Chongzhen revived the Ming Dynasty

It should be said that the wartime procurement system was fairly well accepted in the Ming Dynasty, and merchants generally supported it.

This is not only because the stable orders brought by wartime procurement allow them to expand production without any worries.

Furthermore, because of wartime procurement, it was considered part of their "commercial service," much like the procurement by former junior merchants.

Previously, the imperial court's practice of recruiting merchants involved forcing them to buy goods when no one volunteered.

With the general public serving in the military, it was understandable for businesses to implement this system during wartime.

Especially now that the imperial court has allowed them to make a profit, it is considered reasonable for the profit to be 5% to 10% higher than the cost.

As long as their production costs are not too high compared to the industry average, they cannot afford to lose money.

Factories with high production efficiency can even make a fortune.

Therefore, this kind of "merchant service" was very popular among merchants.

Even when implemented under normal circumstances, some people can accept it.

After Liu Lishun introduced the option and allowed businessmen to choose whether to accept it, their resistance to it will be further reduced.

To boost their enthusiasm, Zhu Youjian also instructed Wang Chengen to apply the same rating system to the suppliers of the supply and marketing group, similar to the imperial rating system, and to assign military grades to dual-use products.

These ratings can be used for advertising, demonstrating an endorsement of quality. They can also incentivize businesses to become suppliers and control the product evaluation system.

To this end, Zhu Youjian instructed the supply and marketing group to cooperate with the Hanlin Academy and the Academy of Sciences to establish a special commodity evaluation center, responsible for assessing quality and cost and proposing optimization suggestions.

These arrangements further improve the functions of the supply and marketing group.

The emperor and his ministers then discussed the source of funds for the supply and marketing group, which would serve as the initial capital for purchasing goods.

Zhu Youjian asked Wang Chengen:

"How much silver can the Imperial Household Department contribute? Let's invest a million in it first."

"It would be best if the Ministry of Works, the Logistics Department, and the Imperial Stud could contribute funds. If they don't have the funds, let them provide the channels and each take 10%."

The plan is to have these parties form a supply and marketing group.

Before Wang Chengen could reply, Liu Lishun hurriedly said:
"Your Majesty, the Suzhou-Songjiang New District can also contribute one million taels of silver. Please allow the New District to own shares in the Supply and Marketing Group."

This surprised Zhu Youjian, who looked at Liu Lishun and said:

"Is your Suzhou-Songjiang New Area really that rich?"

"Isn't the industrial park exempt from tax for five years? Is selling land really that profitable?"

The current Suzhou-Songjiang New Area is basically built on the wealth of the Chu state and through land sales.

However, this revenue must be used to pay taxes; all land taxes levied on the land occupied by the Suzhou-Songjiang New Area must be handed over to the state.

Zhu Youjian did not believe they could have a surplus of one million; otherwise, Liu Lishun would have placed the orders himself long ago and would not have needed to ask others for help when the wartime state ended.

Liu Lishun doesn't actually have that much money right now, but he has come up with a good idea, which is why he proposed setting up a dedicated company earlier.

He said to the emperor:

"I don't have that much money right now, but I have a way to earn at least a million."

"Your Majesty, please allow the Suzhou-Songjiang New Area to continue issuing paper money to supply merchants who come to trade."

"This means printing money themselves," Zhu Youjian said, frowning.
"Currency issuance is now entirely under the jurisdiction of the Financial Reserve Committee."

“You should know the credibility of paper money; what merchant would accept it?”

Liu Lishun calmly said:

"Merchants from the Ming Dynasty were unwilling to accept them, but foreign merchants had no choice but to accept them."

According to the "Collected Statutes", the court would take half of the goods that were presented as tribute by vassal states and return the other half for its value, which had to be paid in both cash and paper.

"Some were six coins and four banknotes, some were four coins and six banknotes, or they were repaid in kind."

"They must use paper money to sell goods at prices determined by the Imperial Household Department, and purchase goods at prices determined by the Imperial Household Department."

(The prices of goods traded as tribute are listed in copper coins. In the "Collected Statutes of the Ming Dynasty," they are priced in paper money. Ivory costs 500 copper coins per catty, and a blue-and-white porcelain plate costs 500 strings of cash each, a price difference of a thousand times.)
This explanation opened Zhu Youjian's eyes.

Because of the decline of the country and rampant smuggling, he rarely encountered tribute missions after ascending the throne and was completely unaware of these matters.

Especially after he promoted free trade and trade quotas were only applied to tribute and controlled goods that were in short supply, he became even more unclear about the operation of the tribute trade.

Only then did he realize that the pricing of goods in the tribute trade was entirely in the hands of the Ming Dynasty.

The imperial court dictated the price; tribute ivory could be bargained down to 500 wen per jin, and blue-and-white porcelain plates, used as a bargaining chip, could be priced at 500 guan each. A three-foot-wide iron pot was considered high-tech and could sell for 150 guan.

With such a vast difference, it's no wonder the imperial court always "gives generously and receives meagerly in return," bestowing upon its vassal states goods far exceeding the value of their tributes.

If we calculate everything based on this price, wouldn't that be a generous gift!
This also explains why smuggling later became rampant, and the imperial court was bypassed by Ming Dynasty merchants and foreign traders. The pricing was simply outrageous, and they all wanted to smuggle goods without the imperial court's involvement.

After understanding these things, Zhu Youjian gained a deeper understanding of the strength and prosperity of the Ming Dynasty.

Before the Industrial Revolution, the handicrafts of the Ming Dynasty were uniquely high-tech, unmatched by any other place in the world.

The industry, with its advantages in porcelain, silk, and iron pots, has virtually no competitors.

While scheming about how to make more money in these industries, Zhu Youjian heard Liu Lishun say:

"Now the imperial court issues silver dollars and subsidiary currency notes, and no longer prints paper money."

"Although they have better reputation and very stable value, there has always been a shortage of silver dollars and subsidiary coins on the market."

"It is especially inconvenient for foreign merchants to carry large quantities of goods for trade."

"They could not exchange enough silver dollars and subsidiary coins, so they could only buy them with silver or barter them when trading in Suzhou and Songjiang."

"I believe that we can still issue paper money to these foreign merchants, allowing them to use it as a medium of exchange for pricing."

"Judging from the foreign trade volume of the Suzhou-Songjiang New Area, at least one million silver dollars worth of paper money would need to be printed to meet the trade needs." Good heavens, this is making foreign merchants use paper money to trade.

The key question is: are they willing? Are the merchants willing to accept it?

If you can't buy the goods, who would want this piece of waste paper?

When this question was raised, Liu Lishun replied:

"We can set up a special foreign trade bank and issue banknotes with the same value as silver dollars."

"The rule was that foreign businesses must use banknotes to buy and sell goods, so that they could use banknotes to purchase goods."

"This solves the problem of insufficient currency and promotes foreign trade."

So that was the plan; Zhu Youjian understood.

The banknotes that Liu Lishun plans to issue are unreserved currencies specifically targeting foreign businesses.

Even if it collapses, it won't have much impact on the Ming Dynasty; in fact, it won't sell any less goods.

This idea is good, but there are many problems with it, he asked Liu Lishun:
"What if foreign merchants come to the Ming Dynasty not to buy goods?"

"Or perhaps they are unwilling to buy from the imperial court, but instead purchase goods from Ming Dynasty merchants. Would they refuse to accept the banknotes issued to them?"

“If this happens, foreign merchants obviously won’t obediently use banknotes, and merchants from the Ming Dynasty won’t be willing either.”

"That would lead to smuggling problems again, just like the previous tributary trade."

This problem was clearly difficult to solve, and Liu Lishun could only say:

"I believe that the supply and marketing group can provide the goods, and a special foreign trade company can be established to set higher prices."

"Foreign merchants should be satisfied with the variety of goods provided by the supply and marketing group."

This is one way, and Zhu Youjian does indeed need to give the supply and marketing group the opportunity to earn excess profits. He nodded and said:

"Foreign trade companies can be established, but their export prices must not be lower than those in the domestic market."

"How much they can earn is entirely up to their ability; there are no limits."

"As for the foreign trade banknotes you mentioned, I believe they can also be issued."

"But there must be collateral, which is the goods of the supply and marketing group."

Following the example of the border currency issued by the anti-Japanese base areas using important materials such as grain and cotton cloth as collateral, Zhu Youjian said:
"The supply and marketing group can issue as many foreign trade vouchers as the goods it controls."

Foreign merchants can use foreign trade vouchers to buy goods, and domestic merchants can also use foreign trade vouchers to purchase goods.

"But if you use foreign trade coupons, then the price will be based on foreign trade prices. This currency is nominally equivalent to silver dollars, but in reality, it can fluctuate by 30%."

"When the actual value of foreign trade certificates is higher than that of silver dollars, then more foreign trade certificates should be issued."

"When the value of foreign trade certificates falls below that of silver dollars, some should be recalled or more supplies should be provided to prevent the certificates from depreciating too much."

"I will have Sihai Bank cooperate with the Supply and Marketing Group to establish a special foreign trade bank to issue foreign trade bonds."

This is clearly more comprehensive than Liu Lishun's idea, allowing foreign trade vouchers to have a wider circulation range.

The issuance volume will also be larger, potentially reaching millions or even tens of millions.

Thinking of all that money, Zhu Youjian's breathing became heavy: because even his own private treasury didn't have that much money right now.

He was particularly thinking about the inland and border regions, which were also currently lacking currency.

If goods from the supply and marketing group are used as collateral, can a new currency be issued in the same way as border currency?

Or, to be more cautious, one could emulate the Guanghua Store vouchers, the predecessor of border currency, and the supermarket vouchers and consumer coupons of later generations, by issuing currency exclusively for supply and marketing groups with strict restrictions on its use.

That would greatly alleviate the shortage of currency in the Ming Dynasty, and the supply and marketing groups would no longer just provide commodity circulation services, but would be able to earn huge profits through finance.

Of course, there are also great risks involved. Zhu Youjian could not guarantee that the supply and marketing group would not issue foreign trade vouchers and coupons on a large scale in the future for profit.

Therefore, he intends to define this token, which can be used as a medium of exchange, as currency as well. He will then have the Congressional Financial Committee, the Ministry of Revenue, and the Federal Reserve formulate policies to regulate it.

Now, it can grow wildly for a period of time, with banks controlled by the inner court cooperating with supply and marketing groups to issue foreign trade vouchers and coupons.

There were many of these banks, each responsible for a specific region. They were also overseen by the Royal Assets Management Committee and the Royal Bank to prevent problems in one bank from affecting a wider area.

What needs to be done now is to improve the rules and regulations and pilot the issuance of foreign trade vouchers and gift certificates.

Thinking of this, Zhu Youjian instructed Wang Chengen:

"Go and discuss with Tu Wenfu about allocating more money to purchase supplies."

"Then, using these materials as collateral, we will issue foreign trade vouchers and coupons that do not exceed the actual cost."

"Foreign trade vouchers are only for foreign trade, while gift certificates can be used to purchase goods at authorized sales points."

"We will first pilot the program in the Suzhou-Songjiang New Area and the Northeast, and then improve the rules and regulations."

He explained his plan and instructed Liu Lishun and Wang Chengen to carry it out properly.

They also agreed to Liu Lishun's request, allowing the Suzhou-Songjiang New Area to invest in the Supply and Marketing Group, giving it a 10% stake.

The initial shareholding structure of the supply and marketing group was determined as follows: the inner court would hold 40%, the Ministry of Works, the Logistics Department, the Imperial Stud, and the Suzhou-Songjiang New Area would each hold 10%, and the remaining 20% ​​would be given to the employees, including ordinary workers and technical and management personnel.

The issuance of foreign trade vouchers and gift certificates had to be carried out in cooperation with banks controlled by the inner court. Furthermore, the Ministry of Revenue was instructed to issue a temporary order prohibiting companies outside the supply and marketing group from issuing tokens.

Silver notes and checks issued by financial institutions such as silver dollars and money shops, as well as grain coupons and other negotiable instruments issued by grain banks, should also be subject to regulation and included in the scope of broad money.

The allure of finance was so great that while Zhu Youjian was enjoying it, he also accelerated the formulation of measures to improve the supervision of this industry.

The goal is for finance to serve the three major industries of agriculture, industry, and commerce, rather than swallowing them up. (End of Chapter)