Da Tang: Father, can I resign?

Chapter 247 I also have a backer

Within a few days, new things appeared on the streets of Pingzhou and Yingzhou.

A new institution called a "bank".

Of course, if you call it a “new” institution, it’s actually not that new.

It was just a small shop facing the street built among the rice shops and cloth shops that were already everywhere.

The things being "sold" were quite novel, pieces of paper with a saddle stamp on them.

The paper was a plain straw yellow with a striking title printed on it:
Liaodong Victory Public Debt Bonds (First Issue).

Below the title are densely packed clauses, including but not limited to: the bond is a security issued by the state government to the public to raise war funds, and the principal and interest will be repaid to the holder one year later. The amount is one tael or an equivalent amount of rice or cloth, the annual interest rate is 5%, and it is guaranteed by the state government's fiscal revenue, and so on.

On the back of the bond, there are huge words "One Thousand Wen".

Each "bank" is staffed with enthusiastic salespeople who enthusiastically promote their selling points to passersby:

"Use Liaodong's money to get land for Liaodong's plows!"

“The credibility of the state government is trustworthy!”

"Being patriotic can also make money. Our Liaodong is really amazing!"

With the sales staff's hard work in promoting the products, many people came to stop and browse the books.

Soon, everyone realized what this so-called "bond" was.

It’s just an IOU!
But this IOU is a bit special. The "borrower" is not a person, but a concept that is more abstract than a specific person - the state government.

However, everyone has had a lot of dealings with state government officials, and is relatively familiar with and has a good impression of them, so it is not so abstract that it is incomprehensible.

Moreover, an ordinary IOU is a note that is signed after the money is borrowed.

This bond is indeed "convenient" because it has been printed in advance for "potential creditors" before they borrow the money, and those who are willing can pay.

There were also some rules for opening these so-called "banks" next to rice shops and cloth shops.

The first major reason is, of course, that clothing and food are closely related to people’s daily lives, and outlets are spread across every corner of cities and countryside, with a wide enough coverage.

The second reason is more profound, that is -

Rice and cloth also have monetary attributes in the current era, and are actually related to the financial business of banks.

Originally, Regent Li Ming had invented paper money and single-handedly brought the Tang Dynasty into the modern era on the eve of credit currency.

However, it is sad to say that after he was forced to flee by Li Tai and Li Zhi, his paper currency policy came to an end.

The monetary policy took a historic turn, and paper money became paper money that was too ugly to burn for ancestors. The currency of the Tang Dynasty also regressed to the pre-modern era when metal and physical objects coexisted.

Then, the long-term deflation problem caused by the scarcity of precious metals such as copper and silver continued, and rice and cloth were once again given monetary attributes by the people and returned to circulation.

Bonds can also be seen as another attempt by Li Ming to simplify the cost of currency circulation.

"are you buying?"

After realizing that the essence of bonds was that the state government borrowed money from the people, the people began to make the most simple calculations:

Is it cost-effective? Will I lose money?
The interest rate is 5% per year, which may seem a bit high, but it is unlikely that the interest rate is high.

Borrowing money and paying interest was no stranger to the common people of the Tang Dynasty.

Every spring during the ploughing season, the landlords would thoughtfully provide “agricultural loans” to poor farmers who were unable to afford oxen and farm tools.

Whenever there are natural disasters such as floods, droughts, locusts, etc., when farmers have no harvest and are unable to make ends meet, the landlords will still provide them with "consumer loans".

The interest rate is not high, just 20% to double it, every month.

In comparison, the "5% annual interest" of this war bond seems insignificant.

However, you can't really say that the interest rate is low.

Because most of the loans issued at that time could not be recovered.

After all, without a nationwide credit system, money lent out is like water spilled.

Once the debtor hides in the mountains or other places, you can’t find him and there’s no way to get the money back.

Even if the local tycoons lend money, it often ends up in vain, with all the principal and interest lost.

It would be easier if the borrower has land or family members as collateral.

If not, the loss will have to be borne by the creditors.

This is one of the reasons why interest rates are so high, as compensation for the extremely high risk of default.

However, compared with farmers with weak debt repayment and risk resistance capabilities, the credit of Liaodong government is too strong.

Li Ming's character accumulated over the past year is too hard-core. If he says he wants to kill a whole family, he will kill the whole family. If he says he wants to colonize Goguryeo, he will colonize Goguryeo.

With Li Ming's endorsement, the state government itself has almost no risk of default.

After eliminating the risk factor, the interest rate of this bond is very high.

In an agricultural society where productivity develops slowly, what industry can steadily provide a growth rate of 5% per year?
Ordinary people may not know concepts such as "risk premium".

But they still have a good idea whether this deal is worth it.

"I am not greedy for this little bit of interest, I mainly want to contribute to the country."

"Yes, yes, every citizen has a share of responsibility for the fate of a country!"

"Li Ming wouldn't cheat me of my money, would he? He gave me my land."

…………

"One million strings of cash? Hiss... Hey, that's... one million strings of cash?"

Fang Yize looked at the cold numbers on the account and pinched his cheeks with a cold expression.

The pain made the corners of his mouth tremble.

No problem, he is still in the cold real world.

It's just that this world has become unrealistic because of Li Ming——

The issuance of the first Victory Bond was successful beyond imagination.

Firstly, this is due to the good character that Li Ming and his friends have accumulated in this hot land of Liaodong over the past year.

Secondly, it benefits from the "bank" that extends all the way to the fields and countryside.

Investors in the first bond issue were unprecedentedly enthusiastic and quickly subscribed for all the issued bonds.

Some paid real money, while others used rice, grain, and cloth at a discount. There were ordinary farmers and workers, as well as economic collectives such as trading companies and production brigades.

All in all, the military funds for the war were successfully raised within just a few days.

Just by asking the printing house to work overtime, they "printed" out an unimaginable amount of wealth out of thin air!
In the past, it would have taken countless years to accumulate such a huge fortune!

"Let me tell you, why do you need to have money first to spend money?"

Li Ming patted his friend's shoulder with a smile.

"Isn't this the solution to your biggest concern, the money issue?"

"Brother Ming, let me remind you that this money is borrowed and must be returned to the people." Fang Yi replied expressionlessly:
"And we have to pay back an additional 50,000 guan, including the principal and interest. This is not a small amount for the current finances, not to mention the principal of 1 million guan."

However, although Fang Yi was tough on the outside, he had already made up his mind:

If we win the war and conquer Hebei, how much profit will we get?

Profits are priceless!

By then, let alone 1.05 million strings of cash.

Even if it's one million and five hundred thousand strings of cash, it still has to come out!

"Who said we have to pay back the principal?"

Li Ming's counter-question interrupted Fang Yize's plan.

Xiao Fang raised his eyebrows slightly, obviously very surprised by Brother Li Ming's answer.

"Do you want to default on your debt?!

"You have to have credit to have money, isn't that what you said yourself?"

We have worked so hard to build up a good reputation among the people, are we going to destroy it just to save a few bucks?

It's not like they haven't paid yet. As long as we win the war, how can we be without money...

"Little brother Fang Yize, your thinking is still not broad enough. Your thoughts are constrained by the mountains of books and the sea of ​​literature."

Li Ming patted his little brother's shoulder earnestly, and curled his lips:
“Who said there was only one bond issue?”

Fang Yize's mouth opened into an O shape, as if he heard heavenly music and his ears were temporarily clear.

“When the bonds are about to mature, we will issue another one to follow up, and use the newly raised funds to repay the principal and interest of the previous bond.

"It keeps rolling and rolling, which means that you don't have to pay back the money..."

Fang Yi felt that he had opened Pandora's box.

It's magic!

National debt, as long as you have the powerful fiscal tool of "national debt".

Fang Yi Ze can have as much money as he wants. He no longer has to argue with other departments over budget and final accounts, nor does he have to worry about insufficient fiscal surplus... "I will decide on the issuance of treasury bonds for the time being, and we will look for a person in charge in the future," said Li Ming.

Fang Yi rubbed his hands and smiled flatteringly:

"Hey, Brother Ming, why bother going so far? You can leave small matters like bonds to me. You have a lot of things to do, so you can focus your energy on other things."

Li Ming looked at Fang Yize.

Fang Yi blinked his eyes sincerely.

"Haha, no way." Li Ming snorted coldly.

A look of disappointment clearly flashed across Fang Yize's face.

He quickly recovered from his facial paralysis and muttered:
"I'm going to work on the war budget."

Then left.

If I give you the power to issue bonds, you must use the interest to create a huge fiscal deficit... Li Ming looked at Xiaofang's back and couldn't help complaining.

When he said “the national debt does not need to be repaid”, it was just an analogy, not that it really does not need to be repaid.

No matter how thick-skinned Li Ming is or how high his credit is, his finances are not unlimited. He cannot borrow unlimitedly and eventually not even be able to pay the interest.

"But national debt is really useful. Why didn't our ancestors think of it before?"

At the administrative level, money is no longer money.

Instead, it represents the sum of social resources that the government can control.

The higher the proportion of money in the government's hands to all circulating funds in society, the higher the proportion of resources the government can mobilize to the total resources of society.

Therefore, government bonds cannot directly create resources.

But the resources of the entire society can be concentrated in the hands of the government.

This has enabled the government's control to develop by leaps and bounds.

In other words, it makes the government more "centralized."

"The next step is to establish a central bank and commercial banks, reissue banknotes, further improve the financial system, and improve the monetary and fiscal tools at my disposal..."

Li Ming began to have beautiful visions for the future.

Just at this moment, Fang Yize came in again, shaking his head.

"Did you drop anything?" Li Ming asked.

Fang Yi scratched his head:

"I forgot to ask a big question. I only remembered it when I was doing the war budget -

"The number of soldiers in Liaodong who can go out to fight in the field is no more than 3,000.

"Can such a small number of people afford a million strings of cash in military funds?"

If it is evenly distributed, each person can get more than 300 strings of cash.

Is this being a soldier or being a noble?
"Who said we only have so few soldiers?" Li Ming crossed his arms.

Fang Yize's eyelids twitched:
"You want to... recruit refugees into the army?"

"How many young and strong people of the right age are there among the refugees? They are not them." Li Ming casually pointed to the map hanging on the wall:
"Look north!"

Fang Yi looked in the direction of Li Ming's finger.

To the north is Goguryeo.

Li Zhi could rely on the imperial court, and Li Tai could rely on the Xueyantuo.

And he, Li Ming, also has a backup hidden energy source!
…………

North of Liaodong, Goguryeo.

Domestic City.

"Go west to Hebei and issue national debt of one million guan...

"Haha, your highness's method is really... quite a method."

In Qingyanli Temple, Fang Xuanling sat as usual in front of the Buddha statue that looked like Li Ming, reading the handwritten letter from Li Ming.

He thought that he had followed Li Ming for so long that he was familiar with this young master's... uh, strange ideas, if not exactly, but at least he was not surprised by them.

But he was wrong.

The fact that the government borrowed money from the common people still surprised him.

Even the usually calm old man couldn't help but drink an extra pot of tea.

He found this policy even more difficult to accept than his own little son with facial paralysis.

Because Chinese people are very conservative at heart and don't want to go into debt.

When I am in debt, I always feel like I am carrying a burden and I cannot sleep well at night.

But if we abandon this outdated idea and think about politics purely from a rational perspective.

Li Ming's strategy of issuing debts to fight a war is really brilliant.

It is equivalent to concentrating the forces of the next few years on this year, thereby strengthening one's own short-term warfare capabilities out of thin air!

With just a few pieces of paper, you have enough capital to start a war!

Use this "investment" to do the real work first, and then use the profits to repay the bonds.

This timing difference is brilliant!

As for the grand strategy of advancing westward to attack Hebei, there is nothing to criticize about it.

Absolutely correct.

Hebei, the gateway, is extremely important to Li Ming.

Losing Hebei means that the road to the south will be blocked, and everyone should prepare to spend the rest of their lives in the icy and snowy Northeast.

Moreover, the reason for this military expedition is very well-known.

Whether it was to expel the Xueyantuo or to defend the king, these slogans were slogans that could gain widespread response and win the support of the whole world.

But it is much more elegant than the ugly civil war between Li Zhi and Li Tai for power and profit.

If we can really take advantage of this opportunity, we can completely take over Hebei.

Not only can it rely on the prestige of war to solve the stubborn problem of aristocratic families once and for all.

It can also make the local people who were saved from danger grateful to Li Ming, make the Hebei region obey Chang'an again, and eliminate the regional conflicts between the two places.

Solve two political risks for the Tang Dynasty at once!

“The idea is great, the next step is how to make it happen.”

If we can't win on the battlefield, everything is zero.

No matter how correct the strategy is, no matter how much support the people have.

After all, wars have to be fought by people.

"The war fund is one million guan, and 800,000 guan will be allocated to Goguryeo first to recruit local soldiers, build weapons and equipment, and conduct training..."

Fang Xuanling read the second half of the letter and couldn't help but smile bitterly and shook his head:

“He’s still messing around as usual.

“Most of the courtiers exiled to Goguryeo were old men who had not seen the battlefield for a long time.

"How can we run a good army with an old man like this..."

He folded the letter and happened to see another line of words on the back of the letter:

I'm sending you a helper, who will arrive almost at the same time as this letter. Please remember to receive him.

"Helpers? Your Highness has thought it through very carefully.

"But is there only one helper? Is that enough to command the entire Goguryeo army..."

Just as he was thinking about it, the temple door opened and a man walked in.

It was a winter afternoon, and the low, slanting sunlight outside was very dazzling.

Fang Xuanling couldn't help but squint his eyes and could only look at the uninvited guest with his peripheral vision.

In the blurred vision, he could roughly recognize that the visitor was also an old man, not tall and strong, but short, fat and round.

Looks a bit familiar...

Fang Xuanling frowned and looked carefully.

As he looked at it, his pupils shrank.

"Mr. Fang, I didn't expect to meet you again in such a remote place."

The old man walked up to Fang Xuanling, bowed casually, and then sat down talking to himself.

"Li Jing, I will wait for your orders."

(End of this chapter)