My Portable Ming Dynasty

Chapter 491 The Struggle for the Right to Seign Coin

After listening to what Lin Bingzheng said, Su Ze also fell into deep thought.

Lin Bingzheng didn't dare to disturb Su Ze, so he could only watch from the side.

Su Ze never expected that these Fujian businessmen could come up with such a trick!

After Su Ze transmigrated, his first significant memorial to the throne was a request to mint coins.

This was the beginning of all the new policies.

It was the imperial court that minted coins in Dengzhou and Laizhou, and the silver that flowed into the Ming Dynasty was transformed into silver dollars recognized in the market under the control of the imperial court.

With its advanced minting technology, the Ming Dynasty could also levy high seigniorage on silver to cover the cost of minting, making minting a profitable business and thus continuously issuing silver dollars.

The revenue from minting coins flowed into the imperial treasury through the Maritime Trade Office, and the Ministry of Revenue could also collect the fire loss fee, thus obtaining additional fiscal revenue.

Su Ze then submitted a memorial to the emperor, persuading him to invest the imperial treasury into the outer court for purposes such as military construction and economic development, thus realizing the economic cycle of silver dollars.

It can be said that this silver dollar minting system was Su Ze's masterpiece.

It was this economic system of silver dollar minting that provided the financial foundation for a series of subsequent new policies.

Therefore, Lin Bingzheng was very politically astute. Lin Maocai and his group's actions in establishing Rishengchang were shaking the financial foundation of the court, which was a sabotage of the new policies!
But Su Ze's thoughts didn't stop there.

In the original timeline, after the opening of the sea during the Longqing era, the Ming Dynasty's finances were already in jeopardy.

A large amount of silver flowed into the Central Plains, and silver became the main currency. However, the money supply was completely dependent on imports. The Ming Dynasty's own currency had to rely on overseas imports, thus losing its monetary autonomy.

In the original timeline, silver flowed in, but the imperial court's revenue did not increase. Yuegang's tax revenue was only tens of thousands of taels a year. A large amount of silver flowed into the people, but it was deposited as savings of the powerful and wealthy.

This silver exacerbated the wealth gap and made land consolidation more severe.

The original timeline of Zhang Juzheng's Single Whip Law, implemented under this premise, involved taxation in silver. However, this exacerbated the wealth gap between the silver-rich southeastern regions and the silver-scarce inland areas, effectively increasing the tax burden on inland farmers and sowing the seeds of the Ming Dynasty's downfall.

Later, as the silver mines in South America and Japan gradually dried up, the silver crisis in the Ming Dynasty worsened. However, the imperial court had already lost the right to mint coins and was no longer able to carry out monetary reforms.

It can be said that the silver crisis in the original timeline was the inevitable result of the loss of fiscal sovereignty after the imperial court and the interest groups in the southeast failed to seize the right to mint coins. This was the main reason for the demise of the Ming Dynasty in the original timeline.

Using his technology, Su Ze gained control of the minting rights at the very beginning of the opening of the sea trade.

However, the world is never short of "clever people." Lin Maocai and others created Rishengchang, which used banknotes issued by banks to compete with the imperial court for the right to mint coins.

The problems in Rishengchang are even more complex than those in the original timeline.

In the original timeline, the gentry in the southeast acquired silver through maritime trade. This silver was still a form of commodity currency and depended on the supply of silver.

However, the silver notes issued by the money exchange were different.

Although Rishengchang claimed that it only issued one tael of silver notes for every tael of silver.

But outsiders have no idea what the actual situation is, or how many denominations of banknotes Rishengchang actually issued.

According to Lin Bingzheng, these banknotes can be cashed out and circulated for transactions, so aren't they credit money, or paper money?
There are so many lessons to be learned from paper money throughout history. The paper money officially issued by the Song and Ming dynasties eventually became worthless due to excessive issuance.

If even the government's credibility is insufficient to guarantee anything, how much credibility can privately issued paper money have?
Smuggling saltpeter and issuing paper money privately—what credibility can these merchants possibly have?

The reason why Rishengchang hasn't experienced a collapse yet is because it's still in its growth phase and has a large amount of silver deposited in, resulting in good liquidity, which is why it's able to maintain its position.

Once the operation expands too much, liquidity becomes scarce, and the over-issuance of currency comes to light, leading to the first financial crisis in this timeline.

In the end, wasn't it the imperial court that had to clean up the mess?
Moreover, their actions will make ordinary people even less accepting of fiat currency, which will further delay Su Ze's fiat currency reform!

We must take strong measures to address the problems with Rishengchang!
Su Ze stepped down from his seat and said to Lin Bingzheng:
“Chizhong (Lin Bingzheng’s courtesy name), I am very pleased that you were able to put aside your own family and report the clan’s affairs to me.”

Hearing Su Ze say this, Lin Bingzheng was awed; he had finally made the right bet.

Rishengchang's problems were very serious, and he himself had made a contribution.

Lin Bingzheng immediately said:
“Prosecutor Su, I will never forget your kindness in recognizing my talent. The Lin family’s actions have truly betrayed the good policies of the court, and I am heartbroken by the family’s misfortune.”

However, Lin Bingzheng still defended the Lin family, saying:

"But Rishengchang is not the property of the Lin family. The family has been deceived and dragged into this mess by their unworthy descendants. We beg Prosecutor Su to have mercy!"

Su Ze nodded and said:

"Don't worry, Chizhong, the court will definitely investigate this matter thoroughly. If it's just about investing and receiving dividends without participating in Rishengchang's operations, the court will certainly not pursue the matter."

Upon hearing Su Ze's promise, Lin Bingzheng breathed a sigh of relief.

Su Ze said seriously:
"This is not merely a crime of illegally smuggling saltpeter, but a calamity that shakes the very foundation of the nation!"

“If Rishengchang and others use silver notes to replace silver dollars, and allow them to circulate, the imperial court will lose all power to mint coins. At that time, the size of the silver and the rise and fall of prices will all be in the hands of merchants!”

Lin Bingzheng immediately said:
“The prosecutor is right. It was precisely because I was worried about such a disaster that I violated family ethics and reported it to the prosecutor.”

Su Ze patted him on the shoulder again and said:

“Chizhong, your awareness is so great that it was not in vain that I transferred you back to the capital from Shanxi.”

"In this world, there are matters of great righteousness and matters of lesser righteousness. Your reporting to the court is for the greater good of the country."

“If your ancestors in the Lin family were alive, they would approve of what you did. You are truly protecting your family.”

"But we still need your help with Rishengchang's matter."

Lin Bingzheng immediately replied, "I will obey your orders, Inspector!"

Su Ze said:

"You need to feign involvement! Since we are of the same clan, Lin Maocai will surely seek you out again. You should pretend to be greedy for profit and investigate the true nature of his bank: first, check the amount of banknotes in circulation, and second, find out the name of the government's inside agent. This matter is dangerous. Are you willing to go?"

Lin Bingzheng immediately said:
"To solidify the foundation of the new policies, your subordinates are willing to die a thousand deaths!"

Su Ze said with satisfaction:
"I'm not sending you to your death. You just need to keep an eye on Lin Maocai's social interactions. In case of emergency, you can send messages to me via pigeon."

"You only need to find out Lin Maocai's social circle, gain his trust, and find out the truth about Rishengchang. I will take care of the rest."

Lin Bingzheng immediately said:
"My subordinate understands!"

Su Ze sighed again and said, "This matter has put you in a dilemma between emotion and law, and your association with Lin Maocai has also damaged your reputation. I will remember these things for you, but I will have to ask you to be moderate."

Hearing Su Ze say that, Lin Bingzheng was truly moved.

In terms of rank and prestige, Su Ze was far above him.

However, Su Jianzheng was able to think about the problem from his own perspective and understand his own predicament, which was enough to make Lin Bingzheng work for him.

Moreover, Su Ze never hesitated to promote and give important positions to those who had followed him, and he would also recommend them to the emperor and important officials.

Lin Bingzheng knew that this was his chance to rise to prominence, so he put in even more effort. He stated:
"Rest assured, Your Excellency, I will uphold justice and not be wronged! I will investigate the matter of Rishengchang thoroughly and try my best to find out the truth!"

Su Ze nodded, and then he continued:

"If Rishengchang is really as Lin Maocai says, with abundant financial resources and powerful connections, you should be more cautious."

"From now on, apart from the five offices under the Secretariat, you and I should not meet in private. Any matters should be conveyed through pigeons."

"Furthermore, if Lin Maocai needs your help with anything, report to Chief Inspector Shen and help as much as you can, to gain Lin Maocai's trust as soon as possible." "Understood!"

After seeing Lin Bingzheng off, Su Ze waited for a while before slowly walking to Zhang Juzheng's duty room.

After explaining the whole story, Zhang Juzheng's expression turned serious.

This Grand Secretary Zhang, who was always particular about cultivating his composure and never showing his emotions, now revealed a murderous aura.

Su Ze knew why Zhang Juzheng was angry.

For a long time, Zhang Juzheng was known as the "Minister of Finance," and the Ministry of Revenue was his private domain, where he firmly controlled the finances of the Ming Dynasty.

But these audacious Fujian merchants actually managed to tear a hole in the Ming Dynasty's finances and attempt to seize control of the minting rights.

Thanks to Su Zechang's long-term efforts, Zhang Juzheng in this timeline gained a deeper understanding of economics.

He naturally understood that the banknotes issued by the banks were actually credit money.

The reason why Li Wenquan's bank, as well as the banks in Shanxi, did not arouse the court's suspicion was that they all settled accounts in silver dollars of the Ming Dynasty.

As long as transactions are still settled in silver dollars, these banks are part of the Ming Dynasty's economic system and help facilitate the circulation of silver dollars. As long as they don't do anything reckless, the Ministry of Revenue won't be too worried.

But Rishengchang is different.

Rishengchang used silver for settlement and had a large amount of overseas business, but it also did business with the Ming Dynasty.

According to Lin Bingzheng, Rishengchang controlled a considerable amount of silver.

The thought of such a large amount of silver breaking free from the control of the imperial court and circulating freely among the people sent chills down Zhang Juzheng's spine.

For a long time, the Maritime Trade Office in the south had been demanding the minting of coins.

However, they were all suppressed by Zhang Juzheng.

The imperial court was still able to control the minting of coins in Dengzhou and Laizhou.

The policy of minting coins only in the north to control trade in the southeast was promoted by Su Ze and was crucial to the financial security of the Ming Dynasty.

Now that someone is trying to exploit loopholes and undermine national policies, how could Zhang Juzheng not be furious?

Zhang Juzheng's voice was as deep and cold as iron: "Issuing silver notes privately! This is not merely merchants seeking profit; it is the beginning of dividing up the land and establishing new territories!"

Zhang Juzheng's phrase "granting fiefdoms and granting titles and fiefs" already defined this matter as a crime of treason, and it seemed that the southeast was about to be filled with heads.

However, Su Ze did not intend to kill anyone.

This matter will inevitably involve killing, but killing alone is not enough.

Just as landlords and gentry in Henan had previously opposed the imposition of commercial taxes, artisan owners in Sichuan were now resisting the entry of goods from other provinces into Sichuan.

The maritime merchant groups in Fujian, and throughout the southeast, had long coveted the imperial court's right to mint coins.

Su Ze said:

"Grand Secretary Zhang, even if you arrest Lin Maocai and others, it will be difficult to eradicate the root of Rishengchang's power."

"Rishengchang's roots are overseas, or even that's not quite right. Rishengchang's roots are in the hearts of the gentry in the southeast."

"If we wipe out Rishengchang today, tomorrow we will have Yuehengchang and Xingyaochang."

"Merchants pursue profits, and maritime trade is highly profitable, but it cannot compare to the profits of money exchange minting."

"Grand Secretary Zhang, the danger to Rishengchang is not just limited to minting coins."

"At the beginning of our dynasty, we issued paper money, which was fully redeemable during the Hongwu reign, but by the Chenghua reign it had become a mere formality."

"Why? It is because the imperial court has a history of excessive spending."

The issue of paper money has been discussed many times in the Ming Dynasty, so Su Ze's words are not considered treasonous.

As a renowned financial official, Zhang Juzheng naturally studied the issue of paper money.

As Su Ze said, the unrestrained issuance of paper money throughout history was the main reason for the collapse of the imperial paper money system.

Su Ze said:

"The imperial court is unable to control the excessive issuance of paper money. The bank notes issued by these banks can be freely exchanged and are much easier to circulate than paper money."

"If banks issue excessive amounts of banknotes, it will affect countless merchants!"

Zhang Juzheng nodded.

In fact, he was also concerned about the issue of banknotes.

Ordinary people still used commodity money, but many merchants had already started using banknotes for settlement.

Just as Su Ze said, as long as you print banknotes, you can use them as money. Who can resist such a temptation?
Can we rely on the credit of merchants?

Zhang Juzheng frowned and asked:
"Zilin already has a plan?"

Su Ze said:

“It is better to guide than to block. The banknotes are already in circulation. If we rashly ban them, it will disrupt commerce and affect the collection of commercial taxes by the imperial court.”

"In my opinion, we should request the court to establish a 'Billing Affairs Office' under the Ministry of Revenue. All private banks that issue banknotes should deposit 30% of their cash as collateral with the 'Billing Affairs Office' of the Ministry of Revenue."

"For the silver notes that have already been issued, they need to be exchanged for new notes within a specified period. The Ministry of Revenue also needs to verify the silver notes issued by the bank."

Su Ze said again:
"This guarantee deposit is not a tax collected by the imperial court, but an insurance for the credit of the bank."

"If a bank encounters difficulties in redeeming its bills, the Ministry of Revenue can provide this guarantee to stabilize the credit of the banknotes."

"This is similar to insurance for merchant ships, except that this money is forcibly handed over to the Ministry of Revenue."

Zhang Juzheng thought for a while and nodded in agreement with Su Ze's method.

"What about Rishengchang?"

Su Ze said:

"The reason why Rishengchang was able to exploit loopholes is because the court's laws and regulations were not strict enough."

"The guarantee deposit I just mentioned, as well as the silver notes issued by banks and money shops, are not governed by the law of the court, which has led to chaos."

"All silver notes used in our Great Ming Dynasty must be exchanged for an equivalent amount of silver dollars. They may not be exchanged for gold, silver, or other similar items. Privately exchanging silver is considered equivalent to privately minting coins and will be treated as an unpardonable crime."

Zhang Juzheng clapped his hands and said:

"First clarify the laws, then carry out punishments. Zilin is following the words of the sages: teach first, then punish. How wonderful!"

However, Zhang Juzheng also said:

"Will Ke Rishengchang obediently give in? Zilin is kind-hearted, but I'm afraid these villains won't be grateful and will cause more trouble."

"Moreover, the southeast region is powerful and will also hinder the new laws."

(End of this chapter)