I traveled with them to the Northern Song Dynasty

Chapter 354 My Darling Ye Shiyun

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Seeing that Zhao Yu was still looking for more ways to make money, Ye Shiyun was actually a little speechless.

In Ye Shiyun's view, among all the emperors of all dynasties, none were richer than Zhao Yu.

Moreover, no dynasty in history has been more prosperous than the Song Dynasty at this time.

Even so, Zhao Yu still had a bit of money to spend.

This shows how extravagant Zhao Yu was in spending money.

Fortunately, Zhao Yu did not build a garden or engage in unnecessary vanity projects.

Otherwise, Zhao Yu would likely have been condemned as arrogant, extravagant, and dissolute.

Even now, after Zhao Yu dies, he might be accused by the gentry who do not like him of being ambitious and warlike.

Zhao Yu was always well aware of this.

But what can be done about it?

As a time traveler, Zhao Yu was well aware that the path he had chosen was not wrong. Therefore, no matter how much money or effort it took, he had to persevere.

Moreover, Zhao Yu did not want to hide his actions. As early as the beginning of his reign, he ordered the historians to record everything he had done, whether good or bad.

Let's say that.

Even if someone were to discover that Zhao Yu had slept with his two sisters-in-law and had them bear his children, Zhao Yu would accept it.

In short, Zhao Yu had already decided that future generations could judge his merits and demerits as they saw fit.

After I die, I don't care about the deluge!

As for Ye Shiyun?
She wouldn't waste that time.

She transmigrated here to enjoy life, so why would she worry about such trivial matters?
Of course, Ye Shiyun was well aware that whether she was doing well or not, whether she was comfortable or not, was closely related to how well Zhao Yu was doing.

So, while enjoying Zhao Yu's kiss with her eyes closed, Ye Shiyun said, "If you want to make more money and start a business, that's difficult. It's like trying to quench your thirst with water from afar. There's only one way to completely solve the problem of money shortage for the Master's family."

Zhao Yu stopped kissing Ye Shiyun and asked her, "Where is the road?"

Ye Shiyun gave a disgruntled "humph" before saying, "Finance."

Zhao Yu, having experienced the information explosion, surely understood that finance is like the circulatory system of the economy and society.

And banks are the most crucial hub in this system.

Taking commercial banks as an example, their main businesses include accepting deposits and issuing loans.

Depositing money into a bank is providing funds to the bank, which then uses these funds to lend to businesses or individuals in need of capital, such as businesses needing funds to expand production or individuals wanting loans to buy houses or cars.

In this way, banks enable idle funds in society to circulate, achieving effective allocation of resources.

Besides banks, securities companies, insurance companies, trust investment companies, and fund management companies are also financial institutions, which together constitute a vast and complex financial system.

Securities companies help businesses raise funds by issuing stocks and bonds, and investors invest by purchasing these securities, thus realizing the flow of funds from investors to businesses; insurance companies provide risk protection for people by collecting premiums, providing financial compensation when people suffer accidents or major losses, and also invest a large portion of the premiums; trust investment companies manage and utilize trust assets on behalf of clients; fund management companies pool investors' funds and have professional fund managers invest in various assets, including stocks and bonds.

Of course, as a financial novice, Zhao Yu only knew this much. As for making money with this system, it was something that even a loser like him, who had never had a six-figure bank account in his previous life, would not know.

Zhao Yu continued kissing Ye Shiyun's snow-white neck, then found an opening and asked, "Doesn't my Great Song already have banks?"

More than a decade ago, when Zhao Mingcheng's father, Zhao Tingzhi, was in charge of currency reform, the Song Dynasty had already launched the Great Song Money Shop.

The money shops of the Song Dynasty were under the jurisdiction of the Three Departments and were backed by the imperial court. Although they were not as complete as the banking system of later generations, they had already begun to take shape in terms of financial circulation.

Its core function was to gather the idle money scattered among the people. People or merchants could deposit copper coins or silk that they did not need temporarily into the money shop and exchange them for a deposit slip. This not only eliminated the risk of hiding money at home, but the money shop would also give some interest as agreed. This was similar to how banks in later generations absorbed deposits and gathered scattered funds together.

At the same time, money shops would also lend to those in urgent need of funds. For example, if a caravan needed to purchase goods but did not have enough money, or a workshop needed to purchase equipment or hire craftsmen but was short of funds, they could borrow money from a money shop by pledging collateral, and repay the principal and interest within the agreed period.

This operation directs idle funds to areas with real demand, allowing businesses that might otherwise stagnate to continue operating. Principal and interest are repaid after profits are generated, effectively making the money "live." This is similar to the logic of banks issuing loans to support production and operations.

—At the same time, this also brought huge benefits to the imperial court and increased its fiscal revenue.

In addition, money shops also served the function of intercity remittance.

At that time, the Song Dynasty had a vast territory, and merchants frequently traded across roads and states. Carrying large amounts of copper coins, including gold and silver, was both inconvenient and dangerous.

Therefore, merchants can deposit funds in local money shops, exchange them for money tokens with a marked amount, and then exchange the money tokens for cash at the corresponding money shop upon arrival at their destination.

This eliminated the hassle of transporting money over long distances and reduced the risk of theft en route, essentially serving as an early form of money transfer and settlement, greatly facilitating commercial transactions. Although these services were simple, they had already built a preliminary bridge for the flow of funds. While the scale and scope of business of the Song Dynasty's money shops were still limited by the times compared to the diversification and standardization of later financial institutions—lending relied heavily on the credit of acquaintances, remittance coverage was limited, and there were no complex businesses such as securities or insurance—their core role in gathering funds and balancing surpluses and shortages already revealed an early form of finance.

Zhao Yu brought up the money shop to tell Ye Shiyun that they already had finance, so why did they need more finance?
Ye Shiyun said, "My intention is to completely liberalize money shops. Anyone who meets the requirements to open a money shop can do so, including members of the royal family. The court should focus on the big players and let the small ones go..."

Although the Song Dynasty's money shops are now distributed in major prefectural cities, state cities, ports, and overseas, their operation is still limited by old practices: lending relies heavily on collateral, and remittance vouchers are issued in cash. Moreover, because they are run by the imperial court, they lack flexibility.

To truly adapt the power of finance to the emerging industrial sector and the booming maritime trade, a different approach is needed.

In other words, new money shops were established in the name of the royal family, while the ban on private money shops was lifted, creating a multi-pronged structure with the existing Song Dynasty money shops.

According to Ye Shiyun, there are at least four advantages to establishing a royal bank:

First, Emperor Zhao Yu's personal involvement and the affixing of his imperial seal to the banknotes created a level of trust far exceeding that of ordinary merchants. Merchants both in the private sector and overseas would certainly be more willing to trust them. Even though the Royal Bank was located in the same port as the Song Dynasty's banks, this reputation allowed the Royal Bank to conduct trial lending based on its operations: workshops with new looms and mines with new smelting methods didn't need to rely solely on land and property as collateral; they could simply assess production capacity and orders to receive advance payments. While the Song Dynasty's banks, constrained by their "government-run" status, inevitably worried about being accused of "over-lending," the Royal Bank could use its "royal endorsement" to test the waters and pave the way for future financial reforms.

Second, the royal bank could take the lead in establishing "insurance" and "securities" systems: Merchants going to sea would deposit small sums of money with the bank; if their ships were damaged by storms, the bank would compensate them according to the contract—this was "insurance," mitigating the risks of maritime trade. Large workshops wishing to expand could have the royal bank issue "shares" on their behalf; after purchasing these shares, the people would share in the workshop's profits—this was "securities," allowing the pooling of public funds for major projects. These new systems were not easily implemented by the Song Dynasty's traditional banks; the royal bank's involvement was legitimate and, by leveraging royal resources, could integrate the efforts of merchants and artisans, making the implementation of these systems smoother.

Third, the Song Dynasty's official money shops, relying on their government status, lacked the desire for reform and development. If the imperial money shops were to operate alongside them with new systems and regulations, and private individuals were granted the right to establish money shops—private money shops, leveraging their local connections or relationships with merchants, could offer more flexible interest rates and simpler remittance procedures, possessing their own advantages. The coexistence of these three entities would inevitably create competition. To maintain its position, the imperial money shops needed to emulate the imperial money shops' "loan-based operation" and the flexibility of private banks; the imperial money shops, fearing private money shops would steal their profits, needed to refine their insurance and securities systems; private money shops, to survive, needed to surpass both official and imperial money shops in terms of reputation and efficiency. This cycle would gradually resolve the rigidity, limited lending, and systemic deficiencies of the old money shops through competition.

As for the distinction between the Royal Banks and the Great Song Banks, it needs to be clearly defined: the Great Song Banks still followed the old system, managing basic exchange and lending between officials and merchants, serving as the foundation for stable finance; the Royal Banks, on the other hand, focused on innovation, experimenting with new systems and filling gaps, serving as the vanguard in breaking the old order. Private banks, however, were allowed to develop on their own, and all compliant ones were permitted to establish themselves, allowing them to develop their strengths in interest rates and services.

In short, the three have their own roles and check and balance each other, and can gradually break away from the old state of "government-run and autocratic" and "no access for the private sector", and evolve into the form of modern financial institutions in later generations.

At that time, money will flow like a living river, which can meet the needs of mines, workshops, and ships. The funds for the Song Dynasty's expansion and industrial development will not be a worry.

Fourth, finance has always been one of the most profitable industries, if not the most profitable. It's fair to say it's the most profitable industry. Zhao Yu established the Royal Bank and promoted it vigorously, which will definitely create another extremely lucrative source of income.

The key point is that finance has the attributes of overdraft and flexibility.

When Ye Shiyun said that Zhao Yu was running out of money, she meant it literally, that he had no liquid funds. But this did not mean that Zhao Yu had no other assets.

It should be noted that Zhao Yu also possessed a vast amount of treasures, antiques, land deeds, factories, ships, restaurants, brothels, gambling dens, overseas assets, and so on...

However, although these items are valuable, they are not easy to liquidate. If you are in a hurry to liquidate them, you may have to sell them at a discount because it is difficult to find a buyer or because the buyer is trying to lower the price. Moreover, the trouble is that sometimes even if you sell them at a discount, it is difficult to liquidate them in large quantities in a short period of time, or they may even become "dead goods".

The advantage of finance lies in its ability to "turn the dead into the living."

In other words, if a royal bank were to act as an intermediary, these "inanimate objects" could be deposited into the royal bank as "pledge." The bank would assess the value and market worth of the objects, pay Zhao Yu in advance, and then redeem them later. There was no need to wait for a buyer or sell them at a discount; these "inanimate objects" could be transformed into readily available cash in an instant.

Even those items that are harder to sell—such as newly acquired large tracts of wasteland deeds overseas or iron molds that have not yet been cast in workshops—can be calculated by the money shop based on their potential profits: how much cotton can be grown on the wasteland in three years; how many looms can be made in a season if the molds are put into production? Based on this, advance payments can be made to allow the "unearned profits" to solve immediate problems.

In this way, all of Zhao Yu's countless "inanimate objects" could circulate through the royal bank, eliminating the worry of "having treasures but being unable to exchange them for money." When expanding the seas and needing to add ships, he would use coral as collateral to exchange for money to buy timber; when workshops needed to add craftsmen, he would use land deeds as collateral to advance wages. Money moved with need, and goods moved with money—this was the wonder of finance "turning stagnation into flow," far surpassing ordinary transactions.

To put it simply, this is equivalent to adding an "engine" to Zhao Yu's wealth, which would almost ensure that Zhao Yu would never lack money again.

Ye Shiyun also gave Zhao Yu a suggestion: if the court's money ran out, another currency reform could be carried out.

With the vigorous development of overseas trade and the expansion of the Song Dynasty's maritime territory, especially the discovery of two gold mines on Huazhu and Huangzi Continent (the latter has not yet been discovered, but it will be soon), this reform can use gold and silver as reserves to issue more paper money, and even lay the foundation for a bimetallic standard.

Ye Shiyun also told Zhao Yu that the best option was to adopt a gold standard, followed by a silver standard. However, the Song Dynasty did not have enough gold and silver, at least not enough for the increasingly powerful Song Dynasty.

In this situation, it would be difficult for the Song Dynasty to widely adopt either a gold standard or a silver standard. Therefore, the only option was to choose the less stable bimetallic standard of gold and silver, and then gradually transition to the gold standard in the future depending on the circumstances.

However, while the bimetallic standard had its drawbacks, such as relative instability and chaos, it also had its advantages:

Because it is a bimetallic standard, its monetary materials can be sourced from either silver or gold, ensuring an ample supply.

Gold can be used for large transactions, while silver can be used for small transactions, offering flexibility and convenience.

The two types of currency can complement each other;

It facilitates the stability of exchange rates with other currencies, enabling gold coin trade with European countries where gold is the primary currency, and silver coin trade with Asian countries where silver is the primary currency.

Ye Shiyun analyzed that the current economic situation of the Song Dynasty is very good, and there is no problem at all in issuing more currency.

In short, because Zhao Yu has Ye Shiyun as his precious asset, his problem of lacking money can be easily solved.

As Zhao Yu listened to Ye Shiyun's suggestions, he became more and more excited.

Smelling the fragrant and incredibly intelligent beauty in his arms, Zhao Yu silently thanked the deity who had brought him and the other five to this world. 'Thank you for letting us come here; otherwise, how could such a beauty belong to me?'

Zhao Yu intensified his kisses on Ye Shiyun, and his hands began to wander.

Before long, Ye Shiyun, panting heavily, continued to offer Zhao Yu advice.

When Ye Shiyun couldn't take it anymore and couldn't say anything more, the two of them ended up on the bed...

……

(End of this chapter)