I am the prince of the Ming Dynasty, I don't give up

Chapter 154 How to Become the Central Bank of Ming Dynasty

If you can’t make any sound, then don’t blow it out. The anti-counterfeiting measures are sufficient anyway.

Zhu Houxuan threw the silver coin in his hand into the air, then caught it swiftly and continued to ask: "How strong is this silver coin?"

"According to Your Highness's wishes, we added copper, zinc, nickel and tin into it. The proportions have been adjusted many times. The strength is now very high." Tian Cheng said hurriedly.

“How much does it cost to make a silver coin?”

"The cost of making a silver coin is 4 cents, but this cost can be further reduced. If more are made, the cost can be further reduced."

Zhu Houxuan weighed the silver coin in his hand and asked, "Is this half a tael?"

"Yes, this is made according to your wishes. One coin is half a tael, which is worth half a tael of silver." Tian Cheng said simply.

"The production cost is about 1% of the currency value, which is acceptable." Zhu Houxuan nodded.

"The masters of the foundry and machinery factory have studied the technology of making this silver coin for several months, and finally decided to use hydraulic stamping. This way, the pattern on the silver coin can be so clear and exquisite. Now only we have this technology. This silver coin is very difficult to counterfeit," Tian Cheng took the initiative to introduce.

Zhu Houxuan was finally satisfied, and said in an appreciative tone: "Reward the masters who participated in the research of silver coin manufacturing technology, and at the same time strictly prevent the leakage of technology."

"Yes, sir!" Tian Cheng stood up suddenly.

This is the first product to be launched by the Ming Royal Bank - silver dollars!
Although Zhu Houxun wanted to develop credit currency, he had to eat one bite at a time and take one step at a time. It was undoubtedly very appropriate to develop silver coins at this stage.

The Ming Dynasty's financial system was extremely chaotic, a huge step backward compared to the Song Dynasty.

In finance, the primary tool for state management is a unified currency and the use of a unified currency to calculate revenue and expenditure. However, Zhu Yuanzhang established a deep-rooted anti-commercial and anti-monetary spirit in the system.

It can be said that the Ming Dynasty now has no unified currency and has completely regressed to the grain standard.

During the 276 years of the Ming Dynasty, copper coins were minted 40 times. Copper coins were the real official currency of the Ming Dynasty. The 40 mints produced a total of about 80 billion coins, an average of 2 million coins each time.

80 billion copper coins were only the average minting volume of the Northern Song Dynasty for two or three years! If we take copper coins as the standard, the currency issuance volume of the Ming Dynasty shrank significantly to about 1/60 of that of the Song Dynasty. How can such a currency scale meet the commercial activities required by society?
The reason why commercial activities in the Ming Dynasty did not suffocate and stagnate due to insufficient currency and regress to a purely agricultural society was that silver effectively supplemented the shortage of copper coins and became a higher-value upper-class currency.

During the Age of Exploration in the West, a large amount of silver was brought from the Americas to Asia in exchange for porcelain, spices and other items, ensuring that the supply of silver continued to increase.

However, the court system maintained a conservative spirit and never designated silver as the official currency, which caused social disorder.

During the first 100 years of the Ming Dynasty, the use of silver was even banned. Later, the ban was lifted and circulation was allowed. Later, Zhang Juzheng went a step further and allowed taxes to be paid in silver.

However, the imperial court never intended to manage silver, let alone issue official silver currency.

However, Zhu Houxuan also understood why the court did not do so, because the Ministry of Revenue of the Ming Dynasty had only 51 official officials and 160 clerks. These 211 people had to manage the finances of the entire Ming Dynasty and handle the taxes of the entire Ming Dynasty. There were many taxes in kind in the taxes of the Ming Dynasty. Because there was no intermediate currency as a general equivalent, this involved extremely complicated conversions.

The No. 211 person is too busy with this alone, so he doesn't even think about managing silver.

In contrast, in order to prepare for the establishment of the Ming Royal Bank, Zhu Houxuan prepared thousands of people who had received modern primary and secondary school mathematics education.

If the Ministry of Revenue does not manage silver, then Zhu Houxuan will take the responsibility of managing silver. The seigniorage tax and other things can be collected for the time being!
Zhu Houxuan chose to make silver coins because he believed that the people of the Ming Dynasty should be able to easily accept silver coins.

As for the production of this silver coin, Zhu Houxuan also put a lot of thought into it.

The first is the silver content, which is the source of the value of metal currency. After careful consideration, Zhu Houxuan set it at 80%. If the silver content is too high, this batch of exquisitely made silver coins will definitely go into the cellar again and be collected by wealthy people. It is impossible for them to circulate on the market. This is not what Zhu Houxuan wants to see.

Therefore, the silver content has been reduced to 80%. Large investors who want to collect it will have to think carefully. If it is used for collection, the value will directly depreciate by 20%.

However, reducing the silver content to 80% was not conducive to the public's recognition of the silver coins, so Zhu Houxuan decided to first tie the silver coins to the popular Qizhou goods.

After the silver coins are issued, he will forcibly stipulate that only silver coins issued by the Ming Royal Bank can be used to purchase Qizhou goods, and there will be a 10% discount when using silver coins to purchase Qizhou goods.

The commercial benefits of Qizhou goods were used to offset the problem of insufficient silver content.

The output value of Qizhou's industry could also absorb the silver coins issued by the Ming Royal Bank in the early days.

After this mechanism has been running for a period of time, people's recognition of silver coins will gradually increase, because another part of the value of currency lies in people's confidence.

By that time he could issue silver coins with a lower silver content.

In this way, he could collect 20% of the seigniorage for each silver coin. The silver currently in circulation in the Ming Dynasty should be less than 2 million taels. If the Royal Bank of the Ming Dynasty could make all this silver into silver coins, the seigniorage received would be as much as 4000 million taels of silver.
If the silver content of silver coins issued in the future is 70%, the seigniorage will be 6000 million taels of silver.
Such huge profits would definitely attract the covetousness of all parties, and someone would definitely counterfeit this kind of silver coin, so Zhu Houxuan increased the difficulty of counterfeiting silver coins while preparing to work with the Jinyiwei to crack down on this behavior.

Such profits would certainly attract the covetousness of the Ministry of Revenue, and Zhu Houxuan had also thought of a countermeasure for this.

There are only 211 people in your Ministry of Revenue. You should entrust such a troublesome task of making and issuing silver coins to the Ming Royal Bank. The Ming Royal Bank will hand over part of the seigniorage to the Ministry of Revenue. You, the officials in the Ministry of Revenue, just need to be responsible for stamping and collecting money.

Things have come to this point. Since this silver coin was commissioned by the Ministry of Revenue to the Ming Royal Bank for production and issuance, this silver coin is the legal tender of the Ming Dynasty and can be used for taxation and other transactions.

Since the Royal Bank of Ming Dynasty can produce and issue a legal tender, it can also produce and issue other legal tenders. As a result, the Royal Bank of Ming Dynasty became the central bank of Ming Dynasty. During this process, the Ministry of Revenue was only responsible for stamping and collecting money.

With Zhu Houxuan's influence at the top level and the poor financial knowledge of the Ming Dynasty civil servants, Zhu Houxuan felt that he should be able to achieve this goal easily.

After Zhu Houxuan took control of the Ming Dynasty's de facto central bank, he was able to slowly sort out the Ming Dynasty's chaotic currency and economic system.
(End of this chapter)