The Ming Dynasty: Starting with Emperor Chongzhen's crackdown on factionalism

In the opening of his memorial, Chen Zhiyuan did not directly criticize the Shanxi merchants, but instead started with the most basic business practices of merchants.

"Looking at the biographies of merchants throughout history, I have found that the way of business is nothing more than 'buying low and selling high, circulating throughout the world.'"

"The source of its profits lies in the exchange of goods. The reason why border trade is so profitable is because the products inside and outside the pass are very different."

"Tea, cloth, porcelain, and medicine from the Central Plains are unavailable beyond the Great Wall; horses, hides, ginseng, and pearls from beyond the Great Wall are rare in the Central Plains. Trading them there can yield tenfold profits."

He wrote slowly, carefully considering each word.

"However, even though such ordinary trade is highly profitable, it has its limits."

"A single tea leaf weighs a hundred catties. From Jiangnan to Zhangjiakou, the cost of transportation, customs duties, losses, and favors takes up most of the money."

"Even with a tenfold profit, the net gain would only be two or three percent. If that were all, how could Fan Yongdou have amassed a fortune of a million? And how could Wang Dengku casually donate tens of thousands of taels of silver?"

This is the key question.

Chen Zhiyuan continued, "Therefore, I believe that the immense wealth of Shanxi merchants did not rely on the regular trade of tea and cloth, but must have come from other sources."

"The two things that are most feared at the border and most strictly controlled by the court are: military equipment and supplies, and intelligence and information."

"Sulfur, saltpeter, and pig iron are cheap in the Central Plains, but expensive outside the pass. This is because Jianzhou lacks these materials for casting weapons and making medicine."

"One stone of sulfur costs five taels in Xuanfu, but can be sold for fifty taels outside the pass. In times of war, it can be obtained for one hundred taels."

"The same applies to pig iron. Such exorbitant profits are a hundred times greater than those from tea and cloth; how could merchants not be tempted?"

"Furthermore, when caravans travel between the interior and exterior of the pass, they can scout out the passes and fortresses along the way, the number of soldiers and horses, the reserves of food and supplies, and the strength of the roads."

"Such military intelligence is a secret to the imperial court, but a priceless treasure to Jianzhou."

"If information is exchanged for gold and silver, the profits are immeasurable."

Chen Zhiyuan paused at this point.

He knew that these inferences were seen as almost malicious attacks by officials in the court who had studied the classics.

They would say: Merchants may pursue profit, but how dare they risk the extermination of their entire family?

They would cite the good deeds of Shanxi merchants who donated grain to support the army, to prove their loyalty and righteousness.

Therefore, he had to explain it clearly.

Why would these people take such a risk?

"Some may ask: Since there is such a lucrative profit in tea and cloth, why would one risk breaking the law for such a dangerous gain? I would reply: It is not that I want to do it, but that I have no choice but to do it."

Chen Zhiyuan then shifted his focus and began to analyze the actual operation of border trade.

"Border trade is not like market trading, where you simply pay and take the goods."

"From the place of origin of the goods to the border market, it is a distance of thousands of miles, with checkpoints everywhere."

"The prefectures and counties take a cut, the customs offices collect taxes, the patrol offices conduct inspections, and the garrison commands verify credentials; every place requires bribery."

"Without the permission of officials along the way, it would be impossible to move an inch."

"This is especially true at the border. The officers and soldiers guarding the border have the power to inspect and verify."

"Documents can be strict or lenient, goods can be detained or released, it all depends on their word."

"For a caravan to operate smoothly, it must cultivate good relations with the customs officials. Offerings during festivals and daily tributes should become the norm."

"This is not unique to Shanxi merchants; all border trade merchants must do the same."

This is the first layer of connection.

The transfer of benefits between merchants, local officials, and border guards.

Chen Zhiyuan's writing became increasingly insightful.

"However, this alone is not enough to amass great wealth, nor is it enough to ensure safety. This is because the greater the profits from border trade, the more covetous people there are."

"Local tyrants can extort money, competitors can frame people, and officials and censors can impeach people based on rumors."

"Without the support of the court, once the incident is exposed, our families will be destroyed and our lives will be lost in an instant."

He gave several examples, though he did not name names, but the old officials in the court would recognize them at a glance.

"During the Jiajing era, Li Zhi, a merchant from Datong, had been running a horse market for twenty years and had amassed considerable wealth."

"Because he failed to properly handle the situation, he was impeached by the imperial inspector for 'colluding with the northern barbarians,' imprisoned, sentenced to death, and his family property was confiscated."

"In the early years of the Wanli reign, Zhao Quan, a merchant from Xuanfu, offended a certain official in the court and was accused of 'smuggling contraband.' Although no evidence was found, he died in prison, and his business collapsed."

"These two cases were discovered by me through consulting old archives of the Imperial History Museum."

"It is clear that the danger to border merchants lies not in the enemy cavalry beyond the pass, but in the impeachments lodged in the imperial court."

"Without the help of the capital, even with a fortune of ten thousand taels of silver, one would be nothing more than fish on a chopping block."

At this point, Chen Zhiyuan pointed out the core issue.

The Shanxi merchants colluded with court officials not for profit and expansion, but primarily for self-preservation and survival.

"Since we need the support of North Korea and China, how should we win them over?" Chen Zhiyuan continued to analyze.

"There are only three paths."

"Firstly, there is the bond of kinship. Many Shanxi merchants were originally from Shanxi, and Shanxi officials formed a distinct group in the imperial court. The bond of kinship naturally fostered closeness."

"It is common practice for merchants to sponsor poor scholars from their hometown to take the imperial examinations, and for officials to reciprocate after passing the examinations."

"Secondly, marriage alliances. Merchants who are wealthy but lack social standing wish to form marriage alliances with officials to enhance their family's prestige."

"Officials are poor but noble, and need financial assistance from merchants to cover their expenses."

"Wang Chengyin, the general of Xuanfu, married a woman from the Wang Dengku clan, which is an example of this."

"In this way, military officers and merchants become one family, making border inspections much easier."

"Thirdly, there is the transfer of benefits. This is the most direct, yet also the most covert. It may involve giving gold and silver, providing shares, managing land on behalf of others, or subsidizing one's children's extravagant spending."

"Officials benefited, and merchants received protection. They understood each other implicitly, without putting it into writing."

As Chen Zhiyuan wrote this, his pen trembled slightly.

He knew he was uncovering a huge secret.

This veil of secrecy not only shrouded the Shanxi merchants, but also the entire bureaucratic system of the Ming Dynasty.

"These three paths intertwine to form a network. Local officials protect their merchants, border generals provide them with conveniences, and court officials speak up for them."

"Merchants, in turn, used gold and silver to supply the border troops with provisions and profits, and to subsidize the expenses of officials."

"One link leads to another; we all prosper together, and we all suffer together."

"Therefore, Zheng Sanjun, Zhang Jimeng, Hou Xun, and others spoke out eloquently on behalf of the Shanxi merchants, not necessarily accepting all their bribes."

"Some may have shared a hometown, some may have had old friendships, some may have been asked by their classmates, and some may have been concerned about the stability of Shanxi."

"Or perhaps—even if they themselves did not directly receive it, their relatives, friends, and disciples may not be clean."

"A single hair can affect the whole body, therefore we must do our utmost to protect it."

This is the most terrible.

Corruption is no longer just the greed of a few individuals, but a symbiotic relationship woven into the fabric of the system.

Shanxi merchants needed the protection of officials to survive and make a profit, while officials needed the merchants' offerings to maintain their dignity, manage relationships, and cope with official expenses.

Even those who are honest and self-disciplined will find it difficult to remain untainted in this web.

After writing about the operational mechanism of collusion between officials and businessmen, Chen Zhiyuan began to address the most fundamental issues.

Why is this so?

"Your Majesty may ask: The court has censors and officials, a supervisory system, and the Great Ming Code; how can such collusion between officials and merchants be tolerated?"

He gave an answer—a cruel one.

"Because the salaries of our officials are really meager."

"A first-rank official's annual salary is one thousand shi of rice, which is equivalent to no more than a few hundred taels of silver."

"However, living in the capital is not easy. Residences, carriages, servants, clothing, social interactions, and gifts for festivals all require money."

"Even a high-ranking official, relying solely on his salary, would find it difficult to make ends meet."

"As for minor officials in prefectures and counties, their salaries are insufficient to support their families. If they do not take from the people, how will they survive?"

This is the economic foundation.

The low salary system forces officials to seek additional income.

Offerings from merchants were the most direct source.

"Secondly, the assessment system emphasizes appearances over substance."

"The performance evaluation of prefectural and county officials focuses on the collection of taxes and grain and the resolution of criminal cases."

"As for the hardships of the people and the actual situation of border defense, these are difficult to assess."

"Therefore, officials are often busy dealing with official documents and have no time to delve into the realities of the situation below."

"Merchants who can help them complete the required amount of money and grain are naturally trusted and relied upon."

"Thirdly, officials can report matters based on hearsay, making unfounded accusations without bearing any responsibility."