Rise of a Lonely City: From Exiled Prince to Ruler of the Nine Provinces

The furnaces of "Black Mountain Iron City" burn day and night, forging an indestructible blade for the Cold Abyss; the 30,000 inhabitants and 5,000 elite soldiers provide this blade with a sturdy handle and the strength to wield it.

However, Xiao Chen knew that only when the country was wealthy could the military be strong.

To support the ever-increasing military expenditures and construction investments, relying solely on land taxes and the salt and iron monopolies is far from sufficient; the sources of wealth must be revitalized, made to flow, and made to circulate.

On this day, Xiao Chen convened a meeting on "Promoting Trade and Benefiting Industry" in the main hall of the Prince's Mansion, bringing together representatives from the Household Department, the Maritime Trade Department, the Finance Department, and major merchant guilds.

Unlike previous emperors who immediately proposed "increasing taxes," he instead presented a document that left all merchants speechless: the "Memorial on Reforming Commercial Taxes."

"Gentlemen, I intend to implement a 'one-thirtieth tax' system as a precedent." Xiao Chen's voice was not loud, but it resounded like thunder in the hall.

"One-third...thirtieth of the tax?!"

An elderly merchant with white hair thought he had misheard and asked in a trembling voice, "Your Highness, the old system of the imperial court was one-tenth of the tax, with taxes levied at every checkpoint and levies at every roadblock, resulting in layers of exploitation and often leaving more than half actually collected. This one-thirtieth tax..."

"The old system harms the people, and I will not adopt it."

Xiao Chen said firmly, "What I want is not to kill the goose that lays the golden eggs, but to let the water flow and raise fish."

At the beginning of the meeting, Xiao Chen did not announce the new policy directly, but instead let the businessmen "pour out their grievances".

"Your Highness, please allow me to speak," a Hu merchant who specialized in grassland trade rose to complain, "When small-time peddlers bring furs south, they have to pass through eighteen tax checkpoints along the way, with numerous charges such as 'passage tax,' 'landing tax,' 'likin,' 'fire loss,' and 'gate fee'... The actual taxes paid are often several times the value of the goods. If they encounter corrupt officials, they can lose everything."

"Your Highness," a local cloth merchant interjected, "the government's tax collection methods are unfair; large measures are used for taxation, while small measures are used for taxation. Furthermore, the conversion of silver into cash is based on a high rate of taxation and a low rate of taxation. Moreover, the clerks are like wolves; if anyone disobeys, they are falsely accused of smuggling, their goods are confiscated, and they are imprisoned."

"It's tough for merchants to travel the land," a grain merchant sighed. "Bandits are everywhere, and the government only knows how to collect taxes, not how to protect merchants. Of all the profits, 30% goes to taxes, 30% goes to feeding the wolves, and 30% goes to bribes. If we can keep 10%, we're lucky if God helps us."

Listening to the merchants' tearful accusations, Xiao Chen remained calm, but his eyes grew increasingly cold.

"Oppressive government is more ferocious than a tiger"—this saying is indeed true. How can trade routes function smoothly under such exploitative policies? How can wealth accumulate? How can the nation become prosperous and strong?

After everyone had finished complaining, Xiao Chen slowly unfolded the imperial edict in his hand and read it aloud:

"The Prince of Jingbei issued an edict:"

"Merchants are those who facilitate the exchange of goods, balance surpluses and shortages, revitalize the economy, and enrich the nation."

"In order to facilitate trade and benefit industry, and to boost the market, a special reform of the commercial tax system is hereby implemented."

"First, abolish all exorbitant taxes and levies, including transit tax, landing tax, and gate tax, which shall be strictly prohibited."

"Second, the permanent commercial tax shall be set at one-thirtieth of the total tax."

"Third, establish the Maritime Trade Office, which is in charge of collecting commercial taxes. It is strictly forbidden for clerks to set up tax checkpoints privately, and it is strictly forbidden to extort merchants."

"Fourth, implement a unified tax system. After paying commercial tax at the first port of entry, merchants will receive a tax stamp and can travel freely within the country. No checkpoint may collect taxes twice."

"Fifth, establish fair scales and standard rulers. The government shall provide standard weights and measures and strictly prohibit the use of large measures and small scales to oppress merchants and the people."

"Sixth, the government has a responsibility to protect merchants. If a caravan encounters bandits, the government must pursue and eliminate them and provide compensation. If the goods are damaged, the government will provide appropriate compensation."

After the imperial edict was read aloud, the hall fell into a deathly silence. The merchants looked at each other, unable to believe their ears.

"Your Highness..."

The old merchant from the Hu Kingdom knelt down with a thud, kowtowing three times with a series of loud thuds, tears streaming down his face. "This is a divine favor! Your Highness is wise! Long live the Prince!"

"Your Highness is wise!"

The merchants all knelt down and shouted "Long live the Emperor!" Their voices shook the palace.

Many businessmen were so excited that they trembled and tears streamed down their faces.

They had spent half their lives in business, enduring exploitation and humiliation; never had they imagined that one day they would encounter such benevolent governance.

Lowering tax rates does not mean that the government collects less money; rather, it achieves overall growth by increasing sales volume with lower profit margins and expanding the tax base.

To this end, Xiao Chen implemented a series of supporting measures to ensure that the new policy took root.

In key locations such as Zhenbeicheng, Baishui Market, Panshibao, and Qinghe Town, branch offices of the Maritime Trade Office were established to unify tax cards, collection, and management.

Tax officials undergo rigorous training, have fixed salaries and responsibilities, and are strictly prohibited from soliciting or accepting bribes; violators will be severely punished.

Tax stamps are made of special paper, stamped with an official seal and anti-counterfeiting watermark, and specify the owner, goods, quantity, value, tax amount, and date.

Goods can be transported with tax receipts; those without receipts are considered smugglers and their goods will be confiscated.

The anti-smuggling team was reorganized into a merchant protection anti-smuggling team, which was responsible for both apprehending smugglers and escorting caravans, as well as suppressing bandits.

Caravans could voluntarily pay a small "protection fee" to enjoy armed escort from the government.

Fair scales were set up in each market, with government officials stationed there to provide free scale calibration services.

Crack down on shortchanging customers, selling inferior goods as superior ones, and engaging in market manipulation.

Encourage businesspeople to form guilds and chambers of commerce to regulate industry practices, mediate disputes, and protect their rights.

The new policy had an immediate and noticeable effect.

"The commercial tax in Hanyuan is one-thirtieth of the total tax, and this single tax applies to the entire territory!"

The news spread like wildfire throughout the northern borders, reaching the Central Plains, the grasslands, the Northern Yan, and the Western Regions. Merchants across the land were shocked upon hearing it, followed by ecstatic joy.

"Although Hanyuan is remote, its taxes are light and its laws are clear, and it has elite troops to protect merchants. It's a good place to go!"

Merchants from the Central Plains organized large caravans, laden with silk, porcelain, and tea, and headed north to Hanyuan.

"Ironware, salt, and cloth from Hanyuan are cheap and of good quality, and taxes are low, so you can make a fortune!"

Grassland merchants drove their cattle, sheep, and horses, flocking to the area.

"Hanyuan is a crucial hub connecting the east and west, with low taxes and convenient transportation; a branch should be established there!"

Merchants from the Western Regions traveled thousands of miles to bring spices, gems, and carpets.

Within the town of Zhenbei, shops lined the streets, goods piled high like mountains. The Baishui market was bustling with activity, the sounds of camel bells ringing out. On the official road, carriages and horses moved in an endless stream, caravans stretching as far as the eye could see.

"Your Highness," Han Lie said, holding the latest account books, his face beaming with joy, "In just one month since the new policies were implemented, the number of inbound merchant caravans has doubled compared to last month! Although the tax rate has decreased, the total amount of commercial tax revenue has increased by 30%! Moreover, the market is booming, prices are stable, and the people are praising us!"

Looking at the bustling market and listening to the clanging of abacuses, Xiao Chen felt gratified.

"Old Master Han," he said to Han Lie, "do you know the true meaning behind this commercial tax reform?"

"This old minister is foolish and ignorant; please give your instructions, Your Highness."

"First, it means understanding."

Xiao Chen said, "The smooth flow of goods facilitates the exchange of goods and resources, and opens up avenues for wealth. When goods flow smoothly, prices remain stable, and when prices remain stable, the people live in peace."

"Secondly, it means gathering."

Xiao Chen continued, "Gathering merchants, gathering wealth, gathering people. When merchants gather, the market prospers; when the market prospers, the city thrives."

"The third is storage."

Xiao Chen's gaze was profound. "Wealth should be stored among the people. A nation is strong when its people are wealthy, and weak when its people are poor. Rather than exploiting the people, it is better to ensure that the people have money in their hands and goods in the market. In this way, the nation will have an inexhaustible source of wealth."

"Your Highness is wise!"

Han Lie bowed deeply in admiration, exclaiming, "This is a brilliant strategy that will remain unchanged for all time!"

The reform of commercial taxes not only brought a flood of wealth to Hanyuan, but also laid the foundation for Hanyuan's commercial development.

It proclaimed to the world: Hanyuan is not only a strong military region, but also a commercial hub and a prosperous nation.