prosperous age

"By the way, you mentioned you were planning to set up a stock exchange. I wonder when that will be?"

Zhang Xueyan suddenly asked another question.

"I have five familiar chambers of commerce that are ready, and with Daming Money Shop, we can currently display the signs of six chambers of commerce."

Once a stock exchange is established, stocks can be listed and traded there at any time.

Wei Guangde said casually.

Although he seemed to have done nothing for the past six months, he had spoken through Zhang Ji, so the chambers of commerce in which he held shares re-evaluated their equity, signed new share contracts, and issued share certificates.

Actually, it was prepared for the establishment of a stock exchange.

The companies he mentioned were, of course, the larger chambers of commerce under his management. He didn't pay much attention to the smaller ones.

"So, does that mean our Ministry of Revenue started the preparations to establish this gold exchange?"

When Wei Guangde first mentioned this stock exchange, he made it clear that the industry must be a monopoly and the imperial court would prohibit other places from establishing similar chambers of commerce or exchanges that specialize in stock trading.

What concerned him most was that every transaction would be taxed, with a tax rate of one thousand per transaction collected from both parties.

The tax rate of 2‰ may seem low, but it is collected on every transaction, and it adds up to a large amount of tax.

Moreover, because it was located in the capital, the income could be directly deposited into the Ministry of Revenue's treasury.

Furthermore, the Ming Dynasty did not have the rule of a seven-day week with only five or six trading days.

Therefore, based on the lunar calendar system, Wei Guangde set the trading days as follows: except for the first and fifteenth of each month, trading was allowed at other times of the month.

The income of ordinary people in the capital was generally higher than that in the north, and the wealthy felt invincible.

Although the Jiangnan region, including Suzhou, Hangzhou, and Songjiang Prefecture, is home to many wealthy merchants, their absolute numbers are still far fewer than those in the capital.

When Zhu Di moved the capital, he really did relocate countless wealthy merchants from all over the country to populate the capital, all in order to boost the city's commerce.

With this group of people as a foundation, once the exchange is established, there will be no shortage of participants.

Moreover, even if the place is deserted at first, Wei Guangde only needs to raise funds to create a buzz and then use newspapers to publicize it, and funds from all over the country will flock to the capital.

Even now, countless wealthy families in Jiangnan still regret not being able to successfully subscribe for shares in Daming Qianzhuang.

After all, this was an opportunity to get close to the powerful and influential class of the Ming Dynasty, which was of great significance.

As long as the stock exchange lists shares of the Ming Dynasty Bank, there's no need to worry about wealthy households from Jiangnan not waving large sums of gold and silver to the capital to snap up shares.

Wei Guangde's idea was to revitalize the financial market of the Ming Dynasty. Although it would open up a new source of revenue for the court, he was more aware that the listed chambers of commerce had to be of high quality and able to make real money.

And in this matter, the Ministry of Revenue is the only one capable of handling it.

By simply checking the chamber of commerce's tax payment records, one can gain a general understanding of the chamber's true situation.

Although Wei Guangde didn't know whether the swindlers in the Ming Dynasty would be even more adept than those in the West and would create a Ponzi scheme much earlier.

I don't think it will happen that quickly.

A Ponzi scheme is a term used to describe investment fraud in the financial sector, and it is the ancestor of pyramid schemes.

In China, a Ponzi scheme is also known as "robbing Peter to pay Paul" or "getting something for nothing".

In short, it involves using money from new investors to pay interest and short-term returns to older investors, creating the illusion of making money and thus deceiving them into investing more.

Many illegal pyramid schemes use this tactic to amass wealth.

It's called a Ponzi scheme because this kind of fraud was "invented" by a speculator named Charles Ponzi.

Because the speculator's surname was Ponzi, it was called a Ponzi scheme in the country.

Charles Ponzi was an Italian-American speculator who lived in the 19th and 20th centuries and immigrated to the United States in 1903.

In 1919, he began to plot a scheme in which swindlers would invest in a fictitious company, promising investors a 40% return on their investment within three months.

Then, the cunning Ponzi used the money from new investors to pay the initial investors as quick profits, in order to lure more people into the trap.

Because early investors received substantial returns, Ponzi successfully attracted 30,000 investors within seven months.

This conspiracy lasted for a year before those blinded by greed finally came to their senses.

These confused investors naturally ended up suffering heavy losses.

Wei Guangde would naturally take strict measures to prevent Ponzi schemes from running rampant in the emerging stock exchanges. Therefore, once the Ministry of Revenue started operating, he would specifically instruct the Ministry of Justice and the Censorate to thoroughly investigate any such scams that might appear in the localities.

In addition, Wei Guangde was also considering whether to eliminate financial bubbles, which is the more well-known "Tulip Mania" among Chinese people.

Although many people view the tulip mania as a Ponzi scheme, it was actually more like the "financial bubble" that people are familiar with today, rather than a fraud.

The Tulip Mania does not meet the definition of a Ponzi scheme, which requires an organizer to promise returns and use new money to pay off old debts to attract new investors.

The tulip mania was a market-driven speculative bubble, not controlled by a single central figure. It is a typical case of asset bubble speculation fraud or financial bubble, similar in nature to the later South Sea Bubble and the dot-com bubble.

But Wei Guangde was even more aware that the harm of such a financial bubble would be greater because it would have a wider impact.

The harm of financial bubbles is mainly reflected in the widespread impact they have on the economy, financial system and society after they burst.

When a bubble bursts, asset prices plummet, and investors who bought in at the peak face huge losses, or even lose everything.

If investors engage in speculation through borrowing, they may fall into a state of "negative equity" after their assets depreciate, triggering a family financial crisis.

As a result, even a purely financial institution like Daming Qianzhuang could hardly escape this crisis.

After all, a decline in asset value can cause assets that appeared to be of high value at the time of lending to plummet in a very short period of time, thus posing a risk of loss to the money shop.

Wei Guangde may disregard other matters, but the Daming Bank must ensure continuous profitability, stabilize the Ming Dynasty's economy, and promote its economic growth.

When a stock is listed on an exchange, it must avoid drastic price fluctuations caused by a large influx of money in a short period of time. It can only generate a certain profit effect, but it must not get out of control.

Otherwise, if merchants were to withdraw funds from the workshops to participate in stock speculation, it would be a catastrophic disaster for the Ming Dynasty.

The main reason why countries in later generations have been so reluctant to talk about bubble economies is that they have such a huge impact on the real economy.

Distorted resource allocation and shrinking investment and consumption are fatal, leading to a vicious cycle that can last for countless years from which it is difficult to extricate oneself.

Therefore, when asked about Zhang Xueyan's question, he only thought for a moment before saying, "My opinion is that the Ministry of Revenue should select a few more chambers of commerce, at least ten or sixteen chambers of commerce should be listed together."

In this way, with the opening of the stock exchange and the presence of chambers of commerce from all walks of life, people will have a wider range of investment options.

The exchange must continuously monitor and understand all listed chambers of commerce, and the chambers of commerce must determine monthly whether there are any major events that have been concealed or not reported.

All chambers of commerce listed on the stock exchange.

"and many more."

Wei Guangde was still talking non-stop, intending to tell Zhang Xueyan all the precautions he could think of at this time, reminding him that the design of the exchange rules during the preparation process must be meticulous, when Zhang Xueyan interrupted him.

"I'll write this down so I don't forget too much."

As Zhang Xueyan spoke, he got up and walked to Wei Guangde's desk, found some Xuan paper, laid it out, took a wolf-hair brush from the brush holder, and then said, "That's enough."

"Hehe, you!"

Wei Guangde actually wanted to say that he had taken notes earlier, but considering he would gradually refine them later, he only mentioned the issues he could think of at the moment. "Your Excellency, does this regular posting mean that the Chamber of Commerce will post notices at a specially selected location outside the stock exchange?"

Zhang Xueyan responded to Wei Guangde's emphasis on information disclosure to facilitate stock selection for investors.

"I've thought about this. The stock exchange has designated the Beijing Daily as the dedicated channel for the Chamber of Commerce to disclose information, and all information related to the stock exchange will be compiled and published monthly by Jinghua Bookstore."

Information released through other channels is not endorsed by the exchange; only information from these two sources is considered authoritative.

The Beijing Daily and Jinghua Bookstore that Wei Guangde mentioned were both his own businesses.

After reorganizing the staff of several bookstores, a special newspaper bookstore and publishing bookstore were established.

The newspapers currently published by the Newspaper Publishing House include the Commercial Daily and the Beijing Daily, which focuses on current affairs news.

Wei Guangde planned to make the Beijing Daily a major channel for publishing serious news, while the Commercial Daily would be more like a channel to attract advertising, focusing on people's livelihoods.

He also wanted to obtain the right to publish this kind of information.

Make money, not shabby.

Once power is in hand, orders are issued.

Zhang Xueyan already understood when Wei Guangde said those words.

However, Wei Guangde continued, "In the future, when the newspaper publishing house grows bigger, I plan to have them listed on the stock exchange as well."

Even the stock exchange itself, being a chamber of commerce, can list on its own exchange, as long as it's profitable.

Wei Guangde continued.

"So, how do exchanges make money?"

Zhang Xueyan immediately asked.

Initially, he planned to operate the stock exchange as a department under the Ministry of Revenue, essentially treating it as a newly established tax bureau.

Since this place can generate tax revenue for the Ministry of Revenue, it's acceptable for the Ministry of Revenue to provide some funds to support them.

But judging from Wei Guangde's words, the exchange itself also has ways to make money, so naturally we should ask about it.

Regardless, the Ministry of Revenue is undoubtedly the largest shareholder of this exchange.

“Every listed chamber of commerce gives the exchange a sum of money every year; this is the standard allowance.”

Stockholders need to register to trade on the exchange, which makes it easier for them to complete stock transactions. There can also be a fee for opening an account.

Individual accounts can have fewer entries, but chamber of commerce accounts can have more.

In addition to the taxes levied by the imperial court on both buyers and sellers, the exchange also levies an operating fee of one-fifth of the five thousand taels of silver.

Wei Guangde recounted all the ways he knew about the game in later generations, but he didn't mention the securities firms.

Since it's unnecessary, this part can be directly incorporated into the exchange, meaning that brokers can be arranged internally by the exchange.

The purpose of doing this is, of course, to better control the market.

It can be said that this stock exchange, under Wei Guangde's control, could directly influence investors' actions by controlling brokers.

Of course, once the market is on track, brokers will be allowed to work in the trading room through affiliation until they become completely independent and establish their own chamber of commerce.

These brokers are essentially brokers; their chambers of commerce are new brokerage firms, but their actual business scope is securities brokerage.

However, Wei Guangde will not allow the current brokerage firms to directly participate in the transactions; a new batch will need to be trained.

Those who work in brokerage firms and want to switch to the stock exchange are also allowed to do so, but they must leave their original brokerage firm.

"Rules must be strict from the beginning, and power must be centralized to avoid problems."

Once the market stabilizes, power should be gradually decentralized, little by little, not all at once.

Wei Guangde didn't say much about the financial bubble issue, as it was too early to bring it up now, and Zhang Xueyan might not accept it.

After all, the Ming Dynasty, or rather, China's ancient history of over a thousand years, seems to have never experienced a financial bubble.

There was no precedent, so it was actually quite difficult for civil officials to understand.

People are used to following the textbook, and their ability to understand and accept new things is limited.

"That's all I can think of for now. I'll add more as I think of things during the planning process."

We need to consider all the details thoroughly before we can officially begin operations.

If something goes wrong with this, the impact can be huge.

Because it was led by the Ministry of Revenue, it would be perceived by outsiders as being done by the imperial court.

Therefore, if there is any oversight, both of us will lose face.

Zhang Xueyan naturally took Wei Guangde's reminder to heart.

"Then I'll go back first and have someone draft the rules. We'll discuss it again after they've been refined repeatedly."

Seeing how much Wei Guangde valued this matter, Zhang Xueyan also began to take it seriously.

For exchanges, he values ​​their ability to generate cash.

Having shares in a money exchange naturally leads to a desire for a way to monetize them.

After all, he had a lot of debts to cover the costs of subscribing to shares.

"To put it bluntly, the most important point of this matter is to make people understand that wealth does not come from land ownership. The shares of chambers of commerce and workshops can also generate wealth continuously, just like land."

Only when such a consensus is reached throughout the land will it be possible for members of the imperial family and noble families to abandon land annexation and instead focus their money and energy on profitable business associations and workshops.

Only in this way can the cycle of dynastic rise and fall be reversed.

Wei Guangde said to Zhang Xueyan.

The dynastic cycle in China is essentially the concentration of land and wealth, which eventually leads to a sudden collapse.

The new forces plunder the chaebol groups that profited under the old system, and then distribute a portion of that wealth to the lower classes.

The process of wealth shifting from dispersion to concentration and then back to dispersion mirrors the rise and fall of dynasties and the changing of the guard.

In the eyes of researchers, this is actually "land consolidation".

In ancient times, the Confucian classic "The Great Learning" pointed out that "with land comes wealth," which had a great influence and directly linked land with wealth. This led to powerful families in later generations desperately acquiring land to pass on as their family business.

The original meaning is that with virtue comes the people, with the people comes the land, with the land comes wealth, and with wealth comes the resources of the state.

This was addressed to the ruler.

But people are more concerned about the wealth generated by the land than about the people.

Having followed Wei Guangde in business, Zhang Xueyan had already accepted this principle and immediately nodded in agreement. (End of Chapter)