My Portable Ming Dynasty

Chapter 305 "Memorial Requesting the Establishment of Publicly Owned Railway Shares to Raise Funds for Road Construction"

Fan Baoxian's first reaction was that Su Ze had gone mad!

How much iron is needed for a railway line stretching from Fangshan to the outskirts of Beijing, a distance of just 100 kilometers?

As a wealthy businessman who runs the Fan family, Fan Baoxian is well aware that for such a massive project, materials might not be the biggest cost.

Will there be any fees for land acquisition along the route?

Do we need to pay for labor costs?

Fan Kuan said:

"The Ministry of Works estimates that this railway will cost approximately 30,000 silver dollars."

Fan Baoxian was completely dumbfounded. A hundred-mile stretch of road cost 30,000 silver dollars. He said:
"Has Su Hanlin gone mad? Thirty thousand silver dollars, if laid out on the ground, could connect the capital and Fangshan!"

"Can His Majesty and the Ministry of Works afford this amount of money?"

Fan Kuan said:

"Therefore, Su Hanlin prepared to raise funds from the public."

"Private fundraising? That's tantamount to taxing the people! Isn't Su Hanlin afraid of damaging his reputation by doing this? Just for a railway?"

It was normal for the imperial court to conscript laborers and impose additional levies for the project. To be honest, it wasn't impossible to squeeze out 30,000 silver dollars if it were imposed near the capital. But wouldn't doing so completely destroy the reputation that Su Ze had built up over many years?

Fan Kuan shook his head and said:

"The fundraising that Su Hanlin mentioned is for issuing public shares."

"Publicly owned shares?"

Fan Kuan said:

"One hundred silver dollars per share, with a total of 300 shares issued, and a minimum subscription of one share."

“Those who purchase public shares will automatically join the railway’s board of directors and enjoy the railway’s profits after deducting operating costs once the railway is completed.”

"In addition, Hanlin Su is preparing to petition the court, using the commercial tax of Shuntian Prefecture as collateral, that those who purchase public shares can receive an annualized interest rate of half a percent. If the railway is not profitable, the interest will be drawn from the commercial tax of Shuntian Prefecture."

"After five years, when the public shares mature, you can choose to sell them to redeem your principal, or continue to hold them and enjoy dividends."

"Publicly owned shares can be purchased anonymously, and the holder can appoint a proxy to join the board of directors."

Fan Kuan finished speaking in one breath, explaining that these were all explanations made by Su Ze in the letters he personally sent to the three major newspapers.

After listening, Fan Baoxian began to think.

Thirty thousand silver dollars is certainly a huge sum, but one hundred silver dollars per share is nothing.

In the capital, the number of people who could afford one hundred silver dollars far exceeded three hundred.

An annualized interest rate of 0.5% is not actually low. 0.5% is five percent. The Fan family's lending business charged 0.5% interest on loans to merchants from the same clan.

Of course, the normal loan interest rate in the capital is now three percent, which is 30%, while the highest historical rate stipulated by the Civil Affairs Department is four percent, which is 40%.

Compared to the interest, half a cent was considered a charitable loan from the Fan family to their clan.

But the accounts can't be calculated like that.

Ordinary loans have high interest rates because the risk of lending them out is also high.

The Fan family's bank only lends to acquaintances, and even so, it still has a large number of bad debts every year.

There's nothing you can do about it; that's how business is these days. Some caravans just disappear once they enter the grasslands, and you can't even find them to collect your debts.

The half-percent of interest on the railway public shares was guaranteed by the Shuntian Prefecture using commercial taxes.

Of course, if it were an ordinary government official acting as guarantor, people probably wouldn't believe it, but if it was Su Hanlin who pushed for it, then the chances of repayment would be much greater.

If interest can be earned steadily, and the principal can be redeemed after five years, it is not considered a loss from a business perspective.

Of course, as the clan leader, Fan Baoxian cannot only consider economic factors.

He looked at Fan Kuan and asked:
"There's no news in the newspapers yet. Has Su Hanlin tipped off the newspapers?"

As expected of the clan leader, Fan Kuan, seeing that Fan Baoxian's intelligence had returned to its peak, said:

"Su Hanlin sent his retainer Xu Wenchang to personally deliver handwritten letters to the three newspapers. Mr. Xu also explained the railway public shares and hoped that the three newspapers would jointly publicize the railway public shares."

really.

Fan Baoxian had already made his decision, but he still asked Fan Kuan first:

"Brother Zhongli, what do you think?"

Fan Kuan said very firmly, "Buy! We should buy!"

really.

Fan Kuan said:

"Clan leader, 30,000 silver dollars, 100 dollars per share, only 300 shares in total."

"Even from a business perspective, this is not a losing proposition."

Fan Baoxian nodded slightly.

In the capital, one hundred silver dollars was not much.

Let alone the extremely wealthy families, even moderately wealthy families could afford it.

Fan Kuan continued:

“Clan leader, I believe the most important thing about the public shares is not the interest, but the position of director.”

"director?"

Fan Kuan nodded and said:

"Although Su Hanlin did not explain the role of this board of directors in detail, since we have this board of directors and everyone is the one who pays the money, shouldn't we also enjoy some rights?"

Fan Baoxian was taken aback; this was an angle he hadn't expected.

Nowadays, there are also cases of businessmen forming joint ventures, but these businesses are usually funded by the same family, and the profits are divided at the end of the year.

The Fan family's bank was actually a joint-stock company.

"But shouldn't the Ministry of Industry build railways? The board of directors wouldn't build railways."

Fan Kuan said:

“The board of directors certainly won’t build the railway, but once it’s built, it still needs to be operated.”

"Since the board of directors is providing the funding, shouldn't they also be able to offer their opinions on the operations?"

Fan Baoxian was stunned for a moment.

Fan Kuan then said:
“Since it’s a board meeting, this is a meeting. Clan leader, you said Su Hanlin is leading the way. Who in the capital would take the lead in subscribing to railway shares?”

Fan Baoxian instantly understood Fan Kuan's meaning.

One hundred silver dollars is not much. Given Su Ze's power in the Ming Dynasty, it is normal for the nobles of the Ming Dynasty to casually buy one to give him face.

Putting aside everything else, those nobles had plenty of silver dollars in their hands.

And then there's the Crown Prince. Su Ze is the Crown Prince's teacher and has a very close relationship with the Wuqing Earl's family. Wouldn't the Crown Prince help him promote the public shares?

In addition, Su Ze had a close relationship with the Grand Secretaries. No matter what, the Grand Secretaries could easily come up with a hundred silver dollars, right?
Fan Kuan used the same rhetoric he employed when he was a hermit:

"Chief, this isn't railway public stock, it's a pass to the higher-ups!"

Fan Baoxian immediately stood up and said:

"Buy! I'll personally buy five shares after the issuance!"

"I'll find a way to persuade the family to purchase it under the name of the Datong Fan family!"
-
Su Ze is drafting a memorial to the throne.

In his memorial entitled "Request to Establish Publicly Owned Railway Shares to Raise Funds for Railway Construction," Su Ze first wrote:

"Your Majesty, I humbly observe that the primary benefit of the capital region lies in industry and mining. The coal and iron produced in Fangshan are the foundation for city construction, metallurgy, and building operations."

“However, from Fangshan to the outskirts of Beijing, the hundred-mile post road is rugged, and a single cartload of goods requires several mules and horses, which wastes a great deal of manpower and time. If this continues, the expenses of all tradespeople in the capital region will be exorbitant, which will be very inconvenient for the national economy and people’s livelihood.”

"I have heard that there is a railway in the Fangshan mines, where horses and mules pull the mine cars on the tracks, which can multiply the effort several times over. One animal can carry three cars, and the savings in transportation costs are countless."

"I consulted with the officials of the Ministry of Works and proposed that a 100-mile railway be laid along the official road from Fangshan to the outskirts of Beijing to facilitate the transport of grain, coal and iron."

"However, this project is enormous, costing approximately 30,000 silver dollars. The Ministry of Works' annual expenditure has already been allocated to the river transport, making it difficult to allocate funds from the treasury; the Imperial Treasury is also concerned that this initiative may not be successful and could waste public funds."

"After much deliberation, I have come up with the idea of ​​adopting the method of joint ventures and shareholdings of merchants, and by adapting the approach, raising funds from the private sector to establish public railway shares."

Su Ze then explained in detail the method of issuing stocks:
"1. Each share is valued at 100 yuan; once 300 shares are raised, the funds for the road transport will be secured. 2. An annual interest rate of half a percent will be paid, secured by the commercial tax of Shuntian Prefecture, and guaranteed by the Ministry of Revenue; principal and interest are guaranteed. 3. The term is five years: upon maturity, the creditor can redeem the share capital at the original value or convert it into road transport shares to enjoy the remaining profits in perpetuity. 4. The shares will be issued anonymously, facilitating market circulation; gentry, merchants, and commoners can all purchase and hold them. 5. A joint audit committee will be established for the shareholders to review income and expenditure; the merchants involved will be jointly audited and their profits shared with the Ministry of Works."

"This method has the effect of 'taking from the people, using for the people, and returning the benefits to the people'."

“The people contribute their wealth, which is far better than imposing harsh taxes; the officials profit from it, which can alleviate the stagnation of steel production; and merchants benefit from it, which can save on the waste of transportation costs each year.”

After Su Ze finished writing the memorial, he put it into the "Portable Ming Dynasty Court" app.

——[Simulation Start]——

The memorial entitled "Request to Establish Railway Public Shares to Raise Funds for Railway Construction" was sent to the cabinet. Zhang Juzheng expressed his opposition to the issuance of railway public shares, believing that it would weaken the authority of the Ministry of Revenue.

Officials from the Ministry of Revenue also opposed this, submitting a memorial stating: "Issuing public shares, ostensibly to issue bonds, is in reality to increase taxes; this precedent should not be set."

However, the emperor was very interested in raising public funds to build the railway and approved your memorial.

——[Simulation End]——

[Remaining Prestige: 1540.]

Wait, it actually passed?
However, Su Ze did not submit a memorial.

Thinking about it this way, the Ministry of Revenue's opposition actually had some merit.

Su Ze was a time traveler, so he naturally knew the benefits of railways and was well aware that the Fangshan Railway could recoup its investment.

But just because you know it doesn't mean others know it.

Su Ze thought of the debt problems from his previous life. Wasn't the lesson profound enough?
If the capital city successfully issues bonds to build railways, will some local governments also issue bonds?
This wasn't something Su Ze was overthinking; it was simply how things were.

In the Ming Dynasty officialdom, civil engineering and infrastructure were also important indicators for promotion.

In the Ming Dynasty, there was a fast track to promotion in the officialdom: the military commissioners of the nine border regions.

This position was specifically prepared for the promotion of local officials. The Military Commissioner was a position that combined military and political power. After taking office, the Military Commissioner of the Nine Border Regions would usually build city walls and camps.

Once the repairs are completed, it becomes a political achievement, leading to a rapid promotion.

This is also why the Ming Dynasty emphasized defense in its nine border regions but neglected military training.

The camps and city walls were tangible achievements, but the achievements in training troops were difficult to judge, and if the battle was lost, the military affairs commissioner would be held responsible.

As local officials, it's only natural that they would make certain choices.

In the past, Ming Dynasty officials were strapped for cash and had no opportunity to make any rash decisions. If they had the option of issuing bonds, who knows how they would blindly build things up.

Perhaps even inland city walls will need to be repaired through debt issuance.

Moreover, just as the Ministry of Revenue opposed, wealthy households in the capital region would naturally subscribe to the public shares, and three hundred railway public shares were nothing in the capital.

Moreover, Su Ze was also afraid of being forced to pay out of pocket, so he stipulated that the subscription amount should start from one hundred silver dollars, with the main point being that he would not take advantage of the poor.

However, if other government agencies issue bonds, it could be an increase in taxes that are forcibly imposed on the people.

That's just how things are on this land.

Fiscal policy has always been a case of either stifling when controlled too much or causing chaos when deregulated.

Driven by the priority of political achievements, it is almost impossible to suppress the impulse to create such achievements.

And the above does not even include corruption issues.

Su Ze decided to take the memorial with him and visit Zhang Juzheng first.
-
Zhang Mansion.

Zhang Juzheng was in a good mood today. With the cabinet's affairs gradually decreasing before the new year, he returned home early, which was unprecedented for him.

He then summoned his eldest son, Zhang Jingxiu, to his study to hear him recount the events that had occurred in the navy.

Zhang Jingxiu returned to the capital with the Manila delegation. After Admiral Li Chao reported to the emperor, the entire navy received rewards from the emperor.

At the same time, the Longqing Emperor graciously permitted the naval personnel to spend the New Year in the capital and return to Laizhou after the New Year.

Zhang Jingxiu originally lived outside, but Zhang Juzheng summoned him back home upon hearing the news.

Zhang Jingzheng was chatting with his younger siblings when he heard his father summon him and hurried to his father's study.

Just as Zhang Jingxiu was recounting his experiences at sea to his father, the gatekeeper suddenly announced that Su Ze was requesting an audience.

Zhang Jingxiu knew that Su Ze's visit to Zhang Juzheng must be to discuss important matters, so he prepared to take his leave.

However, Zhang Juzheng said:

"You have already achieved fame and success. Today, I will see Su Zilin, so you may stay in the study."

Zhang Jingxiu stared at his father in shock.

Zhang Juzheng liked to do everything himself, and his family's staff could only do some clerical work. The study was a forbidden area in the Zhang family mansion, and even his son could not enter without permission.

Even if he passed the imperial examinations, his father would still treat him coldly.

But this time, after returning from the sea, his father's attitude subtly changed.

This time, they actually made me stay and listen to Su Ze's conversation.

Knowing that Su Ze's visit must be about important matters, Zhang Jingxiu became nervous again. What if his father asked for his opinion?
"Go outside the study and greet Su Zilin for me."

Su Ze came to Zhang Juzheng's study again, and he suddenly saw a young man who looked somewhat like Zhang Juzheng, but with dark skin.

The young man was dressed in a scholar's robe, but he didn't look like a scholar.

"Su Hanlin, my name is Zhang Jingxiu. My father is waiting for you in the study."

So he's Zhang Juzheng's son.

Su Ze greeted Zhang Jingxiu. He remembered that the controversy surrounding the Shuntian Prefecture provincial examination was caused by Zhang Jingxiu, but after that incident, he lost contact with Zhang Jingxiu in the capital.

With such dark skin, did you go out to sea?

However, Su Ze had no time to care about Zhang Jingxiu at this moment, and instead took the memorial to Zhang Juzheng's study.

"Greetings, Grand Secretary Zhang."

Zhang Juzheng disliked formalities, so Su Ze quickly explained his purpose:
"Lord Zhang, I have a memorial to submit, and I would like to ask for your correction."

Zhang Jingxiu, who was standing to the side, was completely shocked.

How could someone speak to their own father like that?

Zhang Juzheng was used to this, and he took the memorial handed to him by Su Ze and began to read it immediately.

Zhang Jingxiu thought about how he always had to be careful when speaking to his father, and wondered if Su Hanlin was so casual.

After reading the memorial, Zhang Juzheng frowned and said:
"I don't understand the matter of building railways, but the matter of issuing public shares is still inappropriate."

Su Ze also said:
"I feel that this matter is risky. If local authorities follow the example of public shares to plunder the people, then I, Su, will become the criminal."

Zhang Juzheng nodded in satisfaction and said:
"Zilin, you've come up with this idea; your vision is truly remarkable. So, how do you plan to revise it?"

Zhang Juzheng glanced at his eldest son again and said:
"Zilin, would you mind showing the memorial to my son?"

"Please proceed, Your Excellency."

(End of this chapter)