While those suddenly burdened with public bonds were momentarily bewildered, the concept itself was hardly foreign to seventeenth-century Europeans. Since the Middle Ages, monarchs had frequently issued debt to fund wars and secure royal budgets. In a Europe where market economies and early capitalism were already taking root—the first stock market having been established over a decade prior—notions of joint-stock companies, promissory notes, and bonds were well-understood by the savvy merchant class. Thus, when the Federal Trade Company began distributing these slips of paper, the factory owners required little explanation.

However, this specific instance was unique.

In an era where the monarch was the state, the national treasury was synonymous with the King’s personal coffers; the nation’s wealth was his private property, and the state itself was merely an extension of his estate. Consequently, any bond issued by the “state” was effectively nothing more than the sovereign’s personal debt. It might be repaid or ignored at the monarch’s whim, and should the ruler die, his successor was under no obligation to honor the previous regime’s liabilities.

This was precisely why medieval kings preferred borrowing from Jewish moneylenders. Once the debt was secured, the crown could simply arrest, strip of assets, or exile the lenders before the maturity date arrived. In such a system, credit was secondary to the power of a noble bloodline and a standing army; after all, how could a mere lender force a king to pay when the king held all the swords?

“Can you actually repay this?” a factory owner asked, eyeing the paper with suspicion.

“Of course,” the clerk replied without blinking. “As long as the Federal Trade Company stands, and as long as this nation endures, your debt will be honored.”

“I suppose… that makes sense,” the owner muttered, though his doubt lingered.

The difference here lay in the issuer: the Federal Trade Company, a public institution enshrined in the very Covenant of the Union. It was a body designed to provide a level of institutional stability that a mercurial monarch could not match. People accepted the bonds warily, primarily because they had no other choice. They knew the state was short on hard currency, and receiving a promise of future payment was infinitely better than receiving nothing at all. While the lack of interest was a disappointment, they had reached the limits of their leverage.

Once the bonds entered circulation, the gears of the economy began to turn again. Factory owners used the paper to trade for raw materials and pay mediation fees to the monasteries. With their pockets suddenly “full,” the monasteries and other workshops resumed operations and finally paid their laborers’ wages. The Union had narrowly avoided a total collapse, but as the crisis receded, the economic landscape of the Continental Covenant began to shift in subtle, permanent ways.

***

The Agricultural Knights remained the backbone of the federal economy. The system was simple: the Knights farmed, the Trade Company transported the yield, and the profits were split among the government, the Order, and the citizenry. While most citizens were content to leave the management to the Knights and simply collect their dividends, a small group of “adventurers” sought a different path.

These individuals typically organized into family-based collectives, pooling their land grants to hire a single Knight to perform the labor while they retained management control. They took full responsibility for deciding which lands to clear, which crops to plant, and how to rotate them. In some cases, the roles were reversed, with a Knight gathering a group of citizens to form a private farm under his own management. Regardless of the structure, these adventurers often reaped significantly higher profits than the average citizen if their ventures succeeded.

The disparity extended to the types of crops grown. The large-scale farms managed directly by the Order focused on a diverse array of staples—primarily grains that were easy to mechanize, produce in bulk, and sell on the global market. In contrast, the private adventurer farms tended to specialize in high-profit export crops, with tobacco being the most prominent.

This was where the divergence in fates occurred.

“My God… you’re saying the tobacco intended for Glasgow isn’t selling?”

“The King of Scots is in dire straits,” a neighbor replied with a shrug. “He’s only buying essential grains now. He doesn’t have a copper to spare for luxuries.”

The British Isles were reeling from the recent terror, but because food was chronically scarce, they continued to pour what little wealth they had into importing the Covenant’s grain. Consequently, those who farmed corn or potatoes for domestic consumption within the Union remained largely unaffected. The Order-managed farms, which treated export crops as a minor supplement to their staples, suffered only negligible losses. Since their profits were distributed based on the average revenue of the entire Order, no single individual faced ruin.

The adventurers, however, were devastated. The value of their specialized export crops plummeted to near zero as the Scottish market evaporated, leaving rotting inventories stacked across the territory. This shocking contrast forced many ambitious Knights and citizens to abandon their dreams of independence and return their lands to the Order’s management.

Yet, some refused to yield.

“We’ve invested too much effort to quit now!” they declared. “We just need a new strategy.”

They rapidly expanded the scale of their family farms, realizing that relying on a handful of people and a single crop was a recipe for disaster. To survive, they needed to diversify and find more partners to spread the risk. Some proposed a radical shift in target.

“The crops sold within Virginia held their value throughout the crisis,” an investor noted.

They began cultivating domestic staples—corn, barley, and highly perishable fruits that could never survive an Atlantic crossing. As these former exporters turned their gaze toward the internal market, they discovered a surprisingly lucrative opportunity. The fact that the population had been receiving bonds instead of luxury imports for months played heavily in their favor.

Denied access to foreign goods through the Trade Company, the citizenry began spending their wealth on domestic alternatives. They sought out fresh, premium grapes that never left the continent and invested in feed crops like clover and corn for livestock. While the Order’s agriculture remained outward-looking, these private ventures pivoted entirely toward the domestic consumer.

This shift rippled through the industrial sector.

“You want to expand the brewery? In this climate?”

“Especially in this climate! The private farms within the Order are switching to grapes. The price is going to drop significantly in the coming years, and we need to be ready to process it all!”

With grain and fruit circulating cheaply at home, the burgeoning liquor industry leaped forward, fueled by low raw material costs. The livestock industry followed suit as feed became affordable. Although foreign luxuries were scarce, the abundance of high-quality domestic wine and meat at lower prices shifted public interest toward a more refined culinary culture. The dinner tables of the Covenant grew richer, and the economy stabilized.

While the initial panic had caused a brief spike in prices as people hoarded goods, the realignment of domestic industry eventually restored the balance. However, a lingering observation remained: prices were slightly higher than they had been before the crisis. Most dismissed it; thanks to overwhelming agricultural productivity, the cost of living in the Union was still a fraction of what it was in Europe. Everything seemed to be going well, so why worry?

Something profound had occurred, yet no one had truly grasped it—not even Kim Lee-sang, the man who had authorized the bonds.

***

The bonds had been issued in high denominations, starting at 10 Othellos—equivalent to 1,000 Livres. Considering that a single Livre could represent a month’s wages for a laborer, 1,000 Livres was a sum many would never earn in a lifetime. To put it in perspective, the annual budget of France during wartime was only a few million Livres.

The factory owners who received these massive certificates found them practically useless for daily transactions. They couldn’t use them to pay individual wages, nor could they spend them on personal needs.

“Here are the 10-Othello notes for the timber. Count them and see if the amount is correct.”

“Is this that new paper the government’s been handing out?”

“It is. Look at the intricate engraving—you can tell they’re impossible to forge. Now, can we get that remaining 150 tons of wood delivered?”

Left with no other option, the owners used the bonds to settle accounts with other large factories or pay the monasteries for labor in bulk. These recipients, in turn, used the bonds for their own high-value transactions. Before long, whenever massive amounts of capital needed to move for business purposes, the bonds became the preferred medium.

But their influence went deeper. Because these high-value notes were unsuited for the marketplace, they frequently ended up tucked away in safes as a convenient form of savings. They were arguably safer than Othello chips, as their serial numbers allowed them to be tracked if stolen.

Yet, the bonds were not merely dead weight in a vault. For every bond that was “saved,” an equivalent amount of Othello chips, Livres, and Pounds—previously hoarded for safety—was released back into the market to purchase them. With the supply of foreign luxuries cut off and the volume of circulating currency suddenly surging, sellers adjusted their prices upward.

Simultaneously, the improved liquidity breathed new life into the commercial districts. A sense of vitality returned to the towns, much like the first green shoots of spring. It was a bizarre phenomenon: the Union had barely survived a crisis, yet its economy was suddenly more active than ever.

Even the most inquisitive scholars were stumped. The amount of precious metal within the Covenant hadn’t changed, yet the market was booming. Since the field of economics did not yet exist, they eventually moved on to other curiosities.

But the change was undeniable. Previously, the Othello had functioned as a derivative of the Livre and the Pound, entering circulation through a fixed exchange rate of 100 Livres per chip. Its value was anchored to the gold and silver recognized by foreign governments. In essence, the Union’s economy had been a vassal to the credit of European powers.

That ended the moment Kim Lee-sang issued debt from nothing. Because of the uncertainty of the crisis, he had omitted both interest rates and maturity dates, allowing the bonds to function exactly like currency. It would not be until years later, while reading an educational economics comic in his study, that Lee-sang would shout, “Wait a minute!” and realize what he had done.

Kim Lee-sang had just invented credit-based fiat currency.