Chapter 76: Chapter 75 – A means to an end

Since the establishment of the Hungarian Republic, the government had already promulgated a series of laws conducive to the economic development of the bourgeoisie, including the abolition of a series of harsh donations and taxes which had hindered their growth. These reforms had won the support of the bourgeoisie, but greatly increased the government's financial pressure.

Therefore, when someone had previously suggested that they should issue a Hungarian currency, Kossuth didn't think twice before giving the go-ahead. Unfortunately, soon, he understood the concept of hyperinflation, first hand, as the value of the Hungarian currency plummeted and it became no different from waste paper. After all, the Hungarian Republic's silver reserves were nowhere close to the amount of bills printed and, unlike the future United States, it lacked the prestige and currency domination to be able to print money without worry.

Since the failure of currency issuance, a financial crisis had broken out within the Hungarian Republic as it was left with no other option than to levy more taxes. However, considering their previous failures, the wealthy were no longer willing to give them money so easily. In fact, Kossuth's casual tone had made it clear that he didn't understand what 200 million guldens meant to Hungary.

Carl Howell, a representative of the domestic Hungarian bankers, asked, "Mr. Kossuth, do you understand the significance of 200 million guldens?"

This sudden question stumped Kossuth. He had thought that these aristocrats would bargain with him to lower the tax amount, but he did not expect them to ask this question.

Calculated from the value of the currency, one gulden was equal to 11.69 grams of silver, so 200 million guldens was equal to 2.338 billion grams of silver or 2,338 tons of silver. During the mid-19th century, the value of silver hadn't depreciated since the vast gold reserves of South Africa and Australia had yet to be mined. Therefore, 200 million guldens was equivalent to a little over 20 million British pounds.

The exchange rate of gold to silver was 1:10 or so.