There was a king, a very ambitious king. We shall call him King Aygonot the Fourth. Not content with a kingdom of nominal size and viewing the richness of neighboring kingdoms, he sought to expand it both geographically and economically within. To this end, the King assessed his inheritance which in addition to the lands over which he reigned, included a considerable reserve of gold.
This wealth was kept safe in the Treasury, and the treasury was guarded by a small legion of soldiers and managed by two Jewish factors. It's not important that they were Jewish other than King Aygonot IV was a Christian and since at times lending and borrowing were necessary in the affairs of the kingdom, his ancestors, the Aygonots, a long time ago had enlisted a Jewish family, the Goldsteins, the task of lending, borrowing, and accounting for the treasury of gold. At this time, it was the two brothers Isaiah and Donduit (or just Don) that managed the affairs of the Treasury. While Isaiah was somewhat prone to speculation, Don was very conservative and acted as a force of restraint against Isaiah's capricious leanings.
When the king felt he had a sufficiently large army, he set out to conquer a smaller neighboring kingdom. He had already spent a considerable amount of his Gold to conscript and arm his conquering forces, but because of the prudence and foresight of his noble ancestors, it required only a small withdrawal from his capital accounts in the Treasury.
The first battle, through which a strip of land on the border was conquered, was wildly successful, though it was not sufficient to completely overtake and subdue the neighboring kingdom. The troops returned from the battle, drunken with blood and victory, and modestly enriched through the spoils of plunder. While the king frowned on such behavior (for he was a noble king and believed in decency in both society and in warfare), he was inclined to tolerate the looting to a certain degree because it reduced the required outlay to pay for the troops if their wages were subsidized by “commissions” (where did you think that word came from, anyway?).
During the next few weeks, the king prudently resolved to attack again, but this time drive his forces rapidly into the interior of the neighboring kingdom to overtake the castle fortress of the other king. The two kingdoms had a long history of territorial border disputes, but neither had ever ventured so far as to invade the domicile of each other’s capitols. However, being attacked on the border, the neighboring kingdom began amassing defenses, drafting all of the peasantry between the capitol and the disputed border into a rag tag army.
When King Aygonot's forces entered the neighboring kingdom, they moved rapidly with little resistance towards the capitol. They were, as a matter of fact, quite surprised that they did not encounter even a fraction of the defensive forces that they met previously.
But when they arrived at the fortress of the other king, they were astonished, and their hopes of an easy victory were shattered, for what the defensive forces lacked in terms of sophistication, they more than compensated for with sheer numbers. With only brief hesitation, the Aygonot forces began to decend upon the castle fortress only to be halted by fixed defenses and hordes of armed peasants. What was anticipated to be a quick victory, began to take its toll as the defending army added new peasants to its numbers daily.
At one point, the Aygonot Captain realized that to avoid defeat, they would need, in addition to fresh food stocks, more troops and his men realizing the risks before them began demanding a supplement to their wages. He sent back a messenger who delivered the news to the King. Conferring with his factors, the Goldstein brothers, King Aygonot was advised that abandoning the current enterprise would be a total loss, that whatever they left on the battlefield, would be a loss with no gain whatsoever as an offset. The entire exploit would be a wash. Aware of the losses, and fearing the resulting ridicule and what would certainly amount to disfavor among his countrymen over whom he reigned, he commanded the factors to prepare a ration of Gold for raising new troops, a portion to pay for food stocks, and yet another as wages for the current troops.
A garrison was quickly assembled and guarded the food supplies and gold as they traveled deep into the neighboring kingdom. This turned out to be a perilous task, and an unmitigated disaster. The contingent discovered a small army pursuing them from behind, and realizing that turning back meant a certain violent conflict, not to mention a delay in their mission, they forged ahead more rapidly. But their hopes were dashed when they met another defensive army before them, thus finding themselves surrounded. The entire legion was sacked and both the food stuffs and Gold were confiscated by the resident kingdom's forces and delivered to the opposing king. Now, in addition to heavy fighting losses, a severely fatigued offensive force, the Aygonots were deprived of both food and wages. Conversely, the defending kingdom was now enriched with the conquered Gold, and adding to its treasury, now was able to raise up new troops, which the king promptly did.
When word of this got back to King Aygonot IV, he fell into a deep depression. His initial victory notwithstanding, he was facing an extreme loss of both wealth and face if he was to abandon his cause at this point. He gathered his military commanders that were not yet in the field of battle, brought in the nobles from the fiefdoms within his Kingdom, and inquired of their expertise on a plan to turn this catastrophe around. After several days of meetings, he realized that his nobles were idiots, each conflicted by their own interests, and it was a mistake to involve them in the process. While his generals offered good tactical advice, it amounted to a very expensive proposal, as it required raising new troops and further risks of losing both Gold and more men in trudging through enemy territory to carry out the plan. If King Aygonot could only find a way to reduce the risk, he might yet see victory.
At this time, his factors, the Goldstein Brothers, came to him in seclusion and proposed a way to both raise troops and to deliver wages to the fighting forces without the additional risk of transporting the Gold. They recalled that the Romans had paid their advancing armies in salt, which at the time was a valuable commodity in itself, but was also purely a representation of wealth held for future exchange by the armies when they returned to Rome. Isaiah reasoned, and aware of the high risk that transporting Gold through enemy territory, Don quickly concurred, that in lieu of Gold, that warrant certificates for redemption of Gold could be used. While Don held reservations on further use of the Gold Warrants, Isaiah argued for their use not only for field wages, but also in the raising of new troops and even for paying for the food supplies and arming of the forces.
In making his decision, the King went to the treasury to audit his remaining wealth. While much remained in reserve, the King was disturbed by the amount already depleted in the current conflict and couldn't help but visualize what further defeat might do to his stockpile. The physical space previously occupied by the bullion aroused such intense emotions, that the King thereafter was easily persuaded to use Gold Warrants for both wages and upfront military expenses, and as we shall later see, for other financial obligations within the Kingdom.
The principle behind the Gold Warrants seemed sound, and in light of wealth physically lost through the theft of Gold en route, it was the only prudent means to deliver wages to his armies. The King also realized that soldiers killed on the field, if the territory was surrendered, not only meant a loss of the soldiers, but if the soldiers were carrying any of their wages on their person, the enemy could rummage among the casualties and confiscate that Gold as well, then turn around and use it to raise their own forces. With warrants, the soldiers would return after the war, redeem them for Gold, and the Gold would remain within the Aygonot Kingdom, safely transported from the treasury to the homes of the returning veterans. The Gold Warrants would be of absolutely no worth to the enemy.
With a plausible solution at hand, King Aygonot’s spirits were lifted and he ordered the Goldstein Brothers to acquire a press and print the Gold Warrants using the best papers, the finest inks, and an elaborate design that would be very difficult to forge or counterfeit. Before the ink was even dry on the first set of Gold Warrants, the King, recognizing his earlier failure to send enough forces to get the job done, quickly dispatched an order to quadruple the printing and once again gathered his nobles and regents. He presented to them an opportunity to partake of a share of the current enterprise, that they would receive in exchange to providing troops, a portion of the Victor's Spoils. The king explained the hazard of transporting Gold through enemy territory, and showed them the new Gold Warrants. The Goldstein Brothers had done such an excellent job in printing the warrants, that there was not a soul among the nobles who wasn't more than a little impressed with the validity and genius of the plan to issue these. So much so, that in lieu of real Gold, they themselves committed troops in exchange for the Gold Warrants, for they knew that even within the homelands of the Aygonot Kingdom and even within their own fiefdoms, there were occasional robbers that made the transport of valuables a risky undertaking. In contrast, they were aware the legion of soldiers guarding the King's treasury.
However, before accepting the Gold Warrants, the lords demanded a tour of the treasury to verify that the Gold was intact and adequately accounted for. Even though somewhat depleated, the Treasury was stocked far beyond what the regents could conceive and they were more than duly impressed, if not inspired. With no hesitation, they accepted the warrants and returned to their fiefs to gather troops, who, of course were informed of how the warrants work, and readily enlisted. The enlistees were not afforded a tour of the King's Treasury, and the feudal lords found that the conscription process was marginally more expensive compared to when they used physical gold. Some chose to keep all of the Gold Certificates and pay with real gold, while most simply paid a higher price. Eventually, all of the required troops were drafted and sent forward into battle.
Back in the neighboring kingdom, the large contingent of troops and fresh food stores arrived. The slaughter on both sides was immense, with four defenders dying for each of the Aygonot troops. But pure attrition eventually gave the Aygonots certain victory over the fortified capitol, and a surrender was negotiated. Although the defeated king was promised the status of a noble in the newly enlarged Aygonot Kingdom, the king realized the common fate for a defeated king was death, and in the dark of night, he stole away with a small band of his own soldiers and as much of his wealth that he could fit on several coaches. As he retreated into the interior of his former kingdom, his convoy was intercepted by some of his own lords, who summarily executed the king and his family and parted their wealth between them. Within a few months, even these interior fiefdoms were all eventually absorbed into the enlarged Kingdom of Aygonot.
... To be continued in Part II
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