Noisy and enthusiastic sounds kept coming from among the merchants.
Looking at these merchants, Xiao Ming couldn’t help but shake his head. Only a ghost would believe a merchant’s promise. However, now that the maritime trade routes were open, Xiao Ming also wanted to profit from maritime trade as soon as possible.
And for him, the most direct way to profit was through commercial taxes. After all, he couldn’t undertake all maritime trade by himself, and most importantly, he didn’t have enough manpower.
So he wanted to establish a maritime trading company with the Qingzhou Chamber of Commerce as its core and other merchants as its appendages. This company would be similar to the contemporary Dutch East India Company.
Surrounded by the merchants, Xiao Ming naturally couldn’t continue to dwell on the white sugar matter. Now that the merchants had learned about the maritime trade routes, he needed to carefully consider how to maximize profits.
He asked the merchants to leave first, and he returned to the Chamber of Commerce with Li Kaiyuan.
For the past two years, Xiao Ming had been teaching Li Kaiyuan business knowledge beyond this era. On this matter, he tentatively asked Li Kaiyuan, “How do you think we should handle the maritime trade routes?”
After a moment of contemplation, Li Kaiyuan said, “Your Highness, I believe that the right to maritime trade should be opened to merchants. However, any merchant wishing to engage in maritime trade must obtain a permit from the Chamber of Commerce, otherwise, it will easily lead to chaos in maritime trade, and these permits will also be the proof of merchants paying taxes.”
“Hmm, anything else?”
“While opening up maritime trade rights to merchants, the Chamber of Commerce must play a leading role in maritime trade. We eat the meat, and let the merchants eat the scraps. This way, we can maximize profits,” Li Kaiyuan said.
Xiao Ming looked at Li Kaiyuan in surprise. This fellow had made great progress. He was right, the plate of maritime trade was huge, and the Qingzhou Chamber of Commerce couldn’t eat all of it. At this time, merchants were needed to eat some of the scraps, while they would eat the most abundant parts.
In terms of trade, this meant that the Chamber of Commerce would take the most profitable businesses, leaving the less profitable ones to the merchants, and he could also collect taxes from the merchants.
“You’ve made rapid progress in the past two years. It seems I was right to choose you as the vice-president of this Chamber of Commerce,” Xiao Ming said with a smile.
Li Kaiyuan chuckled and said, “It’s still Your Highness’s sharp eye that can turn this small fish like me into a carp.”
“Don’t be modest. Since we’re talking about commerce, do you have any other ideas?”
“Yes,” Li Kaiyuan said solemnly, “Your Highness, ninety percent of the merchants in the Chamber of Commerce are from out of town, and there has been almost no growth in local merchants. I believe that we should support local people to become merchants. After all, the merchants in the Chamber of Commerce are quite mixed now, and their backgrounds are not simple.”
“You are right, this is also a problem that I am pondering.” Xiao Ming’s expression became serious, “Continue.”
Li Kaiyuan cleared his throat and said, “Your Highness, some production technologies should be opened to the common people, just like building roads last time. The government office can lend silver to the common people, allowing them to pay patent fees to open private workshops. In this way, our slaves can be freed from some low-profit industries to do more important things.”
“Yes, you are right. This time, I am going to promote the development of private capital and activate the capital within the enfeoffed state,” Xiao Ming said, tapping the table. “And I also have a few technologies that I plan to open up. As for the matter of loans, I think the banks in various prefectures should also start operating.”
“Exactly, we’ve been preparing these banks for quite some time. Cao family’s money house has taken advantage of this period, and now we need to reclaim it,” Li Kaiyuan smiled wickedly.
Mentioning the banks, the two went together to find Pang Yukun. The matter of the six prefectural banks had always been handled by him, and he was the one who knew the situation best.
Upon arriving at the government office, Xiao Ming spoke to Pang Yukun about the banks. He immediately led Xiao Ming and Li Kaiyuan to the East Market, and in a row of shops along the street in the East Market, he saw the official bank with the plaque “Qingzhou Bank”.
“Your Highness, this is it. The bank has been open to the public for a month now, but there are very few people coming to the bank, even less lively than the Cao family’s money house,” Pang Yukun sighed.
Li Kaiyuan hurriedly explained, “However, Your Highness, the Cao family’s money house is lively because of the merchants. Common people rarely go to the Cao family’s money house.”
Whether it was a bank or a money house, it was an unfamiliar concept to the people of the enfeoffed state. They would rather hide their silver at home than deposit it in a bank.
Even though Xiao Ming was very popular, the common people had their own small calculations.
The facade of Qingzhou Bank was almost identical to that of Cao family’s money house, both resembling a prison, with the accountants enclosed inside and the public conducting deposits and withdrawals from outside.
Xiao Ming glanced at the plaque and walked in with Pang Yukun.
This plot of land was bought by the government office from a merchant, valuing the pedestrian traffic of the East Market, but now this place had become the quietest area.
The three young accountants in Qingzhou Bank, seeing Pang Yukun and Xiao Ming enter, immediately straightened up from their languid state, sitting upright and attentive.
“Your Highness, this Qingzhou Bank is just like this now, neither alive nor dead. This official has no other way,” Pang Yukun, after all, was not proficient in finance and was at a loss.
For me, the bank was an important means to stimulate the development of private capital in the next step. I asked one of the accountants, “How exactly do you handle the public’s deposit and withdrawal services?”
“Same as the Cao family’s money house, we collect some silver to help the common people deposit their silver in the bank, and at the same time, we issue them bank drafts,” the accountant said.
Upon hearing this, Xiao Ming’s face immediately turned green. This was exactly what he expected when he hadn’t instructed Pang Yukun on how to operate the bank.
He sighed and said to Pang Yukun, “From now on, no silver shall be collected for deposits and withdrawals from the common people. Furthermore, tell them that their silver can even earn interest in the bank.”
“Earn interest! Your Highness, wouldn’t we lose money for nothing?” Pang Yukun asked, confused.
Xiao Ming said, “How would we lose? The bank collects silver, then lends this silver to the common people to open workshops. A portion of interest can be collected from these lent silver. We are the ones making something out of nothing.”
Pang Yukun didn’t react immediately. After pondering for a while, he suddenly realized, “Your Highness, how clever, truly clever! This means we use other people’s silver to make money, and then give a portion of that earned money to the common people.”
“Exactly. For example, if the common people deposit silver, they can get an interest of three per thousand per month. When we lend silver, we can collect five per thousand. In any case, the government office will not suffer a loss. This is banking finance, Chief Minister Pang, you should learn from Li Kaiyuan on this point,” Xiao Ming said with a smile.