Late Ming Dynasty: Oops, I am surrounded by the Donglin Party

"State-owned bank? Why is that?" asked the Minister of Revenue Hai Zhongqi with a frown.

There had been money houses in various parts of the Ming Dynasty, and Hai Zhongqi knew a lot about the money house business, which was nothing more than the exchange of silver bills and the mutual exchange of silver and copper coins.

The money house business is not very profitable. There are only five or six money houses across the Ming Dynasty. Hai Zhongqi does not think that there is any strong connection between money houses and paper money and coinage.

"There is too much to say here, and the money houses in the Ming Dynasty today not only have average credit, but also have a pitifully small business scope. They deserve not to make money.

I will give you a few simple examples. " Zhang Shikang paused for a moment and continued:

“If the Ming Dynasty wants to issue paper money or use coins made of other metals, they must be backed by gold and silver ingots in the national treasury.

Even if the court issues an imperial decree to make the people accept the new currency, the exchange will still require a special agency to be responsible for it. It can't be entrusted to private money houses, right?

This is one of them.

The current money houses in our Ming Dynasty can neither make money for the court nor bring benefits to the people.

The money houses I mentioned can not only make money for the imperial court, but also for the people."

"Lord Zhang, you are joking. There is no perfect solution in the world. The court makes money and the people also make money. So where does this money come from?" Li Banghua asked in return.

"Good question! Let me give you another example." Zhang Shikang started to show off again and immediately forgot about Brother Chongzhen's reminder.

"Zhang San went to stay at the inn and took out one tael of silver as room payment.

After receiving the silver, the innkeeper immediately repaid the money he owed to the vegetable farmers.

After receiving the money, the vegetable farmer also paid back the money he owed for drinking at the restaurant.

After the restaurant owner got the money, he paid one of his waiters.

After the waiter received his wages, he immediately gave the money to the innkeeper.

Because he happened to be one day behind on paying his room rent the last time he stayed at the inn.

After Zhang San went to the inn and looked at the room, he felt that it was too dirty and messy. He did not plan to stay there and asked for the one or two taels of silver back.

After listening to this story, do you have any inspiration? "

Zhang Shikang's expression was like that of an old teacher testing his students.

This made Li Banghua and others feel particularly uncomfortable. Every one of the people present was older than Zhang Shikang's father.

But the story told by Zhang Shikang is indeed interesting and thought-provoking.

But even so, Li Banghua and Hai Zhongqi didn't say a word. That guy would continue talking anyway, and they didn't intend to cooperate with Zhang Shikang's plan to show off.

In the end, it was the Minister of Rites Cai Guoyong who cooperated:

"The silver is still the same one or two taels of silver. After going through a circle, it returns to Zhang San's hands, but it seems that everyone has paid off their debts. It's really wonderful!"

"But Mr. Cai still hasn't gotten to the heart of this story!"

Zhang Shikang shook his head with an expression of hopeless situation, and Cai Guoyong immediately regretted cooperating with Zhang Shikang.

However, Zhang Shikang succeeded in pretending to be powerful, and immediately continued:

“I tell this story to tell you that whether it is silver or gold, only when it is in circulation can the true value of currency be realized.

Before we launched large-scale property raids on corrupt officials, not only was there a shortage of silver among the people, but the national treasury was also short of silver, which led to a decrease in the currency circulating in the market and affected prices.

But the silver was not reduced. It was just hidden in underground silver cellars by corrupt officials and left to mold and blacken.

This is also the reason why, at the financial meeting last year, I said that the nearly 200 million taels of silver in the national treasury should be spent as soon as possible.

The imperial court should control the flow of money at a macro level, which will not only stabilize the purchasing power of money, but also make the Ming Dynasty's business and market more prosperous.

However, this involves another problem of the people of our Ming Dynasty. When they have money, they want to save it and are reluctant to spend it.

So how can we get them to take out the money?"

After saying that, Zhang Shikang looked at the cabinet ministers again, and also glanced at his brother Chongzhen.

He found that this time, no one paid any attention to him. Everyone either lowered their heads to look at the account books, or listened attentively with their eyes and noses focused.

Zhang Shikang instantly felt that his attempt to show off had failed, so he had to continue:

“This is the other function of the state-owned bank I mentioned, which is to take money out of the hands of the people.

Of course, the people would not honestly hand over their money to the banks.

But if the money house says, if you give your family's money to me for safekeeping, not only will you not have to pay the safekeeping fee, I will also give you money every month, and the longer you let me keep it, the more money I will give you.

Do you think the people will be willing to pay the money?"

"Ridiculous! According to what you said, wouldn't the bank lose more money?" Hai Zhongqi frowned.

Nowadays, money shops also have the business of keeping money for the people, but the people need to pay a storage fee.

This is the money that the money house earns. If someone deposits money and forgets to withdraw it, over time, all the money will belong to the money house.

It's not like this hasn't happened before.

However, the Ming Dynasty had never before kept money for the people and distributed money to them.

"Why are you so impatient, Lord Hai? We haven't finished talking about this yet!

Just tell me, if the people deposit money and the bank gives them money, will the people be willing to take out the money? "

Zhang Shikang continued to ask back, but Hai Zhongqi was too lazy to respond. Zhang Shikang had no choice but to continue:

"If this bank has a good reputation, people will definitely be willing to take out their money. After all, money makes money, and who doesn't like that?

So, how do the banks make more money with this money?

Of course it’s lending!

Give this money to those who need it more. For example, our Ming Dynasty now encourages business, and there must be many people who have ways to make money, but they suffer from a lack of capital.

In this way, the money houses can lend money to these people and charge a little more interest than they pay to the people who deposit money. Wouldn't that make money?

Of course, the bank needs to verify the borrower's situation to avoid possible bad debts, or provide guarantees or mortgages. In short, there is always a solution."

Seeing that the old men would not cooperate with him in showing off, Zhang Shikang could only start asking and answering questions himself:

"Then you may ask, what if something goes wrong and the people who deposited money suddenly want to withdraw it.

But all the money in the banks has been lent out. What should we do if we have no money to give to the people?

This involves another point of knowledge, which is the reserve requirement ratio.

Of course, there are too many points of knowledge here, and I can’t explain them to you all in a short period of time.

In short, if there were state-owned banks, the imperial court would be able to earn more income and the people would also be able to make profits from it.

It can also further promote the prosperity of Ming Dynasty's commerce. When Ming Dynasty's commerce is prosperous, the court can collect more commercial taxes.

From any point of view, it is necessary to establish state-owned banks.

What do you think? "

After Zhang Shikang finished speaking, he looked at Hai Zhongqi and the others with great pride.

He felt that the economic common sense he had shared today had touched the souls of these old men.

……