no crime. There is no law or statute forbidding the creation of as many
Imperial Bank certificates as the
Imperial Bank sees fit. That there was some sort of agreement between yourself and my father and colleagues has not been made into anything legally binding. They have done no wrong, while you have violated their rights by attacking them and their families, a gross breach of the law which you will cease immediately.”
Andronikos leaned casually back into his chair but kept his eyes locked on Demetrios. “Once you cease this witch hunt, we will generously agree to waive any claims for damages incurred.” Athena changed her mind; his face needed a spiked mace or seven. “We will return to work, provided you guarantee our safety and property. It is most regrettable that panic in the market has destabilized the value of the certificates. But with our expertise we will ensure that certificates granted by the Imperial Bank to the government are honored at their paper value, and we can certainly ensure some compensation to yourself as I know these market activities have caused you some problems recently.”
“You raise some important points, but I have one question. What of the common folk whose assets and livelihoods have been affected by the market?” Demetrios asked.
Andronikos shrugged. “What do they matter? They make no difference and there are always more where they came from. Their losses are not of any concern.”
“I see,” Demetrios replied. “Before I reply to your request, let me tell you a story.” Athena glanced over at her father, who slowly straightened up in his seat as he continued talking. “Three hundred years ago or so, back when I had just become Kephale of Skammandros, I received a petition from a small village. They were out in the middle of nowhere and the area was dominated by one big landowner. However the landowner’s son had a liking for children, age 12 to 14. Boys or girls didn’t matter, but they had to be in that specific age range. And the landowner forced the tenants to provide their children for his son. The priest wouldn’t do anything; he’d been paid off, as had the earlier officials they’d approached. But when they heard a new appointee had arrived, they came to me pleading for help.”
“I don’t see the relevance,” Andronikos said.
“We’re getting to that. The landowner knew about the petition; he’d expected something like that so he came to me right afterwards. First he offered me bribes, but when I was resistant, then he got threatening. He was a big man and got into my face, speaking demands of me and threatening me with his wealth and connections. Now, I must admit I’m not the best when people confront me directly, but he’d made one key mistake. You know what that was?”
“No.”
Demetrios’ voice was now clear and sharp, his back ramrod straight, and somehow his frame seemed larger. There was certainly no trace of trembling in the limbs now. “He’d made me mad. Really mad. Enough that my vice of backing down when confronted personally went away. Enough to remember that I had the power, and he did not. Do you want to know what happened to the landowner and his son? I had them handed over to the villagers for justice and they beat them to death with farm implements. Nasty way to go. Took a long time and lots of screaming. Got the priest executed too for good measure.” He patted the courier bag at his feet. “They were a poor village, but they gave me this as a gift. I’ve used it ever since, even as Emperor.”
“I…still don’t see the relevance.”
“Well, then I’ll explain it for you. Your father obviously briefed you well on me. He told you to act confrontationally, to press me personally, and to throw in some technical reasons afterwards as a salve. That’s the way to get me to fall in line. Except your father, and you too, made the same mistake. You made me angry. I was angry at the landowner, at his cruelty, his callousness, his indifference to the suffering he caused others, but compared to the anger I feel now, back then I was miffed, slightly irked, mildly peeved.
“You made a good point that there was no law regarding the ratio of IBCs to bullion, an oversight which I thank you for bringing to my attention. I will make sure it is rectified promptly. However your second mistake was to play technical games with me because, to be blunt, I’m fucking better at it than you.
“You are correct in that there was nothing denying you from printing as many IBCs as you wished. However you certainly did not have my permission to create more than what would be warranted by the 3:1 ratio. IBCs are functionally equivalent to coinage and treated as such. And when it comes to coinage the law is clear. Only that permitted by the rightful Emperor is allowed. It is a symbol of sovereignty and authority. For any other party to create coinage is to assert their own claim to sovereignty and authority against that of the rightful Emperor. In short, to do so is to act as a usurper, rebel, and traitor.”
Demetrios pulled three pieces of paper out of the bag. “These are legal arguments from the Megas Kouaistor, the head of the Department of Law at the University of Constantinople, and the head of the Department of Law at the University of Nicaea all agreeing with my analysis.”
He pulled out another piece of paper. “Now this is the Treason Law of Helena I, issued in 1552. Now let’s see, where is that quote…there it is. Anyone guilty of being a usurper, rebel, and traitor will, by trying to seize control of the law, be considered as placing themselves outside the law. Furthermore, any relations within four degrees of consanguinity, by blood or by marriage, shall, regardless of any involvement or lack thereof with the treason of their relation, unless they have acted against said treason, fall under the same penalty. In the eyes of the law they shall no longer exist. They have no rights that need be respected and the rightful monarch may do whatever they see fit to these persons and their properties.”
Demetrios looked up from the paper to now glare at Andronikos. “I find you, your father, your colleagues, and everyone else involved in this to be guilty of usurpation, rebellion, and treason.”
“You, you can’t do that.”
“Oh, I can. And I’m not going to stop there. I will see your families humiliated, dishonored, and shunned by all society. I will see them stripped of everything they hold and hurled into the waste with nothing but their eyes to weep with. I will see them utterly shivered to atoms, with nothing left but your bones to remain as a monument to make future ages shudder at your fate. This I pledge.”
“You’re insane.”
A pause. “No, I’m not,” Demetrios replied in a mild conversational tone. “You’re just saying that because you have no counter-argument to my argument and are therefore resorting to attempted character assassination as if that will invalidate my points. Didn’t I just say a moment ago not to play this type of game with me?”
“But what about the financial crisis? You need our-”
“ENOUGH,” Demetrios said. “The financial crisis that
you created will be fixed without you. The only thing I need from you is the location of your father and his colleagues.”
Andronikos leaned back into his chair, his face hardening. “I won’t tell you. And you offered me safe conduct so you can’t touch me, unless you’re going to go back on your word.”
Demetrios snorted. “Unlike you, I try to not be a lying sack of shit. Don’t worry. I will abide by the terms of the safe conduct, to the letter. You will not be harmed. However, the safe conduct only covers you. It says nothing about anyone else, and as established anyone within four degrees of consanguinity no longer legally exists. That includes your son. I believe he’s four. Such a pretty face; it’d be such a pity if it was smashed against a rock. And your wife-that neck of hers is rather thin, probably snaps easily.”
“You wouldn’t.”
“I would. Because I’m out of patience and I see no point in mercy for you and your ilk. Now if you lead Odysseus to where your father and colleagues are hiding, your wife and son will be spared any punishment for the usurpation. You have fifteen seconds to decide, because frankly I am tired of your voice and face.”
The two stared at each other, Athena counting the seconds in her head. At eight… “I’ll, I’ll do it,” Andronikos stammered, slumping in his chair.
Demetrios grinned coldly. “Excellent. Apparently you aren’t as stupid as I thought.” He looked over at Odysseus. “Please take our…guest and get the needed information from him, then lead a flying column to arrest these traitors.”
Odysseus stood up, smiling wolfishly. “With pleasure.” He and a couple of guards hauled a limp Andronikos out of the room.
“Leave us,” Demetrios said, gesturing at the guards and the secretary. A few moments later they exited the room, and Demetrios looked first at Jahzara and then Athena. “So, do you think I’m crazy?”
“No,” Athena answered. “Cold yes, but not crazy.”
“And why is that?”
“Because an example does need to be made. And cruelty is more easily remembered, while mercy gains little gratitude. Sarantenos should’ve been a warning. That the Berilas family and the like failed to listen…” She shrugged. “…well, they brought this upon themselves.”
Demetrios smiled, this time with a trace of human warmth in the gesture. “Couldn’t have said it better myself.” He looked over at Jahzara. “Do you ever regret making me Emperor?”
“Some days.”
“Is today one of them?”
A pause. “No, not today. They brought this upon themselves.”
* * *
By the middle of October all three directors are in custody. In total, sixty three individuals connected to the Berilas scandal are charged with attempted usurpation, rebellion, and treason on the grounds that creating IBCs, a ‘paper coinage’, without authorization is a declaration of seizing sovereignty from the reigning monarch. All are given the death penalty, and all but one publicly executed in the cities in which they were arrested. The Constantinople executions are of a spectacle unseen in the Queen of Cities since the fall of Venice to young Andreas I Komnenos.
The junior members get a quick death via Long Knife, but the senior members are not so lucky. Many are whipped and beaten before their deaths, which come in varying forms, trampling, no-drop hanging (so death is by strangulation), and the like. The three directors are paraded through the city, each mounted backwards on a donkey, dressed only in a loincloth, while the populace hurl abuse and worse things at them. In the Hippodrome, where all the executions take place, they are whipped ragged and then carried up to the top of a pillar and hurled to their deaths. The people of Constantinople positively adore the spectacle, reveling in the destruction of those who’d ruined so many of their livelihoods.
The families of most of the executed are not harmed, but those of the directors are not so lucky. With the exception of Andronikos Berilas’ wife and young son, everyone within four degrees of consanguinity of the directors are also put to death, although their executions are private and they are given proper burial.
But that is far from all that transpires for the houses of Blastares, Eugenikos, and Berilas. Every member of those families that works in government service is fired, although they at least get to keep whatever pension level they’ve earned. Every member who works in the private sector in any capacity is blacklisted from any government contract, as is anyone who stays partners with them in any venture. Their business partners promptly bail, fearful of Imperial wrath spilling over onto them. Marriage negotiations are broken off; even dinner invitations cease as no one wants to be associated with them.
Generations after Demetrios III have criticized him for this, viewing it as gratuitous vindictive cruelty. Yet there was method in the madness. All three families were famous service families, with generations of service going back at least as far as the heyday of the Laskarid dynasty. They had been part of the service nobility, the beginning of which had been established by Theodoros Megas himself. Instead of a hierarchy based on blood ties, he’d set up a hierarchy that was based (ideally) on merit and on good service to the crown. Many of those families were still acting as part of the service nobility near four centuries later.
These great service families did not completely dominate the upper echelon of Roman society. There was the possibility for other families to move into that tier, but the 50 or so old service nobility families made up a disproportionate percentage of that tier’s population. Their tradition of service brought them access to great power and wealth, but there were conditions. Their service was expected to be of high quality, and failure to provide sufficient quality could lead to their services no longer being required. And it was their service to the throne that provided their access to great power and wealth. Some families had failed to provide the quality and fallen out of the upper tier. Some managed to restore their reputations and get back in. Others did not.
The advantage of this is it provided an extra level of auditing at no cost to the government. The service nobility families would vet their own family members to ensure that they wouldn’t bring disgrace on the family name. Obviously there was nepotism involved in the system (but then so does every system) but they would make sure that the nitwit cousin wouldn’t get promoted to where they could make a mess and ruin everything for everybody.
Or at least that was how it was supposed to work. Demetrios III had overlooked Autoreianos’ shaky hands as Megas Logothete even though his family under this system should’ve encouraged him to retire. This was partly out of personal affection and respect and also because the Emperor recognized the work load was unreasonable; this was the impetus for several of his administrative reforms. Logothete Andronikos Sarantenos had been a much bigger issue. The House of Sarantenos never should’ve let a member that corrupt get into such high office. Yet they had. Demetrios had just punished Andronikos, expecting that to be enough.
Apparently it had not, because the actions of the three families had been on a much broader scale and more of their families had been involved. They’d known, and at best had stayed silent and at worst had aided and abetted. Clearly the service nobility families were forgetting the bargain they’d made with the crown. It’d been a century, during the reign of Nikephoros IV “the Spider”, since one of the old service families had really felt the wrath of the Imperial throne. They needed a reminder and Demetrios delivered it in a form that would certainly get and hold their attention.
The blacklists and executions do not solve the economic crisis. Those who lost landholdings or other physical assets in foreclosures that can be transferred back get those returned, but the vast majority of people affected invested money, and that is not so easily gained.
People are demanding to exchange their untrusted IBCs for reliable coinage. On October 24, it is decreed that any IBCs issued after June 1, 1637, can be exchanged for one-tenth their paper value in coinage; there isn’t enough bullion to pay a higher percentage. IBCs issued before that date or after November 1, 1638 can be redeemed at their paper value. The very public executions were to help mollify the wrath of the populace. To also mollify the wrath of the populace, government IBCs are included, a measure considered necessary to avert the mother of all tax revolts, but a costly one. For all intents and purposes, the Roman government’s tax revenue for the fiscal year 1637 ceases to exist.
At the beginning of November, the new management at the Imperial Bank tries to return to business as usual, issuing IBCs for deposits and loans. Demetrios III has passed explicit laws forcing the bank to keep to a 3:1 ratio, not that the managers, with the evidence of the Emperor’s wrath clearly visible throughout Constantinople, would be inclined to breach that ratio. Demetrios, despite some pressure, did not take the opportunity to abolish fractional reserve banking, recognizing its usefulness, but he makes it absolutely clear it is not to be abused.
The Imperial Bank moves too quickly, and even though the ratio hasn’t even reached 2:1, the new spread of IBCs promulgating sparks another panic in the jittery public. Queue another bank run and market crash, albeit smaller, which ruins what little trust remained in the system.
On November 16, the Imperial Bank shuts its door to business to halt the run. Three days later the Roman government suspends payment on the interest to its war debts. With nobody trusting or taking IBCs, the Roman government can only pay its debts in bullion, but its bullion reserves are such that if it pays its creditors, it won’t have enough to pay the army. Unsurprisingly, they prioritize the men with cannons.
This sparks a panic on the Constantinople stock exchange as people scramble to divest their assets, many of which are tied in with those holding government debt, for hard currency and it immediately crashes. The Thessaloniki, Smyrna, and Antioch exchanges crash when they hear the news from Constantinople.
This marks the start of a major economic depression. The Imperial Bank manages to survive, barely, but at the price of effectively abandoning fractional reserve, despite Demetrios III’s law. It issues IBCs for deposits and loans, but keeps it at a 1:1 ratio. Raising it any higher, in the face of low public and governmental trust, is impossible and it will be decades before trust improves enough for fractional reserve to return. Furthermore, the Bank’s bullion reserves are smaller as people hoard their currency, not willing to risk it vanishing in a shower of paper. The government still puts some of its money from taxes in the Bank, but keeps a noticeable larger percentage in its own vaults.
The government, negotiating with the key debt holders, agrees to resume payments in 1641. It won’t agree to anything earlier as it expects, rightfully, a tidal wave of tax exemption requests. There are too many to audit as usual and given the public anger, nearly all are granted. Tax receipts for the 1638 fiscal year are 60% of the 1637 fiscal year. Notably, Demetrios III in his last act, dictates the debt schedule so that paying off the millions of low-value war popes (bonds) takes priority over returning to paying off the big loans floated through the Imperial Bank. That is because the low-value war popes were overwhelmingly purchased by the common people while the loan-holders are predominantly the wealthy. This is predictably met with outrage, to which Demetrios responds “I will answer to God for the duty I took in securing the welfare of the Roman people, not the welfare of your profit margins”. They are the last words history records him speaking in public.
The flow of capital in Rhomania is sharply restricted, plummeting to less than pre-war levels. Many Romans are utterly ruined by the crisis and there is now little opportunity for aid to get back on their feet. With an inelastic supply of bullion and untrusted paper linked to that supply, there just isn’t the capability to expand the money supply.
Yet production of physical goods, surged by growth from the war years, has been much less immediately affected. So now too many goods are chasing too little money, bringing on deflation and a drop in prices for goods. This is a disaster for producers, such as artisans and proto-factories, who see their goods dropping in value. The natural reaction is to produce more goods to make up for the loss in individual value, which leads to even more goods chasing the same amount of money, driving prices down even further. The issue is ‘solved’ by producers then going out of business and being ruined, so they can no longer produce. Estimated textile production in 1640 is half that of 1637, with other manufactured goods suffering collapses of similar magnitude.
The Roman government does two things to try and help the situation. Firstly, tons of copper, many of which were going to be used to make bronze to replace artillery worn out during the war, are instead turned into copper coins. But follis are the small change of the Roman economy, so while it helps some on the small scale, over the big picture it does little. And copper coins cannot be used to pay taxes.
The other is to import Mexican and Japanese silver to boost the bullion supply. (There are some domestic mines for gold and silver but they were already at maximum production in 1638 and their output is small compared to Japan and especially Mexico.) However only silver is available, not gold, so the minted silver stavraton lose value vis-à-vis the gold hyperpyra. This has been a problem ever since these silver flows entered the world economy, but the trickle into Rhomania substantially increases here. The lessening in value of the stavraton, with which taxes can be paid, is an issue for the Roman government. Roman soldiers are mostly paid in hyperpyra, so the government needs to keep a large stockpile of gold on hand. However their pay increases based on years in service are paid in stavrata, so the devaluing is an effective pay cut and they are not happy about it and they make their displeasure known. The bulk importations cease after the first shipment, the flow turning back into a trickle. That budding crisis is averted, but the money supply remains inelastic.
Other than this the Roman government is in little position to help, even if it knew how. Tax and customs receipts are down to 1620s level, even with Demetrios III’s reforms, while expenses are much higher. There is a new guard tagma, several theme tagmata have been kept at full strength in readiness for the resumption of war with the Ottomans (rather than letting them run down a little, a common cost-saving measure), the fleet is appreciably bigger, there are more subsidies to allies, and literally hundreds of thousands of veteran pensions and resettlement payments. Finally there is servicing the war debt, the interest payments eating up a large fraction of the government’s decreased revenue.
The replacements for the green ships from the Trebizond Yard scandal had been shelved; in January 1639 they are canceled. Other warships when they run out their terms of service are also not replaced. Planned infrastructure projects are canceled (with the exception of the Don-Volga canal, which proceeds at a slow pace with Latin convict labor from the war). Already in unprecedented debt from the war and faced with a resumption of war with the Ottomans which will not be cheap, deficit spending is not in vogue in this climate. Plus floating the kinds of loans that the Roman government got in the early 1630s just aren’t possible in the shrunken market.
Many economists have criticized the actions of the White Palace in dealing with the fallout of the Berilas scandal. They argue that the government should’ve instead spent money on projects to revive the economy and get it moving again. However the government had an inelastic money supply and large fixed costs, namely the military. Another suggestion is that the White Palace should’ve created a fiat paper currency and forced people to use it as a way of freeing up the money supply. Except such an order, particular in the post-Berilas climate, never would’ve been obeyed. And if the White Palace had been stupid enough to pay soldiers in paper money, there would’ve been a reprise of the olden days with a popular strategos hoisted on a shield and several tagmata marching on Constantinople.
The longer-term effects play out over years, well past the end of Demetrios III’s reign. When the depression ends is uncertain, and depends on the metrics one uses. By the most extreme metric, that argues that an economic depression is only over once what was lost has been made good, the depression lasts until
1700. It is not until the start of the next century that Roman economic activity revives to its 1637 level.
Many challenge that end date. Glimmers of growth in the Roman economy appear in 1644, giving an alternative end date. However those signs of growth are smashed flat and further regression caused by the various devastating crises induced by the Little Ice Age; it is these that make the recovery so long, but they had nothing to do with the initial cause of the depression, which is why many favor 1644. On the other hand, the various crises, while devastating even by themselves, would not have been as damaging if Rhomania was not already suffering from a pre-existing depression, hence why others support 1700.
More bullion continued to trickle into Rhomania at a rate slow enough to not raise hackles, gradually loosening the money supply. Meanwhile as memory faded, the Imperial Bank was able to, very slowly and cautiously, up the production of IBCs, allowing capital flow to begin picking up again.
The effects of the Roman depression outside the Empire were rather limited, and not to Rhomania’s benefit. IBCs in Latin hands nearly all dated from the war and so were still redeemable at full value. Those most effected were Rhomania’s main trading partners, and those were its friends and allies. Sicily in particular was hit hard as it depended heavily on exports to the Aegean where no one was buying, which hardly helped the Sicilians’ mood, already infuriated by Constantinople’s Italian policy. Meanwhile Spain and Arles were only slightly touched, while the Triple Monarchy never felt anything.
There were more costs. Roman withdrawal from European affairs was given a solid shove. Salzburg was sold back to the Archbishop in exchange for bullion. The Latin ambassadors who’d arrived in the spring had still been in Constantinople when the storm broke. Already angered almost beyond the point of endurance by Roman belligerency, arrogance, and contempt for their concerns, they had absolutely no inclination to be generous when they smelled weakness.
Dealing with the economic crisis and the Italian crisis burn out an already spent vessel. By the time Demetrios III is free to travel to Prousa, it is the depths of winter. The surgeon wanted to operate in the summer where the warm temperature and fresh air could help him rejuvenate. But even if it was summer, it wouldn’t matter anymore. Demetrios’ health has worsened to the point that the surgeon refuses to operate on the grounds that the procedure now will definitely kill him. According to his physician’s notes, on Christmas Eve 1638, Demetrios Sideros stands 175 centimeters tall and weighs 45 kilograms.
There are further long-term effects, primarily a general wariness of big banks and financial institutions. The White Palace recognizes the usefulness of such things, but is now painfully aware of their ability to ruin everything for everybody. Yet it is also willing and able to act with violence if it sees them getting out of line. Some have argued that this policy stifles economic innovation, but Romans on the street support it as “unlike in Latin countries, bankers are not above the law”. It is crucial for Roman trust in their system.
These effects still exist to the present day, as can be clearly seen if one visits the Imperial Bank. In the courtyard in front of the main office in Constantinople, a pair of 17th century artillery are pointed at the door, between them a Long Knife. In the main lobby, above the entrance, is a 3 meter by 5 meter very realistic and bloody painting of the execution of the Three Directors. And in glass cases in the lobby are the skeletons of the three Directors, displayed as a monument and a lesson to future ages. (They were reconstructed, at least as much as physically possible, after their execution. Demetrios III admitted shortly before his death that he had not thought this part out as well as he could have.)
There stand the remains of Manuel Blastares, Leo Eugenikos, and Ioannes Berilas. Fifty nine of the other executed individuals are buried, which leaves one, that of Andronikos Berilas. He was the one not publicly executed, his head appearing suddenly one morning on a pike in the forum. How he died or where his bones lie is lost to history.
* * *
The Pit of the Forsaken, the White Palace, November 5, 1638:
Odysseus Sideros led the five people following him down into what was commonly called the Pit of the Forsaken, buried beneath the oldest sections of the White Palace. There was a lot of history about these chambers, and not one bit of it had been kind.
He opened the door to the cell, the door groaning heavily. Odysseus lit the three oil lamps ensconced in the wall, so that he could see in the dark chamber which had never seen the sun. Shackled to the far wall was Andronikos Berilas, naked and filthy.
Odysseus turned and looked at the five behind him. All were dressed plainly, with two carrying packs. They were all former members of the partisan band of St Andreas. He knew their names. Nikolaios. Manuel. Michael. Zoe. And at their head was Anna, she who had slain King Casimir.
Yet there were two missing who should’ve been with this famous band. Maria and Gabriel, Anna’s little brother. The two had fought in the partisan band all through nightmares that even Odysseus was uncertain he could understand. Gabriel and Maria had wed after the war and Gabriel had invested in some land distant from St Andreas, thanks to a loan from the Imperial Bank. Except he’d been unable to keep up repayment and the bank had foreclosed. Gabriel and Maria had been cast out from their home and forced to trek to St Andreas for shelter. Except that coincided with the worst storm to hit the Kephalate of Korab in living memory. What exactly had happened no one would ever know, but three days later the bodies of the couple plus their two children, huddled together in each other’s arms, had been found.
Odysseus didn’t have to look at them; he could
feel the hate crackling off of them. To have suffered so much, to have endured so much, and to have somehow, by the grace of God, to survive it all, and then to die like that…
But then he looked into their eyes, particularly that of Anna. He’d heard the rumors about them; everyone had, about what they’d done to survive. He’d not entirely believed them, but now…he knew they were absolutely true. They had eaten human flesh, driven to it by utterly gnawing hunger. That terrible barrier had been broken down, and he knew that once that barrier was broken down, crossing it again was a much easier step. All barriers were like that.
He could see the hunger in Anna’s eyes, not physical hunger, but hunger for revenge, a hunger so deep and gnawing it could only be satisfied by the ultimate meal. It was deepest in Anna, but he saw that terrible fire burning in the eyes of all the five.
His father had chosen these people specifically for this. He had
known this would happen, and deliberately chosen it.
Odysseus turned away and walked over to Andronikos, who whimpered as he approached. Odysseus could feel his own wrath boiling inside him. He was not willing to go as far as the five, but he had not broken that terrible taboo, yet he still longed to pull out his sword and slash this man to bloody ribbons. But that task had not been given to him.
He leaned over and whispered to Andronikos. “Are you afraid?”
“Y-yes,” he stuttered.
Odysseus sneered. “You have no idea what fear is.”
He stepped back and looked at the five, tracing his finger along Andronikos’ throat. “His head and face belong to my father. It is needed to be recognized. The rest of his body is ours to do with as you please.”
Anna nodded. Odysseus walked out of the chamber, closing the door as the five approached Andronikos. He had seen many terrible things, but this was too much even for him.
As he walked out of this antechamber of hell, an epiphany struck him. He’d been working on his paintings of those dinosaurs, yet he’d stalled. There was one issue he couldn’t quite decide on, but one he absolutely had to get right. As the first scream managed to reach him through those cold pitiless stone walls, he knew what to do.
He would give them the eyes of his father.
