Inside Hofburg Palace, during a regular Privy Council meeting, Court Treasurer Jacob presented his meticulously planned currency reform proposal for the royal territories.
The Imperial Bank had previously paved the way for the implementation of this reform, but to achieve it, the most crucial factor was having sufficient silver mine sources.
The Tyrol Silver Mine alone was not enough to support a new monetary system across the vast territories of the Habsburg Dynasty.
The Kuttenberg Silver Mine filled this gap.
After occupying Kuttenberg, the first building Laszlo ordered to be rebuilt was the Italian Palace—the largest minting center for Prague groschen.
However, now, it was taken over by minting experts from Austria and renamed the Austrian Royal Mint.
Here, silver coins bearing the double-headed eagle emblem and Emperor Laszlo's portrait began to be mass-produced; this new currency was named the Vienna groschen, an imitation of Charles IV's currency reform.
"Your Majesty, according to the intelligence we have gathered, there are over two hundred types of silver coins within the Empire, most of which are imitations of the Prague groschen, mixed with other metals," Jacob said, holding a large report paper and generally introducing the monetary situation within the Empire to everyone.
"According to statistics, approximately 120 groschen silver coins weigh 1 Roman pound, and the silver content of most silver coins is close to or even below 60%, which belongs to very inferior currency.
In transactions, the Prague groschen from Charles IV's era was the most popular; these silver coins were heavier than the currently circulating groschen, and their silver content was generally above 70%.
The currency with the largest denomination within the Empire was the rhineland thaler gold coin, jointly determined by the Electors of Rhineland; the value of this gold coin was equivalent to the florin.
However, our country is located in the southeastern border region of the Empire, and we basically use the florin directly for settlement.
In the new monetary system, one rhineland thaler gold coin is equivalent in value to one gold groschen; the gold groschen is for large-value silver coins, and one gold groschen can be exchanged for 24 groschen; below the groschen, there is also a copper subsidiary coin called the pfennig.
One groschen can be exchanged for 10 pfennig.
By comparing with other countries outside the Empire, we found that the value of the groschen is still relatively high; one groschen is approximately seven pence—a subsidiary coin commonly used by the English, circulating on the continent through the Anglo-French War.
Therefore, when carrying out currency reform, we can design a smaller silver coin with a lower value, roughly one groschen for two and a half small silver coins.
Thus, the new monetary system will consist of florin gold coins, gold groschen large silver coins, groschen medium silver coins, a new small silver coin, and pfennig copper coins commonly used by the common people for transactions.
Such an exchange ratio, with the florin gold coin at its core, might lead to the devaluation of the pfennig; to reduce resistance from the peasant and citizen classes, we must implement corresponding laws.
Currently, prices within the Dynasty's territory are relatively stable; we must determine the value of the new silver coins by setting reasonable prices for some daily necessities.
We can first issue the new currency in cities where branches of the Imperial Bank are established, promoting circulation through the exchange of old for new currency.
Whenever the government conducts transactions and repays debts, it will use the new silver coins for settlement; there is profit to be made here.
In addition, laws must be promulgated to restrict the circulation and use of various other silver coins in Austrian and Bohemian cities. Regarding exchange issues, we have collected and summarized various currencies commonly used by people in the Austrian and Bohemian regions and their true values, and after rigorous calculations, determined the exchange ratio of the new currency to each old currency, ensuring no loss of wealth occurs.
The new currency will allow your silver mines to fully realize their value, and wealth will continuously flow into the treasury.
When the time is ripe, you only need to issue an edict, just like Charles IV, to let the Vienna groschen replace the esteemed position of the Prague groschen and become the legal tender throughout the Empire.
As for abolishing the minting rights of the feudal lords to solve the problem of rampant inferior currency, that will have to wait until your imperial reforms begin to show results."
Jacob's lengthy report concluded, and Laszlo was quite satisfied; after establishing a stable monetary system, as long as the quality of the Vienna groschen silver coins—that is, their silver content—remains stable, there is no fear that this silver coin will not circulate in the market.
And Laszlo, who controlled the Tyrol Silver Mine and the Kuttenberg Silver Mine, had the least to worry about regarding the silver content of the coins.
Like other feudal lords within the Empire, Austria also had a mint specifically for imitating the Florence florin, dedicated to producing gold coins for the Austrian royal family; this imitation work had been going on for over a hundred years.
The rhineland thaler was indeed good, endorsed by several Electors, but it could only circulate within the Empire, unlike the florin, an excellent currency widely used in the Mediterranean Sea world.
After all, Florence was nominally also part of the Empire, so who could say the florin was not an imperial currency?
As long as the Venetian ducat gold coins were not used, Laszlo felt it was all acceptable.
"Your Majesty, regarding the new type of small silver coin, we plan to adopt a type of cross silver coin from the South German region. What do you think?"
"I have no objection. As long as the value design of these silver coins is reasonable, I will support it."
In Vienna, the new monetary policy caused a sensation as soon as it was implemented.
The citizen class was the first to accept this policy, with people lining up at the Imperial Bank's windows to exchange for new currency.
Because according to the new law, after a certain point in time, using old currency for transactions would result in a fine if discovered.
After the new monetary policy was implemented, the value of the pfennig remained largely unchanged, while the value of the groschen greatly increased; however, the introduction of the cross silver coin solved this problem, providing convenience for people.
The new silver coins were of excellent quality and immediately attracted significant attention from Vienna merchants upon their release.
A Hanseatic League merchant analyzed in a report submitted to the guild: "It is wise to retain the original value of the florin gold coin, which actually serves as an anchor for promoting the new currency. However, the actual value of the newly established cross silver coin has been overestimated; the Emperor's mint seems to have manipulated things here. Nevertheless, currency stability will inevitably lead to a decrease in transaction costs,"
"This will undoubtedly benefit commerce, and perhaps in the future, the problem of currency exchange for cross-territory trade will be solved by this double-headed eagle silver coin."
The nobles hoarded large quantities of old silver coins, but they were not in a hurry to exchange for new ones.
An Austrian noble wrote in a letter to his relative: "The new groschen is actually priced at one and a half old groschen for exchange. I suspect the value of the new silver coin has been exaggerated, and perhaps His Majesty hopes to use such means to harvest people's wealth."
There were many nobles who shared his opinion, and they were all waiting for fluctuations in the value of the new groschen, at which point they could use their large quantities of old silver coins to arbitrage.
However, with the Emperor controlling abundant silver mines, it is unlikely that the market value of the Vienna groschen will fluctuate significantly for a long time, unless there are large-scale natural disasters or the silver mines are depleted.
The peasants were not greatly affected; they mostly paid their taxes in kind, and tax officials rarely directly collected money from them.
In some places, malicious devaluation of the pfennig still occurred, but very quickly, the Court Finance Committee reported the news, and the army was dispatched to arrest all those who disrupted market stability.
Many people also had ulterior motives, recasting inferior coins into new double-headed eagle silver coins, attempting to pass off the bad as good.
However, the unique embossed patterns and coin dimensions designed by the Royal Mint Master were not so easy to replicate, and the Emperor's secret agents pursued these counterfeiters everywhere. Once caught, they were basically executed on the spot, which forced those with ulterior motives to reconsider whether they dared to produce counterfeit currency in Austria.
The emerging Vienna groschen was gradually seen as a superior alternative to the Prague groschen, and the Emperor used his advantage of controlling silver mine resources to try and establish monetary credit.
Perhaps in the future, Austria will face difficulties with over-issuance of currency and inflation, but in the short term, this currency reform will greatly strengthen central finance and also increase his personal prestige.
The rewards for the painstaking effort to reclaim Bohemia were finally beginning to show.