Volume 3: Confrontation! The Run of Civilization Chapter 596: Paper Money is Too Early
"What did you say? Not enough silver?" Hearing this in a daze, Zhu Youdong suddenly became nervous, and his expression became ferocious.
"Your Majesty, there is not enough silver in circulation. The 100 million taels of silver and 300 tons of gold stored in the bank's central warehouse are still in good condition."
"Oh~" Zhu Youdong, who had just sat back down, let out a long sigh and jumped up again: "You mean there is not enough currency in circulation?"
"No one is more wise than the Emperor."
I am not wise at all. I studied medicine before I traveled through time. Also, among all the online articles on Qidian Chinese website before I traveled through time, none of them discussed economics in detail. I am completely clueless about economics.
However, even though I don't understand, I still have to maintain my composure.
"Ahem, Guojun, you are also an old man of Fangshan, and a master of mathematics. You know, if you want to tell me something, you have to show me the data."
"I have made some preparations." Li Guojun pulled out an account book from his bosom. "Your Majesty, I will start with the annual income of the court. In the sixth year of Tianqi (1625), the court's cumulative income was 183.56 million silver dollars. In the seventh year, it was 204.3 million. In the eighth year, the land tax was fully implemented, and the court actually reduced a lot of taxes to benefit the people, so the income of this year fell to 192 million. In the ninth year, it rose again to 202.5 million... It is estimated that this year, that is, the twelfth year of Tianqi, the court's final annual income will reach about 250 million."
"Hmm." I don't quite understand what you mean by saying this, but I can pretend to be deep.
"Your Majesty, the tax rate of this dynasty is 50% tax to 1 after the trial implementation of the land tax system and the exemption of all corvée labor. The tax rate of commercial tax, uh, the tax rates of different types vary greatly, but in general, the tax rate for industry and commerce is about 50% tax to 1."
"Hmm..." Zhu Youdong understood a little : "Guojun means that the annual increase in the gross national product of our Ming Dynasty can actually be roughly calculated through the increase in the annual revenue of the court?"
"Gross national product? Your Majesty used this word well! Your Majesty, in the past three or four years, with the further deployment of steam engines across the country and the court's wealth, a large number of infrastructure projects have been carried out, which has not only promoted the rapid development of many private industries. The improvement of transportation has also made it possible for many regions that had almost no connection before to have frequent exchanges of materials... The country's, oh, gross national product, has been growing at an extremely rapid rate. In a word, the court's annual income has increased by more than 10 million in recent years, so the country's annual gross national product can at least increase by 50 to 60 million."
"Then what?"
"Then?" Li Guojun touched his head: It seems that the emperor is not very sensitive to numbers.
"Your Majesty, can I give you an example?"
"Well, this is good, Guojun, you say."
"I assume that there is a company producing steam engines in the Ming Dynasty . The steam engines they produce in the first year are worth one million silver dollars. If the state or anyone else wants to take all the steam engines from them, they will have to pay one million silver dollars.
In the second year, they produced ten more steam engines by recruiting new workers, expanding production, improving technology, etc. The total production value was 1.1 million silver dollars. So, according to common sense, if the state or others want to take all these machines away, they have to pay 1.1 million silver dollars. If they still pay 1 million, then the manufacturer will suffer a big loss, and the steam engine will actually depreciate. "
"I understand what Guojun means. The court's annual revenue increases by about 10 million. According to the tax rate, the annual increase in the gross national product is about 50 million. So, in order to maintain the price of goods and keep the currency basically stable, the court should issue 50 million silver dollars to the market every year?"
"That's right!" Li Guojun clapped his hands lightly and said, "Your Majesty, economic issues involve many aspects, and mathematics can only give an approximate estimate. And I have also noticed that as long as the circulation speed of silver dollars is fast enough, it is not necessary to really replenish 50 million every year. However..."
At this point, Li Guojun took out another notebook and said, "After I took over as the president of the bank and discovered this problem, I immediately contacted the Ministry of Heavy Industry and the Ministry of Commerce. Their data showed that the annual trade surplus of our Daming can bring an increase of 3 million taels of silver. The silver mines in Daming, Japan, and Qin (Luzon) can also increase the amount of silver for Daming by more than 3 million taels each year. After these silvers are cast into silver coins, they can bring an increase of 8 million to 8.3 million yuan to the market each year. But this increase is far from enough for the current rapidly growing private demand of Daming."
At this point, Zhu Youdong basically understood: due to technological progress and political system reform, the economic vitality of the Ming Dynasty suddenly exploded, and its GDP grew rapidly every year - yes, if we really want to calculate the growth rate, it is estimated to be only 5% or 6% per year, but you have to know that this was the 17th century when transportation was still extremely backward, and the speed of material exchange and currency circulation was much slower than that of the 21st century. Under such circumstances, achieving an average annual economic growth rate of 5% is already very terrifying.
As the economy grows, the demand for currency naturally increases. In the past few years, there was too much silver deposited among the people of the Ming Dynasty, so when the national economy just started to develop, the shortage of currency was not too obvious. But now, the Ming Dynasty has entered the steam age for thirteen years!
In the past 13 years, steam engines have been widely used in all the country's heavy industrial factories, mines and docks. In the private sector, light industrial factories in Jiangsu and Zhejiang have also realized steam engine power. Even in the economically backward western provinces, at least in each provincial capital, there are steam engine factories.
In 13 years, the Ming Dynasty built nearly 8,000 kilometers of railways. The lowest-grade roads with six-meter-wide cement roads were built for more than 80,000 kilometers. The new army of the imperial court was powerful, bandits and pirates were wiped out, and inland shipping was unimpeded. After the maritime ban was completely lifted, maritime trade flourished, and coastal ports were busy...
As productivity developed, the same number of people produced more things. Transportation became more convenient, and economic exchanges became more frequent. All of these eventually put forward a requirement: more money.
However, the main currency of the Ming Dynasty at that time was silver, the subsidiary currency was copper coins, and the large-denomination currency was gold - all precious metals. The annual increase in the output was limited, and it was impossible to make all the new annual output into currency and put it into the market.
Therefore, the shortage of precious metal currency was a matter of time: before the Ming Dynasty, there was a lack of investment channels, and people liked to cast silver into silver ingots and hide them. After the country banned the circulation of silver and forced the introduction of silver dollars, these hundreds of years of storage re-entered the circulation market - if it were not for these stocks, the problem of currency shortage would have occurred long ago.
"I understand what Guojun means. What do you think we should do?"
"Your Majesty, please restart the treasure banknotes."
"Hiss~"
As a time traveler, I know that anything can serve as currency as long as it is backed by national credit and enforced by law. In fact, compared with paper currency, silver has too many advantages. However, the treasure notes have been ruined by successive emperors of the Zhu family. If we really want to introduce paper currency, will the people approve of it? I have just completed a major overhaul of the court institutions, and it is clear that there will be a lot of riots and even rebellions among the people in the future. If we carry out currency reform at this time...
"Your Majesty!" Seeing Zhu Youdong's hesitation, Li Guojun was also a little anxious: "Your Majesty, insufficient currency will lead to the appreciation of silver dollars and the decline of prices. In the short term, the people will make a profit. But in the long run, factory owners will not make any profit and will not be able to expand production. The weaker ones will even have to reduce their production scale or even go bankrupt, which will inevitably cause a large number of workers to lose their jobs. If these people return to the countryside, the measures that the emperor has worked so hard to promote, such as the equalization of land tax and the unified taxation of officials and gentry, will inevitably suffer a heavy blow! Both industry and agriculture will decline, and the national income will seriously decline. How will the emperor support the army then?"
"..." After a long thought, Zhu Youdong sighed: "Guojun, I understand what you said. But now is really not the right time."
"emperor!"
"Needless to say, silver coins will be changed to paper money sooner or later, but this matter cannot be rushed. So, you will go to Fangshan Academy of Sciences with me later, and you will talk to the professors in the materials laboratory about the current situation of the economy of our Ming Dynasty. Then I will ask them to think of ways to reduce the silver content of silver coins while keeping the weight and volume unchanged. In addition, I will let the Lifanyuan notify Japan, Gui, Qin, Jin and other vassal states to increase their mining. After three to five years, I will seriously consider the possibility of issuing paper money again."
"…If it is three to five years, I guess the damage to the country will not be too great. I understand. I will do my best to maneuver during this period to buy enough time for the emperor."
Looking at the mathematics expert in front of him, Zhu Youdong was furious: Damn Cao Sanxi, he was born as a small trader, and he only thinks about making money all day long. When I asked you to move, you were reluctant, but what about now? When I was short of money before, it was appropriate to use you as the bank president. But now that the country's economy has reached a high level, it still takes experts and scholars like you to find problems!
Wait a little longer, after the civil service system is established, I will prepare for the issuance of banknotes.
