North America 1849, from Gold Rush to Warlord

Chapter 237 Spending money like water

Since we've come up with the topic of education, Edgar Allan Poe also touched on primary and secondary education.

“Boss, we have now built more than 30 elementary schools and six middle schools throughout California.”

Edgar Allan Poe continued: "There are already more than 20,000 students receiving education in these primary and secondary schools, not including the students in the original church schools."

"Now, 60-70% of school-age children in California are in elementary school receiving compulsory education."

"But by the end of this year, we should be able to provide compulsory education to more than 80% of children, excluding Native American children."

Azu nodded: "Well done! However, we need to strive to ensure that more than 90% of children can sit in school and study within three years."

The further we go, the more difficult it becomes to increase the coverage rate of compulsory education.

Not all children and not all parents are willing to accept education. There will always be a minority who see children as cheap labor and tools for making money.

Mobilizing this group of parents and children will be extremely difficult.

Therefore, Azu did not insist on universalizing compulsory education.

In this world, there will always be people who end up at the bottom of society, toiling like beasts of burden. The hardest and most tiring jobs will always be done by those who are illiterate.

……

After discussing education, Azu asked Daisy, "What is the current financial situation of the California government and our Huamei Company?"

Daisy, as always, opened the thick ledger. However, this time, due to overuse of her eyes, Daisy was wearing small glasses for nearsightedness.

Daisy replied, "Boss, last year, the California government's finances were basically balanced, except for the military spending borrowed from Huamei Corporation."

"Last year, in 1851, the total revenue of the California government was $1.12 million, and its expenditures, excluding military spending, reached $1.07 million."

"However, if military spending is included, California's total deficit last year reached $19.3 million!"

"In other words, the California government now owes our Huamei Company $19.3 million!"

"So many...!" Everyone, including Azu, couldn't help but gasp at the number.

Daisy adjusted the glasses perched on her small nose and continued, "Don't be surprised! Our California National Guard, Coast Guard, military academies, and so on, have a total strength of over 20,000 people!"

"Most of this 19 million dollars in military spending goes to personnel salaries. With 20,000 full-time soldiers, each earning an average salary of 700 dollars, this amounts to a staggering 14 million dollars."

"The remaining five million dollars are for the purchase and maintenance of warships and various land combat equipment, as well as the construction costs of various military facilities, such as the coast guard fortress on the south coast of the strait, and the construction of military academy infrastructure, etc."

"This is under the premise that Huamei Company provides warships and various equipment to the California forces at cost price. Otherwise, the cost of purchasing and maintaining this equipment would at least double!"

"Although military spending is enormous, it's all worth it!" Azu calmly replied, "Without a strong army, all of California's current interests are just fleeting clouds, and we'll be devoured alive in the blink of an eye, leaving us not even a bone fragment!"

Hearing this, everyone felt somewhat relieved.

Daisy continued, holding the ledger, "In the first quarter of this year, both California's revenue and expenditure continued to grow."

"In the first quarter, California's fiscal revenue reached $410,000, almost double that of the same period last year. At this rate of growth, the fiscal revenue for the whole year may increase to more than $2 million."

"At the same time, because compulsory education has been included in the scope of fiscal expenditure, the expenditure has also increased significantly, reaching $840,000."

"The increase mainly comes from the construction of school buildings for dozens of schools, which accounts for a full $300,000 in government spending."

"Throughout this year, the school will maintain a very high level of investment in school building construction, which is expected to reach more than one million US dollars."

"The salary expenses for more than 500 teachers also reached more than $100,000."

"The remaining $400,000 is for the state government's daily expenses, and half of that is paid by the salaries of hundreds of state government employees."

Daisy continued, "At this rate of spending, even without including military expenditures, the state government's annual deficit will exceed one million dollars."

Ah Zu laughed and said, "I'm not worried about having a lot of debt. We already owe Huamei Company so much in military expenses, so an extra million dollars is no big problem!"

"By next year, when the school buildings for dozens of schools are basically completed, we will be able to save millions of dollars, and our California government will be able to basically achieve a balance between income and expenditure."

"If I were to become the governor of California, the pressure wouldn't be so great!"

Daisy continued to criticize Azu, saying, "At the current rate of population growth, the construction of this school building will probably never stop!"

"Even if this year is over, the annual investment in building and maintaining school buildings will still require at least several hundred thousand US dollars, and not much less."

Azu smiled at Daisy: "So, what do you think our little housekeeper should do? We can't just keep going into this deficit, can we?"

"Raise taxes!" Daisy answered bluntly. "So much gold has been mined in California, making many people nouveau riche!"

"The gold buried underground belongs to all the people of California! It's an injustice not to tax these gold rush riches!" "Hahaha...!"

Everyone present burst into cheerful laughter upon hearing Daisy's words.

Azu laughed heartily: "My little Daisy, California's biggest gold prospector, isn't that us?"

"Our Huamei Company's gold mining revenue accounts for at least half of the total revenue in California."

"Imposing taxes on gold prospectors is essentially imposing taxes on ourselves."

“That’s right!” Daisy said with a straight face. “The previous interim government of California passed a Foreign Miners Tax Act. Although it contained obvious discriminatory clauses, I personally think that this tax law still has its merits.”

"The California government has almost never effectively taxed gold prospectors, which is absolutely unreasonable!"

"Industries like gold mining, which are among the most profitable, should not only be taxed, but heavily taxed!"

Daisy said solemnly, "No matter how much gold California has, it will eventually be exhausted. When the gold prospectors take their gold and leave California to enjoy themselves all over the world, what will they leave us in California?"

"They will leave nothing behind! Only devastation and countless ugly mine pits...!"

Upon hearing Daisy's words, everyone in the conference room could no longer laugh.

Azu also stopped smiling and pondered, "Hmm... Daisy, what you said... makes a lot of sense! Then tell me, how do you plan to levy taxes on the gold prospectors?"

Daisy replied, "Gold prospectors are difficult to manage and even more difficult to tax when they are panning for gold in the wilderness."

"Therefore, we still have to follow the old method of the Foreign Miners Tax Law and levy a head tax on all gold prospectors."

"The three-dollar tax per month is negligible for gold prospectors."

"But there are conservatively estimated to be more than 50,000 gold miners in California, which would amount to $150,000 in gold mining taxes every month, and at least $1.8 million a year, or even more than $2 million."

"With these two million dollars in tax revenue, not only could the California government potentially break even, but also... Boss, aren't you pushing for massive infrastructure development?"

"With this money, our California government can continue to invest in ports, roads, and municipal construction."

"Otherwise, does California's infrastructure development also rely entirely on Huamei Company's investment?"

After hearing Daisy's words, Azu's expression also became serious as he pondered the feasibility of the plan.

Azu said he didn't care about the proposed poll tax.

Because under its own management, the actual manpower invested in gold mining is only a little over a thousand people, and the majority of the work is done by machinery.

Even if taxes are levied, I would only need to pay tens of thousands of dollars in taxes each year, which is nothing!
For the vast majority of gold prospectors, the monthly head tax of three dollars was actually quite a light burden.

After a moment's thought, Ah Zu turned to Edgar Allan Poe and Zuo Zongtang and asked, "What do you two Secretaries of State think?"

After a moment's thought, Edgar Allan Poe and Zuo Zongtang nodded in unison: "I think it's feasible. California does indeed need to expand its tax revenue sources!"

“Then let’s do it this way!” Azu said, “Amend the Foreign Miners Tax Act to the Miners Tax Act, levy a head tax on all gold miners, get it through the House and Senate as soon as possible, and then submit it to me for signature to take effect.”

"Gold prospectors are widely distributed, and collecting a head tax every month is quite troublesome. So it has been changed to an annual tax of forty US dollars per person per year. Everyone needs to pay the tax and obtain a 'mining license' before they can participate in gold panning."

As he spoke, Azu turned his gaze to Youma: "Because the state government lacks tax personnel, the Independent Cavalry Regiment fully cooperates with the state tax bureau to carry out tax collection work regularly every year."

"Anyone who doesn't pay taxes, or even dares to openly resist taxes, no matter who they are, should be arrested and sent to a coal mine labor camp for a few months of reform through labor!"

"Yes, sir!" Youma stood up and answered crisply.

After arranging everything, Ah Zu turned his gaze back to Daisy and smiled, "Our little housekeeper, are you satisfied with this arrangement?"

"Hmph...!" Daisy snorted softly through her small nose and muttered, "Aren't we all just trying to help you come up with ideas? It's not like anyone wants to be the bad guy!"

"Haha!" Azu could only laugh it off.

Daisy then went on to report on the financial situation of Huamei Company.

"Last year, our Huamei Company's total revenue reached 260 million US dollars, almost doubling again compared to 1850!"

"Two hundred and sixty million...whoa...!"

The entire conference room erupted in chaos!

Everyone knows that Huamei Company is very profitable, but apart from a few key figures, most people don't actually know exactly how profitable it is.

Newcomers, especially those who have just joined, are utterly shocked by this enormous number!
(End of this chapter)