The Ming Dynasty's Five Hundred Years

Chapter 225 The Fiscal Budget System of the Ming Dynasty
The grand court assembly, which everyone had been eagerly anticipating, came to a close, and the list of candidates for the Confucian Temple was subsequently announced to the world. Soon after, the events that took place during the assembly began to circulate among the people.

At the grand court assembly, Jian Yi, the Minister of Personnel, and Li Xianmu, the Right Vice Censor-in-Chief, clashed fiercely, and the School of Mind and the School of Principle completely broke apart and became enemies.

It swept across the entire world like a whirlwind!
Especially after the autumn imperial examinations and the announcement of the results from each province, the candidates from various provinces who were preparing to participate in the metropolitan examinations went to the capital. At this critical juncture, no one could suppress their mutual attacks.

After the Grand Court Assembly, Xia Yuanji, the former Minister of Revenue, was unexpectedly transferred to the position of Left Censor-in-Chief, in charge of the Censorate, while Li Xianmu, the Right Censor-in-Chief, was promoted to Minister of Revenue, officially becoming one of the Seven Ministers of the Ming Dynasty. He naturally relinquished his position as Grand Secretary of the Inner Cabinet.

Among the Seven Ministers, Li Xianmu and Zheng Huan, the Minister of Rites, were political allies who advanced and retreated together. They also had the support of at least three Grand Secretaries of the Cabinet, and thus they had already formed a powerful political force in the court.

After being promoted to Minister of Revenue, Li Xianmu was so busy that he barely had time to breathe. With only three months left until the end of the year, he had to review the financial situation of the entire Ming Dynasty and give a general report to the emperor at the year-end financial meeting. If he relaxed even slightly, he might not be able to complete the task.

The task of contacting the scholars in the capital naturally had to be left to others. Even the matter of reforming the imperial examination system had to be put on hold for the time being, to be considered again after the year-end financial meeting.

Time flies, autumn deepens, and winter snow falls. The seventeenth year of Yongle is drawing to a close, and it is the end of the year once again.

……

Li Xianmu exhaled a slight chill, feeling quite emotional. It was as if Heaven had been kind to them, as the Ming Dynasty had been spared any disasters this year.

"Grand Minister, please come in quickly."

"Thank you for your trouble, Eunuch Hong."

Li Xianmu reached out and took off his bright red cloak, handing it to a palace servant in the hall. Then he went to a side hall of the Huagai Hall. When he pushed open the door, he saw that all the ministers and others had already arrived. He quickly apologized and then sat down in the first seat on the left.

Normally, the Minister of Revenue would not be allowed to sit here, since both the Minister of Rites, nominally the head of the Six Ministries, and the Minister of Personnel, actually the head of the Six Ministries, held higher positions than the Minister of Revenue. However, today is a finance meeting, and as the Minister of Revenue, he should naturally be ranked first.

Before long, the emperor came out from the rear hall and sat down in the first seat. Then Zhu Zhanji and his son Zhu Gaochi also sat down on either side to observe the proceedings.

"Everyone's here." Zhu Di glanced around and said casually, "Then let's begin. Minister of Revenue, please give a brief introduction first."

After bowing to everyone, Li Xianmu went straight to the point and said, "I am grateful for His Majesty's trust in me and his appointment as Minister of Revenue. In the three months since then, I have not done much, except to review the Ministry of Revenue's accounts over the past few years."

Let me first talk about the silver imported into our Great Ming from Japan over the past few years. The output of the Iwami Silver Mine has been gradually increasing. According to the data provided by the relevant department, the annual output of silver from the Iwami Silver Mine has now reached more than ten million taels. Of these, two million taels were left to the King of Japan, nine million taels were directly transported back to the Great Ming, three million taels were put into His Majesty's private treasury, and six million taels were put into the national treasury.

The two million taels of silver that the Japanese king used to purchase silk, porcelain and other goods from the Ming Dynasty were all deposited into the national treasury. In other words, in the seventeenth year of the Yongle reign, a total of eleven million taels of silver were imported into the Ming Dynasty.

This has greatly alleviated the financial difficulties of our Great Ming Dynasty, all thanks to Your Majesty's wisdom.

The ministers and the emperor in the hall couldn't help but smile. The incident with Japan a few years ago now seemed to be the most correct thing to do, and the finances of the entire Ming Dynasty had improved as a result.

"The smelting scale at Iwami Silver Mine can still be expanded. If the number of people can be expanded to 100,000 or even 200,000, the output may reach 20 million taels. Then the Ming Dynasty will never lack money again. As for the miners, we can convert the criminals who have been exiled to mining. It is a waste not to use manpower. We can also let more local Japanese people come to mine. Just give the Japanese king more money. Their lives are not worth much."

Li Xianmu said it casually.

Mining is a deadly job, especially in ancient times when there were no protective measures. In recent years, no fewer than 10,000 people have died or been maimed while mining in Yinshan.

The mine shafts were already littered with bones.

Two hundred thousand people.

Zhu Di pondered, "If the number of people working at Yinshan reaches this level..."

Even if many of those mining are slaves, there will certainly be many Ming Dynasty people there.

Including family members and others, the number would inevitably exceed 300,000. There are few cities of this size in the entire Ming Dynasty.

Building such a city around Yinshan would be a huge challenge, especially considering the supporting infrastructure and provisions. However, considering the enormous profits from silver, Zhu Di decided: "Silver is crucial to the Ming Dynasty. Within five years, expand the number of people involved in smelting and mining to 200,000. After New Year's Day, have the Japanese envoy bring the decree back to Japan."

"Yes!"

The cabinet members responded in unison.

Li Xianmu continued, "Your Majesty, this year's salaries for officials will be supplemented with silver from the amount of paper money, and a portion of the paper money from the past two years will also be converted into cash."

This was considered a good policy, which greatly encouraged the officials. Compared to real gold and silver, no one wanted that worthless paper money.

"The tax revenue in each province remains similar to that of previous years." The Ming Dynasty collects taxes in kind, and unless it is a year of disaster, there are basically no changes.

"According to last year's plan, collecting silver and copper coins in Southern Zhili to replace in-kind taxes was quite successful, with about one million taels of silver and two million strings of copper coins collected."

Zhang Juzheng's Single Whip Law used silver as the tax base and did not collect taxes in kind, and many people could see the advantages of this policy.

Li Xianmu had already submitted a memorial last year, but it was only implemented on a trial basis in Southern Zhili.

"Good!" Zhu Di was genuinely pleased this time. "Since it can be implemented in Southern Zhili, can it be extended to the whole country?" "Your Majesty, no."

Li Xianmu immediately stopped Zhu Di's idea and solemnly said, "Your Majesty, although the import of silver is gradually increasing, most of the trade only takes place in coastal cities."

Therefore, it can only be implemented in the provinces south of the Yangtze River, as well as in Fujian and Guangdong provinces.

The people in those inland provinces don't have enough silver reserves. If the imperial court insists on collecting silver, they will have no choice but to sell their grain and other goods at a low price to exchange for silver, which is equivalent to imposing a heavy tax on them!

Reminded by Li Xianmu, Zhu Di also came to his senses. "Xianmu, what you said makes sense. So, will it always be like this from now on, collecting silver taxes along the coast and in-kind taxes in the inland areas?"

Li Xianmu shook his head and said, "Your Majesty need not be anxious. Changing the tax system is not something that can be done overnight. I will explain it to Your Majesty in detail after the finance meeting."

Upon hearing this, Zhu Di could only suppress his questions and continue listening to Li Xianmu speak. The others in the hall exchanged glances, their expressions varied.

After Li Xianmu finished speaking, each government office began to report its expenditures for the year. Li Xianmu listened with a frown. After the Ministry of Works finished speaking, the emperor would have to confirm that the expenditures were normal. If there were any questions, the minister of the relevant government office would answer them.

Once everything is settled, the expenditure is considered complete. However, if the nature of the expenditure is unclear, the Minister will be held accountable, and might even be demoted.

"I think there's no problem. What do you think, Xianmu?"

Zhu Di had noticed that Li Xianmu had been frowning all along, which was why he asked the question.

Li Xianmu pondered for a moment, then slowly said, "Your Majesty, this year's expenditures are all reasonable, but the expenditures exceeded the tax revenue by six million taels. If it weren't for the silver brought back from Japan, the national treasury would be empty."

I believe this cannot continue indefinitely.

I suggest that a budget system be implemented starting next year.

"A budget system?" Zhu Di asked curiously, and the others in the hall also looked over with some curiosity. "What is a budget system?"

"As the name suggests, a budget is something that is calculated in advance."

"At the beginning of the year, each ministry will make a list of its main expenditures for the year. For example, the Ministry of Works will include in its plans what palaces it will build from the very beginning."

At the beginning of the year, all expenses were calculated, appropriate ones were approved, inappropriate ones were shelved, and those that were obviously overspending were cut.

As for natural disasters and other special cases, they will be handled on a case-by-case basis with dedicated funds.

Now, the approximate annual expenses are clear at a glance.

Lee Hyun-mok's explanation was very clear, and everyone immediately understood. In short, it meant moving some of the year-end financial meeting procedures to the beginning of the year.

The aim is to curb unnecessary spending and projects that are launched on a whim.

But would the emperor agree to that?

Sometimes, if the emperor wanted to build a garden, it would be done immediately. However, if there was such a budget system, the Ministry of Works' funds could not be moved at will.

Zhu Di fell into deep thought, considering whether this system could, to some extent, curb the reality of funds being arbitrarily misappropriated.

He absolutely refused to believe that no one had embezzled any of the extra expenses.

As for the emperor himself, he felt it was worthwhile to be subject to some restrictions, especially since the emperor had his own private treasury and often did not rely on the national treasury.

"I think it's feasible."

"Without rules, there can be no order. Starting from the eighth year of Yongle, we have exceeded our budget almost every year and have been living a very frugal life. We need to increase revenue and reduce expenditure, and we need to address the root cause. Xianmu, your idea is excellent."

At the beginning of the year, all the expenses of each department were calculated, so that who would overspend, in what areas, and by how much, were clearly listed.

What do you all think?

The emperor has already agreed, and there's nothing to object to. Calculating the cost of everything is simply what should be done.

Even though he was somewhat unwilling, he could only agree, saying, "We second that proposal."

As they said this, everyone's gaze swept over Li Xianmu, who had only been Minister of Revenue for three months and had already made institutional policy innovations.

Is this why His Majesty appointed him to this position?

In December of the seventeenth year of the Yongle reign, the fiscal budget system, considered one of the hallmarks of a modern nation, was formally adopted in the Ming Dynasty.

(End of this chapter)