Taichang Ming Dynasty

Chapter 246 The Origin of the Salt Industry and Military Expenditure in Border Towns

Although the capital's tax revenue was nearly 1.25 million taels, the silver directly allocated by the Ministry of Revenue to a certain government office was not necessarily the entire income of that government office.

Let's take the Jinyiwei as an example. In the 48th year of the Wanli reign, the Jinyiwei reportedly received 115,000 taels of silver, 60,000 dan of grain, and 10,000 bolts of cloth as military pay. However, of the cash and in-kind payments to the Jinyiwei, only the five major Thousand Households Offices in Beijing were paid using the Ministry of Revenue's accounts. In total, the total amount, calculated in silver taels, was approximately 68,000 taels.

The 100-household garrisons outside the capital received their rations from other nearby garrisons or prefectures and counties. As for the officers listed in the Jinyiwei register, their salaries were counted as official salaries, just like other military officers, and not as Jinyiwei soldiers' salaries.

When the Imperial Household Department calculated the figures reported by the Ministry of Revenue, it also drew upon the earlier audits conducted by the Western Factory Inspection Bureau. They compared the total revenue accounts of individual yamen with the scattered expenditure accounts reported by the Ministry of Revenue and other yamen. The final conclusion was that there were significant discrepancies between the income and expenditure figures on the books. However, the discrepancies were within acceptable limits.

After reporting this to the emperor, he approved the difference, so the Imperial Household Department did not question the Ministry of Revenue over these "minor" issues.

"After deducting 1,249,352 taels from the capital's taxes, the remaining 3,756,480 taels will be invested entirely in the northern military garrisons. As for how this will be distributed, the Ministry of War will make its own arrangements, as is customary." Li Ruhua concluded, "The above is the portion of last year's land tax and Taicang's revenue and expenditure."

Four million taels was completely insufficient for the nine border garrisons, not to mention the Liaodong gold-eating beast that started at 3.2 million taels. But just as Taicang's revenue was only a portion of national tax revenue, the military pay provided by Taicang to the border garrisons was also only a portion of their revenue.

In reality, the composition of border towns' income was very complex. In addition to the silver from Taicang, there was also grain shipped from Beijing, grain and salaries shipped from northern provinces, and the border towns' own harvests from settlements.

and, salt-based revenues.

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The income based on salt actually consists of two parts: one is to invite merchants to support the border through the opening of the Sino-Japanese War, and the other is to convert the salt tax into silver.

Simply put, the so-called Kaizhong Law involved sending grain to the border in exchange for salt. However, its implementation was incredibly complex. First, the Ministry of Revenue authorized military officers in border towns to accept grain and fodder from merchants. They then issued warehouse notes in duplicate: one for the merchant and the other for the Salt Transport Bureau, which was also managed by the Ministry of Revenue. These warehouse notes could not be directly exchanged for cash or salt. Merchants had to present them to the Salt Transport Bureau for verification in exchange for salt permits before they could receive salt.

This is possible because warehouse notes or salt permits were often over-issued. The decline in salt production, after the salt tax was converted into silver, further exacerbated this phenomenon. The imperial court only required salt farmers to pay silver; it didn't care whether the silver came from the salt produced.

Although the Ministry of Revenue was in charge of the salt industry in theory, in reality, the Ming Dynasty never had an office or official in charge of the salt monopoly. The Minister of Revenue was only in charge of the Salt Transport Commissioner's Office and the Salt Tax Commissioner's Office in name only.

The court's salt management agencies in various places included six salt transport commissioners' offices in Lianghuai, Liangzhe, Changlu, Shandong, Fujian, and Hedong, and eight salt tax supervision offices in Lingzhou, Guangdong, Sichuan, and Yunnan, two of which were in Guangdong and four in Yunnan.

Each Salt Transport Commissioner controlled a major producing area, while each Salt Tax Commissioner controlled a slightly smaller area. These administrative agencies generally did not extend their jurisdiction across provincial boundaries, with the exception of the Liangzhe Salt Transport Commissioner, which covered Zhejiang and part of Southern Zhili.

In the third year of the Wanli reign, Wang Guoguang, then Minister of Revenue, with the support of Prime Minister Zhang Juzheng, initiated the first reform of salt industry management in Ming Dynasty history. He required all local salt administration offices to submit all their accounts to the Shandong Qinglisi (Department of Revenue). Previously, local salt administration accounts had been managed by the respective local departments of the Ministry of Revenue.

However, this procedural change only affected account bookkeeping. Although the Shandong Qinglisi (Shandong Qinglisi) handled all paperwork from that point on, its officials did not become the General Manager of Salt Administration, a position directly under the Minister of Revenue. The nominal General Manager of Salt Administration remained the Minister of Revenue, and such a person had no control over the local salt administration offices. The Ministry of Revenue had no idea how much salt was being produced, nor how much it could produce.

Decentralized management and the lack of a powerful leadership structure fostered enormous opportunities for corruption. In the 44th year of the Wanli reign, Li Ruhua dispatched Yuan Shizhen, a doctor at the Shandong Qinglisi (official office of the Qingli Department) to the Lianghuai Salt Transport Commissioner's Office to investigate the local salt industry. Yuan Shizhen responded by stating that within each salt trade, there were typically several powerful manipulators. These individuals amassed vast wealth by lobbying local officials to enact regulations that favored them. In return, these officials received substantial compensation.

The following year, Li Ruhua promoted Yuan Shizhen to the position of Inspector of the Lianghuai Salt Administration, ordering him to crack down on illegal traders within a certain range and collect enough salt tax to support the border areas.

"The Lianghuai Salt Transport Commissioner's Office has an annual revenue of 900,000 taels of silver. The Liangzhe Salt Transport Commissioner's Office has an annual revenue of 160,000 taels of silver. The Changlu Salt Transport Commissioner's Office has an annual revenue of 140,000 taels of silver. The Shandong Salt Transport Commissioner's Office has an annual revenue of 60,000 taels of silver. The total revenue is 1.26 million taels of silver." Li Ruhua reported.

These four Salt Transport Commissioners were directly under the Ministry of Revenue, and their salt tax revenues were controlled by the Ministry, which only issued fixed collection orders to these commissioners. As for the Salt Transport Commissioners in Fujian and Hedong, as well as the other eight Salt Tax Commissioners, their salt tax revenues were directly transferred to the corresponding military garrisons.

Since this money was transferred directly to the Ministry of War and not to the Beijing warehouse, Li Ruhua simply added, "The entire 1.26 million taels has been transferred to the Ministry of War as border pay. After that, it's the Ministry of Revenue that manages other miscellaneous revenues and expenditures."

"There's no need to talk about the miscellaneous items. You can take a break." Wang An looked at the thick booklet and knew that Li Ruhua had quite a few so-called miscellaneous items. Because the Imperial Household Department hadn't found any major problems with these complicated small items, he simply skipped them: "Minister Cui, it's your turn."

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The primary purpose of convening the Imperial Conference was to understand the state of the country's finances. The emperor had no immediate intention of reforming the existing system. Logically, if the sole objective was to understand the financial situation, summoning officials from the Ministry of Revenue alone would have been sufficient. However, in reality, the other five ministries were all involved in fiscal management in some way, each with its own financial interests and its own separate ledgers. The Ministry of Revenue alone could not possibly provide a comprehensive understanding of the country's financial situation. For example, the Ministry of Personnel collected revenue from levies, the Ministry of Justice collected revenue from corruption and fines, and the Ministry of Rites collected revenue from rewards from foreign tributary missions and from ordination certificates issued to monks and Taoists. Each ministry used a portion of its revenue to maintain its own operations, while the remainder was allocated according to the emperor's directives. In other words, the Ministry of Revenue had no control over the income and expenditure of these items, and had no authority to do so. If the other government offices did not report to the Ministry of Revenue, it would be unaware of the extent of its financial turnover.

Generally speaking, the Ministry of Revenue rarely clashed with the Ministries of Personnel, Justice, and Rites over revenue and expenditure. However, under the Ming Dynasty system, which was based on the Hongwu system, the Ministry of Revenue often came into intense conflict with the Ministry of War and the Ministry of Works. These conflicts were largely due to successive reforms.

For example, in the early Ming Dynasty, a system was implemented whereby horse households could be exempted from some land taxes by raising and handing over horses. This was because horse administration outside of the Imperial Horse Administration was handled by the Imperial Stables Department, which was under the Ministry of War. Therefore, when the system of horse households and horse officials was abolished and replaced with land taxes, or even converted to silver, the excess tax grain or silver became the revenue of the Imperial Stables Department, under the Ministry of War, rather than the Ministry of Revenue. This meant that in some areas, the regular tax revenue was actually collected by the Ministry of War, not the Ministry of Revenue.

"Last year, the Taifu Temple's Changying Treasury actually collected 417,622 taels of silver. It has all been consumed." Cui Jingrong reported.

"What do you mean by total consumption?" Wang An asked.

"Uh..." Cui Jingrong paused awkwardly for a moment. "On the contrary, there's no money in the normal surplus treasury. I went to see it myself. As for how it's used, I can't really say."

"The Minister of War can't explain where the Ministry of War's income went?" The book in front of Wang An did not record the whereabouts of the money in the Taifu Temple's Changying Treasury.

"I just returned to the capital from Shanxi last year to take over the seal of the ministry. The Ministry of War is in a lot of holes, and many records can't be found. But at least 100,000 taels were used to buy horses. The rest should have been allocated to the border towns." Cui Jingrong really couldn't find the relevant records.

"Okay, okay. Let's report the budget." Zhu Changluo rubbed his temples. He was a little tired. The complicated numbers made him feel a little exhausted.

"Yes." Cui Jingrong had originally planned to report the expenditure first and then the budget, just like Li Ruhua did. But since the emperor asked him to report the budget directly, he skipped it.

Cui Jingrong had no intention of submitting the military budgets for the southern provinces, as such accounts simply did not exist. Southern supplies had never been managed by the Ministry of War or the Ministry of Revenue; all expenses for the southern army were funded by the local governments themselves. Imperial practice allowed provincial governors to independently arrange local taxation, even authorizing them to levy taxes based on local conditions. Once the war was over, the governors would disband these armies to reduce local expenses. If a region ran low on supplies, the Ministry of Revenue would not transfer silver or grain from Beijing's warehouses to support the south, but would instead order the nearby provincial governments to provide support.

"Including Liaodong, the northern border garrisons have a total of 867,946 registered soldiers and 113,624 horses. Of these, Gansu Garrison has 62,411 registered soldiers and 8,576 horses."

After Cui Jingrong reported the number of soldiers and horses in each town, he paused. When he was sure no one was asking questions, he continued:

"Based on the figures reported by the various border towns, this year's estimated grain consumption is 3.12 million dan, equivalent to 2.496 million taels of silver. Forage is 22.331 million dan, equivalent to 670,000 taels of silver. Fodder is 1.76 million dan, equivalent to 620,000 taels of silver. And military pay is 9.219 million taels of silver. In terms of silver, the border troops are expected to spend 13.5 million taels. Including the additional Liao tribute and the two grants of imperial grace, last year's expenditure is roughly the same."

"Thirteen million!" Zhu Changluo's eyelids jumped, and he asked, "Taking into account the silver from Taicang transferred by the Ministry of Revenue and the silver from the salt tax, how much does the border army still need? Tell me the total amount and convert it into silver directly."

In fact, even without the emperor's instructions, the Ministry of War would automatically treat the Ministry of Revenue's Taicang silver as military expenses to be allocated to the border troops. This practice had already begun before the Ningxia Campaign.

Cui Jingrong turned the page and said, "In reply to the Emperor. Taking into account the taxes, grain, and fodder directly supplied to the border towns by the northern provinces, the silver from the salt tax, the military settlements in the border towns, and the silver from the Ministry of Revenue's Taicang warehouse, the border towns are expected to receive over 9,124,000 taels of silver. In other words, the border troops still need another 3,880,000 taels of silver. The largest shortfall will be in Liaodong."

Wang An's brow furrowed. "So, taking into account the entire northern supply and the silver stored in the Ministry of Revenue's Taicang warehouse, the border troops are still short of around four million taels of silver?"

Cui Jingrong glanced in the direction of the throne without leaving any trace, and seeing that the emperor's face looked a little grim, he quickly added:
"Of course, this figure is calculated based on the premise that Liaodong is in a state of decay and still needs strong support from the court. If Liaodong can resume production, it will probably save another 2.6 to 2.7 million people." Cui Jingrong himself had no idea whether Liaodong could resume production and how much military supplies it could make up after resuming production.

At this moment, Cui Wensheng suddenly spoke up, "Military Minister Cui, you're calculating this budget based on the maximum, right? As far as I know, there haven't been any major battles in any of the northern border towns except Liaodong. According to common practice, border towns don't usually pay full salaries and rations during peacetime. If you give out the full amount of 13 million taels, how much will go into the pockets of the local military officers, and how much will they give you?"

"Cui Bingbi! Don't make assumptions and tarnish someone's innocence!" Cui Jingrong was stunned and his face turned red.

"Oh! I'm not speculating. Let's not talk about the missing Changying Treasury silver for now." Cui Wensheng had done his homework before coming here. "As far as I know, in the 20th year of the Wanli reign, the year of suppressing the rebellion of Haibai in Ningxia, the total expenditure reported by the northern border garrisons was only a little over 9 million taels, and that was during the war. Going back even further, from the Longqing reign to the early Wanli reign, the border garrisons' expenditures were only a little over 8.5 million taels at best. Last year, they spent 12.4 million taels. I really don't know where it all went."

"Since you are so good at checking accounts, I suggest you take a closer look at how many border troops were registered at that time." Cui Jingrong said tit for tat.

"If it was during that period, the number of registered soldiers in the border towns would probably have remained between 550,000 and 600,000 for a long time." Xu Guangqi's indifferent voice floated from the end of the civil servants' queue.

(End of this chapter)