prosperous age

"If the Great Ming Bank were established throughout the country, silver could be deposited locally, and the silver notes would be delivered to the cashier via postal relay, where they could be redeemed on the spot."

Wei Guangde began to promote the benefits of money shops to the emperor, but at this time, Emperor Wanli was still preoccupied with lending business.

Although I was listening, I didn't really take it in at first.

Emperor Wanli finally came to his senses when Wei Guangde began to explain the benefits.

Master Wei is going to help him make a fortune.

When Wei Guangde was already quite thirsty after speaking, the Wanli Emperor, with great tact, got up, picked up a cup of tea from the tea table beside him, and presented it to Wei Guangde.

This is the tea that is usually prepared in the palace, so that the emperor can drink it whenever he is thirsty.

If you don't drink it, it'll get cold.

Before long, a servant brought fresh tea.

"Master Wei, have some tea to soothe your throat first."

"Thank you, Your Majesty."

Wei Guangde hurriedly got up, picked up the teacup with both hands, and took a sip to moisten his throat, which was feeling parched.

I feel much better now.

Seeing Wei Guangde accept the tea, Emperor Wanli did not continue standing there, but walked around the hall a couple of times with a slight limp.

Wei Guangde knew that Emperor Wanli was a little agitated.

It seems that the emperor was tempted after I mentioned making money and benefiting the people.

Why would he think that way?

It's very simple. When Emperor Wanli was in front of his ministers, or anyone else, he would never sit if he could sit, and if he could stand, he would never move around casually.

Once he starts moving around, he's definitely excited.

It can only be said that the leg ailment had a huge impact on the Wanli Emperor. At this time, he was limping, and to be honest, he did not have the majesty of an emperor.

But what could he do? He was the eldest son, the most beloved child of the Longqing Emperor.

When he was born, the Crown Prince had just passed away, and it was Zhu Yijun who gave Emperor Longqing the confidence to continue.

He has a son, while his brothers don't; that's an advantage.

Perhaps Emperor Jiajing's decision to demote Prince Jing and send him away from the capital was made with this relationship in mind.

The Jiajing Emperor was very sensitive about his offspring, not only because of his sons, but also because only two of them were left to reach adulthood.

More importantly, the reason he was able to sit on this throne was because his cousin, the Zhengde Emperor, had no heir.

"Master Wei, if I were to invest in the money shop you mentioned, how much money could it earn for me in a year?"

After holding it in for a long time, the Wanli Emperor finally asked the question that had been on his mind.

"Your Majesty, first of all, Your Majesty must understand that the main purpose of establishing the Great Ming Bank is not to make money, but to stabilize the soaring interest rates among the people."

The loan interest rates are too high; I've thought about it a lot.

If ordinary people borrow money, it could lead to financial ruin, and in severe cases, even death and the destruction of their families.

Most of the people of our Great Ming Dynasty are self-sufficient farmers, and their ability to withstand risks is weak.

Once burdened with high-interest loans, one is ultimately unable to repay the debt except by selling ancestral property.

If this continues, it will only lead to a large number of homeless people trying to escape loan sharks.

Such a situation could lead to social unrest.

Throughout history, the emergence of large numbers of displaced people has often been a sign of the dynasty's impending doom.

Wei Guangde paused briefly at this point to allow Emperor Wanli time to process what he had said.

Emperor Wanli, upon hearing Wei Guangde's words, also looked melancholy.

He had just thought about how joyful it was to make money, and he could then understand how painful it was for ordinary people to borrow such money.

Although he still didn't understand, knowing full well that he couldn't repay such a loan, why did he still borrow the money?

However, he quickly thought of the Green Sprouts Law in Wang Anshi's reforms during the Northern Song Dynasty, which seemed to have a similar purpose to what Master Wei had said about establishing the Daming Money Shop.

However, the Green Sprouts Law in Wang Anshi's reforms was originally intended to curb usury and increase fiscal revenue by having the government provide low-interest loans to farmers, so as to achieve "sufficient national revenue without increasing taxes on the people".

However, the law revealed serious problems during its implementation, and ultimately it not only failed to benefit the people, but also became a harsh policy that exacerbated social conflicts, and is widely regarded as one of the key reasons for the failure of the reform.

The main reason for the failure of the Green Sprouts Act, as analyzed by Wei Guangde to Emperor Wanli earlier, was that the system design had inherent flaws.

At this moment, he silently turned around and sat back down on the dragon throne, recalling Wei Guangde's words from that time.

The biggest flaw in the design is that the repayment time conflicts with the agricultural season. The loan for the seedling law is issued in two seasons, summer and autumn, but the repayment time overlaps with the harvest season.

Farmers are required to repay principal and interest immediately after the harvest, leaving them with no money to buy seeds and food, which only exacerbates their economic burden and runs counter to the original intention of "helping the poor".

If a money exchange lends the money, this problem can probably be avoided.

For example, money lenders and farmers can stagger their repayment schedules, agreeing on repayment periods of half a year, a year, or even longer.

As for the imperial court imposing mandatory lending quotas on local officials in pursuit of political achievements and fiscal revenue, money shops should not have been subject to mandatory lending or quota assignments.

This problem doesn't need to be considered, and Emperor Wanli believed that Master Wei would have avoided such a problem when designing it.

In fact, according to the regulations of the Ming Dynasty, if the monthly interest rate for a loan is three percent, a loan can be extended for up to three years.

The reason for setting a three-year period was mainly due to the rule that "profits should not cover costs".

Emperor Wanli was well aware of this.

Even if it's business between him and the imperial court, he absolutely cannot violate the laws and regulations of the imperial court.

As for the issue of exceeding the interest rate stipulated by the imperial court during implementation, this is actually a matter of official corruption and falls under the responsibility of the Censorate.

In fact, the interest rate set by Wang Anshi for the Green Sprouts Act was 20% per annum, half the 36% stipulated by the Ming Dynasty.

Another fact that many people may not know is that when the imperial court provided disaster relief and set up soup kitchens, it was free of charge, so the soup was thin and watery.

However, once things stabilize, food will be distributed to the disaster victims to help them save themselves.

The disaster relief grain provided during this process is not free; it will be taken back later, with an annual interest rate of 20%.

Therefore, it can be assumed that the normal interest rate recognized by the ancient imperial court was 20% per annum, and 36% was the highest interest rate for private lending recognized by the imperial court.

The 20% interest rate was set by the government, while the Ming Dynasty Bank was a business association. Although Wei Guangdeng had the royal family and the court invest in it, it was still a business association with a shareholding structure. It was a private business association and therefore naturally applied the 36% annual interest rate.

"And merchants."

Afterwards, Wei Guangde described the consequences of merchants being exploited by usurers.

That is, the profits accumulated by merchants are eroded by usury, making them unable to expand production, and may even lead to their bankruptcy.

Bankruptcy would be even more devastating, causing countless artisans working in the workshops to lose their income and inevitably become part of the displaced population.

"Master Wei, there's no need to say anything more."

"I understand your meaning. This Great Ming Bank is beneficial to both the country and its people, and it must be established."

Emperor Wanli interrupted Wei Guangde, emphasizing...

Realizing the dangers of usury, Emperor Wanli finally woke up from his fantasy of making huge profits through lending.

He knew that this money was not to be earned. The stability of imperial power was the foundation of everything; to disregard the country for a little personal gain would be short-sighted.

Master Wei's purpose in saying all this was to lower the interest rates on private loans, so that ordinary people and businessmen would not be driven to bankruptcy by usurious loans, and to maintain social stability.

The royal family will definitely support this.

Moreover, the invested silver earns interest and returns, making it hundreds of times better than keeping it in a private treasury.

"On behalf of all the people, I thank Your Majesty for your great kindness in saving countless people from suffering."

Wei Guangde hurriedly stood up and bowed to Emperor Wanli.

"Master Wei, get up quickly. They are all my subjects, and I also hope that they live well."

But now that the Great Ming Bank has been established, how to get people to borrow money from it, and the bank's operating regulations, are things that need to be developed as soon as possible.

The Wanli Emperor spoke.

"I will have someone make plans for this matter as soon as I go down. Your Majesty, don't forget that I already have a group of people under my command who are responsible for this."

However, the key to opening these money shops was to quickly expand them to all prefectures and counties across the country, so that people would have access to loans.

Otherwise, they will continue to be exploited repeatedly by those who lend money to them.

Wei Guangde hurriedly said.

"Well, what are your thoughts, Master Wei?"

Although Emperor Wanli agreed to invest, he still wanted to hear more information from Wei Guangde, so he pressed for details.

"I intend to separate a portion of the Ministry of War's postal service."

They are mainly responsible for the civilian sector. As far as I know, in the past two years, the postal service has not only maintained the delivery of official documents and gazettes, but also handled the delivery of personal correspondence and a small amount of goods, and there have been no major mishaps.

What I just mentioned about money shops handling inter-regional remittances for merchants refers to those carrying large sums of money, as well as those handling smaller amounts of money among the general public.

I believe that money shops can also be established, and some postal services can cooperate with money shops.

The Ministry of War now collects station fees from local authorities every year. Although the postal service has been able to generate some income due to the transmission of letters and goods among the people, it is still far from enough.

Therefore, I intend to abolish the collection of military station silver from the Ministry of War nationwide to reduce the burden on the people.

As for this expenditure, apart from continuing to expand the postal service for private goods delivery, it was covered by money shops.

Your Majesty should not worry that this expenditure will erode the profits of the money shops. In my opinion, getting merchants used to exchanging notes through money shops and courier services will actually increase their income.

This idea actually came from Wei Guangde's vision of a future surge in intermediary income for banks, which would become a significant source of profit.

At first, merchants might worry about the risks of passing on the redemption tickets, and what if someone intercepts them?

However, if a well-designed system is in place to ensure that the tickets are accurately delivered to the recipient, many businessmen would likely appreciate this service, given the current inconvenience caused by transportation.

It's important to know that this kind of intercity remittance, in addition to the cash advance fee, also incurs delivery fees, just like the postal service in the past, which also offered this service and handled a large volume of business.

In the era before the banking network system, this method of receiving money and tickets by mail was the mainstream for cross-regional transactions.

Most importantly, with this service, merchants no longer needed to carry too much money and banknotes when they went out.

This is a huge benefit for security-conscious businessmen, who no longer need to worry about being robbed.

As for the money shops during the Ming Dynasty, their main business was lending money and exchanging money, specifically copper coins and silver.

However, due to the minting of silver coins, the money exchange business has basically ceased to exist.

After all, the imperial court had already promulgated monetary laws, and copper coins and silver coins had a fixed exchange rate.

The Ming Dynasty Money Shop, promoted by Wei Guangde, is now largely similar to the most advanced financial institutions in the West, except that it has not yet considered accepting deposits.

Banks also began to appear in Europe during this period, with their main business being deposits, loans, and currency exchange.

The Ming Dynasty did not have currency exchange services, but Europe did.

Because Europe has many countries, a wide variety of foreign currencies circulate in different regions, varying in size, weight, and purity. As a result, the market for exchanging money is quite large, and it was a major business of banks at the time.

In the Ming Dynasty, money shops were very small in scale, often developing from local gold and silver shops. They initially exchanged money and later began lending.

Because the owners of gold and silver shops are often wealthy people in the local area, and they have money to do lending business.

"Master Wei, please draft the terms and conditions as soon as possible and submit them. I only care about how to ensure the safety of the principal when lending money."

Also, what is the approximate profit margin for this business?

Emperor Wanli was not pleased that Wei Guangde wanted to take on the expenses that were originally borne by the imperial court.

However, he was still happy to do so because it would reduce taxes for the people.

Of course, the premise is that one's own interests are not excessively harmed.

"Yes, Your Majesty, I will draft the regulations before the end of the imperial examination."

Wei Guangde quickly expressed his opinion.

The news about dealing with the current state of usury in the country will definitely spread after the imperial examination.

After all, it's impossible to keep such a large number of constables and officials secret for too long.

At that time, a large number of investors will inevitably start to collect their principal.

To ensure the stability of the Ming Dynasty's economy, it was necessary to establish the Ming Dynasty Money Shop at that time to compensate for the market left behind after the withdrawal of these funds.

After returning to the cabinet, the first thing Wei Guangde did was write a note to his family, instructing Zhang Ji to prepare the people in charge of lending money for the Wei family and the rules, as he was going to settle accounts properly that night.

He planned to use the rules he had set in the early days as the charter for the newly established Ming Dynasty money shop, based on credit, to ensure that the lending interest rate would not exceed the court's regulations. With a large number of branches and silver as support, he was not worried about losing to the local money lenders.

However, Wei Guangde's only uncertainty was how to formulate a loan program for farmers.

Since the goal is to safeguard people's livelihoods, lending to the people is a necessity.

In the past, he set strict collateral requirements to ensure the safety of loans and eliminated high-risk customers.

To lower credit requirements now, we can only listen to the advice of our subordinates and understand the lending models in rural areas.

Those who have land can have their problems solved, but what about those who don't?
After writing the note and having Lu Bu deliver it, he continued processing today's memorials.

When it was time to leave the office, Wei Guangde stopped Shen Shixing again and spoke to him privately about the matter.

"His Majesty has already approved it, believing that usury is too exploitative of the people and violates the laws of the court, and should be dealt with severely."

The Ministry of Justice has begun its investigation. In order to ensure the stability of the private economy, I have petitioned Your Majesty to establish the Great Ming Bank to provide loans to the people and merchants at a monthly interest rate of 3%.

His Majesty has already agreed and indicated that he will invest.

"Your Excellency, this matter is beneficial to the country, and I fully support it. I am also willing to contribute my family's wealth to participate in the investment."

But how should we consider the possibility of the imperial court investing?

Shen Shixing asked in a low voice.

"How about we go back, each draft a set of rules, and then discuss it further?"

Wei Guangde laughed.

Because Shen Shixing is known for his steady and methodical approach to things, his ideas may be more thorough and worth considering.

Therefore, he remained silent because he didn't want to influence Shen Shixing's thinking. (End of Chapter)