Date: December 15th, 1905 – Belgrade, Kingdom of Serbia
The biting winds of December swept through Belgrade, carrying the first flurries of snow and a palpable sense of anticipation within the corridors of the Stari Dvor. For Petar, the approaching end of 1905 marked nearly ten months since his inexplicable reincarnation, ten months of relentless effort to wrench his small, precarious kingdom onto a new, more ambitious trajectory. The encounter with Major Dragutin Dimitrijević in November had been a stark reminder of the volatile currents swirling beneath the surface of Serbian society and its military, a constant counterpoint to his efforts at rational, state-driven modernization. While Colonel Mišić continued his discreet surveillance of Apis and his cohorts, Petar knew that true internal stability would ultimately depend on delivering tangible progress and fostering a sense of national purpose that transcended radical zealotry.
The most immediate focus of that purpose was now centered on the ambitious economic development plans championed by Milan Stojadinović's Royal Commission. The initial reports from Stojadinović were encouraging: the French geological survey team was due to arrive in Belgrade after the New Year to finalize contracts and begin their expeditions in the spring. The detailed engineering and logistical plans for the Vrška Čuka coal mine modernization were nearing completion, promising a significant boost to domestic energy production if implemented. These small, concrete steps were heartening, but Petar knew they were meaningless without the financial lifeblood to sustain them. All eyes, particularly his own, were on Lazar Paču, his Minister of Finance, who was due to present his plan for funding these extensive new initiatives.
The two-month deadline Petar had set in mid-October had arrived. On December 15th, Petar summoned both Minister Paču and Prime Minister Pašić to his study. The atmosphere was somber, heavy with the knowledge that Paču had been tasked with achieving the near-impossible: finding substantial new funds in a kingdom already groaning under austerity measures implemented for military upgrades.
Paču entered looking even more careworn than usual, the lines on his face deeper, his shoulders stooped as if by a physical burden. He carried his familiar leather briefcase, which Petar suspected was filled with figures that would paint another grim picture. Prime Minister Pašić, ever the pragmatist, wore an expression of cautious neutrality, ready to assess the political viability of whatever financial contortions Paču had devised.
"Minister Paču," Petar began, his voice calm but resolute, leaving no doubt as to his expectations. "You have had two months to devise a financial strategy for the initial phases of our national resource development program – the geological surveys, the Vrška Čuka modernization, and the preparatory work for the School of Mines and the National Industrial Development Fund. I await your proposal."
Paču nodded slowly, placing his briefcase on the table and extracting a surprisingly slim set of documents. "Your Majesty, Prime Minister," he said, his voice raspy. "The task has been, as anticipated, exceptionally challenging. The kingdom's resources are finite, our existing commitments substantial. To divert further significant sums at this juncture… it stretches our fiscal fabric to its very limits."
He did not, however, declare it impossible. Instead, he outlined a plan that was a masterpiece of reluctant ingenuity, a testament to his financial acumen, however much it pained him to propose it. It was clear he had taken Petar's previous insistence on exploring Stojadinović's more innovative ideas to heart, though he framed them with his own characteristic caution.
The core of Paču's plan rested on several pillars: First, a further, highly targeted review of all non-military, non-essential state expenditures, seeking out even minor efficiencies and deferrable projects. He projected this could yield a small, but not insignificant, sum. Second, he proposed the immediate, albeit cautious, issuance of the "National Resource Development Bonds" that Stojadinović had conceptualized. Paču, however, suggested an initial tranche significantly smaller than Stojadinović might have hoped, aimed primarily at wealthy Serbian expatriates, domestic banks, and patriotic institutions, with the interest rates carefully calibrated to be attractive yet sustainable. He emphasized this was an experiment, its success uncertain. Third, for the Vrška Čuka mine modernization, Paču proposed a mixed funding model: a portion from the new bonds, a direct (and painful) reallocation from the Ministry of Public Works' existing budget for less critical road maintenance, and a bold proposal to seek a partnership with a reputable foreign mining equipment supplier, offering them a small, time-limited share of the mine's increased output in exchange for providing machinery on favorable credit terms. This was a significant departure for the usually loan-averse Paču. Fourth, for the geological surveys and the initial setup of the School of Mines, he allocated funds scraped together from various small contingency reserves and a proposed slight increase in export duties on unprocessed timber – a measure designed, he noted, to subtly encourage domestic wood processing, an idea Petar recognized from Stojadinović's thinking.
"This… portfolio of measures, Your Majesty," Paču concluded, his voice heavy with the weight of the compromises involved, "could, if all assumptions hold and if the bond issuance meets with even moderate success, provide the minimal necessary capital to initiate the first phases of the resource development program over the next eighteen to twenty-four months. It requires us to mortgage some future revenues, to defer other desirable projects, and to place considerable faith in the success of the Vrška Čuka venture and the bond market's appetite. It is a high-wire act, Your Majesty."
Petar listened intently, absorbing every detail, Alex Volkov's mind sifting through the financial mechanics. Paču had not been enthusiastic. He had not offered a sweeping endorsement. But he had, once again, delivered a plan. It was constrained, cautious, and laced with warnings, but it was a plan that allowed Petar's economic vision to take its first concrete steps.
Prime Minister Pašić, who had been listening with a politician's ear for public reaction, spoke first. "The reallocation from public works and any new duties, however small or cleverly framed, will require careful political handling, Your Majesty. The success of the domestic bonds will also depend heavily on public confidence and a strong appeal to national sentiment."
"I understand these challenges, Prime Minister," Petar replied. "And we will meet them." He turned to Paču. "Minister, I recognize the immense difficulty of the task I set you. This plan, while indeed cautious, provides a foundation upon which we can build. I approve it, with the following directives."
He then proceeded to refine and energize Paču's cautious approach. "Regarding the National Resource Development Bonds, I want a public campaign, led by Gospodin Stojadinović and his commission but with the full backing of the government, to promote them not just as an investment, but as a patriotic duty, a chance for every Serb with means to contribute directly to building a stronger nation. We will emphasize transparency and the direct link between these bonds and tangible projects like Vrška Čuka."
"For the Vrška Čuka modernization," Petar continued, "the partnership with a foreign equipment supplier is an astute idea. I want the commission to identify potential partners immediately and begin negotiations. We must secure the best possible technology on the most favorable terms. And the increased output from that mine must begin to contribute to the National Industrial Development Fund's capitalization as soon as possible, to demonstrate the viability of this model."
He also addressed the broader fiscal picture. "While these measures fund the initial steps, Minister Paču, we must continue to seek long-term solutions for strengthening our national finances. I expect Gospodin Stojadinović's commission to work closely with your ministry to develop further proposals for stimulating domestic industry, increasing export revenues from value-added goods, and attracting productive foreign investment that aligns with our national interests. Austerity buys us time; strategic investment buys us a future."
Paču nodded, the lines of resistance on his face perhaps softening fractionally. The King was not just demanding money; he was also pushing for the very revenue-generating schemes that might one day ease the Treasury's burdens.
The meeting concluded with Petar formally authorizing Paču to begin implementing the financial plan. He tasked Stojadinović's commission with an even more active role in driving the bond campaign and the Vrška Čuka project, effectively making the young economist a key player in the execution of these first economic initiatives.
As 1905 drew to a close, Petar felt a profound, if weary, sense of accomplishment. His first ten months as the unexpected King of Serbia had been a whirlwind of activity. He had challenged the inertia of his government, initiated critical military reforms, weathered the initial storm of austerity, and now, laid the financial groundwork for a long-term economic transformation. The kingdom was stirring, a nascent energy thrumming beneath the surface of its ancient routines.
The path ahead remained extraordinarily difficult. Foreign powers watched Serbia with a mixture of suspicion and predatory interest. Internal factions, like Apis's Black Hand, still posed a significant, if currently subdued, threat. The treasury was stretched информацию, and the Serbian people were being asked to bear considerable burdens.
Yet, Petar felt a burgeoning hope. He was no longer just Alex Volkov, a disoriented soul trapped in a historical drama. He was Petar Karađorđević, King of Serbia, a young monarch wielding real power, making difficult choices, and actively forging a new destiny for his adopted nation. He had faced down resistance, demanded accountability, and begun to gather around him a team of individuals, like Putnik, Mišić, and now Stojadinović, who could help him translate his grand vision into reality.
The price of progress was indeed high, Petar mused as he looked out at the snow beginning to blanket Belgrade. But the price of stagnation, he knew with chilling certainty, was far higher. And he, the boy who had dreamed of Roman glory, was determined that Serbia would pay whatever it took to rise. The new year, 1906, beckoned with fresh challenges, but also with the promise of new foundations being well and truly secured.