Qing Yao

Chapter 212 Losing Money to Gain Popularity

If you borrow a hen to lay eggs, you'll eventually have to get something out of it.

Only with eggs can more chickens be hatched, and with more chickens, there will be more eggs.

There was no such thing as a financial license in the Qing Dynasty; anyone with money could open a bank.

Given this, Zhao An has no reason not to enter the financial world.

For a newly established money exchange to quickly make a name for itself and gain a foothold, there is no other way but to get government support.

This practice has become a standard method in the financial industry since then, both domestically and internationally.

However, the concept of finance has not yet taken root in people's hearts, and various financial innovations have not yet emerged, or are still in their infancy. Therefore, Lao Ding found it very rare and thought it was quite whimsical.

“There are always over a thousand clerks, runners and clerks in this county. My grandfather has to spend tens of thousands of taels of silver every year to support them. In addition to taking money from my grandfather, these people also find all sorts of ways to make money in private.”

Zhao An bluntly pointed out that in Ganquan County, anyone who worked for the government, even those on shifts who didn't receive a formal salary, could rake in dozens of taels of silver a year, while those with a little power could rake in hundreds or even thousands of taels.

Take Ding Zhenglong, the ambassador of the Tax Bureau, for example. He spent five thousand taels to buy this position. How much will he earn?
Why do these people make so much money through Lao Ding, yet deposit their money in other people's banks?
"I think it's better for these people to keep their money here than to deposit it in other banks or banks. What do ordinary people value most these days? Nothing more than an official!"

Zhao An told Lao Ding to think for himself: if you, as the county magistrate, personally take the lead in depositing a sum of money into a certain bank, wouldn't your subordinates all think that the bank is reliable?

If they still don't learn from the county magistrate, then the county will issue a document requiring staff to deposit money voluntarily.

When it comes to saving money, it doesn't matter which bank you choose.

Besides, the new bank offers higher interest rates. Who would be so foolish as to go against the county magistrate and ruin their own livelihood?
In reality, there's no need to be so shameless. Just entrust all the daily expenses of the government office, including salaries, to a money shop. Then, imperceptibly, that money shop will become the "default option" for salaried employees to deposit their money.

If they really want to go all out, they can use the authority of the government to forcibly designate merchants to make fixed-term deposits.

In normal business competition, Zhao An is not incapable of hiring people to attract deposits, or giving out small perks like eggs and rice to entice people to deposit their money.

“Everyone has relatives and friends. If all of them deposit their money in our bank, how many people would that be? One person tells ten, ten tell a hundred. Grandfather, how much silver do you think our bank will be able to attract?”

Conservative estimates suggest that the amount of private deposits absorbed in Ganquan County alone could reach over a million taels of silver.

There could even be more.

There's no way around it, there are just too many rich people in Yangzhou.

"Now that you mention it, it seems like you could actually open a money exchange."

Old Ding was persuaded and felt it was a pity not to make use of such good resources. It was easy to borrow the emperor's money, but because of their official positions, they could not borrow too much. However, if they had their own money shop, it would be a simple matter of saying a word if they needed money.

After all, they are currently in the first phase and need a lot of money.

If you keep borrowing, it's not easy to ask whether you can lend it out, and the procedures are troublesome. It's not as convenient as having your own bank where you can withdraw money whenever you need it.

But then a problem came to mind: if they were to offer interest rates higher than other money shops, the annual interest payments to depositors would be a huge sum, and how would they sustain themselves?

"Grandfather, you can rest assured!"

There are many ways to maintain the business. Zhao An's purpose in opening the money shop was not to covet the depositors' principal, but to use their money to generate more money. There are many ways to do this; simply getting involved in the salt industry could solve the interest problem, not to mention there are many other ways to make money.

"We'll get the money shop up and running after the New Year. No matter where we take office, the first thing we'll do is open a branch there!"

Zhao An was full of confidence.

To make a name for the newly established branch in the local financial market, simply copy the Gan Quan experience.

The first step was to get all government employees to deposit money in money shops; otherwise, their jobs would be taken away. The more money shops there were, the more deposits they would attract, and with a huge amount of money at hand, the expenses for training troops would not be a problem.

"As long as we pay real interest, once our reputation spreads, who wouldn't want to deposit their money?"

Seeing that Lao Ding was still hesitating, Zhao An raised a particularly realistic and thought-provoking question: "If the people's money is all deposited with us, Grandfather, do you think the court will come after us? Will the court be able to use the people's hearts, or will we be able to use them?"

This issue actually stems from the tactics used by Wang Danwang, the former governor of Zhejiang, to borrow money from wealthy gentry in Zhejiang.

The effect was very good. After Lao Wang was arrested, the gentry in Zhejiang still spoke highly of him and hoped that the court would give him a chance to redeem himself through meritorious service.

Otherwise, who will pay them back?
The reason Old Wang messed things up was simply because he didn't have a weapon in his hand.

Zhao An, on the other hand, learned from Lao Wang's lesson. Whether it was borrowing money or absorbing private funds, the essence was to create a weapon.

With the knife in your hand, the hearts of officials and the people will have to follow you. What kind of situation will that lead to?
"Oh?"

Old Ding was enlightened; he never expected that opening a money exchange would bring such good fortune. Without further hesitation, he decisively decided to open a money exchange after the New Year.

"By the way, what's the money exchange called?"

Old Ding wanted to give the newly opened money exchange a catchy name, one that would make ordinary people feel confident and trustworthy.

Unexpectedly, her grandson-in-law suggested a trip to the Xianfeng era.

"Xianfeng means 'abundant food and clothing under heaven,' which is not only easy to hear and remember but also a good omen. What do you think, Grandfather?"

If it weren't for the fear that Emperor Jiaqing would die, Zhao An would definitely have usurped the fifteenth prince's imperial title.

It must be said that the reign titles chosen by the emperors of the Qing Dynasty were all quite good.

"Emperor Xianfeng?"

Old Ding pondered it carefully and nodded in approval of his grandson-in-law's suggestion.

Zhao An said that after the New Year, he would discuss this matter with Manager Shi of Hengli Money Shop and try to borrow 200,000 taels from the money shop as start-up capital for Xianfeng Bank.

"Would Manager Shi agree to that?"

Old Ding was worried that his competitors would be his enemies, and that Manager Shi would refuse to lend him money if he knew they were going to open a money exchange and compete with them.

"Competitors are not necessarily enemies."

Zhao Anze said that he could reach a deep cooperation with Manager Shi.

What does that mean?

Manager Shi would find a way to lend them the old master's money for development, and in return, they could introduce customers with large loan needs to Manager Shi. Both parties would get what they wanted.

"You mean we don't lend money at high interest rates?"

Old Ding believed that the biggest source of income for money shops was lending money at high interest rates; otherwise, money shops would suffer huge losses.

"We don't lend at exorbitant interest rates. We only do loans to ordinary people. As long as people are willing to borrow from our bank, we only charge them one cent in interest."

"One percent interest?"

Old Ding was puzzled. The interest rates offered were already 8% or 9%, but the loan was only charged at 1%. Wasn't this just losing money to make a name for themselves?
(End of this chapter)