Chinese New Year

Chapter 1446 Tortoise Coin
In the last few days before the New Year, the leaders of the Shuofang and grassland tribes all came to pay homage and presented many gifts.

The Northern Route Army didn't actually loot much. The reason was simple: they were poor. The only valuable things in their tribes were tributes they received from passing merchants, mostly exotic items, and how to convert them into cash was a problem.

Moreover, there aren't many merchants traveling across the grasslands these days; the most popular route is still the Shule, Yutian, and Shanshan (Loulan) route.

Therefore, they mostly robbed livestock, and kept some silk, gold and silver for themselves. They used the artworks and handicrafts that were difficult to sell as gifts.

Shao Xun didn't take it seriously and returned the favor by giving them silk, spices, and sugar.

The Tuoba tribe, known for its bravery in battle, received kelp from Goguryeo as a reward, and Tuoba Kefu's son, Tuoba Fengtian, was appointed as the eighth-rank official in charge of the Sangziyuan.

After a reward, the barbarians were all convinced.

If you fight bravely and make meritorious contributions, you will be rewarded and given an official position. So next time, you can give it a try.

As long as the current emperor is still alive, he can't be wrong.

After seeing off this group of people, Shao Xun summoned Goguryeo's younger brother, Go Wu, and arranged for Zhou and Yu, the mother-in-law and daughter-in-law, to meet with him.

Gao Wu has almost become a "business trip expert". All year round, he has nothing else to do but run to the Central Plains to retrieve his mother.

Crown Prince Shao Jin had privately advised that Zhou be released, while keeping Yu would be fine, but Shao Xun refused.

The crown prince dared not offer any further advice.

My father didn't inherit the empire from his ancestors; he built it himself. If you anger him, he's really capable of doing some things.

So Gao Wu could only leave disappointed.

The person Shao Xun actually spent time meeting was Li Zhao, a scholar from the Prince Zhao's residence. This man was the younger cousin of Li Yong, the magistrate of Lingzhou, and came from the Jiangxia Li clan. He had previously lived in Chang'an, and this time he was ordered to come to pay homage to the emperor, bringing with him fifteen silver coins.

Shao Xun thought to himself, "What a brat! He's only been here a few months and he's already got silver coins. It seems like he's putting most of his energy into the economy."

“These are five designs of the new coins, three of each. Please take a look, Your Majesty,” Li Zhao said, respectfully presenting fifteen silver coins.

Shao Xun had five-colored silver coins spread out on the table and examined them carefully.

The silver coins were made using the same process, but they were a bit rough and not very round. They were mixed with other metals, such as copper and tin, and their function was very limited.

Shao Xun held it in his hand and weighed it; it was about five or six grams, actually quite small.

In the Central Plains, this silver coin would probably be worth several hundred or even a thousand coins, but in the Western Regions, it would be worth far less. Silver and copper were cheaper there than in the Central Plains, but silver was much cheaper.

This is because the price ratios of precious metals differ in different regions, creating arbitrage opportunities.

But let alone the Middle Ages, even a thousand years later, this arbitrage opportunity still exists. It does not prevent many countries from minting legal tender, nor does it have a particularly bad impact on any country.

Firstly, there was government crackdown; secondly, there was the cost issue; and thirdly, ordinary people didn't have the resources to arbitrage. Only large colonial trading groups like the Dutch East India Company could reap huge profits by transporting large quantities of copper by sea. In fact, the copper they obtained in Japan wasn't used to mint coins, but rather to cast cannons for the various parties participating in the Thirty Years' War. This was because at that time, only England preferred to cast iron cannons, while other countries preferred to cast cannons using copper alloys.

Taking silver from Gaochang to the Central Plains to buy copper in exchange for silver is not a profitable business if you don't sell in large quantities. If you do sell in large quantities, you will face the problem of land transportation costs and the risk of being seized along the way. It is not something that ordinary people can do.

Of course, the practice of buying and selling in parallel will certainly exist, and may have even existed before. For example, merchants from the Western Regions would exchange silver for copper coins in the Central Plains, and then exchange them back for silver in the Western Regions. However, this was done incidentally while doing business, not intentionally, and the profit was not much, so it was perfectly acceptable.

Shao Xun finally narrowed it down to two types: one with a very abstract Tianshan pattern, and the other with a Q-version turtle; both designs were quite outrageous.

After carefully comparing them, he finally pointed to the tortoise-shaped coins and said, "This one will do. The other four types will be destroyed and discarded."

"Yes, sir," Li Zhao replied.

The emperor's intention was not merely to destroy the silver coins before him, but to destroy even the coin-minting molds made in Gaochang. From this day forward, Gaochang would begin minting its own tortoise-shaped coins.

“Dragon coins, tortoise coins, and copper coins are all official currencies of the Great Liang Dynasty, which I call ‘legal currency’,” Shao Xun said. “For example, the dragon coin weighs four taels. A four-tael dragon coin is legal currency and can circulate throughout the country. A four-tael Zhu Ti silver coin is not legal currency and cannot be used to pay taxes or for trade, etc.”

"Indeed, many people may disagree with what I'm saying. If two merchants are buying and selling, and one presents a large ingot of silver, the other will most likely accept it. But you must understand that legal tender is legal tender, and silver is silver; they cannot be treated the same. Even the Persians, Sogdians, Kushans, and the Qin people understand this principle, so you should not dismiss it."

After Shao Xun finished speaking, he asked, "Has Gaochang received that batch of deposited silver?"

"The silver stored in the Kucha mines, totaling 6,740 taels, has been received," Li Zhao replied.

“That’s enough for Gaochang.” Shao Xun waved his hand and said, “You can mint all of it into silver coins and store the copper to mint copper coins. Be careful when sending it out, so as not to cause prices to skyrocket and the people to complain.”

"Your Highness said—" Li Zhao glanced at Shao Xun and said, "If the people exchange their old money for new money, there will be no major problems."

Shao Xun grunted and said, "I'm afraid we won't be able to exchange it all." He had once carefully considered how much currency a society needed.

At the time, he was unaware of this, but later, in the 16th and 17th centuries, the British conducted surveys and statistics, and the answer was that one-sixth of the total wealth of the society was needed at that time.

In addition, the British at the time also concluded that the faster the currency circulates, the less currency is needed, and the slower the currency circulates, the more currency is needed. When commercial activity drops to its lowest level, the government needs to continuously inject new currency to keep the social economy from collapsing.

Today is an ancient agricultural society where people are accustomed to bartering, but there are also increasingly prosperous commercial activities. Shao Xun doesn't know exactly how much currency is needed, and it's not something that can be figured out under the current conditions.

However, over the years he has paid close attention to the grain prices in Luoyang and Bianjing. The lowest price for a dou of rice was more than ten coins, while the highest price was tens or even a hundred coins. This was due to both the supply of grain and the monetary factors.

This amplitude is actually not that large.

During the reign of Emperor Gaozong of Tang, there was a year of bumper harvest, and the price of rice dropped to three coins per dou (a unit of dry measure), while a money shortage also occurred that year. Such extreme prices were obviously abnormal, but the officials of the court submitted memorials to congratulate the emperor, claiming it was a prosperous era, on the grounds that the price of rice had never been so cheap before.

This might make sense, because there has indeed been a bumper harvest, but there have been bumper harvests before, but none have been this cheap.

In an agrarian society where barter was the norm, ordinary people did use copper coins. In fact, in addition to the rent, labor service, and tax system, there were some cash taxes levied during the Tang Dynasty. Moreover, it was impossible to barter every time one went to the market, and not everyone accepted cloth and silk. Overall, a family would have spent more than two hundred copper coins in cash each year.

The price of rice was three coins per dou (a unit of dry measure), which was actually a severe form of deflation and caused great damage to the economy; at the very least, farmers lost money.

This was similar to the situation in northern China after Zhang Juzheng's reforms during the Ming Dynasty. There was a severe shortage of currency in the market, and deflation was rampant. Meanwhile, ordinary people still had to find ways to raise silver to pay taxes, which was truly a terrible blow.

The price fluctuations of grain in the Great Liang Dynasty were relatively small. Shao Xun thought about it and realized that virtual currency (Dragon Coin) had made an indelible contribution, freeing up a large number of copper coins that were previously held by merchants.

As to how much currency Gaochang actually needs, Nianliu will have to figure that out for herself.

Barring unforeseen circumstances, Gaochang Kingdom should experience inflation year by year. However, if Nianliu sends more people to crack down on the use of silver plates, silver bottles, and silver bowls for transactions and gradually strengthens the status of the legal tender, it can still be somewhat curbed.

To put it bluntly, fiat currency is a tool for government regulation.

Theoretically speaking, even if a million taels of silver were imported into Gaochang overnight, as long as it wasn't minted into legal tender and put into the market, that million taels of silver wouldn't be currency and wouldn't have a significant impact on prices—of course, this is only in theory; in reality, it depends on your methods.

In short, without legal tender, there is no economic sovereignty, and your "central bank" is not in your own hands.

Thinking of this, Shao Xun asked someone to bring him paper and pen, and wrote a letter to Nian Liu, offering some of his suggestions.

After writing it, he had his secretary, Wang Xizhi, make a copy for archiving.

His correspondence with Nianliu on financial and economic matters will be archived and recorded. With enough correspondence, it can be compiled into a book. Future generations who are interested can retrieve and read the archives.

"Take this letter to Nianliu," Shao Xun said. "Next January, I will issue an edict to establish Gaochang as a fiefdom, governing the two prefectures of Gaochang and Yiwu, and concurrently overseeing the Later Cheshi Kingdom."

"May I ask Your Majesty, where is the capital of Yiwu Prefecture, and how many counties does it govern?" Li Zhao asked after receiving the letter.

"Didn't Nianliu station two thousand hereditary soldiers in the three garrisons of Yiwu, Rouyuan, and Anmin?" Shao Xun said, "The three garrisons will all be upgraded to counties, with Yiwu as their capital, along with the four counties of Gaochang, and will be granted to my son. The two towns of Jinman and Pulei within the territory of the Later Cheshi Kingdom will each be staffed with one thousand soldiers, recruited from the Central Plains, and will be upgraded to counties after the situation stabilizes."

"I understand," Li Zhao thought to himself with secret delight.

Judging from the Emperor's intentions, the Later Cheshi Kingdom will be abolished sooner or later and become a prefecture under the jurisdiction of Gaochang Kingdom. In this way, Gaochang Kingdom will have more than 50,000 people. With the soldiers starting families and the officials moving some of their families there, the population may reach 60,000 to 70,000.

In the Western Regions, this was no small country; it was at least stronger than Yanqi and about the same size as Khotan. If managed properly, their descendants could live even better lives.

After gesturing for Li Zhao to leave, Shao Xun sat for a while before going to a side hall separated by a wall.

Pei Lingyan was drawing and writing when she saw Shao Xun come in. She asked, "Are you tired?"

Shao Xun sat down next to her and said, "How can you complain about being tired when you're doing something?"

When will you return to Luoyang?

“We’ll have to wait,” Shao Xun said. “I’ve already ordered the Silver Spear Left Battalion to move west. Next spring, the various garrison units will also send 10,000 men west, and we’ll also need to transport some grain. If I’m not here to oversee things, things won’t go so smoothly.”

"Don't get tired."

“It’s the New Year, so even if I wanted to, I couldn’t be tired,” Shao Xun said. “After New Year’s Day, I’ll go back to Mount Li and continue being that debauched and tyrannical ruler.”

Pei Lingyan glanced at Shao Xun with a slightly reproachful look.

Shao Xun laughed heartily, sat with him for a while, and then returned to the main hall to write a letter to the Crown Prince.

(End of this chapter)