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

Chapter 403 Credit Currency
"The method discussed today to solve the funding problem can only solve part of the problem, but cannot completely solve the funding problem," said Zhu Houxuan.

Tian Cheng's heart moved, and he quickly said: "Your Highness means..."

"I think we can consider issuing paper money." Zhu Houxuan's eyes became sharp.

Tian Cheng was overjoyed. He suppressed his excitement and said, "Your Highness, do you think the time is right?"

He and Zhu Houxuan had discussed the issue of issuing paper money a long time ago, but Zhu Houxuan always believed that the time was not yet ripe for issuing paper money.
"Maybe it's mature. I'm not sure, but I think our current economic development speed has been affected by the shortage of currency. We have to make this attempt," Zhu Houxuan said after a moment of hesitation.

Zhu Houxuan was extremely cautious about issuing paper money and credit currency.
It is not okay to be careless. The notorious Ming Baochao is still circulating in the Ming market. The financial credit of the Ming court has been reduced to the lowest level because of the Ming Baochao.
Because of this, the people of the Ming Dynasty were very sensitive to paper money and had a poor acceptance of it.
Therefore, Zhu Houxuan had to be cautious. If he was not, it would be the second Ming Baochao. He only had one chance.

As for why Zhu Houxuan wanted to issue credit currency, it was because he could not resist the temptation of over-issuance of currency, and he also believed that the Ming Dynasty needed to over-issue currency.
Three years ago when he issued silver coins, he believed that the Ming Dynasty was in a state of deflation. Three years later, he still believed that the Ming Dynasty was in a state of deflation, and the situation was even worse than three years ago.
Zhu Houxun founded the Ming Royal Bank and offered an interest rate of 20%, which brought out a lot of "deposited" silver. He then issued silver coins. The silver ingots were minted into silver coins. The value of the currency in circulation in the Ming Dynasty increased by 25% out of thin air. Why was the Ming Dynasty still in a state of deflation?
That is because the existence of the Royal Group has made the economy of the Ming Dynasty grow even more. The existence of the Royal Group has also created a group of people with consumption power. In addition, the full deployment of railways on the North China Plain has further reduced transportation costs and business costs, making the economic activities of the Ming Dynasty more prosperous in recent years.
In simple terms, the economic growth rate of the Ming Dynasty in recent years is higher than 25%, so the monetary value increased by minting silver coins is not enough in the face of this growth rate.
The money supply cannot keep up with economic growth.
But the Royal Bank of Ming Dynasty had no way to increase the issuance of silver coins. This was the limitation of precious metal currency. The issuance was limited by the amount of precious metals it had. Without precious metals, it would not be possible to issue so much currency.
Not only the construction of the Beijing Te District, but also Zhu Houxuan's subsequent series of reform policies require a relatively loose monetary environment. In the current state of monetary tightening, some policies cannot be implemented at all.
Zhu Houxuan wanted to implement a reform policy similar to the Single Whip Law. The reason was simple: the in-kind tax was too backward, had no future, and was already showing signs of collapse.
The real burden on the people of the Ming Dynasty was not those taxes at all. Even in the Jiangnan region where taxes were the heaviest, the court's regular taxation was not considered a heavy oppression.

The real big part is the storage cost, transportation cost, and even management cost from the tax. The cost of transporting one dan of rice from Jiangnan to the capital is enough to buy several dan of rice in Jiangnan, and these are all borne by the people (people collect and solve).

If the Ming Dynasty wants to develop better, taxation must be monetized. This will benefit the court and reduce the burden on the people.

Of course, the prerequisite is a loose monetary environment and sufficient money supply. Otherwise, local landlords and gentry can artificially create a scarcity of money to exploit the people who are eager to pay taxes.

In order to solve the currency problem, Zhu Houxuan found that he had few options.
The Ming Dynasty lacked silver and copper and produced almost no silver. Moreover, during the Song Dynasty, copper in Jiangxi had been mined out, but copper in Yunnan was still controlled by the chieftains in the southwest.

This is a new discovery after Zhu Houxuan became regent. It is not that the Ming Dynasty did not want to issue copper coins, but it simply could not produce the copper to cast them.
Zhang Juzheng's One Whip Policy was a good policy, but it could not solve the problem of currency shortage.

If you don't have silver, you don't have silver. Copper coins won't refresh on the shelf automatically.
This is not the fault of the One Whip Law, but the inherent deficiency of the Ming Dynasty. Before the Ming Dynasty, there was Gan copper, and after the Ming Dynasty, there was Yunnan copper. The Ming Dynasty was stuck at a time when there was a gap between the old and the new.
The reason why the Qing Dynasty was able to implement the "One Whip Law" and also promoted the "tax-to-land" policy was that, in addition to the iron fist of Emperor Yongzheng, there was another very important material basis: the Qing Dynasty controlled Yunnan copper. The annual output of Yunnan copper increased from 150,000 catties in the late Ming Dynasty to more than 10 million catties, which provided the Qing Dynasty with sufficient currency supply.
Zhu Houxuan has recently been sorting out the problems of the Ming Dynasty from the perspective of the ruler of the Ming Dynasty, and a strange idea suddenly occurred to him:

The man who came home and knocked on the door.

If this guy had not led the army in person, but had used all the money and strength to fight the Luchuan battle fought by Wang Gonggong, and forcibly completed the transformation of the southwest into aboriginal officials, and directly obtained the Yunnan copper, then the currency problem of the Ming Dynasty would have been solved. After the currency problem was solved, many problems would have been solved, and there would have been no Zhang Juzheng later.
Unfortunately, the person in Daming who could have done this went to knock on the door.
So Zhu Yuanzhang came up with the Ming Baochao, but he didn't understand the principles of economics, which led to the continuous depreciation of the Baochao.
Zhu Di, Zhu Gaochi and Zhu Zhanji, three generations, tried to use spices to endorse the Ming Baochao, but it only slowed down the speed of the Ming Baochao's credit going completely bankrupt.

At the time of Zhu Houxun, the speed at which silver flowed into the country from South America had not yet reached its peak. The largest source of silver was still Iwami Silver Mine in Japan. However, none of this silver would be given to Zhu Houxun for free. If Zhu Houxun wanted to get enough silver, he would have to pay a huge price, so he could not get enough silver.

Zhu Houxuan also considered supporting Zhu Houzhao to take over Yunnan Copper, but after careful consideration, he felt that it was too slow. It would take 20 to 30 years for the copper produced by Yunnan Copper to solve the currency problem of the Ming Dynasty, and Zhu Houxuan really couldn't afford to wait.

Therefore, Zhu Houxuan had no choice but to issue paper money and credit currency.
Zhu Houxuan did not intend to use the imperial court's credit as a backing for issuing paper money this time, because the imperial court had no financial credit at all.
He used his eight years of business experience in Ming Dynasty, his three years of managing the Royal Group's credit, and Zhu Houzhao's military exploits as endorsement.
Even so, Zhu Houxuan was prepared to conduct a small-scale pilot project within the Royal Group at the beginning.
(End of this chapter)