Gou was a member of the imperial family in the late Ming Dynasty

Chapter 693: Alliance with Shanxi Merchants
The reason why the border trade was opened up was not to let Hengtong alone to do it, but to involve the Shanxi merchants. This was also the cleverness of Zhu Shenzhui.

Compared with the gentry in the south, it is relatively easier to start from the north, especially the Shanxi merchants. Moreover, Zhu Shenzhui is originally from Shanxi, and his Hengtong is also a member of the Shanxi merchants. No matter whether there are overt or covert struggles with other Shanxi merchants, when facing the business companies in the southern provinces, everyone is "one of our own" after all.

Zhu Shenzhui is no longer a businessman, he is the regent of the Ming Dynasty. He is in a different position and his way of thinking is different from before. The Shanxi merchant group not only has huge wealth, but also has a deep background. A monarch must know how to balance, whether in politics or other aspects.

Using border trade to win over the Shanxi merchant group is equivalent to finding a powerful arm for oneself, and can also make the aristocratic families and officials behind these Shanxi merchant groups stand on one's side, thereby reducing opponents in the court and enhancing one's own strength.

Didn't a great man say that we should make more friends and fewer enemies? Although this saying sounds simple, it contains great wisdom.

This is how politics works. Being stubborn and tough is not the way to go. Only necessary compromises and means are the way to achieve your goals.

For Zhu Shenzhui, the gentry class and groups in the south were his real enemies, but he was not able to take action against them now, and was also worried that once he took action, not only would he not get good results, but it would cause huge political shocks. So in this case, he first tried to win over the noble families in the north by winning over the Shanxi merchants, so that the gentry class and official groups in the north would stand on his side. The best way to win them over was through interests. Under the premise of having common interests, any smart person would know how to choose.

"Your Highness, do you intend to let Hengtong remain the main one and let other families serve as auxiliary ones?" Kang Youfu understood Zhu Shenzui's intention and couldn't help asking.

Zhu Shenzhu shook his head: "Let the Shanxi merchants trade on their own. Hengtong will not participate in direct trade. Let them discuss it on their own and come up with a plan."

Kang Youfu was shocked, and his face was full of confusion: "In this case, Hengtong will not be a wedding dress for others? Once all the companies join forces to ignore Hengtong, how can the various companies control it?"

"Why do you want to control it?" Zhu Shenzhui asked back, and said with a smile, "You can't catch a wolf without sacrificing a lamb. These businessmen are all smart people, especially the Zhang and Wang families. If Hengtong takes the lead, they will certainly be willing to cooperate, but there will definitely be some small moves behind the cooperation. Without taking big profits, how can people be satisfied with just a few small profits? If it were you, what would you do?"

Seeing Kang Youfu was in deep thought, Zhu Shenzhui continued, "Shanxi includes the north and northwest of Zhili. From Zhangjiakou in Xuanfu to Hequ, there are thousands of miles of borders. At least three or four border trade ports can be opened. Among them, the existing Weiyuan can be reopened, and Zhangjiakou can also be counted as one. As for the other two, they can choose Fengzhen in the north of Datong or Piantouguan. Let them decide for themselves."

"In each trade zone, one or two companies will jointly register with the imperial court to obtain trade qualifications. There is no limit on the amount of trade. Except for firearms and military equipment, which are not allowed to be traded privately, tea, salt and other commodities can be completely liberalized. As for grain trade, there will be temporary restrictions, and a quota system can be implemented."

"What is the quota system?" Kang Youfu asked.

"Our Ming Dynasty is short of grain. If there is no restriction, large-scale grain exports will inevitably cause food shortages in the interior, which will cause price hikes and civil unrest. Each Shanxi merchant can engage in grain trade in small quantities, but if it is a large quantity, there must be a limit. This limit is the quota. Each family is initially limited to a certain amount, and exceeding the amount is not allowed. However, forced restrictions cannot avoid the phenomenon of underreporting. Other means can be used to implement it, such as the court dividing the ratio. If you want to export 100 dan of grain beyond the quota, you must sell the same amount of grain to the court at the market price to obtain the same qualification."

"In addition, we can also purchase cattle, sheep, horses and other items from the grasslands and classify them according to their weight, teeth, strength or weakness to offset these material quotas. You can discuss the specifics with the various families and report to the king. Let Hengtong assist the Jinyiwei to supervise the implementation."

Kang Youfu's eyes lit up, and he immediately understood Zhu Shenzhu's intention. This was a good idea. As the head of Hengtong, he knew all too well the methods of businessmen. In the face of profit, businessmen would do anything to achieve their goals. Even if there were restrictions, they would think of other ways.

Just like the imperial court has never allowed Ming merchants to trade with Mongolians. Even though border trade was set up in certain areas since the founding of the Ming Dynasty, it was often only for a period of time. These border trade ports would be closed soon after they were opened, and were blocked most of the time.

But this blockade is only in name only. Private smuggling has never disappeared. Otherwise, how did Zhu Shenzhui's Hengtong develop to this point today? Isn't it because of the rapid accumulation of wealth through smuggling?
From this point of view, even if the border trade is officially opened and the court allows it, these merchants can't guarantee that they won't do something small in private? It is often said that it is better to loosen up than to block. Absolute restrictions are simply impossible to achieve. It is better to slightly open a loophole and use other methods to solve this problem. From this point of view, this quota system is the best. However, Kang Youfu also thought of other problems, that is, how to collect taxes and ensure the implementation of the quota system. Many merchants can do anything for profit, and they have done smuggling and trading. They have no concept of collecting taxes, so how to control these?
Zhu Shenzhui had a plan for this. He told Kang Youfu that the solution to this problem was very simple. Border trade was not allowed to use cash. It was just a matter of following the method that Hengtong had used in border trade. In other words, although Hengtong was not directly involved in trade, it could be used as a platform for bilateral trade, especially Hengtong's bill bank. For bilateral trade, whether it was Mongolia or Ming, all materials had to be delivered to the designated location, and then Hengtong would value the materials according to their grade and issue Hengtong's bills as proof.

All specific trades were settled with Hengtong bills. In this way, the quantity and amount of goods of both parties, the scale of trade and even the amount of each trade were all in the hands of Hengtong. Since all the data were in Hengtong, they were also in the hands of Zhu Shenzhu. Commercial taxes and so on could be directly deducted proportionally during settlement. The amount of gold and silver after deduction was handed over with Hengtong silver bills, which completely avoided the possibility of tax evasion in private trade.

"I understand! I understand!"

After hearing this, Kang Youfu completely understood why Zhu Shenzhui said that Hengtong was not directly involved in trade. In this way, although Hengtong was not directly involved in trade, it controlled the trading platform. All trade, no matter how big or small, must be conducted through Hengtong. In this way, many loopholes were blocked directly from the source.

Moreover, Hengtong had implemented this operation before, and it posed no problem to Hengtong. It was just on a larger scale and involved more regulatory groups.

Zhu Shenzui's move was equivalent to cutting off the source of the trouble. Although he did not directly participate, he directly controlled the market and the platform. Through the Hengtong platform, both trading parties could directly grasp each other's vital points and were not afraid of anyone playing tricks.

In this way, not only can the collection of commercial taxes and other taxes be guaranteed, but the business of Hengtong Bank can also be expanded through this means. More importantly, using Hengtong bills (silver bills) for final settlement is equivalent to turning a large amount of gold and silver into the gold and silver reserves of Hengtong Bank through this means, thereby using a method similar to the previous Baochao method to make the silver bills issued by Hengtong become actual currency.

Kang Youfu had never thought that Zhu Shenzhui would use this method to solve the problem. He was very impressed and excited. In his opinion, if this method was adopted for border trade in Shanxi, could the trade in other provinces also be adopted in the future? If so, then as time goes by, Hengtong will become the richest business in Ming Dynasty, and even control the lifeline of Ming Dynasty's economy. And Kang Youfu's status and power at that time...? I dare not think about it, I dare not think about it!

As if he could see what Kang Youfu was thinking, Zhu Shenzhui smiled and told him that this situation was impossible and he would not let it happen. Although Hengtong was Zhu Shenzhui's industry, Zhu Shenzhui would never let Hengtong dominate the market and become too powerful to be eliminated.

Using Hengtong now is only temporary, and in the future this special kind of business, ticket shops, will not only be Hengtong. As time goes by, ticket shops will inevitably be gradually liberalized, and various large and small similar ticket shops will emerge.

In Zhu Shenzhu's view, Hengtong's role is to exist as the central bank of the future, rather than to operate as a monopolistic financial enterprise. This is just the first step. When the time is right, Hengtong's functions will gradually change, and the entire Hengtong will be split up in the future. The first step is to separate Hengtong Ticket Bank from Hengtong General Merchants. This is also the intention of Zhu Shenzhu to let Kang Youfu hand over Hengtong Shanxi General Merchants to others. After the separation, the original Shanxi General Merchants will become an ordinary local merchant, and Hengtong Tickets will be controlled by Kang Youfu. This is the ultimate goal.

In addition, taking into account local and border issues, in order to prevent Shanxi merchants from repeating the same old mistakes, a series of other arrangements must be made after opening border trade.

Among them, the commercial taxes and other taxes collected by Hengtong will be divided proportionally. Hengtong, as a platform, will charge 15% of this part as Hengtong's profit to ensure operation. The remaining 15% will be taken out and divided among the border troops, garrisons and the dispatched Jinyiwei in the customs and trade area.

The border troops took the lion's share, after all, they were responsible for the border and had a lot of pressure on military expenses, so they took about 7% of the total tax, and the remaining 8% was divided equally between the guards and the Jinyiwei. The three parties cooperated in this way, and the more taxes they collected, the higher the amount they got.

In addition, 70% of the remaining 10% was kept in Shanxi, that is, the provincial government, as local fiscal revenue. The remaining 60% was taken into the central government, but not through the Ministry of Revenue. A special account was opened directly in the head office of Hengtong Ticket House. This account was directly controlled by Zhu Shenzhui to avoid the money being lost inexplicably after it arrived at the Ministry of Revenue. Zhu Shenzhui could not trust the Ministry of Revenue at the moment, and he could only feel at ease when the money was in his own hands.

(End of this chapter)