Qing Yao

Chapter 388 Old Master, Society is a Perilous Place

Old Song meant this was a special case, meaning the provincial education commissioner would have made an exception for anyone else.

However, this special arrangement was unacceptable to the students and faculty of the university.

A round trip to Fengyang would take several days. Leaving aside whether we could get the compliant permits back, the time wasted would likely increase the penalty interest and compound interest at Xianfeng Bank by a considerable amount!
Don't let the 60,000 taels of silver not be enough to pay off the debt.

The problem is that even Old Song, the chief secretary of the provincial treasurer, couldn't prevent the provincial treasury from operating illegally, because the latest regulations for the management of the provincial treasury were promulgated by the provincial treasurer's office, and the provincial treasurer's office also required the provincial treasury to strictly implement them.

As the chief secretary to the provincial governor, Old Song couldn't very well contradict himself.

Although it may seem a bit old-fashioned and dogmatic, it can prevent a series of consequences caused by violations of regulations to the greatest extent possible, so the benefits outweigh the drawbacks.

"What is your opinion, sir?"

Seeing the provincial education commissioner's grim expression, Old Song kindly offered to help him sit down, but the commissioner refused, leaning on the table for support and saying in a trembling voice, "If the silver cannot be produced today, what will become of my debt? The money lender is blocking the door every day. I truly, truly..."

He simply couldn't continue speaking, because the thought of those debt collectors' faces and the gossip in Anqing City about his master's debts was too much for him to bear. The academic official felt a sense of helplessness that he could no longer endure.

I'm truly powerless.

As a provincial education commissioner, a high-ranking official of the third rank under the jurisdiction of the imperial court, it's unbelievable that he's now reduced to being harassed by loan sharks, with neighboring units refusing to help resolve the issue or even send police to maintain order. Anyone would be driven to despair in that situation.

"I've heard some things about your affairs, sir. Alas, I have no idea how the people from the Xianfeng Company would do things. If I did know, I wouldn't have told you."

Old Song looked regretful and sympathetic. After pondering for a moment, he suggested, "How about this, I'll accompany you to Xianfeng again and ask them to give you some more time. Once Lord Zhao has completed the necessary procedures, the money will naturally be repaid."

Upon hearing this, the provincial education commissioner hesitated and asked, "Would the money shop extend the deadline?"

"You should give me some face. Your Excellency, even Emperor Wenzong couldn't do anything to them, so how could I, a mere provincial treasurer, not be able to suppress them? Do you really think they're the ones who call the shots in Anqing?"

Old Song's statement rekindled the hopes of the provincial education commissioner. Indeed, the education commissioner's office, which was in charge of education, could not control these lawless merchants, but the provincial governor's office was in charge of civil and commercial affairs of the entire province. As the saying goes, a local official is more powerful than a distant one.

If Emperor Xianfeng's side dares to disrespect the provincial governor's office, then don't be surprised if the provincial governor sends people to inspect your fire prevention facilities and the cleanliness in front of your door every day.

Then go ahead. Whether it's desperate measures or a last-ditch effort, the Education Commissioner has no other options.

At that moment, Old Song led the Education Commissioner to the branch of the Xianfeng Company located in Anqing.

Upon seeing that it was Lord Song, the provincial treasurer, accompanying the provincial education commissioner, Manager Li, who was in charge, was quite polite. However, as soon as he heard that Lord Song had come on behalf of the provincial education commissioner to negotiate the extension of the repayment period, his chubby face, which had been wearing a smile, immediately fell.

"Lord Song, it's not that I'm disrespecting you or the old master, but every country has its laws and every profession has its rules!"

Manager Li spread his hands and said, "The loan contract clearly states the overdue penalty interest in black and white. When Lord Song brought the old master here, our manor delivered 50,000 taels of silver to the Education Commissioner's Office without saying a word. Now that the repayment date has arrived, the Education Commissioner not only refuses to repay but also hasn't given us a reply. Now it has been more than half a month!"
If everyone were like the old master, how could our money exchange continue operating? Furthermore, this loan was only made out of respect for you, Lord Song. Now that things have turned out like this, Lord Song, how do you plan to resolve this matter?"

The shopkeeper's words were full of complaints.

Old Song hurriedly smiled and said, "Here's the thing: it's not that Lord Xu doesn't want to repay the money, but there's been a little mishap. So, Manager Li, could you make an exception for another half month? Interest will still be calculated for this half month, but we'll waive any penalty interest. I guarantee that Lord Xu will definitely repay the money after half a month. How about that!"

"Don't even mention half a month, not even a single day!"

Manager Li was also frustrated by the old master's loan, shaking his head like a rattle drum. "Today is the deadline! If we don't see 60,000 taels of silver by sunset, starting tomorrow, it won't be as simple as just sending people to shout at the yamen. It will be much more difficult to deal with then!"

After saying that, he gave a slight snort, "So what if he's an old master? Even a governor or viceroy wouldn't refuse to pay back a debt!"

It was a direct threat.

"Are you trying to force me to my death?!"

Seeing that the other party was completely unmoved and even dared to threaten him to his face, the scholar, who had been engaged in literary research in the "ivory tower" of the Hanlin Academy, felt not only deeply humiliated, but also so angry that he trembled with rage.

"What are you saying, Grandmaster? What do you mean we forced you to your death? Paying back debts is a matter of course! When you took the money, you didn't say you wouldn't pay it back."

Since it involved tens of thousands of taels of silver, Manager Li dared not utter a single word. Seeing this, Old Song naturally pleaded on behalf of the Education Commissioner, but Manager Li was as stubborn as a turtle trying to eat a weight, refusing to reveal the slightest word.

Old Song, in his haste, was about to lose his temper when the voice of Liu Xiaolou, the head of the Xianfeng Bank, came from outside: "Oh, what wind has blown Lord Song and the old master to my little temple today?"

"Boss, you've come at the perfect time!"

Manager Li hurriedly stepped forward to report the situation.

After hearing this, Liu Xiaolou pretended to exclaim "Oh dear!" and then said to the anxious and red-faced Education Commissioner, "Master, you really did a bad job. If you had only dragged it out for a few days, it would have been fine, but you dragged it out for more than half a month. If everyone in our bank did what you did, Master, wouldn't our bank go bankrupt?"

"Boss Liu,"

Old Song stepped forward to smooth things over, explaining that it wasn't that the old master was unwilling to repay the money, but rather that there was a problem with the approval document. He said that if the master could be given another ten days or half a month, the money would definitely be in his account.

"Lord Song, don't be fooled by the fact that I run a money exchange with lots of silver coming in and out every day. In reality, my money exchange is under a lot of pressure. Tens of thousands of taels is no small amount. Who could bear having that tied up with the old master for so many days?"

Liu Xiaolou's attitude was similar to that of Manager Li, insisting that the old master must repay the money.

This was a tricky situation, leaving Old Song feeling helpless. Seeing that the old master was about to faint from anger, he couldn't help but snort coldly: "The old master is the face of education in this province. The way you're doing this isn't just embarrassing the old master, but embarrassing all the scholars in this province! Boss Liu, let me give you a piece of advice: some things can be done, but don't go too far, or your money exchange business probably won't last long."

"This"

Liu Xiaolou sensed the threat in Lao Song's words, hesitated for a moment, and said, "Grandmaster, you definitely need to collect this money, otherwise my bank will be hard to maintain. I know your difficulties, Grandmaster. Here's a solution that satisfies both sides. I wonder if you would be willing to listen?"

The academic official was completely at a loss and hurriedly asked, "What brilliant idea does Mr. Liu have?"

Liu Xiaolou nodded and walked up to the Academic Director, saying, "In our money-lending business, there's a saying: 'borrow new money to repay old debts,' which means borrowing new money to pay off old debts, but with a slightly higher interest rate. I wonder if the Master would be willing?"

"Borrowing new money to pay off old debts?" Before the academic official could speak, Old Song asked the key question for him: how does the interest rate for new debt compare to that of old debt?
The answer I received was that the interest rate for new debts is higher than that for old debts. Previously, the old master borrowed 50,000 taels of silver with a monthly interest of 400 taels, which amounted to 4,800 taels per year.

This is the cheapest interest rate, given the best terms considering the official's status and the prestige of the provincial governor.

However, if you borrow new debt, you have to follow industry practice and pay an annual interest rate of 1.2%.

If we take a loan of 100,000 taels as an example, the interest for one year would be 12,000 taels.

Upon hearing that the interest rate was so high, Xue Zhengda instinctively wanted to refuse, but Liu Xiaolou's next words made him hesitate again.

Liu Xiaoban meant that although the interest rate on new bonds is high, it is still not as high as the compound interest and penalty interest on old bonds!
If the old master borrows 60,000 taels of new debt now, he can pay off all the interest and penalties on the old debt in one go, and only bear 1.2% of the interest.

If he doesn't lend it, based on the current penalty interest and compound interest, the old master's debt of 50,000 taels will balloon to 100,000 taels in at most two months.

Which is more cost-effective?

Old Song also helped with the calculations and concluded that borrowing new money was definitely more cost-effective. He then directly made the decision for the Education Commissioner, suggesting that Xianfeng Bank lend another 60,000 taels of new money to the old master to repay the previous 60,000 taels of old money. The loan period would only be one month, so that the treasury's silver would be used to repay the debt as soon as it arrived. The old master would only need to bear the interest on the 60,000 taels of new money for one month.

It's only a few hundred taels, very cheap.

After hearing Old Song's calculations, the Provincial Education Commissioner no longer hesitated, because borrowing new money to repay old debts was indeed worthwhile. Otherwise, if the old debts snowballed, he wouldn't be able to pay them off even if he sold the Provincial Education Commissioner's office!
Unexpectedly, Liu Xiaolou shook his head and said, "Our firm cannot lend you this new debt, Grandmaster. We can only help you borrow from other banks, but the minimum is 100,000 taels. Otherwise, we're afraid we won't be able to lend it."

What does that mean? In the trade, it's called "borrowing" or "splitting".

Xianfeng Bank borrowed 100,000 taels from its peers on behalf of the old master. Of this, 60,000 taels were used to repay Xianfeng Bank's old debts, and the remaining 40,000 taels had to be converted into cash and subject to interest according to industry rules. In the end, the old master only received 35,000 taels.

"Master, rest assured, we are all legitimate and operate in accordance with industry standards. We would never dare to deceive you."

To reassure the old master about lending, Liu Xiaolou indicated that his business partner was Hengli Money Shop, a subsidiary of the Imperial Household Department.

Big brand, state-owned enterprise, backed by the emperor!

Absolutely trustworthy!
"Hengli will lend you 100,000 taels, and you will repay the estate 60,000 taels, leaving you with 35,000 taels. This way, you will not only repay the estate's debt, but you will also have some money to spare for emergencies. Wouldn't that be more comfortable?"

As they were talking, Liu Xiaolou asked Manager Li to fetch a loan authorization form. The procedure was very simple; the old master only needed to sign and affix his seal, and the rest would be handled by Xianfeng Bank in conjunction with Hengli.

There's no need for a master to appear, which ensures client privacy and saves clients time and effort.

"That's good,"

Old Song nodded repeatedly as he listened, then leaned close to the bewildered Education Commissioner's ear and said, "The Imperial Household Department's bank is reliable. Why don't you just set it up, sir? That will save the gossip in Anqing from spreading every day."

Manager Li chimed in, "Master's method is perfect for the old master; otherwise, it wouldn't do for him to keep dragging on this debt."

What is the Academic Commissioner thinking right now?
He must have been struggling internally. What was originally a loan of 50,000 taels for an emergency had turned into a repayment of 60,000 taels, resulting in a loss of 10,000 taels out of thin air. Although the 10,000 taels had been lost to the provincial treasury, he had inexplicably incurred a debt of 100,000 taels. It felt a bit like drinking poison to quench his thirst.

To lend or not to lend?
Liu Xiaolou, Lao Song, and Manager Li were surprisingly in agreement: they all remained silent, letting the old master weigh the pros and cons of lending or not lending.

The house was quite quiet.

If you had a stethoscope, you could hear the student council president's heart pounding.

Thinking about how Emperor Xianfeng might intensify his debt collection tactics tomorrow, how the 50,000 taels loan might balloon to 100,000 taels or even more, and how his official reputation would be ruined by this debt.
The academic official dared not think any further. He steeled his heart, determined to get through this immediate crisis first, and asked bitterly, "So how exactly does this 'borrowing new to repay old' work?"

"Simple!"

Liu Xiaolou placed the loan authorization letter that Manager Li had brought in front of the Education Commissioner, saying, "This is a letter of intent. As long as you sign it, I will immediately send someone to Hengli Money Shop to process the loan. As for the money you owe our shop..."

Tell Manager Li to bring the loan agreement for the 50,000 taels of silver that the Education Commissioner previously signed, "and it will naturally be wiped clean!"

After saying that, he paused, "If you are unwilling, then we will have no choice but to follow the rules. In that case, not only you, but also your family and relatives will have a hard time having peace and quiet."

The words were gentle, yet contained an undeniable threat.

Cornered, the student affairs officer stared at the densely packed loan authorization document, his hands trembling violently.

"My lord, rest assured, I will take care of the 60,000 taels of silver from the provincial treasury. As for the extra silver, I will urge the provincial treasury to allocate the next year's expenses for the education office in advance."

According to Lao Song, the provincial education commissioner would have to pay back at most a few thousand taels. Even if the commissioner couldn't come up with that amount himself, the government office could squeeze it out by cutting back on the funds of the prefectures and counties below.

"The old master?"

Liu Xiaolou handed over the calligraphy brush.

In the end, the old master, having exhausted all other options, signed his name in the place Liu Xiaolou pointed out on the contract. Manager Li then brought out ink and asked the old master to press his name onto the contract.

It comes in triplicate, which is quite formal.

After everything was done, the old master stared blankly at the bright red ink on his thumb, as if he heard something shatter.

Feeling lost, utterly lost.

How did I end up with a debt of 100,000 taels of silver out of nowhere?
"What are you all standing there for? Hurry up and serve tea to the old master and Lord Song, serve them the best tea!"

Liu Xiaolou, with a smile on his face, put away the contract that the Education Commissioner had signed. "Grandmaster is straightforward, and I am too. Please rest assured, Grandmaster, the thirty-five thousand taels will be delivered to your residence in seven or eight days at most!"

(End of this chapter)