The Han culture is spreading strongly in Southeast Asia

Chapter 785 Gold Mountain and San Francisco
Financial reform was the last thing Prime Minister Luo Fangbai wanted to do before retiring.

The reform was simple: it changed the currency anchor of the Great Yu Dynasty from silver to gold.

"Your Majesty, silver production is increasing daily in various places such as the Northern Continent, and European countries also have large reserves. More importantly, most of the silver-producing areas are under the control of Europeans, with the Kingdom of Spain having the most."

If we continue to use silver as the base currency, not only will the value of the currency fluctuate due to production, but European countries such as the Kingdom of Spain can even manipulate the value of our silver dollars by controlling the production of silver.

Gold is different. A huge gold mine has been discovered south of the Beihezhou Wenshui Port, and the first batch of gold prospectors have already begun to move in.

Meanwhile, three months earlier, Governor Mao Xiangsheng of Zhanzhou had also submitted a memorial claiming that a gold mine with astonishing reserves had been discovered in the southeast of Zhanzhou. Governor Mao even stated that the river below was shimmering with gold, and that gold particles could be sieved out with a winnowing basket.

What Luo Fangbo was referring to was the biggest problem that the silver standard encountered after the First Industrial Revolution.

Silver isn't actually that rare. It was used as a base currency in China in the past because China was relatively short of silver mines, and because mining was difficult and costly due to the lack of explosives and steam pumps.

For example, the Iwami silver mine in Japan did not impact the silver standard in history because the cost of mining was quite high. The manpower and resources spent on mining, smelting, and sending the silver to Ming China, combined with the scarcity of silver, fully justified its monetary value.

But by this time, at the end of the 18th and beginning of the 19th century, the problem became much bigger.

With the availability of explosives, steam pumps, and mature sailing ship technology and shipping routes, Europeans, represented by the Spanish, could mine silver at extremely low prices and then ship it to Dayu in large quantities.

The result was that not only did silver production surge, but the time it took for the large sailing ships carrying silver to reach Dayu was also very fixed, as they relied to some extent on the monsoon.

This led to frequent, artificially created large fluctuations in silver prices at different times of the year, causing significant damage not only to merchants and factory owners, but also to ordinary people who suffered greatly.

As a result, the Shanghai government had to establish a futures and stock management agency for silver to reduce or delay losses caused by silver price fluctuations.

As for Mo Zibu's practice of forcibly anchoring the value of silver to only the silver dollar as a legal currency at the beginning of the founding of the country, it has long been unsustainable.

Secondly, the large-scale appearance of silver greatly reduced its monetary value as a precious metal. Reflected in the specific market, the value of silver-minted currency began to become unstable.

Finally, the low cost of silver mining in Europe, represented by Spain, allowed them to use silver as currency, leading to a degree of plunder of the Great Yu.

For example, in Suzhou Prefecture, a weaver who works day and night for five days is worth only the equivalent of the output of a Mexican-Spanish overseer in a silver mine for twenty minutes.

The difference between the two is enormous, somewhat like exchanging 100 million shirts for an airplane in later times. It's like using the hard work and resilience of the people of Dayu to provide the Spanish with a happy and fulfilling life.

This even made life much better for the Kingdom of Spain in recent years, and the navy built several more battleships.

Of course, more importantly, just as Luo Fangbo said, the Europeans who controlled silver mining could completely manipulate silver production and even the amount of silver delivered to cause losses to the Great Yu and plunder its wealth.

Gold, on the other hand, doesn't have this concern. Regardless of how easy or difficult it is to mine, the output is limited, and the amount that can be mined worldwide is so small that its value is quite stable.

In addition, the two major gold-producing areas mentioned by Luo Fangbo are historical San Francisco and Melbourne, which could be completely controlled by the Great Yu Dynasty itself.

It could even be directly controlled by the imperial court, with the Ministry of Revenue and the Inner Court Transport Office deciding on the output, and the Fuxing Gold Company handling the specific acquisition and smelting, making every step controllable.

"Can the anti-counterfeiting technology of the paper money keep up? After the looting of paper money during the Mongol Yuan Dynasty and the Ming Dynasty, will the people support the issuance of paper money?"

Although gold is to be used as the standard currency, it is certainly not possible to directly mint large quantities of gold coins for circulation. Otherwise, no matter how much gold you have, it will not be enough to mint them.

The primary function of gold is to be cast into gold bars and ingots to serve as the basic reserve for currency issuance.

The market will still mainly consist of silver dollars and copper coins, but their pricing method will begin to be directly related to gold, while paper money will be used as a supplement.

Finally, over several decades, the system will gradually transition to a model where paper money is the primary currency, supplemented by a small amount of gold and silver coins, and copper coins will be phased out.

Luo Fangbai nodded, agreeing with the emperor's concerns. The paper money had long been ruined by the Mongol Yuan and Ming dynasties. Anyone with a little knowledge could immediately recall those famous historical scenes upon hearing the words "paper money."

"We have now mastered intaglio engraving and watermarking techniques, and the microtext technology that Your Majesty mentioned has also made significant progress."

At the same time, the Ministry of Works also mastered a paper-making technology that was extremely difficult to counterfeit. Paper produced using this technology was significantly different from most paper on the market; it was easily identifiable. If used to produce banknotes, it should provide excellent anti-counterfeiting protection.

"Your Majesty, counterfeit money does not actually have that much of a destructive effect on the overall economy, because if too many counterfeits are made to look too real, they can be easily tracked down. Only small batches of relatively inferior counterfeit money have the potential to escape detection."

Rather than appearing in large quantities, a small amount of counterfeit money would be insignificant compared to the vast economy of the Great Yu Dynasty.

Zheng Jinshui is correct, because for counterfeiters to achieve both large-scale production and near-perfect imitation of genuine currency, the technology they use must be very advanced, and the counterfeiters themselves must be highly skilled.

With such obvious characteristics, it was very easy to detect in this era when industry was not yet developed.

On the contrary, poorly made counterfeit currency, which is specifically designed to cheat uninformed ordinary people, is difficult to trace and control.

But after listening, Mo Zibu couldn't help but glance at Zheng Jinshui and sighed inwardly. This was a major reason why he had always been reluctant to let Zheng Jinshui become prime minister.

A small amount of counterfeit money is not a big deal for the overall economy. For example, if there are 5,000 counterfeit bills in a 100 million silver dollar coin banknote, it is a big deal. However, if these 5,000 counterfeit silver dollars are in the hands of specific individuals, it will be a huge problem.

Well, let alone five thousand, even five silver dollars would be a huge deal for a textile worker or an old farmer selling vegetables.

Zheng Jinshui lacked Luo Fangbai's meticulous attention to people's livelihoods and his compassionate spirit; he was purely a political creature.

Such a person, who seizes power in chaotic times, may become an iron-fisted leader, turning the tide in desperate situations.

However, if this principle is applied to the current prosperous era, where we are laying a solid foundation for future generations, it may not necessarily be a good thing.

Therefore, under Mo Zibu, Zheng Jinshui could only serve as a technical and auxiliary bureaucrat. Letting him take charge of the overall situation would be a disaster for those at the bottom.

However, in any case, the transition from the silver standard to the gold standard, like that of major European countries, and the adoption of gold-linked paper money as the main circulating currency, was an inevitable path.

Otherwise, given the size of Dayu, if the value of its base currency fluctuates like the tides, it will cause serious problems.

"Let's bring this matter up for discussion at the Republican Congress. Let's not keep it secret. Let's lay things out in the open so everyone has a clear understanding, and then move forward step by step."

"If possible, I would also like to establish a supervisory office at the Republican Assembly to specifically oversee the issuance of paper money. We must not allow the Great Yu's precious paper money to become something that anyone can print at will, ultimately becoming worthless even to wipe one's backside with." Mo Zibu presented his proposal very carefully. Luo Fangbai's eyes showed admiration. He cupped his hands, slowly bowed to Mo Zibu, and said, "Your Majesty is benevolent and kind; truly a blessing to the people of Great Yu!"

Luo Fangbai wasn't flattering him; he was speaking from the heart. In his view, the right to issue paper money was an extremely important power. As long as the emperor didn't issue it recklessly, there would be no shortage of money.

Now, for the sake of financial stability, the emperor has relinquished the power to arbitrarily extract wealth from the entire nation, which is certainly a great act.

Zheng Jinshui was taken aback. He really wanted to advise his adoptive father, the emperor, not to relinquish such great power.

But having followed Mo Zibu for over twenty years, he knew Mo Zibu's temperament well and knew that persuasion would be useless, so he remained silent.

So the three of them discussed it briefly and decided that since the emperor wanted to put it out for discussion at the National Republican Assembly, there was no rush to do it now.

It's already October, and the National Republican Congress will convene next February (lunar calendar). That's when the decision will be made.

Not long after, another official from the Ministry of Rites reported that the United States had changed its president, with George Washington abdicating in favor of John Adams. The minister had come by ship, intending to pay homage to His Majesty in Nanjing and present his credentials.

When Mo Zibu saw the words "abdication" written by Ru Fen, the Left Vice Minister of the Ministry of Rites, he almost spat out a mouthful of blood.

This Vice Minister Ru is an honest and upright official who is quite capable of governing the local area, but he doesn't seem to be very suitable to be the head of a highly specialized department like the Ministry of Rites.

"Since Nanyang is about to start sending slave laborers to rubber plantations, it needs an honest official who can steadily advance the process. Let Ru Zhikui go to the Nanyang Envoy's Office as the Assistant Minister and put him in charge of the Provincial Judicial Office!"

Mo Zibu said calmly, "This is the power of the founding emperor. He doesn't need to consult with anyone; he can decide the future of a third-rank official with just a single sentence."

The so-called Assistant Minister was actually the deputy to the Chief Minister of the Ministry of Personnel. The personnel were not fixed, and the direction they were in charge of was directly appointed by the emperor.

“Although the United States is far to the east of Beihezhou, with a small population and a poor country, Ru Fen, as the Left Vice Minister of the Ministry of Rites, actually misunderstood the change of the chief ruler in their tyranny as abdication. This is truly laughable.” Zheng Jinshui also looked both amused and exasperated.

At that time, the newly established United States of America was still a small carambhava on the world stage, and nobody took them seriously.

Even the United States is currently a big fan of China, believing that everything about Seres is noble, wealthy, and civilized.

So, although the nation had only been established for about ten years, several groups of merchant ships and envoys had already arrived. John Adams' famous campaign promise was to make everyone as wealthy as the Seres.

Mo Zibu flipped through the pages again and finally found something that interested him: the United States and France were fighting in North America.

The incident naturally stemmed from the French Directory demanding the return of the loan that Louis XVI had given to the United States.

The U.S. representative stated that the United States owed the French Bourbon dynasty that debt, not the French Directory.

Want money? Simple. Have King Louis XVI issue a decree, and America will pay you back.

This infuriated the French and completely exposed the true colors of the American founding fathers—these guys were just a group of plantation owners with some knowledge and experience.

They may be quite capable, each a powerful figure in their own right, but they really have little experience in governing the country and have never had a broad perspective.

Of course, France was a powerful and influential country in the world at that time, but the clown who would later switch between de Gaulle, Pétain, and macaron was a different story. So, in the beginning, the United States did not intend to renege on all its debts.

But the Directory in France was also a strange bunch. Their negotiators secretly demanded a huge bribe of £50,000 from the Americans, while publicly demanding that John Adams apologize for his past criticisms of the French Revolution.

At the same time, the United States not only had to repay its loans, but also had to provide France with a loan of approximately £3.5 million, or roughly 11 million silver dollars.

This condition made the Americans feel that the French Directory had no sincerity in negotiating, which angered the Americans so much that they said they would pay back the money if Louis XVI came back to life.

Well, they're all incredibly abstract and shameless, so it was practically inevitable that they'd turn on each other and start fighting.

"I think these Americans are going to suffer a great loss. They disbanded their navy ten years ago and now only have a small coastal anti-smuggling fast fleet, which is no match for the French offensive in northern Hezhou."

Mozibu was right. After the negotiations broke down, naval conflicts began between the United States and France. During the two years of conflict, the French caused the Americans to lose thousands of merchant ships. In the end, the Americans survived only because the British sold them weapons and gunpowder.

“Since the United States of America is going to suffer a great loss, shouldn’t we offer some assistance?” Luo Fangbo asked in a low voice.

In his view, the Great Yu Dynasty should do anything that could sow discord between the French Directory and the French government. After all, His Highness Prince Lu was the brother-in-law of King Louis XVI, and the Emperor was also related to Louis XVI by marriage. The Great Yu Dynasty was currently supporting the Bourbon family.

"Ignore them, let them fight!" Mo Zibu waved his hand with some disgust. Helping the Americans? I'd rather use that money to renovate my garden.

These guys are typical ingrates. Don't be fooled by the fact that the English are now supporting them despite past grievances. In the blink of an eye, they'll engage in trade protectionism, raise tariffs, and steal English textile technology, which led to a major conflict between the two countries in 1812.

Of course, Mo Zibu did not make this decision entirely out of hatred for the United States.

Rather, these guys are simply not worth supporting. If you support them, once they recover, they will inevitably expand westward into the northern Hezhou, and then conflict with the Great Yu will be unavoidable.

So Mo Zibu would be overjoyed if it meant causing them more losses; there was no way he would help them.

After discussing state affairs, Mo Zibu returned to the inner palace. Not long after, the bad news came that his second elder brother, Duke Cai, Mo Zitang, had passed away due to illness at the age of seventy-three.

Because Mo Zibu's father was almost fifty years old when he was born, there was a significant age gap between him and his brothers. Therefore, his second brother, Mo Zitang, is already seventy-three years old this year.

Of course, Mo Zibu was not Mo Tianci's youngest son. Historically, Mo Tianci had two sons when he was eighty years old. The timeline is also similar, as Mo Zibu's youngest brother, Mo Zijun, was born when Mo Tianci was eighty-three years old.

Upon receiving the devastating news, Mo Zibu was stunned for a long time. His second brother was honest and straightforward, with no ulterior motives. In the early days, he had always completed the tasks assigned to him by Mo Zibu very well, and his relationship with Mo Zibu was the best among brothers.

Thinking of all this, Mo Zibu took out his third brother Mo Zirong's memorial requesting to return to the court and gently wrote the word 'okay' on it.

In the past decade, too many of his loved ones have passed away.

Four years ago, it was his maternal uncle Chen Dasheng, followed by his cousin Chen Guangli, and two years ago it was his elder brother Qiong Guogong Mo Zihuang. Even his second son Mo Zhouyu's mother, Wu, passed away this year due to illness.

“Come back, it really is time to come back. From now on, the burden of Europe will be borne by this kid, Mo Gongze.”

(End of this chapter)