Ming East India Company

In the late winter of the thirty-seventh year of the Wanli reign (1598).

A cold wind howled at Tongzhou Wharf, and the canal waters rippled coldly.

With the last bag of grain transported by sea safely stored, the accounts checked, and the grain quota fully written off, Cheng Keqin's core mission of transporting 200,000 shi of grain northward has come to a successful conclusion.

The entire voyage was flawless. Relying on Ni Shangzhong's deliberate holiday to exploit the gap in Tianjin's air defenses, the cover of thousands of ships sailing together on the Haihe River, and Li Sancai's legitimate position in the canal transport, this group bypassed the layers of corruption along the canal and successfully filled the gap in canal transport caused by the floods in Jiangnan. This ensured that Li Sancai's canal transport performance remained top-notch this year, and also thoroughly verified the feasibility of the secret canal transport route between the East China Sea and the Ming Dynasty government.

After the handover was completed, the officials of Tongzhou warehouse checked, sealed, and archived the goods as usual, and no one noticed anything unusual throughout the process.

In all the official documents and records of the Ministry of Revenue, this 200,000 shi of grain was still the regular river transport grain, which was transported north in accordance with the rules and stored in full, all in accordance with ancestral regulations and national laws.

With their mission accomplished, the other shipping fleets prepared to return home. However, Cheng Keqin, a merchant by trade, had no intention of going back just like that.

He stood at the bow of the boat, watching the endless stream of empty cargo ships returning south on the canal, but he did not rush to order the anchor to be raised and the boats to set sail.

On this northward journey, they mingled with the official fleet by temporarily connecting with inland river transport boats to enter the capital. The boats were no different in type from the regular transport boats of the Ming Dynasty.

Since they were part of the grain transport fleet, they naturally enjoyed all the regulations and privileges of the imperial grain transport ships, the most special of which was the tax exemption when the grain transport ships returned empty.

The ancestral rules of the Ming Dynasty clearly stipulated:

The grain transport ships that sailed north to carry grain were a matter of national importance, but returned empty to the south without paying taxes or duties. In order to alleviate the hardship of the grain transport workers and subsidize the cost of transporting grain, the imperial court granted a special permission—all official grain transport ships that returned empty were exempt from commercial taxes at all checkpoints, tax offices, and customs offices along the way, and were allowed to carry goods and freely travel between the north and south for trade.

This rule was originally a benevolent policy of the imperial court to maintain the canal transport system and appease the canal soldiers, but in the years of Wanli when official corruption was rampant and canal administration was lax, it became the biggest den of corruption.

River officials and laborers have long relied on the tax-free privilege of returning empty-handed to smuggle goods and resell them between the north and south, which has become an open and corrupt practice.

However, ordinary cargo ships had limited cargo capacity and were hesitant to operate on a large scale.

Cheng Keqin, with his entire fleet of replica cargo ships, familiarity with the north-south trade routes, and backed by the substantial capital of the East China Sea, and with no one to inspect or control him, had a duty-free shipping route that was nothing short of a golden trade route that was risk-free, highly profitable, and facilitated smooth trade between the north and south.

Having made up his mind, Cheng Keqin decided to take advantage of the return of the grain transport ships to facilitate trade, using the name of official grain transport ships to conduct cross-sea trade.

He immediately summoned the captains of each ship and whispered the order:

"Once the grain shipment is completed, immediately remove all grain transport labels and revert to the standard designation for empty grain transport ships. All ships shall be disguised as empty official grain transport ships and proceed south with the main fleet of grain transport ships. All customs offices, tax ports, and inspection checkpoints along the way shall be traversed according to the old practice for empty grain transport ships."

"Pass down the order to postpone the return to Songjiangkou for regrouping. Instead, select major towns and commercial ports along the way to purchase large quantities of northern specialties and resell them in Jiangnan. Take advantage of the imperial court's tax exemption policy to fully profit from the price difference between the north and south."

Once the order was given, more than a hundred converted inland waterway cargo ships were tidied up, their grain transport equipment removed, and their holds emptied, making them appear as if they were returning empty, quietly merging into the mighty torrent of cargo ships heading south.

In winter, fewer and fewer cargo ships head north on the Grand Canal, while countless empty ships return south, stretching for hundreds of miles in a magnificent display. The officials at the various customs offices, accustomed to seeing empty cargo ships returning year-round, have long since become numb and complacent, merely glancing at the flags before letting them pass without a single person boarding to conduct a thorough inspection.

Cheng Keqin took charge of the main ship and began purchasing goods from various locations.

The northern regions of Zhili and Shandong are rich in cotton, dried dates, medicinal herbs, furs, coal, coarse cloth, iron pots and ironware. These northern products are inexpensive and plentiful, but local sales in the north are slow and profits are meager. However, they are extremely scarce and sought-after goods in the wealthy counties of Jiangnan.

Conversely, silk, cotton cloth, tea, sugar, and fine lacquerware from the Jiangnan region were expensive and scarce in the north.

The price difference between the north and south is huge, and with the entire process being tax-free, without any commission from checkpoints or tax losses, the profit can be several times higher.

The fleet sailed south, reaching the two major canal commercial towns of Linqing and Jining in Shandong.

This place is the largest river and land port and commercial hub in the north, where goods from both the north and south are gathered and distributed. Merchants flock here, and the market is bustling. Cheng Keqin ordered his fleet to moor at a secluded river bend, keeping a low profile and avoiding any fanfare, and under the guise of the customary practice of smuggling goods by cargo ships, to purchase large quantities of northern specialties at low prices.

With the convenience of being a cargo ship, local merchants dared not make things difficult for him, and tax officials dared not interfere. Cheng Keqin used his personal trading capital to buy up large quantities of cheap goods from the north: tens of thousands of bolts of coarse cloth, thousands of pieces of ironware, cartloads of medicinal herbs, piles of dried fruit, and whole furs, filling every available space in the ship's hold.

Ordinary merchant ships transporting such heavy cargo incur numerous costs, including customs duties, port fees, and miscellaneous charges. However, Cheng Keqin's fleet enjoyed the privilege of being exempt from taxes for grain transport ships, paying no taxes or fees whatsoever, thus minimizing costs.

After being fully loaded with goods from the north, the fleet continued south along the canal without any obstruction.

All the customs officers, inspectors, and gatekeepers along the river, upon seeing that the cargo ships were empty, released them in accordance with ancestral regulations, without even asking a single question.

They traveled all the way to the Jiangnan region, specifically Yangzhou and Suzhou.

Winter supplies were scarce in Jiangnan, while medicinal herbs, furs, refined iron, and dried dates from the north were all in high demand, and their market prices were far higher than the original prices in the north. Cheng Keqin remained calm and composed, shipping the goods in batches, in a dispersed manner, and quietly, relying on secret trade routes in Jiangnan to sell off the entire shipload of northern products.

Between entering and exiting the country, the combination of duty-free arbitrage and the price difference between the north and south resulted in substantial profits during the short ten-day voyage, with a steady stream of silver coins flowing in.

After making huge profits from the trade, Cheng Keqin did not take the money back to Ryukyu to hand over the goods. Instead, he thought of another way to invest all the money he had earned from the trade into the grain market in Jiangnan.

In the thirty-seventh year of the Wanli reign, the Jiangnan region had just experienced a major flood, resulting in a poor autumn harvest, fluctuating grain prices, and scattered surplus grain in prefectures and counties. The government strictly controlled official grain and prohibited smuggling out of the country, but there was still a large amount of scattered grain circulating in the market due to private households, gentry hoarding grain, and surplus grain in rice shops.

With ample cash at his disposal, Cheng Keqin took advantage of the completion of the canal transport tax collection and the slight relaxation of government inspections to assign manpower to conduct multi-pronged and decentralized acquisitions.

Cheng Keqin dispatched dozens of teams to go deep into the rural towns and villages of the four prefectures of Suzhou, Songjiang, Changzhou and Huzhou to collect grain from local gentry, wealthy households and private rice merchants.

In just a few days, they collected more than 40,000 shi of high-quality Jiangnan rice in addition to the official grain quota.

This neither affected the original quota of 300,000 shi of grain transport nor required Li Sancai to use his authority to allocate it; it was purely a grain reserve created out of thin air by taking advantage of loopholes in the Ming Dynasty's grain transport rules.

After collecting the grain, Cheng Keqin ordered the fleet to tidy up the cabins and organize their formation. Carrying more than 40,000 shi of newly collected private grain, they sailed down the river and returned to the secret anchorage at Songjiangkou.

At this time, the main ocean-going fleet of Ryukyu, which had been waiting to rendezvous in the open sea, had been anchored in the waters off Songjiang Estuary for several days as scheduled, quietly waiting for the inland river fleet to return and hand over the cargo.

The river and the sea meet once again.

Despite the rising and falling mist and the surging tides, the Songjiang Estuary remains a bustling hub of commerce and fishing boats.

More than a hundred converted cargo ships on the inland waterways slowly sailed into the designated handover anchorage and steadily joined the giant ocean-going vessel from the Ryukyu Islands in the open sea.

After both fleets anchored and were secured inside and out, Cheng Keqin boarded the large Fu ship with account books and grain registers to report the entire journey to the garrison commander.

"On this northward journey, all 200,000 shi of official grain were safely deposited into the treasury, and the grain transport was a complete success. On the return journey, we relied on the Ming Dynasty's grain transport ships to return empty and exempt from taxes, and traded goods from the north and south along the way, making a considerable profit. All the profits were used to purchase surplus grain from Jiangnan. On this return journey, the ships carried more than 43,000 shi of private grain."

The officer in charge who was waiting for him quickly waved the signal flag, and the cargo ships approached the Fujian ship in an orderly manner.

The sailors pulled the rope, the winch turned, and the grain sacks rose.

Bags of grain were being loaded into the cabins of the Fujian-style ship.

After loading was completed, Cheng Keqin ordered the cargo ship to be connected to the Fujian ship, the sails to be billowed, and the ship to sail eastward.

More than ten days later, in the main hall of Kagoshima, Shirano sat in his seat listening to Cheng Keqin's report.

"How much grain did you bring back?"

"The total amount of grain consumed, plus the private grain purchased later, was about 150,000 shi (a unit of dry measure).

"How much does it cost?"

"On the return trip, thanks to the tax exemption privilege granted by the imperial court, we have already earned back all the costs of this voyage and even saved several thousand taels of silver."

"Li Sancai didn't take a share? That's not like him!" Luo Sigong keenly noticed the "blind spot".

Zhang Yu, who was in charge of the negotiations, laughed heartily:

"Master and Eunuch Luo are overthinking it. According to normal losses, delivering 200,000 shi of grain would require at least 400,000 shi of grain to be consumed en route. We only took 100,000 shi, so the rest will all belong to Li Sancai!"

He's probably busy with accounts at the Grand Canal Governor's office right now, too busy having fun to think about extorting any more money from us.

Shirono looked up, very excited.

"It seems that from now on, the business of transporting grain to the north will be ours."

"That's right."

Su Zhongman, standing to the side, rubbed his little hands together and started doing the math:

"If we can get 400,000 to 500,000 shi of grain from the canal every year, the food problem for Ryukyu will no longer be a problem for the next few years."

The annual grain transport from the south to the north is 2.5 million shi (a unit of dry measure), but with losses, it amounts to 7 to 8 million shi. Based on this year's profit scale, if we only take on 1 to 1.5 million shi, it will be enough to solve the grain shortage.

"Moreover, this profit is based on the surge in grain prices after the floods in Jiangnan this year. If there is a bumper harvest, our returns will likely be even greater."

Cheng Keqin added.

Shirane nodded in satisfaction:

"Put all the grain into storage, and also tell Bai Wenyue that we have solved the grain problem, so let him freely recruit immigrants to Ryukyu."

Furthermore, Zhang Yu, from now on you no longer need to stay in Kagoshima. Go to the Jiangnan region and wait for me, maintaining good relations with Li Sancai, Ni Shangzhong, and others. I'm giving you a fief of 300 shi this time, and there will be a greater reward if things go well later.

Cheng Keqin, you will be responsible for organizing a grain transport team to handle grain transport affairs in the East China Sea.

Cheng Keqin and Zhang Yu immediately knelt down to express their gratitude. Zhang Yu, in particular, was originally a landless farmer who came to Ryukyu to make a living. He was sent to Ryukyu because he could speak the Huainan dialect and was noticed by Luo Sigong.

Now, Bai Ye has not only given him a noble status, but also allowed him to be stationed in Huai'an. This is clearly giving him a huge opportunity to make money.

Millions of bushels of grain were transported by canal every year; even a small portion could fill a fortune.

Bai Ye was well aware of what Zhang Yu was thinking, but the officialdom had to be conducted according to its rules. Since everyone in the Ming Dynasty had been involved in the matter of grain transport, one more Zhang Yu wouldn't make a difference, as long as he could get things done.

Thus, a breach was torn in the canal transport system that had lasted for more than two hundred years during the Ming Dynasty.

And so, a new chapter was turned in the millennia-old tradition of transporting grain northwards.

……

Having solved the food problem, Bai Ye set his sights on another big opportunity.

Those are the spices from the Spice Islands.

Throughout the Age of Exploration, 90% of the driving force for Europeans was this flavorful condiment.

From Columbus to Magellan, from Prince Henry the Navigator to Vasco da Gama, every navigator's lifelong pursuit was spices, and more spices.

At the time when Shirano lived, the landscape of the spice trade had also undergone significant changes.

Early spices mainly consisted of pepper and cinnamon, especially pepper. During the Age of Exploration, pepper and spices were almost synonymous. When Vasco da Gama's fleet returned, 90% of the cargo on board was pepper.

However, the replacement of land routes by sea routes is not something that can be achieved overnight.

With the opening of new shipping routes, merchants who were originally engaged in Mediterranean trade did not sit idly by and wait for their demise.

The Italian city-states, represented by Venice, and the Ottomans immediately thought of the traditional means of commercial competition—price reduction.

As a result, within 200 years of the opening of new sea routes, the price of pepper plummeted. By the late 16th and early 17th centuries, when Shirano lived, pepper had become so cheap in Europe that even beggars could afford to mix a little pepper into their meals.

Decreasing profits prompted Europeans to seek new sources of profit growth, and the Portuguese quickly expanded their influence to the Maluku Islands in Southeast Asia.

It is different from pepper and cinnamon produced in India.

The spices of the Maluku Islands are cloves, nutmeg, and nutmeg coat.

These things were only produced in the Spice Islands at the time, unlike pepper which had the whole of South and Southeast Asia as a source of supply.

Realizing the benefits of a monopoly, the Portuguese quickly took control of the Maluku Islands and banned merchants from other countries from trading there.

The Maluku Islands have also acquired a more prestigious name – the Spice Islands.

However, the good times didn't last long. The Dutch, a rising star in the Age of Exploration, also set their sights on the profits of the Spice Islands. Fleets of the East India Company sailed in one after another, vying with the Portuguese for control of the Spice Islands.

With the Spanish Habsburgs seizing the Portuguese throne in 1580, the new monarch was not concerned with protecting Portugal's interests in the Far East, and one Portuguese colony after another was conquered by the Dutch.

By the time of Wanli 37, the Portuguese had lost most of the Spice Islands, with only scattered strongholds such as Tidorei remaining. They could only resist the Dutch by funding local indigenous uprisings.

Because Dutch rule was more severe than Portuguese rule, the local indigenous people were generally more aligned with Portugal, leaving the Spice Islands in a state of chaos.

Shiro saw this as an opportunity; he planned to take advantage of the chaos in the Spice Islands to steal the spice seeds.