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

Chapter 749 Financial Malpractice
Zhang Juzheng's silver-compensation policy was to convert all taxes from the original payment in kind into silver and cash, and at the same time abolish the Baochao system established by Zhu Yuanzhang.

The former does not seem to have a problem. After all, in the past, taxes were paid in kind. For example, farmers grew grain and paid grain in proportion, textile weavers and silkworm breeders paid silk, merchants paid silver or materials in proportion, and so on.

After the imperial court collected these taxes, which were mainly made up of materials, they still needed to be transported and sorted in a tedious manner, and then distributed, sold and finally exchanged for silver by the relevant departments. This greatly increased the labor intensity of government offices at all levels. In addition, many material reserves had a time limit. If they were not disposed of in time, the materials that had exceeded the time limit would be greatly reduced in value, or even become unusable waste.

This is also the reason why the Ministry of Revenue of the Ming Dynasty would clean up the warehouses every once in a while, select the materials that are not easy to store and sell them at a low price or even directly dispose of them. The waste of doing so was very serious. Zhang Juzheng saw this and in order to simplify the procedures and improve the efficiency of tax collection, he directly implemented the method of converting all taxes into silver in the reform. In other words, since Zhang Juzheng's new policy, all taxes in the Ming Dynasty are no longer paid in kind, but all are converted into silver.

This was quite beneficial to both the common people and the court, but Zhang Juzheng had not expected the hidden dangers in its implementation. When Zhang Juzheng was in office, such a policy was strictly implemented, but after his death, this policy began to have drawbacks. The main problem was that the assessment of the silver exchange rate was entirely in the hands of local officials, and the common people had no chance to change it. In order to profit from it, the officials calculated the silver exchange rate for ordinary people as high as possible, and increased the fire consumption of silver. However, they kept reducing the rate for the merchants and gentry who had colluded with them, making the burden on the common people heavier day by day. In the end, they could not pay the taxes and had to sell their fields and children, and eventually became homeless.

Apart from this, the abolition of Baochao was the only thing that could be done. The Baochao system was established by Zhu Yuanzhang and was vigorously promoted during the Hongwu reign.

However, in the early years of the Ming Dynasty, the country had been in a period of war, the finances were tight and there was a shortage of silver, so the court followed the example of the Song Dynasty's Jiaozi to promote Baochao. The promotion of Baochao had a good effect at the beginning, but due to the limitations of people's vision at the time and subsequent financial reasons, the court kept printing Baochao whenever it was short of money, which caused the Baochao to continue to depreciate, and finally caused a serious mismatch between the face value and value of the Baochao.

By the middle and late Ming Dynasty, the value of Baochao had depreciated a lot, and most people almost didn't want to use Baochao. However, due to the court system, they had to use it. This caused the credit of Baochao to be reduced to the point where no one wanted to use it.

Moreover, according to Zhu Yuanzhang's treasure note system, copper coins and treasure notes were the real official currencies of the Ming Dynasty. High-value metals such as gold and silver were not official currencies, and private transactions were prohibited. However, in the middle and late Ming Dynasty, due to the sharp depreciation of treasure notes, silver gradually replaced the role of treasure notes. The original currency system was already in name only. Whether it was private or official, silver as a currency to replace treasure notes had been quite recognized.

But the key issue is that Baochao still has the status of official currency. No matter how valuable silver is, it is not real currency. Even if there is a large amount of silver trading among the people, it is illegal for the Ming Dynasty officials. Only transactions with Baochao are legal.

Zhang Juzheng followed the trend and promoted the policy of abolishing Baochao and using silver as currency. On the surface, it was an improvement and achieved good results. However, even though Zhang Juzheng had talent, he was not a real economist. He did not expect that the implementation of his policy would cause a very serious consequence. The abolition of Baochao, the original official currency of the Ming Dynasty, completely replaced the role of Baochao as currency. In addition, because of the easy storage and high value of silver, it flowed into the hands of wealthy families and became a dead object for storing wealth, thus losing its original function of currency circulation.

If currency cannot circulate, or cannot circulate effectively, two problems will arise.

One problem was that the value of the currency itself began to rise sharply, exceeding its original actual value. Another problem was that there was a lack of silver in the market, which caused prices to rise and the court's income to drop sharply. Coupled with various other factors, the court could not effectively intervene in the currency market due to the lack of silver, including using a series of measures to regulate the economy.

Although Zhang Juzheng was an able minister, he was not a perfect man. It was normal that he did not consider the issues comprehensively in the New Deal due to his limited vision, which led to negligence in policy making. Moreover, when Zhang Juzheng was alive, these drawbacks were not revealed at the time because of his iron-fisted approach and strict implementation of policies. However, it was different after his death. Although his New Deal ended in failure due to his death, Zhang Juzheng's policy of replacing silver with silver and abolishing the treasure note system was still implemented, which had serious consequences.

The collapse of the Ming Dynasty economy was not because the Ming Dynasty had no silver, but because the Ming Dynasty's silver or wealth was not controlled by the court, but fell into the hands of the gentry class, the civil service group and the noble group. This made it impossible for the Ming Dynasty court to adjust the economy by issuing treasure notes as before, and could only alleviate it by increasing taxes and levies to extort silver from the people. Zhu Shenzhui only slowly figured out this situation later. Why did he split the original Hengtong into two and establish the Ming Royal Bank on the basis of the Hengtong Ticket Bank? At the same time, he spared no effort to promote the implementation of Hengtong silver notes in the northern provinces, and even gradually exerted influence in the south?
The purpose was to rebuild the economic system of the Ming Dynasty, and the fundamental way to build this system was to once again implement the Baochao system, thereby excluding silver as the official currency, strictly prohibiting private transactions of gold and silver, and replacing them with silver bills, thus taking control of the economy into their own hands.

Of course, it is not so easy to restore the original circulation of Baochao. After all, Baochao has long been a bad thing. The abuse of Baochao in the Ming Dynasty has reached an extreme, otherwise Zhang Juzheng would not have directly abolished this system. Baochao is now worthless and is not even hard to use to wipe one's butt. If Zhu Shenzhu directly ordered the restoration of the Baochao system, he would inevitably face opposition from all sides, and even cause great turmoil.

Zhu Shenzhui used silver bills to replace treasure notes, using the method of boiling a frog in warm water to slowly change the current situation. This was the only method he could use. At present, the Royal Bank of the Ming Dynasty had been established under the auspices of Kang Youfu, and the credit of Hengtong silver bills had also been recognized in many provinces of the Ming Dynasty. In addition, the border trade in Shanxi had been specified to be conducted through the silver bills of the Royal Bank of the Ming Dynasty, and silver was not allowed to be traded directly in private. This began to change the equivalent of the means of trade. At the same time, by absorbing private silver and replacing it with silver bills, the overall monetary system was established step by step, and then gradually promoted to various places.

The same will be true for overseas trade in the future. China's currency has always had a very high reputation among neighboring countries. Even now, Southeast Asian countries are still using copper coins from the Ming Dynasty, the Song Dynasty, and even the Tang Dynasty as official currency. The same is true for places like Japan and Korea. The copper coins of the Ming Dynasty are hard currency there. The outflow of a large number of copper coins has also caused a shortage of copper coins in the Ming Dynasty. The number of coins minted by the court each year cannot meet the demand, which is also a reason for the financial shortage.

Copper is not only used as currency, but also an important metal in industry. With the development of industrialization in the Ming Dynasty, copper is very useful not only in civilian but also in military industry. The role of copper in modern industry is quite large. There are not many copper mines in the Ming Dynasty, and copper is originally scarce. If copper continues to flow out in large quantities as currency, not only will the value of copper continue to rise, but it will also cause a shortage of copper.

In the future, the Ming Dynasty will use silver notes to replace the official currency and eventually become the official currency, not only internally but also externally.

Once the nature of silver notes as currency is determined and gradually accepted by all parties, the Ming Dynasty will no longer need to rely on gold and silver as circulating currency, and the demand for copper metal as a subsidiary currency will also be greatly reduced.

This is actually the most basic and simple economic means. In the era of information explosion in the 21st century, this economic means is not only for experts and scholars, but also for college students. Moreover, the use of paper money as circulating currency has many advantages. As long as paper money is not issued excessively and a certain proportion is controlled, the overall economic market can be effectively regulated, and the national economy can be controlled by the central government without being restricted by the people.

In addition, the internationalization of paper currency not only increases the national strength and expands its external influence, but also ties the economic lifelines of neighboring countries to the Ming Dynasty, allowing these countries to bear the economic burden of the Ming Dynasty and reduce the economic pressure on the Ming Dynasty itself.

This practice was very common in Emily in later generations. As the most important member of the international currency, the number of its issuance far exceeded the strength of its own economy. However, its value was extremely strong and was accepted by the world. The main reason was Emily's international influence and strong national strength. Through military and economic means, it allowed countries to share their debt ratios, maintain its own economic stability and currency strength, and thus carry out economic kidnapping and plundering from other countries.

Although Zhu Shenzhui was not an economics major, he had some basic knowledge of this. In particular, he started to prepare for this matter after he understood the main problems of the Ming Dynasty's economy. The purpose of establishing the Ming Dynasty Royal Bank was also for this purpose. However, it would not be effective in a short period of time to achieve this. It would take a certain amount of time for gradual influence and replacement. Judging from the current situation, it would probably take at least ten to twenty years to have initial results.

More haste, less speed, Zhu Shenzhui knew this very well, no matter how anxious he was, he couldn't achieve it overnight. In addition, he had to be careful not to offend the interest groups and prevent the counterattack of these interest groups, so he couldn't be impatient.

(End of this chapter)