The Confusion

by Neal Stephenson

  "Some money must change hands though!" insisted Abraham, who had heard all of this before but still could not quite bring himself to believe it. He was fourteen years old.

  "Yes—a tiny amount," said Jacob Gold. "But only after they have exhausted every conceivable way of settling it on paper, by arranging multilateral transfers among the different houses."

  "Wouldn't it be simpler just to use money?" Abraham asked doggedly.

  "Perhaps—if they had any!" Eliza said. Which was meant as a jest, but it stilled them for a few moments.

  "Why don't they?" Abraham demanded.

  "It depends on whom you ask," Eliza said. "The most common answer is that they do not need it because the system works so smoothly. Others will tell you that when any bullion does become available here, it is immediately smuggled out to Geneva."

  "Why?"

  "In Geneva are banks that, in exchange for bullion, will write you a bill of exchange payable in Amsterdam."

  Abraham's eyes blossomed. "So we are not the only ones who are worried about how to extract hard money profits from Lyon!"

  "Of course not! For that, we are competing against every other foreign merchant in Lyon who does not share the belief, common here, that entries in a ledger are the same as money," said Samuel.

  "What kind of person would believe such a thing, though?" Abraham asked.

  Jacob Gold answered, "The kinds of people who have been here for so long and who make a comfortable living off of those ledgers."

  Eliza said, "But the only reason this system works is that these people know and trust each other so well. Which is fine for them. But if you are on the outside, as we are, you can't take part in the Dépôt, as this system is called, and it is difficult to realize profits."

  Jacob Gold added, "It is fine for those who have the houses here, the land, the servants. They transact an enormous amount of business and they find ways to live well. The lack of hard money is only felt when one wants to cash out and move somewhere else. But if that is the kind of person you are—"

  "Then you don't live in Lyon and you are not a member of the Dépôt," Eliza said.

  "We can talk about this all day, going in circles like the Uroburos," said Samuel, clapping his hands, "but the fact is that we're here and we want to buy some timber for the King. And we don't have any money. But we have credit from Monsieur Castan who in turn has credit because he lives here and is very much a member of the Dépôt."

  "Thank you, Samuel," Eliza said. "You are correct: people trust Monsieur Castan; when one of the other members of this Dépôt writes in his ledger ‘M. Castan owes me such-and-such number of ecus,' to them that's as good as gold. And what we need to do is turn that ‘gold' into some timber arriving at Nantes."

  "Thanks to Monsieur Wachsmann," said Jacob Gold, referring to our host, "we have some ideas as to where we might go and make inquiries about who has timber, and might be willing to sell it to us; but how do we actually transfer the money to them from the King's Treasury?"

  "We need to find someone who is a member of this Dépôt and who is willing to write in his ledger that the King owes him the money," Eliza said.

  "But that still doesn't get the money into the hands of him who sells us the timber, unless he is a member of the Dépôt, and I do not phant'sy that lumberjacks are invited," said Samuel.

  "And it provides no way for us to realize a profit," Abraham, the ever-vigilant, reminded them.

  Eliza reached out and pinched him on the nose to shut him up while she pointed out, "True, and yet wax, silk and other commodities are sold here in immense quantities, so there must be some way of doing it! And some do realize hard money profits, as is proved by the covert transfers of bullion to Geneva!"

  Monsieur Wachsmann was therefore brought in. He was a stolid gray-headed Pomeranian of about threescore years. They explained their puzzlement to him and asked how he sold his goods, given that he was not a member of the Dépôt. He replied that he had a sort of relationship with an important businessman in town, with whom he kept a running account; and whenever the account stood in Monsieur Wachsmann's favor, he could leverage that to get what he needed. The same would be true, he assured his visitors, of any timber wholesaler big enough for them to consider doing business with.

  "So a plan begins to take shape," said Samuel. "We will negotiate terms with a timber-wholesaler, denominated in ecus au soleil, never mind that they are a wholly fictitious currency, and then take the matter to the Dépôt and allow them to clear it on their ledgers. We end up with the timber; but is is possible for us to extract any profit?"

  Monsieur Wachsmann shrugged as if this was not something he paid much attention to; and yet his estate showed that he had profited abundantly. "If you would like, you can route the profits to my account, and I will owe them to you, and we may plow these into later trades within the Dépôt, which may eventually turn into some material form, such as casks of honey, that you could sell for gold in Amsterdam."

  "This is how people move to Lyon, and never leave," muttered Jacob Gold, combining in this one remark the Amsterdammer's amazement at Lyon's business practices with the Parisian's disdain for its culture.

  Monsieur Wachsmannn shrugged, and looked at his château. "Worse fates can be imagined. Do you have any idea what Stettin is like at this time of year?"

  "What about getting some bullion and running it to Geneva for a bill of exchange?" Abraham demanded. "Much quicker, and easier to carry to Amsterdam than casks of honey."

  "There is a lot of competition for the small amount of bullion that exists here, and so you will have to accept a large discount," Monsieur Wachsmann warned him, "but if that is really what you want, the house that specializes in such transactions is that of Hacklheber. They are at the Sign of the Golden Mercury, cater-corner from the Place au Change."

  "Now, there is a familiar name," Eliza said. "I have been to their factory in Leipzig, and been ogled by Lothar himself."

  "I have never heard of them," said Samuel, "but if this Lothar was ogling you it means he is not altogether stupid."

  "They are metals specialists," said Jacob Gold, "I know that much."

  "When the Genoese here went bankrupt," said Monsieur Wachsmann, "it happened because the Spanish mines had hiccuped in their delivery of silver to Seville. Bankers of Geneva and other places came to Lyon to fill the void left by the Genoese. They had connections to silver mines in the Harz and the Ore Range, which flourished for a brief time, until Spanish silver once again flooded the market. Anyway, one of those banking-families had an agency in Leipzig, and the people they sent thither to look after it became linked by marriage to this family of von Hacklheber. Because of the Hacklhebers' connections to the mines, they had older ties to the Fuggers. Indeed, it is said that this family goes all the way back to the time of the Romans…"

  Abraham snorted. "Ours goes back all the way to Adam."

  "Yes; but to them this is all very impressive," said Monsieur Wachsmann patiently, "and by the way, now that you have had your bar mitzvah you might spend less time poring over Torah and more learning social graces. At any rate, fortune favored the Leipzig branch, and before long the Hacklheber tail was wagging the Geneva dog. It is a small house, but reputed extraordinarily clever. They are in Lyon, Cadiz, Piacenza: anywhere there is a large flux of money."

  "What do they do?" Abraham wanted to know.

  "Lend money, clear transactions, like other banks. But their real specialty is maneuvers such as the one we are talking about now: shipment of bullion to Geneva. Do you remember when I warned you that there would be a discount if you converted your earnings to bullion here? It should have occurred to you to wonder just where the missing money disappears to in such a case. The answer is that it goes into the coffers of Lothar von Hacklheber."

  Monsieur Wachsmann rolled to his feet, and paced across the terrace once or twice before going on.

  "I trade in wax. I know where wax comes from and where it goes, and how much wax of differ
ent types is worth to different people in different times and places. I say to you that what I am to wax, Lothar von Hacklheber is to money."

  "You mean gold? Silver?"

  "All kinds. Metals in pig, bullion, or minted form, paper, moneys of account such as our ecus au soleil. To me, money is frankly somewhat mysterious; but to him it is all as simple as wax. Or so it would seem; like honeycombs in a boiler, it melts together and is con-fused into one thing."

  "Then we shall go and talk to his agent here," Eliza said.

  "Agreed," said Samuel de la Vega, "but I say to you that if they simply had a few coins lying about the place, we could get this whole thing done in an hour. That this system works, I cannot deny; but this Dépôt reminds me of certain towns up in the Alps where people have been marrying each other for too long."

  "THE NEXT DAY," Eliza continued, "I met Gerhard Mann, who is the Hacklheber agent in Lyon."

  She now relaxed her grip on Bonaventure Rossignol's testicles. For in the end, this was the only way she had found to maintain Bon-bon's attentiveness as she had discoursed of ecus au soleil and the Dépôt and so forth. But the mention of the name Hacklheber brought Rossignol to attention.

  "Lothar von Hacklheber," she continued, "is not the sort who gladly suffers an employee to while away the afternoons sipping coffee in the café."

  "I should think not!"

  "He has so arranged it that Mann has more work than he can handle. This forces him to make choices. He is always dashing about town on horseback like a Cavalier. Carriages are too slow for him. Arranging the meeting was absurdly difficult. It required half a dozen exchanges of notes. Finally I did what was simplest, namely remained still at the pied-à-terre and waited for him to come to me. He galloped up, naturally, just as I was beginning to suckle Jean-Jacques. And so rather than send him away, I invited him in, and bade him sit down across the table from me even as Jean-Jacques was hanging off my tit."

  "Appalling!"

  "But I did this as a sort of test, Bon-bon, to see if he'd be appalled by it."

  "Was he?"

  "He pretended not to notice, which was not an easy thing for him."

  Rossignol shuddered. "What did you talk about?"

  "We talked about Lothar von Hacklheber."

  "YOU MET HIM IN LEIPZIG?" Mann asked.

  "It had to do with a silver-mining project in the Harz," Eliza said, "in which he elected not to invest: a typically shrewd decision."

  Eliza explained to Mann what she had in mind. He pondered it for a few moments. At first she saw concern, or even fear, on his face, which made her suspect that he did not really wish to do it, yet was loath to refuse, for fear of what he might say, were Eliza to go to him and pout. Mann was a young man—indeed, would have to be, to last for very long, working as he did—and Eliza saw clearly enough that he had been posted to this place to prove himself, or to fail, so that he could decide where to send Mann next. Mann had blue eyes a little too close together, and a broad brow, so expressive that in its creases and corrugations she could read his feelings like sonnets on parchment. He was intelligent, but lacking in resolution. She guessed that someone of strong personality would one day get the better of him, and that he would end up sitting at a banca on an upper floor of the House of the Golden Mercury in Leipzig, peering down into the courtyard with a mirror on a stick.

  After a few moments' thought, Mann relaxed, and began to sift through the vocabularies of diverse languages to express his thoughts. "It would be—" he began, and then switched to German in which Eliza could make out the word-part "sonder," which to them meant "special" or "exceptional" or "peculiar." This was his polite way of telling her that the sum involved was too small to be worth his time. "But we are encouraged to make such transactions. Sometimes they are like the first trickle of water coming through a tiny crevice in a dike; the amount that comes through is not as important as the channel that it cuts along its way, which presently carries a much greater volume." Which was his way of saying that he had heard she was backed by the French government, and wanted to participate in what she was doing, now that expenditures were rising because of the war.

  "It is not a similitude that shall be of any comfort to Dutchmen," Eliza said, having in mind her colleagues, the de la Vegas.

  "Ah, but if you cared about the comfort of Dutchmen you would not be on such an errand," Gerhard Mann reminded her.

  "SO THROUGH HIS OWN CLEVERNESS Gerhard Mann had devised a way to escape from the interview without giving me or him any cause to be angry," Eliza said. Tired of sitting on Bon-bon, she now rolled back and sat cross-legged on the bed between his spread knees.

  "I let the de la Vegas know that we had now a way to get hard money out of Lyon," she continued. "Within a few hours, they were making the rounds of the timber wholesalers, and within a day, had struck two separate deals: one for a shipment of Massif Central oak logs, which were stacked near the bank of the Saône a mile upstream, another for some Alpine softwood at the confluence of the Rhône and the Saône. If you'd like, Bon-bon, I can devote an hour or two, now, to explaining in detail the negotiations amongst ourselves, the two merchants who sold us the timber, Monsieur Castan, various other members of the Dépôt, Gerhard Mann, and certain insurers and shippers."

  Rossignol said something under his breath about la belle dame sans merci.

  "Very well then," said Eliza, "suffice it to say that some entries were made in some ledgers. A fast coach went to Geneva, which is some seventy-five miles away as the crow flies, though considerably farther as the horse gallops. Abraham got his Bill of Exchange, though the margin of profit was scarcely enough to cover their time and expense. The timber was ours.

  "At this point—mid-November—we supposed the matter concluded. For we had the timber, and had arranged shipping. An Amsterdammer would consider the deal closed. For to such people it is a perfectly routine matter to ship any amount of goods to Nagasaki, New York, or Batavia with the stroke of a quill.

  "We, as well as the logs, had to go north: Jacob Gold to Paris and the rest of us to Dunkerque, whence the de la Vegas could find sea-passage north to Amsterdam.

  "The fastest way would have been for me to climb back into the carriage I had borrowed from Monsieur le marquis d'Ozoir and go north by road. But there was no room in it for the de la Vegas. The weather had turned cold. We were in no particular hurry. And so we decided to send the horses and carriages north by road to Orléans, where the drivers could rent mounts, or hire another carriage, for the de la Vegas.

  "In the meantime, we would take the river route to the same place, arriving a few days later.

  13 DECEMBER 1689

  WHERE BONAVENTURE ROSSIGNOL HAD FIBRILLATED between boredom and disbelief, the Marquis d'Ozoir was richly amused when Eliza told him the same story. At the beginning of the interview, she had been merely furious. When he began to smirk and chuckle, she tended toward homicidal, and had to leave the room and tend to Jean-Jacques for a little while. The baby was in a gleeful mood for some reason, grabbing his feet and fountaining spit, and this cheered her up. For he had no thought of anything outside of the room, nor in the past, nor the future. When Eliza returned to the salon with its view over the harbor, she had quite regained her composure and had even begun to see a bit of humor in this folly of the logs.

  "And why did you send me on such a fool's errand, monsieur?" she demanded. "You must have known how it would all come out."

  "Everyone in this business knows—or claims to—that to get French timber to French shipyards is an impossibility. And because they know this, they never even try. And if no one ever tries, how can we be certain it is still impossible? And so every few years, just to find out whether it's still impossible, I ask some enterprising person who does not know it's impossible to attempt it. I do not blame you for being annoyed with me. But if you had somehow succeeded, it would have been a great deed. And in failing, you learned much that will be useful in the next phase of our project—which I assure you is not im
possible."

  He had risen to his feet and approached the window, and by a look and a twitch of the shoulder he invited her to join him there. Gone were the days when one could look out over the Channel and see blue sky above England; today they could barely make out the harbor wall. Raindrops were whacking the windowpanes like birdshot.

  "I confess the place looks different to me now, and not just because of the weather," Eliza said. "My eye is drawn to certain things that I ignored before. The timber down at the shipyard: how did it get here? Those new fortifications: how did the King pay for them? They were put there by laborers; and laborers must be paid with hard money, they'll not accept Bills of Exchange."

  The Marquis was distracted, and perhaps a bit impatient, that she had strayed into the topic of fortifications. He flicked his fingers at the nearest rampart. "That is nothing," he said. "If you must know, the nobility have a lot of metal, because they hoard it. Le Roi gets to them at Versailles and gives them a little talk: ‘Why is your coastline not better defended? It is your obligation to take care of this.' " Of course they cannot resist. They spend some of their metal to put up the fort. In return they get the personal gratitude of the King, and get to go to dinner with him or hand him his shirt or something."

  "That's all?"

  He smiled. "That, and a note from the contrôleur-général saying that the French Treasury owes him whatever amount of money he spent."

  "Aha! So that's how it works: These nobles are exchanging hard money for soft: metal for French government debt."

  "Technically I suppose that is true. Such an exchange is a loss of power and independence. For gold can be spent anywhere, for anything. Paper may have the same nominal value but its usefulness is contingent on a hundred factors, most of which are impossible to comprehend, unless you live at Versailles. But it is all nonsense."

  "What do you mean, it is all nonsense?"