Volume 4: Hot! The whole world is a warring state Chapter 724: The Divine Beast Bank is Released
As a time traveler from 21st century China, I can still come up with a few ideas to stimulate domestic demand.
The first thing, of course, is to undertake various large-scale projects.
The Ming Dynasty entered the steam age only 20 years ago. In addition to the Jinzhou to Daqing railway outside Shanhaiguan and the Central South railway built outside the mainland for military needs, only three railways were completed: one horizontal railway (Jinan-Luoyang-Xi'an-Lanzhou-Xinjiang) and two vertical railways (Beijing to Guilin, Beijing to Guangzhou). In other words, the Ming Dynasty's railway construction still had great potential.
In addition to railways, there are also roads. Although the widespread use of internal combustion engines and the birth of automobiles are still a long way off, with the six-meter-wide cement road, short-distance logistics in various parts of the Ming Dynasty have obviously become much more convenient. Four-wheeled carriages, which have never been popular in China in the original historical plane, are now also very popular. Therefore, vigorously building roads at this time can still see the benefits.
There was also the recently invented wired telegraph: at that time, the Ming Dynasty only had one telegraph line from Beijing to Nanjing to Guangzhou to Guilin to Indochina. To improve the national administrative efficiency, it was also necessary to have telegraph access in every county.
In addition, there is the construction of thermal power plants, hydropower plants, and the construction and grid connection of transmission lines...
The above projects alone will consume hundreds of millions of dollars in five years. With such a huge amount of money invested, countless large projects will be built. On the one hand, the people involved in these projects will have a lot of money. On the other hand, the completion of these projects can greatly improve efficiency and reduce costs - won't domestic demand be boosted?
"Everyone, this is what I think. To stimulate domestic demand, we must first carry out large-scale infrastructure construction across the country... These projects, judging from the wealth you just reported to me, are not enough. If you don't have enough money, the court's money is naturally not enough. However, the court can give you convenience, so that you can leverage more money with the money in your hands."
"May I ask your Majesty, what should we do?"
"I intend to open up the banking industry to private capital."
"ah?"
"Oh, Your Majesty, this is really great news!"
Looking at the four surprised wealthy businessmen, both the former president of the Royal Bank, Cao Sanxi , and the current president, Li Guojun, looked unhappy.
" Haha , you two should stop looking so serious. Well, Guojun, tell me yourself, how many people have Prince Xin's men taken away from your banking department in recent years?"
"Uh... I am ashamed. In the past three years, a total of 1,453 people from the bank's head office and branches have been taken away by the Censorate."
The Ming Royal Bank was established by Zhu Youdong in order to gain control of the national finance. At the beginning, this institution played a very positive role in collecting funds, reforming the currency system, curbing the excessively high interest rates of private lending, and promoting the development of ordinary private merchants.
However, it is said that absolute power leads to absolute corruption: after the Royal Bank had a complete monopoly in the financial world of the Ming Dynasty, corruption cases within the bank emerged in an endless stream, becoming a severely affected area in the officialdom of the Ming Dynasty, where the integrity and honesty system had been strengthened, the civil service system had become increasingly mature, and the overall official style had been good.
Nowadays, let alone loans, it has become a normal situation for ordinary people to find it difficult to enter the bank, face the bad face, and handle things. There is no other way. If you have spare money at home and want to save it to earn interest, there is only one legal deposit-taking institution in the Ming Dynasty. You can save it or not!
This was the case with deposits, not to mention loans: Generally speaking, if an ordinary person borrowed 10,000 silver dollars from a bank, he would have to give at least 20% back to the local branch manager responsible for the loan - otherwise it would be difficult to get a loan. In addition to the 20% kickback, ordinary people applying for loans had to endure the bank staff's demands during the loan process - in short, if a loan of 10,000 yuan was taken, only 7,000 yuan would be enough to prove that the local bank had a good conscience.
There is no way. This is the only company that can handle loan business legally. As I said before, it’s up to you to choose the loan or not.
Monopoly, civil servant status, and a large amount of money passing through their hands every day - this is not a good thing that can make everyone work honestly and wholeheartedly. Even with a ruthless person like Zhu Youjian paying close attention, there are still countless bank employees who continue to be corrupt...
Zhu Youjian reported this situation to Zhu Youdong many times. Jinyiwei and Dongchang also sent a lot of intelligence one after another. The Censorate, Jinyiwei and Dongchang all focused their efforts on domestic anti-corruption efforts on banks. Li Guojun even set up a rectification organization within the bank - but, without breaking the monopoly, these can only suppress the problem and cannot fundamentally solve the problem.
Therefore, it is necessary to break the monopoly, allow private capital to enter the banking industry, and promote the self-innovation of the Royal Bank in the competition. In the past, the Royal Bank was the biggest obstacle to the entry of private capital. Now, when the economy of the Ming Dynasty is in trouble because of the loss of the Indian and European markets, it is an excellent opportunity.
"I allow your four chambers of commerce to take the lead and unite with your local powerful merchants to form a new bank. The new bank is allowed by the Ming court and is protected by the Imperial Ming Charter. It can conduct deposit and loan business, but it is a private commercial bank operated entirely by you."
The most basic financial function of a bank is to use deposit interest as an inducement to pool together countless small idle funds among the people, and then lend out large sums of money: you can invest for yourself, or let others use the money to open factories, shops, or do business - it is an efficient fund amplifier!
As the top merchants of the Ming Dynasty, the four major chambers of commerce have been drooling over the bank for a long time. And now that the emperor has finally opened the door, how can they not be excited?
"Everyone, if you want to set up a bank, you must have a reserve fund of at least 10 million silver dollars. The Royal Bank will give a guiding range for deposit and loan interest rates. You can only make adjustments within this range. After you gradually expand your business across the country, the Royal Bank's deposit and loan business will gradually shrink."
"emperor?"
At this moment, Cao Sanxi and Li Guojun had to stand up and express their dissatisfaction, otherwise the two bank presidents would not be able to explain to the nearly 100,000 bank employees behind them when they returned!
"Haha, you two don't have to stand up so quickly. Just listen to me." After waving his hand and suppressing the two jumping gods of wealth, Zhu Youdong said: "Since the Jiajing period, the economy of our Ming Dynasty has been highly dependent on overseas markets. Due to the household registration system, taxation system... In short, the unreasonable distribution system, farmers who account for 95% of the population of our Ming Dynasty are generally poor and have almost no consumption capacity. Therefore, not to mention that the agricultural tax of the court cannot support the country, the business community of our Ming Dynasty cannot count on domestic demand. To obtain wealth, we can only rely on selling our products overseas and earning money, so that we can maintain the operation of the country.
Since I became the regent, I have been working hard to reverse this situation for 30 years. Today, the household registration system has been rebuilt, the numerous agricultural taxes have been merged, and the government has gradually become more clean, so the living conditions of farmers are much better than before. In other words, farmers now have extra money in their hands. In addition to having a certain consumption capacity, they also have some savings needs - after all, if you keep your money at home, it may be stolen, but if you put it in the bank, you can earn interest, so why not?
But how do you treat ordinary farmers, who still make up nearly 90% of the Ming Dynasty today? You don't accept copper coins or silver coins. The staff of the county branch even refuse to let them in because their legs and feet are covered with mud? It's really outrageous! In the early years of the establishment of the Royal Bank, the profit from the difference between deposit and loan interest rates accounted for more than 10% of the court's annual revenue. But how much is it now? Oh, it's five million. But you also know that the court's annual revenue last year was the worst in the past five years, and it was 360 million!"
"Your Majesty, we are ashamed. Please rest assured that we will allow private capital to enter the banking industry to compete and fundamentally change the current problems of the Royal Bank. We have no objection and will fully support it. But please also be merciful and allow us to continue to retain our deposit and loan business."
"Haha, you guys, let me tell you, once the four of them enter the banking industry, you won't be able to compete with them given the work attitude of their employees. If you don't take the initiative to shrink and shift the focus of the Royal Bank's work to financial policy making, and insist on competing with private banks for ordinary customers, you will suffer a great loss sooner or later."
"…Your Majesty." The current president, Li Guojun, gritted his teeth and said, "Please give me, and the 100,000 employees of the Royal Bank, a chance. I hereby promise that if the Royal Bank suffers losses due to competition and is defeated by its competitors, I will resign voluntarily, and before resigning, I will personally cut off the deposit and loan business of the Royal Bank."
"Well, okay, I'll do as you say this time."
At this point, Zhu Youdong's idea of expanding domestic demand was very clear: to expand domestic demand, we must carry out large-scale projects. However, the state has no money to carry out large-scale projects, so it can only raise funds from the private sector. But you can't take the money from the private sector directly - if you do such a thing, you can only do it once, and don't expect others to continue to support you in the future.
Therefore, Zhu Youdong raised funds from the private sector by allowing private capital to set up banks. When Cao Sanxi had just joined the team of the Crown Prince, he could go door to door and bend down for a copper coin to sell products. Nowadays, Cao Sanxi, who has been an official for too long, no longer has this attitude, but private capital does.
Only with private commercial banks can every copper coin in the hands of more than 100 million farmers in the Ming Dynasty be fully concentrated: in this way, the Ming Dynasty will have enough funds to build various large projects, and the first step of expanding domestic demand can be completed.
"Okay, this matter has been settled. You will discuss the specific regulations with Situ Cao and Governor Li later, and then submit them to me for review. I have something else to do, so I will return to the Imperial City first."
"Uh... Your Majesty, I have an unwelcome request."
"Tell me about it?"
"Your Majesty, please give a name and plaque to the bank that I am about to open."
"Hahahaha, you guys are really good at planning. You haven't even paid me the endorsement fee, but you've already arranged for me. Well, as for the name of the bank... You are all wealthy merchants who aim to expand your business nationwide and even globally. It would be too unfair for you to choose regional names like Southwest and Shanxi. So, aren't there four families here? Why not name it after the four sacred beasts: Azure Dragon, White Tiger, Vermillion Bird, and Black Tortoise!"
