Steel, Explosives, and Spellcasters

"On the first day of the 'reverse auction,' nothing happened."

No Forge Master made an offer to the baron and his wife. Anna did not actively negotiate with the various workshops nor did she accept the flurry of social invitations—publicly.

Privately, she asked Carlo Aide for more "ledgers."

The buyers stood off silently. Both sides understood that the outcome would depend on who could keep their composure the longest.

For dinner, Berlion boiled bone-in meat and then removed the meat and sinews clinging to the bones, doused them in sauce, and made a main dish that was tender and deliciously flavored.

The bones meant for marrow extraction were instead given cheaply to two wolfhounds.

At the dinner table, Anna excitedly shared her new findings with Winters: "… It's precisely because the workshops in the Steel Fort divide labor so intricately that their business operations are quite fascinating.

Take, for example, the Schmid family's swords workshop. The Schmid family doesn't smelt iron or burn charcoal, and they even subcontract the hardening and sharpening processes to other workshops. They solely focus on transforming iron materials into sword and knife blanks…"

"Hmm." Winters stirred his vegetable soup absentmindedly, responding reflexively.

Anna studied Winters for a moment and then asked softly, "What's the matter? Is hiring craftsmen not going smoothly?"

Winters was not upset about hiring blacksmiths, but he indeed had difficulty recruiting Steel Fort blacksmiths during his outings.

He came back to his senses and apologized by squeezing Anna's hand, "It's nothing."

"You can tell me," Anna said, stretching out the last word slightly.

Winters exhaled, "It's not going well, no blacksmith wants to go to the Newly Reclaimed Land, and high wages are not tempting them."

But what truly distressed Winters was another matter, something that he could do nothing about and had to rely on Colonel Berny for.

"Don't be discouraged." Anna's voice had a calming magic, "You will find people willing to work for you."

Winters felt much more relaxed, he nodded and asked with a smile, "Let's return to the Schmid family. What's up with them? Bars of iron can't directly be made into swords or knives, can they smelt them?"

"Mr. Schmid's eldest son runs a steel workshop with two forges." Anna had the internal workings of the Schmid family memorized, able to answer without checking the records.

She continued, "Since they delegate many steps to other workshops, the senior Mr. Schmid can focus all his energy on forging swords. This makes their sword workshop extremely efficient. The Schmid family's swords workshop has only one forge, yet they produce so many blanks, primarily due to the precise division of labor among the blacksmiths guild in the Steel Fort."

"Isn't that an advantage?"

"I haven't finished yet." Anna blinked her beautiful eyes and fetched a piece of bread from the basket, "Though the Schmid family's workshop is very efficient because they only do one type of business, their ability to resist financial risk is very poor. Just like this loaf of bread, even though it's very long, if there is no thickness variation, then breaking it doesn't require much force."

After saying that, Anna broke the bread into two pieces and handed one half unceremoniously to Winters.

"How would you break it?" Winters asked, puzzled.

Hearing this, Caman, who was sullenly sipping his soup, glanced unintentionally at Winters.

"Breaking is just a metaphor," Anna's tone was like coddling a child, "The focus is still on capital. Mr. Schmid doesn't pay for raw materials with cash on delivery. 'Deferred payment' is common among workshops in the Steel Fort—that's credit. Other workshops pay Mr. Schmid in advance for materials and services, and Mr. Schmid can wait until the goods are sold and the finances recouped before paying…"

Winters listened silently until it finished, digested for a while, then tried to rephrase in his own words, "So you mean, Mr. Schmid is actually borrowing money to produce, and if the weapons don't sell, he can't repay his debts?"

"Not exactly borrowing money." Anna tilted her head in thought for a moment, "But close enough."

"So he owes some money, so what?"

Anna dropped her playful tone and spoke earnestly, "It's not just a matter of owing money. If Mr. Schmid becomes insolvent, his chair will be smashed to pieces."

"Smash the chair?" Winters heard this term for the first time.

"Exactly." Anna hesitated for a moment then softly uttered another term, "Bankruptcy."

The table fell silent, and the movements of Winters and Caman stopped.

Because bankruptcy is no small matter. Under current laws, bankruptcy not only meant zeroing out properties and losing all commercial reputation but also severe criminal penalties, including but not limited to imprisonment, hard labor, and corporal punishment.

"Bankruptcy?" Caman asked skeptically, "Mr. Schmid has worked his whole life, surely he has some savings that prevent bankruptcy from one failure?"

"Mr. Schmid indeed has considerable savings, that's why he owns seven forges," Anna explained to Caman, "Apart from wood, lake water, iron ore, and a little bit of food, the Steel Fort produces almost nothing. Maintaining this city costs money, especially in Monta. Mr. Schmid seems not a man chasing luxury, perhaps he has some emergency funds saved. But I doubt those workshop owners who live as luxuriously as the people of Flora have enough capital to handle this crisis."

Anna looked at Winters, "So we should change our approach. You always wanted to cooperate with large workshops because they have many backlogs and one deal could meet the demand. From now on, however, we should target those smaller workshops first."