Late Yuan Dynasty: I am the true emperor

Chapter 374: Year-end Military and Political Conference (Part )

Hearing Tao An's question, Liu Zhang immediately explained.

“Although our new banknotes are tied to copper coins and silver dollars, they cannot be fully exchanged for copper coins and silver dollars in a short period of time. This is why we issue paper money. The relationship between copper coins, silver dollars and paper money is like the relationship between a weight and goods. It is just a weight to measure their value.

“Therefore, we will display copper coins and silver dollars in the supply and marketing cooperatives in each town, but we will not allow them to be exchanged by the public. If the people want to exchange silver or copper coins for new banknotes, that’s fine, but we will not accept them for the time being.

"As for the credibility of the new banknotes, our new banknotes are called salt and iron coupons. Their real value comes from their ability to be exchanged for salt and iron. Therefore, as long as they can be exchanged for salt and iron in full, even if they cannot be exchanged for silver dollars and copper coins, the credibility of the new banknotes will not collapse."

Everyone nodded when they heard this, approving the plan, and Liu Zhang continued.

"The second question is the method of issuance and how to determine the price. This question is more complicated. I have formulated it according to the method mentioned by the Marshal, taking into account the prices of commodities in previous dynasties, the common prices among the people, and the income and expenditure of the people. The Marshal has agreed to it.

"According to the survey, in the pre-Song Dynasty and even the Yuan Dynasty, the average daily income of the urban population during the peaceful period was around 200 wen. For example, the daily income of waiters in ordinary restaurants and hotels was about 100 wen. This is the most unskilled job, and anyone can serve dishes.
"The daily income of boat trackers and dock porters is about 200 wen; the daily income of skilled craftsmen, such as carpenters and blacksmiths, is about 300 wen; the daily income of ordinary peddlers and fish vendors is between 100 and 300 wen, depending on the business of the day.

"The above is the income situation. As for expenditure, food and clothing are the most basic living expenses. According to the prices in the peaceful period, during the reigns of Emperor Zhenzong and Emperor Renzong of the Song Dynasty, a dou of rice cost about 40 to 70 coins. Before the fall of Emperor Huizong, the price of rice had skyrocketed to 200 to 400 coins per dou, and a dan of rice cost three to four thousand coins.

"During the Shaoxing period of the Southern Song Dynasty, due to the war, the price of rice soared to 100 to wen per dou. The lowest price was wen per dou. Even until the end of the Song Dynasty, the price of rice remained at to wen per dou.

"During the Yuan Dynasty, due to the chaotic currency system and the people's hardship, the price of a dou of rice never fell below a thousand coins.

"Although there were times in the Tang and Song dynasties when a dou of rice cost only three or five cents due to good harvests, that was not normal. As the saying goes, low grain prices hurt farmers. For farmers, this price was basically equivalent to no income for a year, so it cannot be used as a reference.

"The normal price during the peacetime period should be between 40 and 70 wen per dou of rice, while in the Yuan Dynasty it was more than 100 wen. Considering that the lowest-income restaurant waiter in the city earns 100 wen a day, and if he only cares about himself, one dou of rice can at least last for three or four days, then he can earn enough food for six or seven days every day. Of course, this is just a rough estimate, not counting firewood and water. If we only count food, it is not a problem for one waiter to feed two or three people.

"In terms of clothing, a young adult needs at least one bolt of cloth (two feet wide and four feet long) for his clothes, from top to bottom. Taking the most common cotton and linen cloth as an example, a bolt of cotton and linen cloth costs about 150 coins in peacetime. Let's take the example of a low-level worker with a daily income of 100 coins. After deducting food, if he lives frugally in daily life, he can save money to buy a bolt of cloth and a new piece of clothing every month."

This was the income and expenditure situation of a worker at the bottom of society during the peaceful times in ancient times. People were confused by what they heard and some did not understand the relationship between these data and price pricing.

Liu Zhang continued, "The Marshal said that compared to the urban population, the income of farmers cannot be too low. If the urban income is much higher than the rural population, farmers will flock to the city to work. Therefore, if we want to balance the income from farming and working, we can only use the price of grain to adjust.

"In the richest area of ​​Taihu Lake, paddy fields produce about 500 catties per mu in two seasons, while dry fields in Anfeng Road produce only about 200 catties per mu. Taking the average, assuming 350 catties per mu, a young man and a cow can cultivate 50 mu of land, which is 17500 catties per year, or 1400 dou in total. The average daily income is 40 dou and 156 liters. Based on the lowest grain price of wen per dou of rice, a farmer's daily income is wen, which is between the income of a restaurant waiter and a dock worker.

"This does not include taxes and other expenses. This is the total income from the 156 mu of land. Apart from the women weaving to supplement the family income, coins a day is usually the total income of a family. If it is shared by the whole family, the income of a single person is even lower. Moreover, in today's world, many people are still tenant farmers. They don't even have mu of land, so their lives are even more difficult."

Everyone suddenly understood what was going on after hearing this, as if they understood something, but they still didn't get the point.

"So the commander said that the price of grain from the land should not be less than 40 wen per bushel, otherwise the farmers would not be able to survive, because farming could not even sustain their survival, and the people would rather abandon their land, become refugees, and go to the city to find work."

Qin Conglong suddenly realized and clapped his hands, "Cheap grain prices hurt farmers, it's true, it's all clear after this calculation, but the income of urban residents is not too high, so how to set the grain price has become a problem. If the grain price is low, farmers will have no income, and if the grain price is high, the people in the city can't afford it, and both sides will have a hard time."

Liu Zhang nodded immediately and said, "Yes, Mr. Qin is right. Therefore, the Marshal decided to set the purchase price of rice at 45 wen per dou. The rice is harvested from the fields, stored in warehouses, and then shelled and sold for retail. Excluding storage, processing, and transportation costs, the retail price in the city should be around 50-60 wen per dou. This price is barely acceptable even to peddlers and hawkers.

"If it is a good year and the price of grain is lower than this, the government should come forward to buy it at 45 wen, and in a bad year, sell it at a fair price of or wen. This is the Changping Warehouse system that has existed in all dynasties."

Everyone nodded after hearing this, and now they all understood.

Liu Zhang continued, "With the price of grain as the basis, the prices of salt, iron, cloth and other goods can also be determined.

"Since the Han Dynasty, when the salt and iron industries were officially operated, the price of salt was about 20 times that of grain in peaceful times. The lowest price was 6 to 12 times, and the highest price was probably during the Wu Zhou period of the Tang Dynasty, when the price of salt was times that of grain. The price of ironware was about to times that of grain starting from the Song Dynasty. All prices were determined by taking the median.

"Based on the retail price of grain of 53 wen per dou, the price of grain per catty is 3.5 wen (i.e. 20 wen). Based on 10 times the price of salt and 70 times the price of iron, the supply and marketing cooperative's salt price should be 35 wen per catty, iron price should be 150 wen per catty, and cotton and linen cloth should be wen per piece.

"The government only needs to set the prices of grain, salt, iron, and cloth, and the people can set the prices of other goods themselves."

Everyone nodded after hearing this. This calculation was clearer and more reasonable, and the price was also more moderate. Of course, it was still very expensive for ordinary people.

Salt was probably the most expensive consumption tax in ancient times. After the government monopolized it, it raised the price like crazy. In modern supermarkets, ordinary rice is about 3 yuan per pound. Calculated 20 times, 60 yuan per pound of salt, who can afford it? No wonder why the ancient government cracked down on private salt. It was really profitable to monopolize the national salt sales! Almost the same as the modern tobacco tax.
However, there was progress in ancient times. Since the Ming Dynasty popularized the salt-drying method, the price of salt has dropped from 20 times that of grain to about 10 times, which is a huge improvement over previous dynasties.

Of course, even if Lu Jin promotes the salt-drying method now, the price will not be lowered for the time being, because fiscal revenue is more needed during the war!
Liu Zhang continued, "Once the price is determined, there will be more ways to issue the new banknotes, mainly three ways." The first is salaries, military expenses, and factory expenses. New banknotes can be used to pay salaries to officials in the marshal's office. New banknotes can also be used to issue pensions and rewards, or to reissue military pay, and craftsmen in state-run factories and mines can be paid their salaries every month with new banknotes. This is one way.

"For the civilian population, we can use work in lieu of relief. In the newly annexed areas of eastern Zhejiang, we need to build new cities or repair water conservancy facilities. We can recruit workers from the civilian population and pay them daily wages.
"In addition, there is the Changping Warehouse reserves I just mentioned. The grain production in eastern Zhejiang is quite abundant. The people keep enough for their own consumption. After paying taxes, there is still a lot of surplus grain. We can use new banknotes to purchase this excess grain and use this channel to distribute the new banknotes to the people. This way, we can issue new banknotes and increase grain reserves. This is the second point.

"There is also private exchange, which allows wealthy people and merchants to exchange their hidden gold, silver and copper coins for new banknotes. First, we can issue new banknotes for circulation. Second, we can buy back the gold, silver and copper from the people to increase the government's reserves. After we collect them, we will mint them into copper coins and silver dollars. When the quantity increases, we can issue them to the people for circulation. This is the third way to issue new banknotes."

Everyone nodded after hearing this, and Tao An asked, "So, the new banknotes cannot be exchanged for the old banknotes of the Yuan court? The people are only allowed to exchange them with gold, silver, copper, or physical goods, or labor?"

Liu Zhang nodded immediately and said, "Yes, the excessive issuance of paper money by the Yuan Dynasty has caused chaos in the world and the people are living in misery. This loss should not be borne by us!"

Tao An frowned when he heard this, then turned to look at Lu Jin and asked, "Does the lord think so too?"

Lu Jin did not answer directly, but asked, "Mr. Zhu Jing, if you have any ideas, you can just say it."

Tao An said immediately, "I think that the people are poor now. Their only wealth is the banknotes issued by the Yuan court. Ordinary people don't have gold, silver or copper stored in their homes. If the Marshal's Mansion directly cancels the banknotes in their hands, won't the people lose all their property? I think it will be difficult to win people's hearts in this way."

Before Lu Jin could say anything, Liu Zhang retorted, "But if the exchange of treasure notes is allowed, how can the Marshal's Office exchange them now that the values ​​of treasure notes in various places are chaotic? If officials are allowed to exchange new notes at will according to the values ​​of local currencies, who knows how many people will embezzle and enrich themselves, and why should the Marshal's Office bear the losses for the Yuan court?

"Besides, if the people don't exchange their treasure notes for new notes, then how long will we have to wait for them to be exchanged? If time passes, the Yuan court will surely print more old notes to exchange for our new notes, and then won't our new notes also depreciate?"

Upon hearing this, Tao An said seriously, "Just because our lord said to establish rules and regulations and help the people, we can't just invalidate all the banknotes. To put it bluntly, since we have the ambition to help the world, we can't complain about the bad state of the world. We are here to assist our lord in rebuilding the world and cleaning up the mess. Even if the Yuan court is so rotten and dirty, we will help clean it up!

"If there are difficulties, we can find ways to solve them. Your one-size-fits-all approach is lazy and irresponsible, my lord!"

Liu Zhang was speechless immediately, while Lu Jin seemed to be thinking about something. In fact, it is not impossible to allow the exchange of Yuan court's old banknotes. After all, during the War of Liberation, we also exchanged gold yuan coupons.
But you can't just do it blindly, there must be methods, so Lu Jin asked back.

"Then what do you think, Mr. Zhu Jing? We need to recover some of the losses of the people, but we cannot let the Marshal's Office lose too much. We cannot let our officials take advantage of loopholes to engage in corruption. We also need to prevent the Yuan court from continuing to issue treasure notes indiscriminately for malicious exchange. Do you have any ideas?"

Tao An thought for a moment and said, "In order to avoid malicious exchange by the Yuan court, we can issue an imperial decree to all places after printing enough new banknotes. We must notify every county, town, village, and household. After the notification is in place, we can set a deadline, such as two or three months, to exchange all the private banknotes. After the deadline, our army will no longer use banknotes in the places it occupies.

"With our army's blockade capability, the people inside cannot escape, and merchants from other places can set up checkpoints on important trade routes and refuse to allow them to exchange money, thus avoiding malicious exchange by the Yuan court.

“If someone takes the opportunity to embezzle, we can hand it over to a special official to supervise the matter, and then the Inspectorate will send imperial envoys to inspect and supervise. Local officials can report it. Even if there is some corruption, we will just investigate and deal with it according to the law.

"The currency values ​​in various places are in disarray. We need to recover the losses of the people while preventing the Marshal's Mansion from suffering too much loss. We can set an exchange price for each mansion and choose a median price to recycle old banknotes. The losses will be borne by the people and the Marshal's Mansion in half.

"For example, in Jiankang City, one copper coin can be exchanged for 200 coins. We can use new coins to exchange for coins to recover the old coins. The people and the general's office will each bear half of the loss. For other places, we will handle it according to the local copper coin price as usual."

Lu Jin immediately praised, "This is a very good idea. Let's do it according to your method! Mr. Liu, please come up with a set of rules after the meeting."

Liu Zhang immediately responded, "Yes."

Seeing that Lu Jin agreed, Tao An also hurriedly bowed and said, "My lord is wise. If you can recover the old banknotes in the hands of the people, you will definitely win the hearts of the soldiers and civilians in the newly annexed areas!"

Lu Jin said, "Mr. Zhu Jing is right. We are here to rebuild the world and clean up this mess. We can't just ignore it. Mr. Zhu Jing's words are like a bolt from the blue. I almost made a mistake."

Tao An quickly said modestly, "This is because the lord is kind and righteous, and he cares about the people of the world. If it were an ordinary person, even if a minister advised him, the lord might not listen."

Lu Jin nodded and stopped being polite. Instead, he said, "Liu Qing and Mr. Zhu Jing have finished talking about whether this can be exchanged for silver dollars, how to issue it, how to set the price, and whether to recycle the old Yuan Dynasty banknotes. The last question is whether to issue salt permits and whether to open the salt market. Let me answer it.

"My answer is that we don't need to issue salt permits, nor do we need to open the salt trade system. Our current territory is crisscrossed with waterways, and transportation is very convenient. We can transport materials ourselves. As for whether we will open the salt trade system in the future, we will talk about it later.

"At least in the short term, Liu Futong in the Central Plains and Xu Shouhui in Huguang and Jiangxi do not have the ability to produce salt on their own. Only we have salt. We must make good use of this opportunity to promote our salt and iron coupons throughout the country and squeeze them dry and bankrupt them financially. I want to squeeze out all the gold, silver, copper and materials in their hands!"
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(End of this chapter)