My father, Li Shimin, please call me Crown Prince

Chapter 435 The Beginning of the Age of Exploration, Insurance Fraud
In the spring of the twenty-second year of the Zhenguan era, just as the monsoon winds of the South China Sea began to stir the sails of Guangzhou Port, a new decree from the Eastern Palace swept across the trading ports of the Tang Dynasty with the sea breeze—following the currency and credit reforms, Li Chengqian turned his attention to the turbulent ocean trade and introduced a new policy that was enough to overturn the rules of trade that had prevailed for thousands of years: "ship cargo insurance".

This new system, spearheaded by the Ministry of Revenue, was so straightforward that it astonished veteran merchants: all ocean-going merchant ships registered with the government were required to pay a "premium" of five percent of the cargo's value to the Ministry of Revenue before setting sail. In the event of storms, shipwrecks, pirate raids, or other unforeseen circumstances, the Ministry of Revenue would compensate for losses of up to seventy percent of the cargo's value from an "insurance pool." Half of the insurance pool's capital came from the premiums paid by merchants, while the other half was subsidized by the imperial court from customs duties.

When the news reached Yangzhou Port, the Persian merchant Arohan was preparing to ship a ship full of silk to the Abbasid Caliphate. He stroked his beard, looked at the notice posted by the Ministry of Revenue, and shook his head repeatedly: "Using copper coins to exchange for a piece of paper, saying they'll compensate if the ship sinks? This is even more absurd than the Tang Dynasty notes in Chang'an! Last year, my brother encountered pirates in the Strait of Malacca, losing both his ship and his cargo. Who could he complain to? The Tang court says they can compensate, but if the ship really sinks, what will they use to pay?"

Not only foreign merchants, but also many local maritime merchants in the Tang Dynasty adopted a wait-and-see attitude.

The Feng family, the largest shipping merchants in Lingnan, had been operating the shipping route from Guangzhou to Jiaozhi for generations and were well aware of the risks at sea.

Every year, three to five ships disappear in the eye of a typhoon or are looted by the "Kunlun slave pirates".

Feng Ang, the patriarch of the Feng clan, held the insurance policy from the Ministry of Finance and sneered, "Five percent premium? I only lose one ship every ten years. The premium I pay is more than the actual loss! Is the imperial court trying to squeeze another layer of profit out of the insurance?"

When the doubts reached Chang'an, they indeed stirred up trouble in the imperial court once again.

The newly appointed remonstrating official of the Censorate immediately submitted a memorial: "Your Majesty, merchants pursue profits and should therefore bear risks. Does the court's guarantee of the cargo on ships not encourage them to take risks?"

"Furthermore, if the premium pool is depleted, will the national treasury have to fill the hole? This is competing with the people for profit and undermining the foundation of the nation!"

The new remonstrating officials were promoted from humble backgrounds. Based on the previous system of remonstrating officials supervising all officials and thus being promoted based on their performance, they were clearly capable of being promoted to the Censorate, and their 'political achievements' were outstanding.

The path to promotion for remonstrating officials is different from that of other officials. Their achievements are based on how many corrupt officials they have investigated, and they have to climb up the ladder by standing on the corpses of others.

This person was born to be at odds with other officials, so much so that this once 'famous' remonstrating official in the court has now become a thorn in the side of most officials.

Thus, the current group of remonstrating officials is essentially tied to the current crown prince.

Even the newly appointed remonstrating officials said so, which shows how impractical the officials felt about the Crown Prince's decree.

The remaining forces of the Five Clans and Seven Families also seized the opportunity to launch an attack, saying that "ship cargo insurance" was "using falsehood to make up for reality, deceiving oneself and others," and even brought up the sentence in the Book of Han, "Those who compete with merchants for profit are traitors to the country," to subtly criticize the crown prince for valuing commerce over agriculture.

At the political council meeting in the Zichen Hall, Li Chengqian slammed the memorial on the table and glanced at the assembled officials: "The customs duties paid by maritime merchants to the court each year account for 30% of the tax revenue of Lingnan Circuit. When their ships sink, not only do the merchants go bankrupt, but the court also loses tax revenue, and the coastal people lose their livelihoods."

"Insurance is not a safety net, it's mutual assistance. It allows a hundred businessmen to each contribute a share to help the unlucky businessman make a comeback. That's how you protect businesses, and it's also how you protect the country."

He looked at Dai Zhou, who was in charge of finance: "Last year, the goods lost by Lingnan merchants due to shipwrecks amounted to two million strings of copper coins, causing the price of silk to skyrocket this spring. If insurance is implemented, the annual premium income will be about five hundred thousand strings of copper coins, plus the five hundred thousand in subsidies from the imperial court, which will be enough to cover the losses in a normal year. Minister Dai, can you do the math?"

Dai Zhou bowed and said, "Your Highness's calculations are extremely accurate. If trade can be stabilized, tariffs can increase by at least 20%, far exceeding the subsidy of 500,000."

"As for taking risks?" Li Chengqian sneered: "Merchants dare to sail their ships into the deep sea because of their courage, not luck."

"With insurance, they dared to build bigger ships, take longer routes, and sell Tang Dynasty silk and porcelain to more distant places. This was not an adventure, but an expansion of territory, only using merchant ships instead of swords and guns!"

Hearing the Crown Prince say this, the officials had nothing to object to.

The current court has long since become a one-man show for the crown prince.

Regardless of whether it makes sense or not, as long as the Crown Prince insists, others can only offer suggestions at most.

Moreover, the matter of the seagoing vessel does not conflict with the interests of most aristocratic officials; it is sufficient to simply raise the idea.

In order to implement the insurance system, Li Chengqian once again resorted to an iron fist.

The Crown Prince decrees that all merchant ships registered in ports such as Guangzhou, Yangzhou, and Mingzhou that do not participate in insurance will be subject to an additional 30% tariff.

At the same time, the Huitong Company made its accounts public, posting monthly premium income and claims payouts publicly, with officials from the Censorate supervising the process to prevent embezzlement.

Most importantly, he needs a "living example".

Three months later, the opportunity came.

One of Feng’s merchant ships was en route to Srivijaya when it encountered a typhoon. The ship broke apart, and the crew drifted for several days clinging to planks before being rescued, but the cargo sank to the bottom of the sea.

Feng Ang had already given up hope, but with a try-it-and-see attitude, he submitted a claim to the Huitong Company.

Unexpectedly, seven days later, officials from the Ministry of Revenue arrived with Tang Dynasty notes worth 700,000 copper coins, offering 70% compensation based on the goods' estimated value of 1 million coins. Feng Ang touched the seemingly light Tang notes, feeling their weight, and tears streamed down his face: "The court... really compensated us?"

The news spread like wildfire, reaching all the treaty ports in an instant.

Arrohan immediately went to the Transaction Bureau and bought insurance for all his merchant ships.

Merchants who had initially been observing also came to register their goods with their lists.

The premium pool of Huitong Company quickly became full, and 800,000 guan were received in the first month.

The far-reaching impact is reflected in the shipyard.

In the past, when shipbuilders built ships, they only sought to make them "cheap and durable," and dared not use new technologies or materials, fearing that they would lose everything if the ship sank.

Now that insurance provides a safety net, businesspeople are starting to boldly pursue innovation.

The shipyard owner, surnamed Zhang, spent a lot of money to hire Li craftsmen from Lingnan who knew the "keel reinforcement" technique. The ships they built were 30% stronger than before.

Minnesota shipwrights even experimented with lining the bottom of ships with copper to prevent sea worms from eating them—these innovations required additional investment, and insurance gave them the confidence to try and fail.

In less than six months, the port of Guangzhou has undergone a complete transformation.

The tonnage of merchant ships docked in the port has increased by an average of 20% compared to last year, and more and more of them have the words "Huitong Insurance" printed on their sails.

Merchants also began to insure their spices and ivory through the Tang Dynasty's insurance system. In the "foreign merchant district" of Chang'an's West Market, discussions about "insurance premiums" and "compensation" replaced the previous curses against pirates.

Looking at the "Monthly Report on Ocean Trade" sent from the south, Li Chengqian noted that shipping routes had extended to the Red Sea coast, tariffs had increased by 30% year-on-year, and more than 20 new shipyards had opened.

He knew that the insurance system brought not only the safety of merchant ships, but also the outstretched arms of an empire toward the sea.

Of course, the criticism never stopped.

Some say that merchants made a fortune through government insurance, while farmers still paid heavy taxes.

Some people worry that if a series of natural disasters and maritime disasters occur, the insurance pool will be depleted, and the imperial court will go bankrupt as a result.

Even Li Shimin said to Zhang Anan in the Ganlu Hall: "He is gambling with the fate of the nation. He is betting that the gifts the sea gives to the Tang Dynasty can outweigh the swallowing of the storms. If he wins, it will be a maritime empire; if he loses, it will be an abyss."

But Li Chengqian seemed unconcerned. In his reply to the Ministry of Finance, he wrote: "The sea is the source of all the world's wealth. Danger and profit coexist; those who avoid danger will lose, while those who navigate danger will gain." At the end of the reply, he added: "Order the Ministry of Works to take the lead in compiling 'New Techniques for Ship Construction,' and promote the use of watertight compartments and compass navigation, so that the ships of the Great Tang can not only withstand storms but also know their course."

When the monsoon winds blow again in the South China Sea, more Tang Dynasty merchant ships bearing the "Huitong Chengbao" sails are breaking through the waves and heading towards seas that have never been touched by the Central Plains dynasties.

Behind them lies the Tang Dynasty, which is redefining "the world" with its systems and courage.

The small pebble of commercial insurance has created ripples in the long river of history, which are spreading outwards, foreshadowing the coming of a new era belonging to the ocean and trade.

In the midsummer of the twenty-second year of the Zhenguan era, the docks of Guangzhou Port were filled with the steam of pine wood and tung oil.

Thirty newly built "Sea Falcon" ships are being launched one after another, with the eagle beaks carved on their bows painted in black, gleaming coldly in the sunlight.

This is the core combat force of the "new navy" strongly promoted by Li Chengqian. The ship's hull is two zhang wider than the old-style tower ship, with twelve bronze cannons mounted on the deck. The bottom of the ship is covered with copper plates to resist corrosion, and even the sails are made of hemp cloth soaked in tung oil.

Such a fleet would be truly invincible on the high seas today.

After all, it was still several hundred years before the Age of Exploration that followed, until Zheng He's voyages to the Western Ocean during the Ming Dynasty.

To put it another way, even though current shipyard technology is somewhat inferior to that of later generations, a fleet equipped with cannons like this would still be invincible even in the Age of Exploration.

"Each ship is equipped with fifty archers, twenty gunners, and three 'navigation students' who understand astronomy."

Cui Dunli, the Vice Minister of War, stood on the dock and read the Crown Prince's decree to the naval captain: "His Highness the Crown Prince said that the new navy will not patrol the inland rivers, but will go to the more distant seas."

"Any merchant ship flying the flag of the Great Tang Dynasty may send a signal for help when encountering pirates. Any naval force that fails to send troops upon seeing the signal will be executed by the captain!"

Upon hearing this, the Persian merchant Arohan on the dock tightened his grip on the abacus slightly.

He had just purchased "ship cargo insurance" for three merchant ships, and now, looking at those dark-muzzled sea hawks, he suddenly felt that the words "pirate plunder" on the insurance policy from the Huitong Company had become insignificant.

The formation of the new online army has been much faster than the government and the public expected.

Li Chengqian selected elite troops from the Twelve Guards, recruited "frogmen" familiar with water from the Li tribes of Lingnan, and even arranged for fine horses to train "cavalry archers" on the ships.

This was to facilitate cavalrymen boarding ships to engage the enemy during boarding maneuvers.

Even more astonishing is the innovation within the shipyard.

The craftsmen divided the ship's bottom into more than a dozen watertight compartments according to the blueprints sent by the Crown Prince. Even if a compartment leaked, the whole ship would not sink.

The navigation compass was no longer a blurry fish-shaped compass, but a bronze-made dial that was accurate to the inch.

Li Chengqian published in the Chang'an Gazette: "The Maritime Silk Road cannot rely solely on merchants to forge their own path; the imperial court must provide them with a 'protective umbrella'."

But as soon as this protective umbrella was opened, some people started to have wicked ideas.

In early autumn, Huitongsi received a report from Arohan.

His merchant ship, the "Persian Star," encountered pirates in the South China Sea. The cargo was stolen, and the crew escaped in small boats.

According to the policy, Huitong Company is required to pay out 700,000 guan, which is almost several months' income for the insurance pool.

The officer in charge of investigating the case is Cai Yu, a captain in the new navy.

He was once a student of the Tang Dynasty Martial Arts Academy.

The squad leader of the first batch of squads to leave the battlefield.

He led two sea gyrfalcons to search the reported area for three days, but only found a piece of ship plank with suspicious burn marks on it.

“Ships that were actually looted by pirates either showed signs of a struggle or left behind cargo wreckage.”

Cai Yu stood on the deck, gazing at the azure sea: "This ship looks like it was burned down by itself."

Even more suspicious are the crew members' testimonies.

All seven Persian crew members said the pirates were Kunlun slaves, but their descriptions of the pirate ship's appearance differed; some said it had black sails, while others said it had red sails.

Cai Yu had the confessions translated into Chinese and discovered that three of them mentioned hearing an explosion before the ship sank.

This is definitely not the method of pirates; it sounds more like a salvo of naval cannons firing.

It's the navy conducting artillery drills.

Three days later, the frigate Arohan arrived in the South China Sea.

Cai Yu had someone place the ship planks they had found in front of him: "This piece of pine wood was taken from the stern of the ship. The fire marks on it are from the inside out, so it was definitely not set on fire by pirates. And this copper nail, the stuff on it is not seawater, but silt from a freshwater river. Your ship was never in the deep sea; it was taken apart near the river mouth."

Aro's face turned ashen, but he still stubbornly insisted, "Commander Cai cannot wrong me based on a mere piece of wood!"

Cai Yu sneered: "Then let me show you the evidence."

Several Li people and frogmen pulled a sealed wooden box from the sea. Inside was the fine silk that Arohan had reported as "robbed," and it was stamped with his shop's seal.

“We found it in a cave on a deserted island, where your crew’s wine jug was also found.”

It turned out that, seeing the new navy's tight escort and the disappearance of pirates, Aro conspired with his crew to sail the ship to a remote sea area, dismantle valuable goods and hide them, then set the ship on fire to stage a robbery in order to defraud the insurance company.

He thought he had done everything perfectly, but he didn't expect the new online army's frogmen to be able to dive and find evidence, nor did he expect that the route recorded by the compass would become irrefutable evidence.

"According to the new policy's 'Insurance Fraud Law,' those who commit insurance fraud will be fined three times the premiums paid and sentenced to ten years in prison."

Upon hearing of this first insurance fraud case, Li Chengqian ordered: "Have Arohan's crimes engraved on a stone tablet and erected at the Guangzhou port, so that all foreign merchants can see that the Tang Dynasty's insurance policies can ensure safety and also deter wickedness."

On the day of the execution, merchants from Guangzhou Port came to watch the spectacle.

Aruohan, chained to the stone tablet, watched as his silk shop was raided and confiscated by the authorities. He couldn't help but cry out, "I thought the Tang Dynasty's navy was only good at fighting, but I never expected them to be so good at investigating cases!"

(End of this chapter)