Fu Shanhe

Chapter 448 Continues to Make Big Promises

Since he was not well-liked, Li Mu had no intention of getting close to him.

Once you reach a certain status and position, you won't lack people.

The one thing the Great Yu Dynasty had in abundance was people who wanted to become officials.

Even notorious forces like rebels and northern barbarians had scholars flocking to them, let alone a high-ranking official like him.

The moral bottom line of scholars in Dayu has always been quite flexible.

For the sake of their own careers, many people chose to ignore Li Mu's unconventional behavior.

There was no other way; the promises Li Mu had made earlier had to be fulfilled once again.

After the nobility took control of the government, Li Mu submitted a memorial recommending him.

All the officials appointed in the ten prefectures have been approved by the Ministry of Personnel, with the highest-ranking official reaching the fourth rank.

Even if one passed the imperial examination and became a Jinshi, most people would never reach the fourth rank in their lifetime if they followed the normal career path.

With a plethora of success stories, the appeal to readers is immense.

The Annam Protectorate still has 20 prefectures and more than 100 counties with vacant civil service positions, equivalent to the official positions in two provinces.

To save face, these people forcibly interpreted Li Mu's unorthodox behavior as: training grassroots officers.

The reason is that the new education system mainly recruits the children of military personnel and some descendants of immigrants.

Since the goal is to train military generals, it is reasonable to adopt an education system that differs from Confucianism.

Although textbooks and military strategy have absolutely nothing to do with each other, they are still referred to as military education.

Regardless of any doubts, Li Mu was an authority in military affairs, comparable to famous generals of the past.

Famous generals of the past could write military treatises, and famous generals of today can certainly do the same.

If you don't see any trace of military strategy, it's because your understanding is insufficient and you can't comprehend its mysteries.

Within the Shihlin community, a debate even broke out.

Supporters extract parts of the textbook and forcibly expand their interpretations to serve as evidence.

Opponents, on the other hand, uphold the sage's ideas as the highest principle and oppose militarism.

Currently, scholars in Guangdong and Guangxi have split into two factions, with supporters and opponents arguing fiercely.

As for the other provinces, they are still dominated by the traditional Confucian camp.

The division among scholars in Guangdong and Guangxi was mainly due to the fact that many civil officials of the Annam Protectorate came from the Guangdong and Guangxi regions.

They entered the ranks of officials through Li Mu's recommendation, so they certainly couldn't go against their boss.

The presence of successful examples around them has influenced the stance of some scholars.

The competition to become an official in Dayu is incredibly fierce.

The limited number of Jinshi (successful candidates in the highest imperial examinations) in the southern region were mostly divided among the four provinces of Southern Zhili, Zhejiang, Jiangxi, and Fujian. The combined number of Jinshi from Guangdong and Guangxi was less than half that of Fujian.

The imperial examinations were held every three years, and on average, the two provinces of Guangdong and Guangxi could not get more than ten places each time.

There are so few spots available; there aren't enough for everyone.

The emergence of the Annam Protectorate gave everyone a new option.

The number of officials produced by Li Mu's single recommendation was equivalent to the number of officials produced in ten imperial examinations in Guangdong and Guangxi.

The impact on the local area is undoubtedly enormous.

"My lord, as the territory expands, the expenses of the Protectorate are also rising sharply."

Customs duties, commercial taxes, and minting revenue alone could not cover the government's financial expenditures.

Relying on the finances of Guangdong and Guangxi to support the economy is not a long-term solution.

The situation in the ten northern prefectures has stabilized. What do you think about resuming taxation on the people?

Wang Jingchuan offered his advice in a tactful manner.

Imperial grain and national taxes have been a tradition for thousands of years.

Given the unstable situation ahead, exempting taxes for a few years is a normal practice in order to stabilize public sentiment.

Now that the local situation has stabilized, continuing the tax exemption would be a huge waste.

Although the Protectorate's commercial tax and customs revenues grew rapidly, the government's expenses grew even faster.

Both foreign wars and domestic immigration have consumed a great deal of money and food.

"Approximately how much is the Protectorate's fiscal revenue this year?"

Li Mu asked with concern.

With two months left until the year-end settlement, government revenue can already be roughly estimated.

Barring unforeseen circumstances, the error will generally not exceed five percent.

"In the ninth year of Yongning, customs revenue was estimated at around 600,000 taels, commercial tax revenue was roughly 3 million taels, and coinage revenue was about 200,000 taels, totaling about 3.8 million taels."

Annam has fertile land; if land taxes and miscellaneous taxes are levied on the people of the ten northern prefectures, fiscal revenue is expected to double.

Wang Jingchuan answered happily.

In feudal dynasties, the main sources of fiscal revenue were land tax, commercial tax, and miscellaneous taxes, with land tax being the most important.

Before the tax reform, land tax accounted for more than 80% of Dayu's fiscal revenue.

The fact that the Annam Protectorate was able to keep the proportion of land tax below 50% was undoubtedly a remarkable achievement.

Once the collection of land tax and miscellaneous taxes is restored, the fiscal revenue of a province can reach 7.6 million taels of silver, which would be considered quite good even in the Great Yu Dynasty.

Moreover, this is only part of the Protectorate's territory. If the other twenty prefectures also establish a sound tax collection system, fiscal revenue will increase significantly.

It will take some time before we are completely self-sufficient, but the fiscal deficit will be reduced significantly.

"The growth rate of fiscal revenue is quite good. Let me first introduce the commercial tax!"

Li Mu said calmly.

The ninth year of Yongning was undoubtedly a bumper year, with the Protectorate's fiscal revenue increasing by a full million taels compared to the eighth year of Yongning.

"My lord, there are many types of commercial taxes, among which salt tax, mining tax and rental income are the most numerous."

This year, salt tax will contribute approximately 800,000 taels, mining tax will contribute 600,000 taels, and shop rent will contribute 500,000 taels.

In addition, transaction tax contributed 300,000 taels, tea and wine tax contributed 200,000 taels, fines and confiscations amounted to approximately 300,000 taels, and other various taxes totaled 300,000 taels.

Wang Jingchuan immediately took stock.

From a later perspective, such a tax structure was undoubtedly very unhealthy.

However, in the current situation, it is in line with reality.

Even though the Protectorate intends to develop industry, commerce, and manufacturing, it is still in its early stages.

The self-sufficient small-scale peasant economy severely restricted the development of industry and commerce.

Against this backdrop, the monopolistic operation of salt naturally became the largest tax revenue source.

The high proportion of mining taxes was due to the availability of a large amount of free labor, meaning the government did not need to pay the labor costs of prisoners.

The rental income from shops came from the earlier confiscation of real estate belonging to Annamite nobles.

From a long-term development perspective, it is not appropriate for the government to hold a large amount of real estate.

However, post-war Annam was in dire need of reconstruction, and at that time, it was difficult to sell these properties even at rock-bottom prices.

Occupying prime locations in the city, these properties couldn't remain idle indefinitely, so the government took them out to collect rent.

Despite the low rent collected, the large number of confiscated properties outweighed the low rent.

Aside from some residences bestowed upon him, which Li Mu used to reward meritorious officials, most of the high-quality real estate in various regions remained in the hands of the government.

"Land tax and miscellaneous taxes will be temporarily suspended."

The potential for business tax is enormous; we need to take a long-term view.

We can do the math: the addition of twenty prefectures is itself the greatest asset.

Salt is a basic necessity, and as long as illegal salt trade is curbed, increasing salt tax to two million taels next year shouldn't be a problem. With the continued increase in immigration, salt tax will continue to grow rapidly for a long time to come.

Mining tax revenue growth may be slower, but with such a large increase in land area, there must be some valuable minerals.

Even without considering these issues, next year's growth rate will not be less than 30%.

Needless to say, rental income also added a lot of real estate to the government offices while the army was conquering cities and seizing territories.

Activating these assets in the future can generate substantial revenue.

The growth rates of transaction taxes and tea and wine taxes will also be high.

If you observe carefully, you should notice that the purchasing power of the people in the ten northern prefectures is increasing.

With the elimination of exorbitant taxes and the exploitation by remnants of the previous dynasty, their income increased significantly.

Once you have money in your pocket, you'll eventually spend it.

During holidays and festivals, spending on tea and alcohol will inevitably continue to increase.

Even if some of them are misers, the investment in farm tools and livestock is still indispensable.

Optimization of production tools can further improve the grain production capacity of the Protectorate.

You've probably heard how high grain prices are in the north.

Transporting a ship full of grain from Annam to Liaodong could easily yield several times the profit, which was entirely possible.

The shipyard is already in operation, and more and more merchant ships are being built.

In the future, if we profit from trading grain at higher prices, our income will be no less than that from land taxes.

Li Mu's answer left everyone speechless.

They had considered beforehand that the proposal might be rejected, after all, it was a promise made by Li Mu.

Even if people are used to the government's grain and taxes, if a promise is broken, it will still affect their reputation.

It's understandable to forgo this benefit for the sake of political credibility.

To everyone's surprise, Li Mu's reason for refusing was "to settle accounts."

When people have money in their pockets, it will definitely boost commerce; there's no question about that.

However, the Protectorate's industrial chain was too weak, and the flow of money among the people was too slow.

Taxes collected from business operations are far less efficient than money taken directly from the pockets of ordinary people.

Under normal circumstances, they would certainly argue their case and list a series of benefits of taxation.

But Li Mu was good at making empty promises.

Immigration and military campaigns abroad cannot continue indefinitely.

If one of these tasks is stopped, the Protectorate will have a grain surplus.

Due to the policy of prohibiting grain exports, the price of grain in the Protectorate remained low for a long time.

The price of a shi (a unit of dry measure) of rice was generally around three or four qian (a unit of weight), while coarse grains were even cheaper.

In Liaodong, thousands of miles away, a shi (a unit of dry measure) of rice could sell for six or seven taels of silver, and during special periods it could even reach more than ten taels.

While the huge price difference was partly due to unscrupulous merchants hoarding and speculating, the severe food shortage in Dayu was also an undeniable fact.

It involves collusion between officials and businessmen, and ordinary people can't do this kind of business, but the Protectorate government can.

Even if we don't expect to sell at retail price, we can still make huge profits by wholesaling rice at a price of four or five ounces per shi (a unit of dry measure).

Even if they don't go to Liaodong, they can still make a considerable profit by transporting the goods to places like Henan and Shandong for sale.

The profit from buying three to five bushels of rice from each commoner and reselling it exceeded the revenue from land tax and miscellaneous taxes.

Since there are better options, there is naturally no need to levy land taxes and miscellaneous taxes.

After all, there are costs involved in levying taxes.

The collection of land tax and miscellaneous taxes, in particular, is most prone to breeding corruption.

The imperial court may have collected only one dou of rice, but by the time it reached the local area, it would have become three or five dou, and in the end, the imperial court would bear all the blame.

"Your Excellency is wise!"

The crowd answered in unison.

Influenced by Confucian culture, people attach great importance to their reputation both before and after death.

If Li Mu's planned route succeeds, it means that the Annam Protectorate will be exempt from land tax and miscellaneous taxes for a long period of time.

The "imperial grain and national tax," which had existed for over a thousand years, came to an end under their leadership, marking a truly epoch-making event.

Based on this alone, its future historical evaluation cannot be low.

To leave a mark on history, enduring a few years of hardship is absolutely worthwhile.

"Don't worry, everyone. The financial strain is temporary."

The subsequent strategy of the Protectorate will shift from expanding its living space to developing the economy and increasing fiscal revenue.

The army is unlikely to see any major changes in the short term, but the navy is likely to see some activity.

According to the intelligence gathered, there are several islands in the South Seas region that are rich in gold, silver and copper mines, and I intend to take them over.

If all goes well, mining revenue alone will bring in millions of taels of silver annually.

Li Mu said with a smile.

While the profits from direct mining are substantial, they are still far less than those from minting coins.

The Protectorate's revenue from minting taxes was not high, mainly because the currencies it minted were copper, silver, and gold coins.

Raw material costs limited the profits from minting coins.

The best option is still to print banknotes.

With the Great Yu Dynasty serving as a negative example, issuing fiat currency is basically out of the question.

Officials, merchants, gentry, and ordinary people were all victims of the paper money, and no one wanted to experience it a second time.

The failure of the paper money system does not mean that there was no paper money in the world.

The banknotes printed by money shops and banks were actually a form of paper money.

The difference lies in the shift from a credit standard based on paper money to a gold and silver standard.

With the silver notes, one could exchange them for the full amount of gold and silver at money shops and banks.

Even if the banks charge a handling fee, it's still better than the daily depreciation of the paper money.

The public's acceptance of banknotes far exceeded that of the imperial banknotes issued by the court.

With readily available examples, Li Mu could naturally learn from them.

The credibility of banknotes stemmed from the promise by money shops and banks to print them on a 1:1 basis and to fully redeem them.

Even if leverage is added privately, the percentage will definitely not be high, otherwise the credit cannot be maintained.

The Protectorate General's Office is leading the effort, and its credit is inherently stronger than that of money shops and banks, so it can add some leverage, but the leverage certainly cannot be too high in the early stages.

To leverage the reputation of silver notes to promote paper money throughout the entire Protectorate, a large reserve of gold and silver was needed.

The reason for the delay in taking action in Southeast Asia was that the navy would face competition from the Franks when it entered the region.

In the early stages, the navy's strength was limited, and even if it could win against the Frankish, it would have to pay a heavy price.

Besides Westerners, the widespread presence of pirates also posed a significant threat.

If both sides suffer heavy losses and the pirates benefit, then the losses will be enormous.

As time went on, warships were launched one after another, and the navy's resources became increasingly substantial.

The expansion of territory brought the Protectorate closer to the South Seas, giving the navy the ability to confront any enemy at sea right on its doorstep.

With sufficient confidence, it was time to put the Southeast Asia strategy on the agenda.

……

(End of this chapter)