Still, if John George had left the borders open like he had in most of 1634, things wouldn't be too bad. But the major market for their wheat was Magdeburg and John George did not want his people dealing in American dollars. He wanted them to use his Saxony thalers, period. They could sell their wheat in Dresden, but that would mean going down the Schwarze Elster to the Elbe then back up the Elbe to Dresden, where they'd get a lousy price. In spite of Herr Berger's new steam barges, it was still more expensive to go upriver. Actually, that was the reason that the Elbe had been closed. Altogether too many people had shipped their crops down to Magdeburg last year. The village had made their second payments on the stuff they had bought, but just barely. It didn't look like they would be able to make the next one.
****
"They're lovely, dear." Greta tried to hide the worry. Karl was so proud of the dishes he'd ordered to surprise her. God only knew how they'd pay for them.
"Civilized, they are," Karl said. "Very up-time."
Greta was beginning to hate that term.
****
Marie wasn't blaming the up-timers She wasn't really blaming anyone. Aside from a few extravagances, they had mostly bought things that would-in the long run-pay for themselves. In the long run. They shouldn't have bought so much so soon. But everyone had been so happy about the good year in 1633. They had gotten almost twice what they got most years and their costs had been the same. The profit had been almost three times what it was in a normal year. They had seemed rich. They had been rich. It had seemed like a perfect time to be alive.
****
"I'm getting worried."
Anna Katherine Schuster didn't really want to hear this. Her brother Heinrich was close to impossible to live with in the first place. When he got worried he gnawed at problems like a dog with a bone. A little dog with a big bone, meaning he never got beyond scratching the surface of whatever he was worried about. "What about," she asked.
"Th-that fucking John George, is what. Things were going fine until he closed the border. We can't pay our debt in Saxony thalers! Have you heard what they're trading for in the Magdeburg market? It's-it's . . . they're worthless!"
That was only the truth, Anna Katherine knew. She and Heinrich-Schuster Finance Company, as they called their business-had made a lot of loans to villages in Saxony in 1633. Only the wealthiest and most productive villages had been offered credit, of course. It wasn't like there was any lack of productive villages that didn't have the cash to buy the new products.
Because Schuster Finance was arranging the sales-in effect buying the stuff and reselling it-they got volume discounts from the catalog stores, Burke's Wish Book, as well as the Gerber Bargain Book and others.
They hadn't passed those discounts on to their customers. After all, they were doing a lot of work and travel and deserved a fair profit. And it wasn't like they were short on customers. There might not be enough cash out there to pay for all the goods that the new factories were producing, but ten times what those factories were producing wouldn't make a dent in the demand.
They had taken the orders, offering "rent with an option to buy" contracts to the villages, in order to sell the stuff up the Elbe and its tributaries. They had had an inheritance, the rents on several villages in Saxony and had sold them for the startup money. They used that money to buy the goods from the catalog stores and have them sent to the customers. They had done their research before going into the business, and had learned that small loans were almost always paid back. It had seemed like a great business to get into-revolving credit with an initial interest rate of only eight percent . . . but as soon as the customer fell behind on payments, the interest jumped to twenty-five percent. It would give them a better income than the rents, they were sure.
With the first loans secured by the stuff being bought and subsequent loans secured by not only the new purchases but the old ones as well, business had boomed. Boomed to the extent that Anna Katherine wasn't sure where Heinrich had gotten the money for the later loans.
What they hadn't counted on was the closing of the Elbe. That had affected over seventy percent of their customers. It also meant that they couldn't repossess much-not with John George's troops in the way.
"We should be fine," Heinrich insisted, clearly trying to convince himself. "As long as we get paid. I used the collateral of the loans to leverage our investment. Got one heck of a good rate, too."
Anna Katherine felt her face pale. "Oh? You didn't mention you were doing that." This was a disaster. If they didn't get paid then the bank would foreclose, taking their paper and checking the books. Heinrich was in charge of getting the money and Anna of making the loans. There were some minor irregularities in their bookkeeping. Well, minor as long as most of the people made their payments. And it wasn't like they were the only company doing it. It was just that some of the customers didn't actually, literally, exist. Some products sold according to the books hadn't actually been bought or delivered.
Not to mention that the irregularities were minor, so long as Heinrich didn't pay any attention to her books. Which he usually didn't. Until now. She'd had a fairly free hand with the accounting and payments that came in. And there were things a girl wanted that her brother didn't really need to know about.
****
"I mean, it isn't all that different than what the Grameen banks did up-time. At least mostly, and the late fees would cover the rest. There would be no problem at all if my idiot brother Heinrich hadn't leveraged us so much."
Rodger Rude's hearing was fairly acute. It had to be. Of course, he didn't call himself Rodger Rude in real life. That was his pen name. He leaned back a bit in the booth, partly to hear better and partly to keep the woman in the next booth from noticing him. And especially to keep the man she was with from noticing him.
"Now, Anna," the man rumbled. "Don't worry. I did exactly what you said. The money is perfectly safe."
Rodger wasn't about to bet on that. This sounded like a real nifty little story. Betrayal of kin, cheating, lying, financial shenanigans-maybe even stealing.
But, darn it, Rodger didn't really have a handle on money. Which meant he was going to have to share the byline with someone. Probably that twit, Karl Gottliebe, who'd been freelancing for The Street. And all over the radio. Any program that mentioned money or markets, there Gottliebe was, giving out advice. Ah, well. Rodger would share the byline for a story that sounded as juicy as this one.
****
"I'll say," Rodger muttered. "This contract is downright punitive once you miss that first payment."
"Worse than that," Gottliebe pointed out. "Take a look a subparagraph J. If you can read it without a magnifying glass, that is."
Rodger shook his head and picked up another contract. "I'll take your word for it. SFC is bad enough. It's almost honest, sort of. Not illegal, at any rate. The big bad guys are Heileman Finance. They're the sort the usury laws were designed for."
"I've blocked out a program time. The article hits The Street tomorrow, then tomorrow afternoon I'll announce my consumer report on credit," Gottliebe said. "There are more good companies than bad. But HFC is certainly going down. And SFC is going to lose a lot of business."
"Six weeks it's taken," Rodger said. "But we've got them.
****
"This is Hans Gunther, reporting for The Street. As anyone who has read the paper knows, our own Karl Gottliebe has been involved in an investigative report on consumer credit. While most of the companies were on the up and up, we want to warn you about Heileman Finance and a couple of other companies. Schuster Finance Company, for instance, has some very irregular contracts. Karl, tell our listeners more, please."
Rodger fairly hated listening to Karl speak over the radio, but it was impossible to do it himself. It would blow his cover sky high and he got too much dirt by being unidentifiable by the Grantvillers. Pity, though. Karl's voice was so nerdy-sounding.
"Ladies and gentlemen, there has been a great deal of 'rent
with an option to buy' going on all over the place. And, over all, that has been a good thing. It's gotten a lot of products into the hands of people and businesses that needed to have the product in hand to make the money to pay for it. Farmers and craftsmen have benefited and so have their customers, as they have produced more. But it seems every silver-lining has to have a cloud. It's become rather easy to get in over your head. And worse, some of the people offering 'rent with an option to buy' contracts are dishonest. You need to read the contracts before you sign them. If you didn't do that, you still need to read them. Because not everything we have learned from the up-timers is good. Scoundrels and cheats have learned new techniques to take advantage of us. As if they didn't have enough already.
"We urge everyone in range of our broadcast who has signed a contract with any of the finance companies that have proliferated in the last few years to review their contracts very carefully. Pay particular attention to any fine print. Take them to a lawyer if they seem confusing-or even if they don't. I'm afraid, Hans, that there are going to be some very sorry customers out there. Some companies have perpetrated outright fraud, some others are skating on very thin ethical ice. I want to stress that most of them have proven to be excellent companies that provide excellent service. As usual, though, a few bad apples are rotting the entire barrel."
"What about the report that Anna Katherina Schuster was seen leaving Grantville early this morning? Do you think that's in indication of wrong-doing?"
Rodger cursed. He'd missed that.
Gottliebe went on. "While what the Schusters have done isn't illegal, it is certainly unethical. But it is not a crime in Saxony. Arguably, it's not even a crime here. It seems to me that Anna has left her brother Heinrich holding the bag for whatever they may have done. I'll have more on this in half an hour on our new program, which is called Consumer Reports."
****
Greta Schultz listened to the market reports almost religiously. And it was a darn good thing, too. She pulled out the family's contract with SFC, then had to sit down with her hand pressed against her chest. "Marie. Marie. Go get Peter Kreger. Right now."
Marie didn't think to argue, even though her mother had interrupted a delicate piece of soldering.
****
"This won't affect us," Eva Katharina said. "Hans and I didn't buy anything for ourselves. We've been waiting until we had some cash."
"You don't understand, Eva," Peter said. "I didn't either, not until I read the fine print. I commend Greta for bringing this to my attention once she found out. And I have to point out that it isn't just the Schultz family that has been buying with village credit." He looked around the room. "About half the families here have been signing contracts that obligate the whole village to a much higher interest rate if even one payment is missed. Among other things that are even worse."
"What?" "Not us!" "We haven't bought anything!" The uproar in the room was furious.
Peter waved them all down. "Subparagraph J on the SFC contracts is the culprit. And we won't even go into the HFC contracts, since we were lucky enough that we didn't sign up with them. What that little clause says is that if someone misses two annual payments, the debt is transferred to the village as a whole. Plus, they can repossess everything that has been bought. Everything. We all agreed to the main contract that let the village buy the plows, the reaper, the fridge unit, and all the common purchases."
That meant that if Greta's new tableware wasn't paid for, SFC could take the plow, the thresher, the refrigeration unit . . . everything that they had bought. That all the payments went into one common fund. Greta's flatware, Anna's bolt of fine wool cloth-all went into the same pot as the plow and thresher-so nothing was paid for till everything was.
They all started talking at once, blaming anyone who had bought anything on their own. Which just about everyone had.
Pastor Althus stood up and looked around the room. The uproar lessened in intensity. "I note that while you're all fussing, you're doing it in a warm room with good lighting and with full bellies." He walked over to a shelf that was full of how-to books. He picked up one that everyone in the village recognized. It had a big red cross on the front and covered such things as how to set a broken bone and the effects of vitamins on health. "Do you happen to remember the winter of 1628? There were no frozen vegetables that year. No raspberries frozen in August to be eaten in February. The insulation wasn't all that great, either. I particularly remember that, because three children died that year. All three from pneumonia. Have we had a case of pneumonia this year? I must have missed it. All the children that were in the village last fall are still here and a new one besides. A happy, healthy little fellow he is too, little Robin. Is there a lack of grain for the village to eat? A lack of vegetables?"
That got a laugh. People were eating rather more vegetables then they might have preferred in the winter of 1635. Pastor Althus put the book back in the shelf.
"Is anyone suffering from frostbite because they have no gloves or holes in their shoes? You all know that we really are living much less precarious lives than we used to. And what are we doing with the Lord's gifts? Arguing, fussing and fighting over who bought what that they shouldn't have. That they wouldn't have, I am quite sure, if they had known what it might mean.
"No one has accused me yet so it falls to me to accuse myself. I bought a new cassock and several books that weren’t, strictly speaking, necessary. What we have to do is make sure that no one defaults on their loan. Whatever their intent, the people of SFC have facilitated our gaining of the tools we need to pay the debt. We will use those tools. We will find new things to make and sell. We will work together as a community in God, as we always have."
"I'm sorry, Pastor, but we need to be careful," Johan Keller said. He didn't sound particularly apologetic, but then he never did. "We have wasted a lot of time, energy and money on harebrained schemes. Like the giant vegetable garden. We've more vegetables than we can eat and we can't sell them because putting them in the freezer ruined them. We could have increased the number of chickens instead. Eggs always sell. So does meat, so we could raise more goats."
Greta Schultz looked at Johan's rather ample belly and sneered. Johan Keller liked meat, bread and butter. He didn't like cabbage, squash, pumpkin, snap peas . . . the list went on. "We made mistakes last year," Greta pointed out. "We were figuring out what worked and what didn't. It takes an extra layer of waxed paper around the little box. That we didn't want to use because of the extra expense, but we learned. We should have very little freezer burn this year. Granted, the waxed paper costs, but if we use it properly, we can expect to sell all of the garden that we don't want for ourselves. We should grow more fruits and vegetables this year, not less."
The upshot of the meeting was that everyone in the village was put on a strict budget. Everyone, even those few who hadn't given in to the urge to buy on credit.
****
"Shh," Peter said. "It's time for Consumer Reports, again."
"Well, Herr Gottliebe, what's the latest on the credit scandal?"
"The big news today is that Anna Katharina Schuster appears to have left her, ah, friend in Halle and taken off for parts unknown. Meanwhile, Heinrich Schuster denies all knowledge of his sister's whereabouts. He has turned over all of the company's paperwork for audit and hired the firm of Hardegg, Selfisch and Krapp to represent him in the suit that Hermann Weisel filed this morning."
"Is there some legal action that victims of HFC and SFC are able to take?" the reporter asked.
"There may be," Gottliebe said. "In the case of HFC, where there was extortion involved and often the goods weren’t delivered, there are a number of options. However, in the case of SFC, it's going to be more difficult. Certainly, the customers can't just stop paying. Whoever ends up owning SFC will own the debts owed to them and effectively that means that they will own the products sold. Still, I certainly urge anyone with one of these punitive contracts to seek legal advice. There is anot
her option that may be available to customers of SFC, and this is going to sound weird. Get another loan. A consolidation loan, then pay the entire value of the products you bought."
****
"What are you planting, Mama?" Marie asked.
"I'm not sure what all of it is," Greta admitted. "These big beans are pretty, though. We ordered several packets of seeds from The Plant Ladies, out of the Burke Wish Book. And seed potatoes from the Grange, since they store well. Those green beans that are supposed to be so good for you and that you can eat really soon after planting, and those little orange carrots. A different cabbage, just to see how it did. Anyway, they included this 'bonus summer surprise' packet, it's called. It's a bunch of different looking seeds, anyway. I figure it can't hurt to plant them. We might get something useful and we've got to weed the garden anyway."
"I'll say." Marie looked around. The fields dedicated to vegetables were much more extensive than usual.
"We've got to produce a lot this year," Greta said. "We've just got to. I know the frozen vegetables will be a success this time."
"I hope so, Mama. Right now, I've got to go see Johan. I've got more radio guts ready for cases."
****
"Here you go, Johan." Marie placed the four crystal sets on the work bench. "These are rea . . . what are you building?"
"A really fancy radio case," Johan said. "Inlaid with different woods, all that stuff. Value added, like they talk about on the radio. It ought to sell for more than the usual radios do. Every pfennig helps."
****
"Well, sigh, it's that time of year again, isn't it, ladies? You all know what I'm talking about, don't you?"
Greta had no idea what the woman was talking about, but Fanny Farmer was her favorite cooking show, so she kept listening.
"Yes, that's right. The zucchini and summer squash are coming in, aren't they? Now, don't groan. I know, I know. It won't be long before your co-workers and neighbors are bringing in piles and piles of it!"
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