My younger brother Zhuge Liang

Chapter 444 I'm not targeting you, I'm saying that everyone's math skills are rubbish (except my second brother)

Wu Su's first reaction after hearing Zhuge Jin's big promise was naturally shock:
"As long as we serve the court and stabilize trade, we can exchange cattle and sheep for pickled bacon? Impossible, right?
The livestock of the Wuhuan tribes were slaughtered as soon as they had grown enough meat. In summer and autumn, there were hundreds of thousands of heads of livestock each season.

How can the Han merchants afford so much salt to pickle meat? Will there be no shortage of salt on the grassland in the future? Even if they can do it, how expensive will this pickled meat be? "

He asked a series of questions, all of which were of concern to other tribes on the grassland.

This sounds too unbelievable. From the objective conditions to the means of implementation, it is hard to imagine. No wonder they were shocked.

Previously, the salt production in the northern coastal areas and the scale of the entire industry were indeed unable to support this.

Upon hearing this, Zhuge Jin was naturally not in a hurry to reveal everything. He just said bluntly: "You don't have to worry about the supply of salt. When the time comes, as long as you are willing to cooperate with the court, you can naturally let the envoys of the cooperating departments go to see the scale of salt storage in Yuyang Salt Warehouse with their own eyes. As for where the salt is produced, it is not your concern."

There was no need to reveal the secret of the salt-drying method now. Anyway, Zhuge Jin only needed to let the Wuhuan people see the sufficient sea salt inventory, and then see the large-scale salted meat workshop they prepared and the finished salted meat inventory, and he would be able to win their trust.

However, even if Zhuge Jin told the Hu people about the technological advances in salt-drying, they would not be able to use it - the Hu people did not control any section of the coastline of the Bohai Bay or the Korean Peninsula part of the Yellow Sea.

But Zhuge Jin still wanted to keep these technical secrets for a few more years.

After hearing what Zhuge Jin said so confidently, Wu Su and others could not question the salt production capacity and inventory scale for the time being. This thing cannot be faked, so they will just see it for themselves when the time comes.

The princes are in such a high position that even if their words are not golden, at least they will not joke about their reputation and credibility.

Some Wuhuan envoys asked politely: "Since the princes are so sure, how dare we, the barbarians, not believe it? I wonder if the price of salt will drop after the salt trade is expanded in the future? Or will it remain high?"

Zhuge Jin: "The price of salt will naturally drop. I can't say how much, but at least it will drop to 40% of the current price. In this way, even if you increase the amount of salt used by two or three times, the total cost will not increase. If you use more, the expenses will increase."

By switching from boiling salt to drying salt, more than half of the fuel can be saved, and the labor cost is not that high. All in all, it is normal for the cost to be reduced by 20% to 30%. If the salt is sold at 40% of the selling price, it can still make more money than before.

The key is that after small profits but quick turnover, the scale of the industry will expand quickly, and the absolute number of total revenue will increase even more significantly. Therefore, the "terminal retail price" that Zhuge Jin dared to set is definitely worth scrutinizing.

Of course, the selling price he mentioned is only the price of the salt itself, and does not include the salt tax. The tax on salt is very heavy, sometimes more expensive than the cost price of the salt itself.

As for how the salt tax would be adjusted and whether it would be discounted by 40%, Zhuge Jin did not mention it.

Therefore, among the envoys from the grassland tribes present, only a small number of relatively stupid ones immediately became excited after hearing the price. However, the more intelligent ones had already realized the problem and did not dare to be happy too early.

When the atmosphere calmed down a bit, Wu Su asked cautiously in a low voice: "I wonder if the salt tax will also be reduced by 40%?"

Zhuge Jin: "Salt tax... that's another issue. If the salt is only used for direct consumption by the tribes on the grassland, then of course the original tax rate should be followed. After all, if the salt tax is lowered, some people will change the use of the salt and resell it. How can the court manage it?

What if someone buys the low-tax salt and then resells it to the local Han people, or even sells it to the Cao bandit-occupied areas of Shanggu and Daijun after passing through the grasslands? Wouldn't that be aiding the enemy?"

Zhuge Jin spoke very righteously and gave very sufficient reasons why the salt tax must not be reduced. The Wuhuan people had no way to refute him, but they all showed more disappointment, and their originally rising expectations for the expansion of trade in the market also receded a little.

However, Zhuge Jin had always been able to control their emotions. After a little "first downvote and then upvote", he didn't let them wait too long and immediately followed up with another sentence: "But..."

The group of Hu people below, like Pavlov's hounds, quickly perked up: "But what?"

Zhuge Jin cleared his throat and said, "However, if you are willing to cooperate with the court and make a lot of pickled meat, the cost will be huge. So I discussed it with Mi Shijun and came up with a temporary solution that would satisfy both parties.

Anyone who wants to ship salt out of Yuyang Pass will be subject to strict inspection according to the original salt tax rate! However, if the salt is used for pickling meat or other special licensed purposes, it can be used directly in Yuyang Pass and not shipped out of the pass in the form of salt, then the original salt tax can be directly discounted by 70%! If the pilot is successful in the future, this tax rate can be discussed again!"

That group of Hu people had no economic sense, and what Zhuge Jin took out was too new, so they were really confused.

Not to mention that they were confused, even Mi Zhu, who had just been revealed the whole thing by Zhuge Jin a few days ago, was actually a little dizzy at first.

So Zhuge Jin continued to answer questions and explain many details, and these Hu people finally understood it roughly.

The strategy that Zhuge Jin thought of was actually similar to the "Customs Bonded Zone" in later generations.

In later generations, customs will of course impose import tariffs on imported goods.

However, if the raw materials and intermediate products such as high-end chips are difficult to produce domestically, and the final products are still sold abroad after domestic processing, then the country will give the final tax refund for the import of these chips.

The specific operation here is to process the products in the factory in the customs bonded area and write them off during final export, thus returning the money used to guarantee the tariff at the beginning.

(Note: If the final product is not sold abroad but sold domestically after processing in the bonded area, the bonded tariff money will not be refunded. For example, if you buy Qualcomm chips to make Apple and then sell them to the United States, you can get the bonded tariff money back. But if you buy Qualcomm chips to make Apple and then sell Apple in the domestic market, you can't get it back.)
Zhuge Jin had more than 1,800 years of experience in economic and tax management than the ancients, so such a strategy was certainly easy for him to come up with.

In the future, the salt produced by Changlu Salt Field, except for the part sold for normal consumption by Han people inside the Great Wall, will be traded as usual according to the original old laws and old tax rates, and the rest will be transported to the border market in Yuyang.

The salt that enters between the inner and outer checkpoints of Yuyang is equivalent to entering the bonded area.

In the future, Zhuge Jin will turn Yuyang County into the most concentrated livestock slaughter and meat processing base in the entire northern border, similar to the status of Chicago in the Great Lakes region in the 19th century. (Chicago was originally famous for slaughtering cattle and processing beef, so the teams there are all called the Bulls)
The meat processing plant covers the entire industrial chain, including slaughtering, cutting, and pickling. It can also add cowhide tanning for armor, tendon tanning for crossbow strings, sheepskin tanning for fur coats, dairy products, etc. In the future, the livestock processing and distribution of the Three County Grassland will be located here.

As long as the Hu people are willing to cooperate and sell cattle and sheep at any time to ensure the supply chain of cattle and sheep, this centralized and efficient production method will not fail.

At the same time, it can also encourage the cattle and sheep on the grassland to be killed in time after they stop growing meat, so that they will not eat too much grass in vain, which will waste feed and make the meat become old in vain.

The total output of livestock products in the entire three-county grassland can definitely increase by half or even more than half compared to the original production order and resource allocation model.

The only cost is that a huge amount of sea salt will be used extra - but the production cost of salt is not a big deal, the main thing is the heavy tax. After Zhuge Jin used the sun-drying salt method, he controlled the entire industry chain from the source, which was almost a cost-free business.

……

Zhuge Jin and Mi Zhu discussed the general action strategy with these Hu people.

Zhuge Jin then took out the mathematical tools he was good at and discussed the accounts with the messengers who had questions, could not calculate the accounts, and could not see the rate of return clearly.

What level of mathematics could those barbarians have? They originally had only a vague qualitative concept in their minds for many problems, but never had a detailed quantitative analysis.

After Zhuge Jin broke down and analyzed the issues one by one, the Hu envoys soon understood everything and were astonished.

Zhuge Jin could start with the "efficiency of energy transfer in the food chain" and explain why raising cattle, sheep and pigs is the most efficient and why raising other animals is not an option, and what habits and physiological characteristics can make animals grow more fat and meat.

We talked about the yield curve of feed-to-meat ratio and then came up with the golden time for slaughtering.

"Do you know why the most suitable size for raising meat is sheep? Because even smaller animals grow faster, but waste too much heat. The heat dissipation of animals is proportional to twice the length, and the energy consumed by the heat production and digestion and absorption physiological activities of animals is proportional to three times the length.

So in the end, animals the size of sheep are the best solution for quickly raising meat. Rats and rabbits grow and reproduce faster than sheep, but they are too small, so most of the food they eat is lost to maintain body temperature and heat dissipation, so it cannot be stored and turned into meat.

Pigs and cows are larger than sheep, and they are less efficient at growing meat than sheep just based on their size. But cows have an extra vented stomach, which allows them to digest grass more than sheep, and absorb it more thoroughly, making up for the extra loss of their larger size. Pigs eat and sleep, so less feed is wasted in exercise, and they grow fat, which can also make up for this energy loss..."

When Zhuge Jin spoke these words, he tried his best to use simple and easy-to-understand words that were easy for people in the Han Dynasty to understand.

The concepts were all from the high school biology textbook. As a gold medal lecturer in high school education in his previous life, he naturally mastered them with ease. He just changed some words when relaying them.

In the end, a group of Hu people who had raised cattle and sheep all their lives had to admit: Even if they did not consider management and overall planning, and only considered the understanding of raising cattle and sheep itself, these guys were only rich in practical experience, but when it came to summarizing the principles, they were simply far behind the princes.

The princes, however, were sages who were born with knowledge. They knew both the facts and the reasons behind them. As a Han scholar-official, he had such a profound understanding of raising cattle and sheep.

With such a solid foundation, combined with his mathematical coordination tools, how could the Hu people not be convinced? After all, this was the area where the Hu people were best at, and he crushed the Hu people head-on.

At the meeting that day, Zhuge Jin answered every question and feasted with the Hu envoys for two hours. In the end, these Hu people no longer had any doubts about the feasibility of the plan and were completely convinced.

……

Of course, no longer doubting the feasibility and feasibility does not mean that we no longer question every aspect of the entire plan.

The Hu envoys knew that there was only one key point left to reconcile the two countries, which was how to gain each other's trust in the long term, how to get the Han government to promise to run the border market in a long-term and stable manner, and to ensure that the trading volume remained consistent and would not be strangled. Once the Hu people were deeply embedded in this trade cooperation system, the benefits would certainly be huge, but their lives would also be in the hands of others.

Zhuge Jin only replied, "We have enough salt for you to pickle the meat." However, pickling meat will cost extra and salt will be wasted. The envoys such as Wu Su were still very curious about the "cattle and sheep futures" that Zhuge Jin had mentioned before.

According to Zhuge Jin's brief explanation, the "cattle and sheep futures" seemed to ensure that if you had too many cattle and sheep and were likely to die of starvation due to a snowstorm on the grassland, you could ship them to the Han area in advance and sell them. If you wanted cattle and sheep again in the future, you could buy them back.

If cattle and sheep can be coordinated and accessed across time, this will certainly be a huge attraction for the Hu people on the grassland.

Because they keep their own cattle and sheep, every day they save means an extra day's loss in feed costs. If they can keep them with the Han people, even if it's at a 10% or even 20% discount, as long as they can ensure that they can be taken out in time in the future, the Hu people are willing to do so.

In other words, in this era, people did not think that interest should be paid for depositing cattle and sheep. Instead, they thought that the depositors should pay a storage fee, which was the cost of feed.

They still didn't believe it. How could Zhuge Jin guarantee that he could take it out in the future?

Facing this problem, Zhuge Jin once again put forward his insightful ideas: "This is easy. First, when you come to sell live cattle and sheep, if you do not want to exchange them for salted meat, you can exchange them for an opportunity to get cattle, sheep or fresh meat when you are short of cattle and sheep in the future."

Then, the Han merchants will first pay you the corresponding money according to the official price of cattle and sheep. Of course, this official price must be 20% lower than the normal market price. The 20% difference is the storage fee of the court market and the fee for overdue feed.

In addition to paying you an 80% discount on the spot, the court will also issue a deed with seals of both parties, which will be aligned with the contract and specify the time, number, weight and price of your batch of hedging cattle and sheep.

In the future, if you are short of cattle and sheep and want to directly exchange them for fresh uncured meat or live cattle and sheep, you can bring copper coins or gold and silver according to the market price, and then bring this hedging contract for cattle and sheep. If it is correct, it can be accepted and redeemed at the official price.

The final specific discount depends on the length of the redemption period. If the one-year term is refunded 10%, it is actually a 10% discount. If the three-year term is not refunded or compensated, it is actually a 20% discount. If the five-year term is not refunded, it is actually a 30% discount. If there is no acceptance after five years, it will not be accepted. The copper coins used to sell cattle and sheep can be used for whatever purpose.

However, if there is a year when the entire grassland is hit by snowstorms and the cattle and sheep cannot be raised and must be slaughtered, the court will ensure that the cattle and sheep are returned to you in the form of pickled meat at the price of pickled meat, and for the part where pickled meat is more expensive than fresh meat, we will only charge you half the price of salt. The remaining half of the cost of salting will be regarded as compensation for the court's failure to fulfill its contract. The court is a big family and a big business, how can it break its promise on such a matter! "

The specific algorithm of the plan mentioned by Zhuge Jin is not yet mature, but it can be piloted for a few years and the price discount rate can be fine-tuned in the future.

Anyway, the scale of this kind of trade will not be too large in the first few years, and the pressure of acceptance can be solved.

Because as long as this trade gets going slowly, it is entirely possible to sell cattle and sheep in a good year in one county, and in another county where the weather is bad and there is a snowstorm and famine, and simply take from one place to make up for the other.

The border city of Yuyang of the Han Dynasty served as an insurance company for regulating risks in the northern grasslands of Youzhou.

The capital pool of insurance companies is definitely more abundant than that of banks, and there is a lot of room for hedging and arbitrage.

The Hu people didn't understand anything. They didn't understand that Zhuge Jin's move was to create an insurance pool. Even though they were taken advantage of by Zhuge Jin, they only saw that "the princes only charge us a small storage fee, so that we can store the cattle and sheep that we can't eat, and take them when we need them in the future."

The "extra cost for the shelf life of cattle and sheep" was borne by the princes, which was a huge favor. How could the tribes on the grassland not be grateful for such a benevolent policy?
As for the price… Of course there is one.

That means they will have to be dogs of the Han court in the future, and they must not commit crimes or cause trouble again.

Otherwise, once the relationship with the Han court broke down, they would not be able to exchange the futures contracts in their hands for spot goods, and they could only find other channels to spend the copper coins they obtained from the discounted sales.

The deeper one is embedded in the Han Dynasty's trade system, the more difficult it is to extricate oneself.

Among the Hu envoys, some who were particularly clear-headed had already noticed this.

But they knew that this concern was the only one that could not be brought to the table - if they asked a question like "If we trade so deeply with the court, what will we do if we want to betray the court in the future?", wouldn't that be like exploding themselves?

Fortunately, Zhuge Jin was very considerate and considerate.

He took the initiative to offer another suggestion that was considerate of the other party, which immediately shook the last of the doubters' concerns.

Zhuge Jin said, "In fact, there are still many hidden dangers in the market of Yuyang, which you have not thought of yet. Even if your tribes are sincere in their friendship with the court and are willing to do business for a long time.

But what if the Han merchants or officials who run the business below take bribes and squeeze you, or take advantage of your difficulties to hoard goods and squeeze you more, how will you respond?

As for the court, of course I have the final say, but the people below me, based on the lessons of the Han Dynasty's 400 years, I know frankly that I may not always be impartial - so, I thought of a way to try to ensure that neither side is hoarded and harassed by the other side.

I will instruct Mi Shijun to split up the Han merchants in Yuyang Border City in the future, and ensure that there are multiple Han merchants from different backgrounds on the Han side to trade with your grassland tribes. In this way, there will be many tribes on the grasslands coming to trade, and there will also be multiple Han merchants coming to purchase meat, leather and tendons. Buyers and sellers will have to compete with each other, and it will be difficult for one party to dominate and hoard goods to threaten the other party. ”

After Zhuge Jin finished speaking, the Hu envoys who were still wavering and worried finally softened completely.

Zhuge Jin's move, in fact, has no guarantee of the final effect. It is nothing more than splitting up the monopoly, just like the three cards in the telecommunications market and the three barrels of oil in the oil market in later generations, showing that the benefits are given to the counterparty of the transaction.

But the sincerity he showed and the creativity he came up with to demonstrate his sincerity are enough to impress people.

As one of the most intelligent princes in the world, he has come up with so many plans for this matter. This system must be very secure.

Moreover, if we don't respond quickly at this time, the pilot initiative will be taken by other tribes, and it will be difficult to regain the market share in the future.

The princes made it clear that Han merchants had to compete with each other and no one was allowed to benefit alone. This was certainly to reassure the Hu merchants.

But at the same time, this also means that the competition between Hu merchants will definitely be more intense than that between Han merchants.

Hurry up and sell your cattle and sheep! If you don’t sell them now, you will run out of futures quotas!

After figuring out this logic, the various Hu people on the grassland finally began to compete with each other enthusiastically, fearing that they would suffer losses.

"We are willing to follow the good governance of the princes!"

"We, the Tadun tribe, are willing to sell all the surplus cattle and sheep this autumn to the imperial court! We don't need to exchange them for pickled meat! We can just exchange them all for copper coins and corresponding futures contracts!"

"We, the Louban tribe, are willing to exchange all the proceeds from the sale of cattle and sheep for pickled meat, ironware, and tea to show our sincerity! All the money we get from the sales will be spent in the border market of Yuyang!"

Zhuge Jin finally revealed a rare hint of pride on his face.

"Very good, very good, don't worry, as long as the tribe responds enthusiastically this time, every tribe will have a chance! The court has enough copper coins, salt, iron, and tea. I guarantee that as long as you want to sell, the court can consume all the goods!"

Zhuge Jin finally set the tone for this event, announcing that any tribe willing to cooperate with the court would have meat to eat and would be able to reap huge benefits from this trade, which would be mutually beneficial.

The various tribes responded quickly. Just a few days after the meeting, some tribes actually drove large herds of cattle and sheep to Yuyang to sell, and were led by Han officials to tour around and observe.

The newly built Yuyang Salt Warehouse by the Shui River opened the eyes of the Hu merchants and envoys. They saw batches of sand ships coming from Tianjin Port, led by Zhou Yu's navy, transporting large amounts of sea salt into the salt warehouse, and the key point was that a fleet came every few days to make up for the shortage at any time.

After seeing so much sea salt, how could they still be worried about the power of the imperial court?

Because this is the first year of pilot trade, the sea salt has not yet been used to pickle bacon and ham in large quantities, so the spot trading volume of bacon is definitely not enough.

But it didn't matter. With the court's credibility and the endorsement of Zhuge Jin's various promises, those tribal merchants didn't insist on taking the bacon back in person.

They used all the money they earned to buy ironware, salt, and tea that the Han people could provide. If they couldn't spend some of it, they would buy silk and porcelain for the enjoyment of the tribal leaders.

Since he didn't need the unspent part, he saved some copper coins to test the waters, and at the same time signed a "cattle and sheep futures contract."

Mi Zhu, the governor of Youzhou, suddenly had so many cattle and sheep kept by the Hu people. The food problem of the Youzhou army was instantly solved for the most part.

Zhuge Jin ordered him to quickly separate a portion of the sheep and use them as food for Zhao Yun's cavalry who would take advantage of the grassland to launch a surprise attack on Gongsun Du.

-

PS: It’s the third day of the Chinese New Year, and although I haven’t resumed updating twice a day, it’s still a long chapter with more than 6,000 words.

If you really want to be a chapter-breaking person, it can actually be counted as two chapters with 3K...

(End of this chapter)