My Portable Ming Dynasty

Chapter 195 Collapse
Little Fatty Jun stared at Huang Ji's sheet of paper filled with calculations, as if reading a book written in a foreign language. He asked in bewilderment, "Why?"

Huang Ji put down his pen and said:
"Does Your Highness know who is behind these major grain merchants in the capital?"

Zhu Yijun shook his head, and Huang Ji said:

"Those who can open grain stores in the capital are all from powerful backgrounds, and many of them are nobles who have shared the fate of the country."

Zhu Yijun nodded.

Huang Ji then said:
“But nobles can’t directly manage grain stores. The managers of these grain stores in the capital are either their supervisors or hired managers.”

"As Your Highness knows, no matter who runs this shop, there will always be treacherous parasites who will betray you."

Zhu Yijun nodded repeatedly at this point.

The "Monopoly" game that happened recently taught Zhu Yijun a lesson: people are susceptible to temptation.

No matter how honest a person may seem, it's hard for them not to develop greed when placed in the position of a manager handling so much money.

The method Su Ze taught himself was to use a monitoring system to punish people, and then use a certain percentage of profits as rewards.

When people in these positions realize that what they gain from reaching out is disproportionate to the losses they ultimately incur, normal people will weigh the pros and cons and give up the idea of ​​reaching out.

The reason why the shops in the Eastern Palace were able to make a profit was largely due to the use of the Longmen Accounting Method, an advanced management system.

Huang Ji said:

"Many nobles don't understand commerce, but they still have ways to make money."

“Grain trading is a stable business, and the profits are also relatively stable.”

"Therefore, many grain shop owners do not interfere with the specific accounts, but only require a fixed amount of profit to be handed over each month."

When Huang Ji said this, Xiao Pangjun understood.

Some grain merchants engage in price gouging because the managers want to make extra money, and their owners may not be aware of it.

This is tantamount to these grain store managers using public funds from the grain stores for gambling.

Once the losses reach a certain level, they will affect the normal operation of the grain store, and then their actions will be discovered.

Therefore, when the losses reach a certain level, they will definitely sell off their shares and run away.

Zhu Yijun counted on his fingers and said:

"But is it too easy for them to lose so little?"

Su Ze then said:
"No, they will definitely lose more than that price."

Huang Ji didn't have a deep understanding of economics, and he looked at Su Ze with some doubt.

Su Ze said:

"Your Highness, do you know that the deadliest time on the battlefield is not when breaking through enemy lines, but when fleeing?"

"When the battle was over, the soldiers began to flee. If they accidentally fell, they would be trampled to death by the soldiers behind them."

"When grain prices collapse, the same principle applies. Grain traders will trample each other out of the market, and the price will not be the number Huang Shaoshi calculated."

Zhu Yijun understood Su Ze's analogy, and he was eager to see what would happen.
-
On July 12, news began to circulate in the capital that severe rainstorms had occurred outside the city, and large numbers of refugees were rushing into the city to grab food.

The capital city was so large that although most people had never seen these disaster victims, it did not stop the prices of grain in the surrounding grain stores from rising all the way up.

As a report in the New Gentleman's Daily recounted the tragic plight of a family fleeing from the outskirts of Beijing, news of the floods outside the city spread like wildfire, exacerbating the panic within the capital.

Various outrageous rumors circulated among the people, with some saying that tens of thousands of people had been affected by the disaster, and others saying that not only the capital region was affected, but also Hebei and Shandong provinces, with millions of disaster victims flocking to the capital.

Amid these outrageous rumors, people in the capital flocked to nearby grain shops to buy up food.

Grain prices in the capital city continued to rise.

Then, even more alarming news emerged: many grain stores put up signs limiting purchases, and some grain stores were sold out shortly after opening in the morning.

When asked, these grain shops all replied that they were short of grain.

This caused even greater panic in the capital. Some people lined up overnight to buy grain, and grain prices began to skyrocket.

Grain merchants in the capital held another meeting under these favorable circumstances.

Fan Kuan came out of the Shanxi Guild Hall and went to the warehouse of Fan's Grain Store. The managers of several major grain stores in the capital bowed to him.

Fan Kuan accepted the gift without hesitation.

A shopkeeper stepped forward and said, "Mr. Fan, this newspaper is far more effective than hiring people to spread rumors!"

Everyone expressed their admiration for Fan Kuan.

Fan Kuan also became smug.

This isn't the first time grain merchants have engaged in price gouging; they have plenty of experience with it.

However, in the past, hiring people to spread the word was ineffective and took a long time.

Fan Kuan's suggestion to use newspapers to spread the news had an unexpectedly good effect.

Fan Kuan was somewhat pleased with himself.

It was his idea to spread information through newspapers, but Fan Kuan never expected that newspapers would be so effective at spreading information.

He became even more determined to convince his employer to start his own newspaper in the capital.

As everyone was celebrating their victory, someone suddenly asked:

"I heard that Imperial Censor Chen has gotten into trouble?"

Fan Kuan sighed and said:
"Censor Chen's memorial angered His Majesty, and he has been demoted."

Hearing this, everyone sighed. Without the Five Gates Patrol Censor as their backer, life wouldn't be so easy from now on.

Fan Kuan was also disappointed, as no one expected that the Crown Prince would present an opera troupe to Empress Chen and even reconcile the relationship between the Emperor and Empress.

The court officials all praised the Crown Prince highly, but just then, Chen Jing's memorial was delivered to the emperor.

This shows the magnanimity of the Longqing Emperor; if it were the late Jiajing Emperor, Chen Jing would have already been killed by the Embroidered Uniform Guard.

Chen Jing was demoted again, and Fan Kuan lost his patron, so he was also somewhat melancholy.

Just then, someone suddenly rushed in.

"It's bad news! The Yuefu Xinbao newspaper published a statement refuting the rumors, saying that the floods outside the city were completely unfounded and that there were not many disaster victims in the city."

Everyone looked at Fan Kuan. They had already witnessed the power of newspapers. Now that the top-circulation newspaper, Yuefu Xinbao, had come out to refute the rumors, wouldn't grain prices be on the verge of collapse?

Fan Kuan smiled and said:

"Don't panic, everyone. It's easy to spread rumors, but it takes a lot of effort to refute them. How can just one article in the Yuefu Xinbao completely dispel the people's doubts?"

“If a real famine occurs, his newspaper office will not distribute food.”

"Everyone should continue to stockpile grain."

Fan Kuan's words were met with nods of agreement from the crowd. Panic-mongering rumors were not so easily quelled, and grain was not like other commodities.

If there's a shortage of common goods, we can simply choose not to buy them.

But food shortages can be fatal.

After everyone finished discussing the matter, they returned to their respective shops and put up the purchase limit sign again.
-
On July 13th, grain prices in the capital rose again.

Then another message came from the capital: officials of Shuntian Prefecture requested the release of grain, but the Ministry of Revenue rejected the request. There was no disaster in the suburbs of Beijing, and the Ministry of Revenue had no reason to open the Ever-Normal Granaries.

In fact, the Ministry of Revenue's reasoning was justified. According to the law, the Ever-Normal Granary was for releasing grain during years of famine. Now that it was not a year of famine, whose responsibility was it to open the granary?
What if we encounter another disaster this year?
When this news arrived, the last hope of the people of the capital was shattered.

Grain prices in the capital began to rise wildly.

Fan Kuan woke up in bed and the manager of the guild hall brought him the latest newspaper.

Yesterday he attended another banquet, where the managers of several grain shops took turns toasting him. Fan Kuan still felt a bit hungover, his head buzzing. He drank some hangover soup, but the hangover didn't improve, and he picked up the newspaper anyway.

When he looked at the local news section of the Yuefu Xinbao newspaper, he suddenly saw a news item.

Are the merchants under the Donggong Palace selling grain at fair prices?
Fan Kuan frowned. "Even the Crown Prince's palace sells grain?"
They hadn't dealt in grain before, so could it be grain stored up from before?

Selling at a bargain price?

With so many people in the capital colluding to drive up prices, can the few shops in the Eastern Palace really hold them back?
Fan Kuan sneered; he didn't take the news to heart.

However, Fan Kuan still decided to go to Datong Grain Store. He had also invested the silver he had saved over the years into the grain hoarding business. Although he had comforted the store manager yesterday, he was still uneasy until the money was in his pocket.

When Fan Kuan arrived at the Datong Grain Store and saw the long queue of people, he felt much more at ease.

The grain shop manager said anxiously:

"Mr. Fan, grain prices are already high enough. Why don't we sell some first?"

Fan Kuan, however, said:
"No, shopkeeper! Didn't we agree to wait until the price reaches that number before selling? The grain price hasn't peaked yet!"

After leaving the Datong Grain Store, Fan Kuan, fearing that other grain stores might run away prematurely, visited several more grain stores to reassure the managers.

Immediately afterwards, Fan Kuan went to a nearby East Palace merchant shop and saw that the shop had a sign that read "Selling at fair prices" and that some people were queuing up. He then turned back to the Datong Grain Shop.

"Manager, quickly send someone to the shops in the East Palace to buy grain!"

The shopkeeper was startled upon hearing this, but Fan Kuan said:
"This must be grain that the Crown Prince previously presented to him. Now it's being sold to give the Crown Prince a reputation for loving the people."

"Where can you find such cheap grain near the capital these days? Buying it and reselling it would bring in a fortune!"

Hearing Fan Kuan say this, the shopkeeper was also tempted, but he still asked cautiously:

"What if the Crown Prince has a lot of grain?"

"How much grain does the Crown Prince have?"

Fan Kuan said:

“The cities surrounding the capital have grain, but not much, and it will take at least ten days to transport it here.”

Hearing Fan Kuan say this, the shopkeeper was finally relieved and immediately sent his assistant to the shops in the Eastern Palace to buy grain.

When the shop assistant brought back the grain, Fan Kuan was even happier. Sure enough, the Crown Prince didn't know how to do business and easily sold the grain at a low price. Wasn't this helping him make a fortune?

Just as Fan Kuan and the shopkeeper were celebrating their success, a waiter suddenly said, "Shopkeeper, something terrible has happened! The grain ships have entered the city!"

Fan Kuan suddenly stood up and said:

"Nonsense! It's not the time for grain to be transported to the capital, how could there be grain ships entering the city!?"

The waiter stammered:
“Mr. Fan, you are not from the south.”

"Not from the south?"

"They're coming from the east! Grain ships from Zhigu!"

Fan Kuan was stunned for a moment, then rushed out and rode his horse towards the Yongding River wharf outside the city.

When Fan Kuan arrived outside the city, he saw a dense crowd of people thronging the dock, with dockworkers carrying bags of grain onto mule carts.

Fan Kuan wondered where the grain came from, when he heard a eunuch standing on the dock shouting:

"The Crown Prince is benevolent and cannot bear to see the rising grain prices in the capital harm the people. This grain was transported to Zhigu by sea. Don't worry, there's as much as you need!"

Fan Kuan's vision went black for a moment. He looked at the cargo ships on the river and then remembered the opening of Zhigu Port.

Zhigu has a natural deep-water harbor and is connected to the capital by a canal.

Fan Kuanguang only thought about transporting grain by land, but he never considered shipping it by sea from Zhigu and then using the canal to deliver it to the capital. This way, the grain transport would be several times faster and more efficient!
With so much grain entering Beijing, can grain prices hold up?

Fan Kuan thought of his savings accumulated over the years, gritted his teeth, and rode back to the city.

He grabbed the manager of Datong Grain Store and said, "Sell it all! Sell it all!"

The shopkeeper was startled. Just moments ago, Fan Kuan had been advising him to buy grain, so why the sudden change of heart?

Fan Kuan said with a livid face:

"The Crown Prince has already made his plans. If we run now, we can still survive! Any later and it's all over!"

"What about the other grain stores?"

Fan Kuan was almost cursing out loud:
"Why should I care whether my fellow Daoists die or I die?"
-
Over the next two days, prices in the capital city began to plummet.

In fact, even with the sea transport from Dengzhou and Laizhou, Zhu Yijun was unable to obtain much grain in a short period of time.

However, Su Ze had his men unload the grain at dusk and transport it back into the city, then secretly send it out of the city at night, and transport it back into the city early the next morning.

This created a sense of abundance in the grain market, completely shattering the confidence of grain merchants.

When Datong Trading Company began selling off its grain, grain prices simply couldn't hold up any longer.

Once food prices start to fall, people stop rushing to buy grain.

This was not a time of food shortage, yet grain prices began to plummet, prompting more grain traders to sell off their stock to recoup their losses.

The stampede caused grain prices to collapse, and within just two days, the accumulated gains of the past few days were wiped out.

Just as Xiao Pangjun was rubbing his hands together, ready to press his advantage, Su Ze stopped him.

"Your Highness, grain prices have stabilized; there's no need to lower them further."

Zhu Yijun asked, puzzled:

"Master Su, we use sea freight to transport grain, which is much cheaper. Even if we lower the price, we can still make a profit. Why don't we sell it?"

"If we keep lowering prices, we can completely crush these unscrupulous merchants."

Su Ze shook his head and said:

"Your Highness, low grain prices also harm the people. Large fluctuations in grain prices are all detrimental."

Hearing Su Ze say that, Little Fatty Jun also decided to stop.

Su Ze continued:

"Your Highness can send someone to inquire if there are any grain shops for sale, and Your Highness can purchase one."

The fact that the Donggong Shops were able to successfully enter the grain business this time is already a great achievement.

Zhu Yijun hurriedly ordered Zhang Hong to gather information. If they could buy a few more grain shops, the Crown Prince's position would be firmly established.

Su Ze's actions made Zhu Yijun understand what "business warfare" meant, and it felt even more exciting than the battlefield!

Su Ze continued:

"Your Highness, the large fluctuations in food supplies in the capital are also detrimental to the people's livelihood."

Without a guarantee of food security, there is no way to promote industry and commerce, so Su Ze has been thinking about how to stabilize grain prices.

Su Ze continued:

"Managing grain is a fragmented and complicated business, not a very good industry. Your Highness is the crown prince and should not be looking at such petty profits."

Zhu Yijun said solemnly:
“Master Su is absolutely right.”

Su Ze said again:
"But food is the foundation of the nation, and the Crown Prince cannot let it go unchecked."

Hearing Su Ze's contradictory words, Zhu Yijun couldn't understand what he meant.

Su Ze said:

"I request that a large-scale grain trading market be established."

(End of this chapter)