The new message said that Raesinia remained committed to finding a mutually acceptable solution to the debt problem, and hinted in the most oblique possible terms that she was aware of the conditions in the markets in general and concerned about VRT in particular. This would probably go over most heads, but the friends of Second Prince Matthew, who had bought into the venture on the strength of his promise that he had Raesinia’s support, would hear it loud and clear. It should turn things around, making today’s scare brief. If greed is stronger than fear. That seemed likely—?this was Borel—?but...
Raesinia didn’t relax until Cora returned, sending Barely over with a note. “VRT stable at -9, broader market -3. Hornets buzzing.” The last referred to Goodman and his friends among the Honest Fellows, whose market activities Cora had been observing. The wild fluctuations had no doubt alarmed them, and Raesinia felt that she could count on them to take the appropriate steps.
So far, so good.
*
“It’s Master Goodman,” Barely said through the door. “He wants to see you immediately.”
“We have a conference scheduled for Thursday,” Raesinia said, feigning confusion. They were in Cora’s room, sitting behind the heavy dining table.
“This is not an official meeting.” Goodman’s voice was muffled. “This is urgent. And I suspect you would prefer to be discreet.”
I would prefer to be discreet, would I? She kept her voice neutral and hid her smile. “Very well, I suppose. Let him in.” She got up, exchanging glances with Cora.
The door opened. Goodman was in his usual suit, but there was something very slightly off, his cuffs uneven and his tie askew. For him, Raesinia suspected, this was the equivalent of turning up to work stark naked. He pushed into the room, and she had to give ground rapidly to avoid a collision. He glared at her, ignoring Cora completely.
“I expected better,” he said. “I don’t know why. In retrospect, this is exactly the sort of pathetic grubbing so typical of Vordanai. But I thought that being royalty meant you’d have at least the pretense of honor. More fool me, I suppose.”
“My dear Master Goodman,” Raesinia said, pretending shock. “What exactly are you implying?”
“We can drop the act, as long as we’re alone.”
“We’re not alone,” Raesinia said. “I think you know my companion Cora?”
Goodman waved a hand impatiently and sighed. “If I must spell it out, I’m referring to your involvement in the Vor River Trading concern. Do you deny it?”
“I suppose it would be silly to try, seeing as you seem so certain.”
“Believe me, I didn’t want to do this.” Goodman took a deep breath, steadying himself on the back of a chair. “The thought that a member of one of the great royal families of the continent—?albeit one fallen on hard times—?would stoop to entangling herself in trade out of pecuniary interest was the farthest thing from my mind. However, after the events of the last few days and my own investigations, it has become clear to me that you have done exactly that, and furthermore have used your privileged position to profit from our private discussions. I am, frankly, ashamed, and I suspect His Majesty feels likewise.”
Goodman took a deep breath as he finished this speech, and Raesinia gave him a moment to recover. She walked to the sideboard, where there were several dusty bottles of amber liquor.
“Would you like a drink, Master Goodman?”
“I would not,” Goodman said stiffly. “I ask again. Do you deny any of this?”
“Let me see if I understand what you’re accusing me of. You think that I fed information from our negotiations to this trading company, in order to unfairly make money for myself in the market?”
“That is exactly what you did,” Goodman said. “And it is highly illegal under Borelgai law, I might add.”
“Would this be a good time to point out that Vor River Trading has not, in fact, made any money?” Raesinia poured a tumbler half full of sticky spirit, and carried it back to the table.
“I don’t see that it matters,” Goodman said. “I never accused you of competence in your crimes.”
“I see. So, what do you intend to do?”
“In light of your agreement with His Majesty, I am prepared to be lenient,” Goodman said, swelling visibly. “The concern will be wound up immediately. You will be confined to the Keep until your marriage, with or without an escort from the second prince. Your companions”—?he glanced derisively at Cora—“will be returned to Vordan by the first available vessel.”
“And the creditors?”
“What? What creditors?”
“The creditors,” Raesinia said patiently, “of Vor River Trading. As I said, the concern has done poorly. If it’s wound up, I doubt there will be enough to pay its debts.”
“Don’t expect me to believe you honestly care,” Goodman said. “But His Majesty will, I’m sure, make your creditors whole.” He smiled nastily. “I imagine we’ll recoup our losses from Vordan eventually.”
“Oh, good.” Raesinia turned to Cora. “How much would that be, do you think? In round figures.”
“In round figures?” Cora’s lips moved soundlessly. “Six hundred, maybe seven. Certainly not more than eight...”
Goodman rolled his eyes. Cora counted, ostentatiously, on her fingers, and then grinned.
“Yes, that’s about right. Call it seven hundred million marks.”
The merchant’s face clouded. “What sort of nonsense is this?”
“We’ve had quite an influx of investors of late,” Raesinia said. “And with Second Prince Matthew vouching for us, your banks have been more than happy to extend credit, which has allowed us to leverage those investments—?that’s the term, isn’t it? Leverage?”
“You’ve lost seven hundred million marks?”
“We haven’t lost it yet,” Cora said. “It’s invested in the market for Vordanai debt derivatives.”
“We bet on Vordan’s not having to pay, in other words. For some reason there was no shortage of investors willing to take the other end of that bet. So if Vordan does pay out in the end, we’ll be in quite the hole.”
“I see,” Goodman said grimly. “Clearly I underestimated your capacity for dishonor. And this is supposed to force my hand, is it? Make me grant you a favorable deal?”
“Something like that,” Raesinia said.
Goodman grinned like a snake. “Passing clever, I’ll admit. But contracts are just paper. If the king declares them invalid, your little attempt at blackmail goes up in smoke.”
“That would be very interesting,” Raesinia said. “Cora, do you want to explain this part?”
“Well,” she said cheerfully, “first of all, those contracts are pledged as collateral to the banks, in exchange for the loans that paid for them. So if they go up in smoke, then a lot of angry creditors are going to come looking for VRT.”
“That is hardly my problem.”
“What they’re going to find,” Cora went on, “is that our accounting has been... well, a bit irregular. Specifically, we’ve sold more shares in the company than actually exist.”
“A lot more,” Raesinia said.
“Each mark of income is about thirteen thousand percent overpledged,” Cora agreed. “There are a lot of investors holding a lot of paper that will suddenly be worth essentially nothing. When they find out, there’ll be a panic.”
“You—” Goodman looked from Cora to Raesinia and back again. “You didn’t. That’s absurd.”