A Good Landlord in the Tang Dynasty: Starting from the Village Chief

Chapter 164: Not Managing Money
After receiving his own one copper coin and two dou of rice, Li Yi signed and stamped the document.

Lingshi said to him with a smile: "Does the deputy supervisor have any extra money to lend?"

Li Yi had just discovered that when the food allowances were distributed, many officials actually took more than a thousand coins. Now he understood that these officials had used their private money to deposit into the official account and handed it over to the money-catching officer as public money to lend out.

The interest rate on public funds is 100%, and the minimum monthly interest rate is 8%. Fifty thousand coins will cost 4,000 coins in interest per month.

The officials of this yamen gave the remaining money on hand to the money-collecting clerks to use as official capital for lending. The government office would take a portion of the interest, the loan clerk would take a portion, and the rest would be given to the owner of the money. Everyone benefited.

"Is it possible to use private money to pay for government funds?"

"The capital has over seventy yamen and over six hundred censors, most of whom are like this. Many yamen even have extra censors who aren't on the payroll."

The main reason why the imperial court lent public money was that it did not want to bear the burden of public expenses. It gave capital and used the interest every year to subsidize public expenses, public kitchen meals, and even monthly salaries and miscellaneous expenses.

It is said that there is no need to collect taxes from the people anymore.

But where does the money actually come from?

The interest rate is so high, someone has to pay for it in the end. Now it depends on the ability of the money collectors in the various government offices.
Those who are capable can find people who need to borrow money and guarantee to repay the loan and pay interest on time. Some people can even add some private money to the government capital to lend it out.

For this reason, each government office would not directly send the clerks who did clerical work in the government office to collect money, but would select the sons of officials or the sons of powerful and wealthy businessmen and give them the official position of clerk.

And as long as you can successfully complete the task of catching money, you can be appointed as an official.

This was even a disguised form of buying an official position. A money-grabbing clerk was responsible for lending 50,000 coins, and the annual interest was only 50,000 strings of cash.

Theoretically, if you pay 50,000 yuan out of your own pocket, you can buy an official position.

If you become a money-catching official, you can be exempted from military service and punishment.

If you have the ability, you don't have to pay the interest yourself. You can also use the government's banner to use your own money to become an official and make a profit.

This is a display of magical powers.

If we can't find someone capable enough to catch the money, we can only force the money onto the rich landlords and let them pay for it.

In fact, it is exploitation of large households.

The Palace Garden Supervisor also had nine cashiers with 450 strings of cash.

These nine people were all children of noble families and it was not difficult for each of them to manage a mere 50,000 coins. They had plenty of connections and could lend the money to merchants.

He could even help his colleagues in the yamen to lend money with his own money, which not only allowed him to make a good commission but also to build good relationships with his colleagues.

Li Yi asked the money-catching official,
According to the custom of the Palace Garden Supervisor, officials would give their private money to them for lending, with an interest rate of eight percent. The person who collected the money would take two percent, two percent would be given to the government office, and four percent would be taken by the official who paid the money.

"Although the interest on our private money, which is deposited into the government capital, is only four percent, the principal is safe and the interest is guaranteed. If you, the deputy supervisor, have any extra money, I will give you five percent interest."

Li Yi thought to himself that these people were really wild and courageous.

We gave them 4% interest, and then they lent it out based on official capital, which was more than 8% interest, actually more than 8.3%.

"With such a high interest rate, it's hard to lend money, right?" Li Yi asked.

Wei Qilang said with a smile: "Cats have their ways and mice have their ways. We are here to catch money. If we don't have some skills, how can we dare to do this job?"

His father was also a sixth-rank official. Although his rank was not high, his family had been officials for generations and his connections were good. It was no problem for him to put in a few hundred strings of cash.

"In fact, the interest on public funds doubles every year, which is not considered high. After all, there is no compound interest. You can get as much as you borrow.
Nowadays, only the interest rates on incense donations from some large temples are lower than this, while the interest rates on private businessmen and landlords can be even higher."

This is the situation in the entire market, so the monthly interest rate of 8% and double the annual interest set by the court is only at an upper-middle level.

The court stipulated that usury is the kind where the interest exceeds the principal, which is called usury. The interest on public funds is at most double the amount, which does not count.

Li Yi has some spare money now.
There are more than 500 taels of gold alone, which is worth more than 4 million coins, but he does not intend to use it to make a small profit.

However, he did not object to the officials of the Palace Garden Supervisor who embezzled money from the government. Their income was not high, and they could not take out much money.
"You must regulate the use of public funds for lending. Loans must be given to those in need on a voluntary basis. You cannot force loans, nor can you arbitrarily increase interest or charge handling fees."

Fan Fang has now handed over the public money, public land, public kitchens, etc. to him to manage, so he still has to express his attitude.

"Please rest assured, Deputy Supervisor," several money-grabbing officers patted their chests and expressed their stance.
After chatting for a while, I found out that these people actually didn't just lend money directly to others. Many times they used the official certificate to trade directly in the market.

Engage in some short-term transactions, reselling supplies,

After all, these people are all high-ranking officials and descendants of aristocratic families. They work in the government offices, are well-informed, and are very good at carrying out these operations.

This is just like when the news of the defeat at Qianshuiyuan reached Chang'an last time, and the price of grain soared, Li Yi concluded that Xue Ju's troops could not reach Guanzhong, and the price of grain would soon fall, so he immediately got a batch of grain and brought it to Chang'an to sell.

Not only did he gain a good reputation for himself, but he also actually earned more than 200,000 yuan.

The money-grabbing officials used official capital to enter the market for transactions, which was actually equivalent to competing with the people for profits. They could even use their connections to get some scarce materials to resell.

But it's like this,
As long as the court didn't pay any money, the people below could find the money based on their own abilities, as long as they didn't go too far. Consider Wang Dalang, who also worked in the Ministry of Revenue, a small, unofficial official, collecting money for ten years. Even when offered an official position, he refused to move because he made more money and lived a comfortable life.

When I go home,
Li Yi was thinking, the interest rates for lending money are really high these days.

What kind of business can make double the profit in a year?

If Li Yi could overcome the psychological barrier and also lend money at high interest rates, with his capital, this would really be a good way to accumulate wealth quickly.

He could also open a pawn shop, as this short-term pawning money could be turned over faster.

But in the countryside, I have seen many people borrowing money and food, being forced to sell their wives and children due to high interest rates, and even becoming slaves themselves.
It's really not a good idea to do this.

Fortunately, he is not so short of money, and he now has ways to make money.
After arriving home,
Li Yi told Shi Niang that he would send people to provide more clothes and food to the servants in his family so that they could have a good winter.

"The general camp and other places are all recruiting disaster victims. We need to take good care of them this winter and make sure no one freezes or starves to death."

Du Shiniang was surprised that her husband talked about these things after returning.

"Don't worry, Alang. Second Uncle Luo and Third Uncle Luo are now regularly inspecting the various farms and delivering food every ten days. Winter clothing has also been arranged. Although their accommodation this year is a bit simple, they will have no problem getting through the winter."

"Why are you suddenly talking about this?"

Li Yi said, "I just feel sorry for them. Now that they follow me, Li Yi, I have to be responsible for them. Even if I were raising cattle, horses, mules, or donkeys, wouldn't I have to build a good shed and feed them more feed this winter?"

"By the way, have any fellow villagers asked us to borrow money or food recently?"

"Yes, there are quite a few. Some are due to sudden illnesses in family members, some are due to funerals or weddings, and some are due to lack of food and clothes for the winter," Shi Niang replied.

"If a fellow villager comes to us to borrow money because he is short of food or clothing, and wants to borrow a thousand or two thousand coins or a bushel or two of grain, we will charge a lower interest rate, or even no interest at all," Li Yi said.

Ji said on the side: "Although Alang is kind-hearted and takes care of his fellow villagers, this is against the rules. You can accept less, but you can't accept nothing."

“Yes, the rural landlords who borrowed money and grain charged at least ten percent interest per month, and most of them were short-term loans.

The interest rate of double is not considered high. Many short-term investments can double the interest rate in just three to five months.

Some will deduct interest before lending, which is called interest at the outset, and some will compound interest when the loan matures.

As for borrowing grain, it's usually one dan in spring and two or three dan in autumn. Or one dan of rice in spring and one or two dan in autumn."

Li Yi shook his head after hearing this. In the Tang Dynasty, people called interest that exceeded the principal "usury." However, most of the loans were for three to five months, or half a year to a year. The annual interest rate was already over 100%, yet it was not considered usury.

"We can't ask for such high profits. It's too much of an exploitation of our fellow villagers."

"Six-month term, 4% monthly interest." Li Yi added, "We will try to lend only to fellow villagers who are in urgent need."

I don’t make money from this, but I help the people around me and earn a good reputation for myself.

Help in emergencies but not in poverty.

Those who come to borrow money will be reviewed. If they are in urgent need or in difficulty, we can lend them some money to help them through the difficult times. The interest rate will be lower, and they can ask for a guarantor and sign a promissory note. There is no need for collateral.

Try not to borrow a lot or from outsiders.

"For workers in our workshop, tenants we've recruited, or fellow villagers who are in urgent need of money or grain, if the amount is not large, we will reduce the interest by one percentage point. This is a benefit for everyone."

Ji asked, "Does the money and grain borrowed by the society also have this interest rate?"

"Um,"

Other landlords lend money at an annual interest rate of 120%, 150%, or even 200%. Public funds also lend at an annual interest rate of 100%. Temple kitchen loans also charge an interest rate of 40% to 50% to 100%, or even higher.

As for the loans lent by those ruffians, idlers, and ruffians in the neighborhood, they are even more ruthless.

Li Yi has now set the interest rate for the Li family's loan at 4% per month for half a year, which is equivalent to 48% per year.

If you borrow one stone of grain, you have to return one stone, two dou and four liters after half a year.

The interest rate for half a year was 24%, which would be considered usury in later generations, but in this era, everyone from Du Shiniang to Ji Lingyi and even Yu Youji thought that Li Yi was doing good deeds to accumulate merit.
In an era when 100% interest is common, Li Yi's interest is less than half of that of others.

“Isn’t it too low?”

"We are only providing emergency relief to our fellow villagers,"

Yu Youniang said, "Actually, there's no need to pay so low. A 6% monthly interest rate for half a year is already very generous."

The monthly interest rate is 6%, which is 36% in half a year. The public funds are 48 to 50% in half a year, which is indeed much less.

"Forget it, there's no need to dwell on this little bit. If you can't pay it off on time, you can repay it in installments. Let's not worry about the profits anymore.
If old debts are not settled, new debts will not be taken on, that’s it.”

(End of this chapter)