Water Margin: The opening scene involves assassinating Emperor Huizong of Song and forcibly taking L

The Yuan and Ming dynasties continued the imperial examination system of the Song dynasty.

One of Li Zicheng's slogans during his rebellion was "fair buying and selling," and he wanted to abolish the Ming Dynasty's tax system.

Ultimately, the tax system was abolished in the Qing Dynasty, but a crucial prerequisite for its abolition was that the degree of "monetization" of taxation and the market was sufficiently high.

The Ming Dynasty, established by Zhao Yuan, also collected a large amount of taxes in kind.

Chapter 3339 The Way of the Merchant

For example, when a merchant transports a ship full of timber, whether it's the toll fees along the way or the transaction tax at the place of sale, a large portion of the goods need to be deducted to offset the tax.

Because commodity prices fluctuate and copper coins are not easy to transport and carry, collecting taxes in kind can actually prevent officials from cheating merchants and embezzling commercial taxes.

These taxes in kind could not be kept in warehouses by the government indefinitely; they had to be sold to merchants to be converted into cash.

To realize the value, the market price must be used, but the monthly price that the central government receives each month, and the ten-day price that local governments receive each ten-day period, both differ from the actual market price.

Without proper coordination, the scope for collusion between officials and businessmen is enormous!

……

After the founding of the country, the emperor and his ministers steadily reformed this matter.

First, for materials that are crucial to the national economy and people's livelihood, the allocation system will continue to be used.

Second, the remaining goods will be sold through auctions.

Third, the method of exempting corvée labor from taxes, proposed by Wang Anshi, was adopted.

Fourth, gradually increase the amount of paper money issued.

The ultimate goal is to fully monetize commodity taxes and use paper money to solve the problem of physical tax collection.

Once commodities are monetized, the remaining physical distribution will no longer require allocation, and the allocation system can naturally be completely abolished.

However, this cannot solve the problem of wealthy businessmen colluding to monopolize and manipulate the market.

Now, Fatty Zheng has proposed a solution: to establish an exchange in Kaifeng.

While it cannot completely eliminate monopolies, it can make the market more transparent and increase the cost of monopolistic practices for wealthy businessmen.

Zheng Hong said, "When I was an official in Guangdong, the Guangzhou Maritime Trade Office ran the exchange very well."

"During the Song Dynasty, goods transported from the inland to Guangzhou were controlled by a few major merchants, and seagoing vessels had to be mindful of the merchants' wishes if they wanted to import goods."

"The goods shipped from overseas to Guangzhou were monopolized by the imperial court and ultimately controlled by the merchants in the capital."

"After the founding of the Ming Dynasty, seafood was no longer collected and sold by the government, which led to both land and sea goods being controlled by the Guangzhou merchants."

"But with the Maritime Trade Office, you can clearly see how much land goods are going to go to sea and how much sea goods have already entered the port."

"The wealthy merchants of Guangzhou could no longer control the goods."

"If they try to lower the price and refuse to buy the goods, merchants from Fujian and Zhejiang will take them."

"Moreover, this exchange is different from the market exchange office of the former Song Dynasty, because the government will not interfere in buying and selling."

Zhao Yuan chuckled and said, "The establishment of exchanges in the six major maritime trade offices was only to facilitate the collection of customs duties. I never expected such an unexpected gain."

Zheng Hong said, "Not only that, the exchange has also made it easier for merchants to buy and sell."

"For example, mainland merchants can sell their orders in advance on the exchange, while maritime merchants can buy the orders in advance and make an initial payment. When the next trade wind arrives, both parties can quickly complete the agreed transaction."

"It can prevent goods from being stuck in the warehouse for a long time, and it can also prevent you from not being able to find the goods you want when you need them."

With the emergence of exchanges, futures will inevitably follow. Merchants can solve the problem of how to avoid risks themselves.

Zhao Yuan asked, "Are there people who specialize in reselling invoices for profit?"

"Yes," Zheng Hong nodded.

See? People are even trading futures now.

Zhao Yuan felt that it was time to issue paper money in the six major maritime trade offices.

Zheng Hong said, "Kaifeng is right under the emperor's nose. The dynasty was newly established and the court had extremely high prestige."

"There will naturally not be a situation where merchants hoard coal and hoard it, causing the entire city's residents to freeze to death because they can't afford coal."

"But merchants dare not engage in large-scale ventures; instead, they often engage in small-scale ones."

“I looked through the price inquiry documents from Kaifeng Prefecture last year and found that some merchants took advantage of the nationwide crackdown on major cases to collude and manipulate prices in Kaifeng Prefecture for profit.”

"Hehe." Zhao Yuan chuckled.

Several merchants who took advantage of the situation to manipulate prices in the capital last year had their properties confiscated.

Of course, the reason their homes were raided was because they were involved in a major corruption case.

After several businesses were severely punished, prices in Tokyo quickly stabilized.

Because the government confiscated a lot of stock, it auctioned it off directly to middle and lower-level merchants (retailers).

Zheng Hong said, "Goods from all directions are being transported to the capital."

"Merchants are manipulated by the guild leaders, and so are small and medium-sized merchants."

“They take advantage of both their suppliers and customers, and deliberately disrupt prices. The government can’t always manage to do so, and often they can’t manage it all.”

"I believe that an exchange can be opened in Tokyo. This would be equivalent to a government-run market exchange that only collects taxes but does not participate in the transactions."

"It bypasses the drawbacks of Wang Xianggong's market exchange affairs while still obtaining the benefits of them."

Zhao Yuan shook his head: "The stock exchange is not a panacea. Once the wealthy merchants figure it out, they will be able to manipulate prices through buying and selling orders."

"Of course, this will significantly increase their costs, making it less easy for them to operate than before, and it will also be easier for the government to handle."

“That’s enough,” Zheng Hong said.

Zhao Yuan praised you, saying, "I never imagined that you would make such great progress over the years in the local area."

Zheng Hong smiled and said, "Although I'm not good at studying, I've always been good at business, and that's all related to my business acumen."

Chapter 3340 Buying and Selling

Zhao Yuan said, "I have asked the cabinet and the six ministries to discuss and cooperate with the stock exchange in carrying out commercial tax reform."

"We'll first conduct a pilot program in Kaifeng, identify any shortcomings, and then expand it to major inland cities."

"It is unnecessary to implement it in all provinces of the country like Wang Anshi's Market Regulation; it is sufficient to promote it only in a few major cities."

"Your suggestion this time is excellent. Continue to observe, learn, and do more, and you will have a good chance of becoming the Minister of Revenue."

.....

Huang Bojian was a merchant from Yangzhou who used to only do land-based cargo transportation. After the Ming Dynasty reformed the Maritime Trade Office, he quickly switched to transporting overseas spices by leveraging his connections.

Foreign merchants transported spices to Guangdong and Fujian, and Ming Dynasty maritime merchants then transferred them to Ningbo, Hangzhou, or Haimen.

Merchants continued to transship the spices to Runzhou (Zhenjiang) or Yangzhou.

Huang Bojian purchased goods in Yangzhou and transported them all the way to Kaifeng via the Grand Canal.

This multi-level transfer system allowed merchants to profit at each level.

However, the price of spices in Kaifeng was much lower than in the Song Dynasty, because spices in the Song Dynasty were bought and sold by the government.

After the Ming Dynasty reformed the Maritime Trade Office, not only did merchants at all levels earn more, but the imperial court also collected more taxes.

So the question is, where do these profits come from?

In addition to overseas spices, Huang Bojian also transports some southern goods, and diversified operations can hedge against potential risks.

But no matter what they transport, they earn more than before.

Because the tax checkpoints in the prefectures and counties along the way have been abolished, there is no need to pay tolls repeatedly.

The imperial court only set up tax offices in a few key locations to collect taxes, which greatly reduced the burden on merchants.

Thanks to the wise and benevolent emperor of the Ming Dynasty, the merchants' lives have finally improved!

Upon arriving at the tax office southeast of Kaifeng, Huang Bojian stopped his boat and waited to enter the office to file his taxes.

Many merchant ships were moored inside and outside the harbor. After waiting for more than two hours, it was finally Huang Bojian's turn to enter.

The dockworkers carried the goods inside, and Huang Bojian watched the whole process until the goods on the ship were transferred to the open space.

Then, continue queuing.

After waiting in line for almost two more hours, Huang Bojian finally produced his goods receipt.

The document lists the type and quantity of the goods and indicates that the place of origin is Yangzhou.

And which tax offices are passed along the way, and how much toll has been paid.

From Yangzhou to the tax offices along the way, each place had to stamp the document; missing even one stamp meant it was considered smuggling.

"Inspect the goods!" the tax collector shouted.

Tax officials immediately conducted random inspections, but it was just a random inspection; inspecting all the goods would take too much time, as there were many merchants waiting in line.

Huang Bojian was in a good mood. Since the nationwide crackdown last year, even tax officials no longer deliberately made things difficult for him.

In the past, there would always be minor problems, and you had to give them a little money to get rid of them.

During a random inspection of the goods, a tax official said to Huang Bojian, "Sir, please sit over there. The court has issued a new law."

Huang Bojian, unaware of what was going on, had his trusted confidants stand guard there while he curiously walked inside.

There sat an official surrounded by many merchants.

The clerk pointed to the notice on the wall: "Please read this carefully, sir. If you have any questions after reading it, you may ask Master Zhong, who is sitting here."

Huang Bojian pushed his way through the crowd; the notice contained the detailed rules for the establishment of the Tokyo Stock Exchange.

In the past, when goods were transported to Beijing, they were delivered to the tax office and then moved to official warehouses for storage.

Wholesalers or intermediaries come to inspect the goods and estimate their value. If they reach an agreement, they buy the goods.

If the goods don't sell, you have to pay a warehouse usage fee every day.

Every industry has its guilds, and the leader of each guild is usually the largest wholesaler, who often also works as a middleman.

Small and medium-sized retailers have to rely on wholesalers for supplies.

Merchants from other places also have to rely on wholesalers to buy goods.

Out-of-town merchants can certainly trade directly with retailers; the law does not prohibit this.

However, if the guild leaders find out, they will not buy goods from this merchant again next year, nor will they sell the goods to the relevant retailers.

Any private transactions that bypass the guild will be jointly cracked down on by the guild leaders.

How do guild leaders manipulate prices?

They first privately agreed that they would not buy any goods during a certain period.

Goods brought in by merchants from other places can only be stored in the warehouse, and they have to pay warehouse usage fees every day.

Over time, not only could out-of-town merchants not afford the warehouse fees, but even the government warehouses, piled high with goods, could not withstand the pressure. The officials managing the warehouses would then force the merchants to sell their goods at low prices.

Left with no other choice, out-of-town merchants had to sell their goods at rock-bottom prices, or even at a loss.

After taking advantage of the merchants, the guild leaders then took advantage of the retailers, since they had their own warehouses anyway.

As long as there isn't too much stockpiled goods, they can collude to limit shipments, creating the illusion of a shortage, and then sell them to retailers at inflated prices.

"Haha, Tokyo now has a stock exchange! This is a great boon for merchants from all over the world!"

Huang Bojian heard a merchant clapping and praising.

A customer nearby asked, "May I ask, sir, is this exchange really reliable?"

"Besides Tokyo, where else are stock exchanges located?"

Chapter 3341 Futures Trading

The merchant said, "All six major maritime trade offices have trading centers."

"Why does it look like the Market and Exchange Bureau of the former Song Dynasty?"

"No, no. The officials in charge of market transactions bought and sold their positions. At first, they were on our side, but later they gradually changed their ways."