My life is like walking on thin ice

Chapter 372 Jiangdu, my brother, I am writing to you.

For future generations - whether it is modern people more than two thousand years later, or people living in the dynasties of China thousands of years in the future, the weight of the words salt and iron will definitely not be light.

Salt, as an indispensable condiment of human civilization and a necessary channel for obtaining trace elements, is almost as important as food and cloth.

——No one can live without food, no one can live without clothes;

Of course, no one can live without salt.

The situation is even more exaggerated on the grassland. Not only do people need to eat salt, but even horses and cattle and sheep need to consume a certain amount of salt.

For the new era in the future, daily necessities are often not considered a good business;
Instead, it should be regarded as a political task that concerns the livelihood of the people and even national security.

But in the feudal era when productivity was low and there was no upper limit on the economy and consumption, daily necessities were the most worthy business to invest in.

——The farmers may refuse any of your goods, but they will not refuse to buy your food, your cloth, and your salt.

They account for the vast majority of the society but own only a small part of the society's wealth. The market for "daily necessities" can be described as both huge and small.

The reason why it is huge is that there are more than 30 million people in the Han Dynasty, and more than 99% of them are farmers at the bottom of society.

The reason why necessities of life are called "necessities" is because as long as you have these things, you will never have to worry about selling them and there will definitely be people who will buy them.

As for the small size of this market, it is because the profit margin and total market size of this market are somewhat disproportionate to the number of people covered by this market.

But as the saying goes: water dripping wears away the stone.

There is a saying in later generations: There are 1.3 billion Chinese people. If each person gives me one dollar, I will be a wealthy man with a net worth of 1.3 billion.

The same is true in this era.

——As long as you can do business with everyone in the world, even if you can only make one cent of profit from each person, the total amount will be as high as 30 million.

In later generations, for various reasons, the profit margins of daily necessities such as grain and salt, which are related to people’s livelihood, were suppressed to the limit by the state machinery.

Therefore, most businessmen choose to do businesses with higher profit margins, which do not require occupying a large market to make profits. However, they look down on the business of daily necessities, which can only be thankless if they occupy an extremely large market and make a few cents per person.

But in the feudal era, only the necessities of life had a large enough market.

A very intuitive example is the official grain production in the Shaofu treasury in the past few years.

——The profit margin of one penny per stone of grain was no different from making free money, but over the course of five years, it accumulated over time and earned a full profit of 3.5 billion pennies for the Shaofu treasury.

Just by doing business as a middleman, the Shaofu made such huge profits;

What if this daily necessity was produced by the Shaofu itself?

Take grain as an example: what would it be like if the Shaofu treasury could grow a new type of "grain" with a short growth cycle, low various input costs, but a very high selling price?
For the government-run grain, the Shaofu needed to first spend money to buy the grain from the people, then store it, transport it, and finally add an extra dollar of profit to the selling price before selling the grain.

A profit of one penny;

One penny per stone.

However, the profit rate brought by the 'new type of food' - salt - that Liu Rong found for the Shaofu's treasury can only be described as horrific.

Last year, after firmly establishing his throne, Liu Rong sent people to the coastal state of Jiangdu to experiment with the salt-drying method.

After four months of research in summer and autumn, the various costs and inputs of this new salt-making method had already been compiled into a report and sent to Liu Rong.

——In order to dry salt, the experimental team first hired a hundred young and strong people, spent no more than 100,000 yuan on labor costs, and opened up 200 acres of salt fields on the coast.

These two hundred mu of salt fields were directly developed into a square shape, two hundred steps (360 meters) wide and two hundred and forty steps (432 meters) long, and were further divided into sixty areas by cross lines, each area being forty steps (72 meters) long and twenty steps (36 meters) wide.

The labor cost of bringing seawater into the salt fields would be roughly equivalent to 20,000 coins.

At this point, after an investment of 120,000 coins in labor, the salt drying process was almost complete.

All that’s left is to wait.

If you are lucky, it will take three to five days, and if you are unlucky, it will take ten days to half a month - just wait until the seawater in the salt field evaporates under the scorching sun, leaving only a layer of coarse salt.

Taking into account that someone is needed to look after the salt fields during the salt-drying process, based on the highest standard of fifteen days, the investment would be about thirty thousand coins.

When the salt drying is finished, the total cost will reach 150,000, and then you can harvest hundreds of stones of coarse salt that can be further processed or sold directly for the poor to eat!

stone!
Instead of pounds!

You have to know that salt, no matter it is the finest salt or the coarse salt that has only gone through a sun-drying process and will harm human health if eaten, is only sold by kilogram in the market, whether wholesale or retail!

Hundreds of stones equals tens of thousands of pounds!

Even if we use the lowest quality and cheapest salt: coarse salt mixed with soil and sand, the market price is at least fifty coins per pound!
Thus, a shocking conclusion came out.

——If the crude salt dried from seawater is sold directly through only one process, the investment-profit ratio will be roughly 150,000 coins, corresponding to a revenue of 15 million to 20 million coins.

Compared with the final revenue, the investment is basically negligible and can be completely classified as "a huge profit".

A great man of later times said: If there is a 10% profit, capital will be guaranteed to be used everywhere;
With 20% profit, capital can become active;

With 50% profit, capital will take desperate risks;
For 100% profit, capital dares to trample on all human laws;
With a profit of more than 300%, capital dares to commit any crime, even risking hanging.

The salt-making process newly created by Liu Rong will increase the profit margin of salt production and salt sales to an astonishing 10000%.

Hundred times profit!
Even if we don't fantasize, but just think down to earth about the current Han Dynasty, the population of the people and the consumption of salt, the results are still frightening.

——According to later standards, the annual salt intake of a normal person is approximately 6-8 jin (1.5 kg-2 kg).

Taking into account that the lower-class people in the feudal era often could not even eat the "standard amount" of rice, we halved this estimate and took the most conservative estimate of 3 kilograms of salt intake per year.

All in all, the total salt consumption of the Han people in one year was more than 100 million jin.

Putting aside the profit margin or the input-profit ratio - even if the Shaofu treasury can only make ten coins per kilogram of salt, the annual consumption of 10 million kilograms of salt will be a huge income of up to 100 million coins per year.

The annual tax on people is 120 million;

The government-run grain revenue is 700 million coins per year; if we add the 100 million coins per year from salt, it means that within less than five years of Liu Rong being in power and less than two years of taking the throne, the financial revenue of the Shaofu treasury had more than doubled!
The most terrible thing is: salt, let alone according to Liu Rong's ultra-low-cost production process;

Even those salt merchants who use the old method of braising salt would never leave a profit margin of only ten cents per catty.

According to Liu Rong's estimation, if after being exposed to the sun, the melted water is filtered and distilled, the cost of producing fine salt will not exceed five cents per catty, but its value will be as high as two hundred cents per catty.

The world consumes tens of millions of kilograms of salt every year. Even if only one-tenth, or 10 million kilograms, is fine salt, based on the profit of more than 190 coins per kilogram, the profit would be as high as 200 million yuan per year!
If we add in the relatively cheap but equally low-cost crude salt, which can also generate a profit of more than 40 coins per jin, the total demand is as high as 90 million jin...

It is no exaggeration to say that if the salt can be monopolized, the Han Dynasty's Shaofu treasury will have a huge net income of up to 600 million coins every year, which will last as long as the country!

With this money, the emperor of the Han Dynasty could launch a war of the same scale as the Han-Xiongnu Hetao Campaign every autumn without any psychological burden, and he did not have to worry about financial pressure at all.

Also, don’t forget;

The above entire set of estimates, whether it is profit margin or market demand, are all estimated based on the most conservative conditions.

The actual situation will only be more pleasing than this estimated data, but it will never be worse than the predicted value presented by the data.

The salt alone was enough to make Liu Rong excited.

——The government-run grain business earned a total of 350 million yuan in five years, but it only took half a year to convert it into salt.
It has been more than five years since the porcelain was made. Compared with the huge amount of 600 million yuan earned from the official salt business every year, the profit of porcelain is actually not even worthy of mention...

This is the case with salt, a necessity of life, but the situation with iron is at the other extreme.

For the lower-class farmers, iron is not an indispensable necessity like food, clothing, or salt.

But whether they are farmers or military generals, they all have an inexplicable obsession with iron farm tools and weapons.

In the eyes of farmers, iron farm tools are more labor-saving and trouble-free than pure wooden farm tools;

Most importantly: extremely long service life.

Even if it is broken, there is no need to replace it with a new one. You can just find a blacksmith shop to bang it around and repair it, and it will be as good as a new one.

It is even simpler for soldiers - weapons made of iron or even steel can easily crush bronze weapons!
If you own a farm tool whose parts are partially made of iron, it is no exaggeration to say that it can be considered a family heirloom of a farmer's family.

And it’s not the kind of thing that is placed in ancestral halls and looks good but is useless, but something that can be used to make a living!
The situation with steel and iron weapons is even more exaggerated - not to mention the private ownership of generals, even the standard weapons issued by the court are of uneven quality, and even the parameters cannot be unified. There are also restrictions on official positions and titles, and limited quantities.

From this perspective, iron, whether for civilian or military use, is not a highly profitable project like salt that can be produced at low cost and then sold at a high price.

But once iron tools became popular, the indirect benefits they brought were simply unimaginable.

——When iron tools become popular and their price drops to a certain level, farm tools will inevitably be the first to be swept up by iron.

More labor-saving and convenient agricultural tools mean the liberation of more productivity;

Farmers who used to be able to take care of only 100 acres of farmland and even needed help from the elderly, children, women and children in their family may now be able to take care of 200 acres or even 300 acres of farmland.

As farming capacity improves, more wasteland will naturally be reclaimed. The Han Dynasty's farmland, population, total grain output, as well as the agricultural tax collected proportionally based on output and the head tax collected per capita will all increase steadily in the next hundred years.

There are more farmlands, land annexation has been eased, and the people can breathe a sigh of relief and even become a little richer;
The total amount of grain has increased. Regardless of the price of grain, at least most people can have enough food to eat.

As grain production and population increase, agricultural taxes and head taxes will rise, national fiscal revenue will increase, and national strength will naturally increase accordingly.

It can be said that the iron business is a good business that can earn money from everything except directly making money - even the country's fortune!
What's more, 'not making money' is only relative to the exaggerated hundred-fold profit from salt.

If salt and iron were monopolized together and put into the treasury of the Shaofu, the profits from ironware in the civilian field would also be considerable.

——It is definitely not as profitable as salt.
But after all, smelting is a technical job, and the finished product is a production tool, so a profit margin of five to ten times is at least not a problem.

"It was conferred since Emperor Taizu Gao, until the rebellion of the Seven Kingdoms of Wu and Chu."

"——During this period of more than 40 years, King Wu Liu Bi spent at least 30 years doing everything he could to open mountains and mine, smelt copper and cast coins."

"Although this is bronze smelting technology, it can still be considered as learning by analogy, and I have a technical foundation..."

"Now that we have an idea, let's start exploring for iron ore within the Wu State."

"If we can find a decent iron ore, our Han family's steel production base will be located in the copper smelting area where King Wu Liu Bi once smelted copper."

...

"And salt."

"The trial phase is over, and the costs, profits, finished products, and processes have basically reached maturity."

"If we want to dry and produce salt on a large scale, we need my good brother who is 'ambitious'..."

Thinking of this, Liu Rong finally lowered his head with a smile and spread out a blank silk cloth in front of him.

He picked up the pen, but was not in a hurry to write, but thought for a long time, and took a moment to choose the words;

After a long while, Fang gently put down his pen:

——My brother Jiangdu, it’s nice to see you in person.

It has been more than a few months since we parted last year;

My younger brother is a noble among the feudal lords, but due to state affairs he has been stranded outside the border for a long time. This is actually my elder brother's fault.

As the ancients said, the eldest brother is like a father;

As an elder brother, one may choose a business for his younger brother to do, or buy a property for his younger brother to keep.

Even if you are not smart, you can still find a career and some property.

It is bitterly cold outside the Great Wall. If I have no intention of staying here and am interested in hearing your conversation, I should return to Chang'an as soon as possible to discuss this in person.

Brother, cook wine and roast meat, and prepare the bed for you...

(End of this chapter)