Chapter 39: Lu Beigu's Conception

"First, establish the Well Salt Salt Certificate in Sichuan, requiring merchants to purchase Sichuan Well Salt Salt Certificates with copper coins, with the sales scope not exceeding the original sales area of well salt."

"Second, issue the Xie Salt Salt Certificate in the northwest; the court will issue salt certificates specifically for purchasing grain in various prefectures of the northwest, based on a certain proportion of the annual output of Hedong Xie Salt. Merchants may exchange these salt certificates for salt at Hedong salt fields, with the sales scope not exceeding the original sales area of Xie salt."

"Third, emulate Liu Yan's transport strategy from the Former Tang, changing the direct transport of southeastern military grain to the northwest into a system where, every few years, southeastern merchants bid for the qualification to undertake segmented grain transport based on the quantity of Well Salt Salt Certificates they hold."

"Fourth, establish a military grain warehouse in Kaifeng exclusively for the northwest, storing the military grain transported from the southeast. After paying a deposit, merchants can choose to undertake the task of transporting military grain to the northwest in exchange for Xie Salt Salt Certificates, the quantity of which is far less than what would be obtained by purchasing grain and transporting it themselves."

"Fifth, set up a salt certificate exchange office in Kaifeng, allowing merchants to exchange Well Salt Salt Certificates for Xie Salt Salt Certificates and vice versa according to the proportions stipulated by the court."

The amount of information was somewhat large; after Zhao Bian finished listening, he did not immediately sort it out clearly.

"Explain the details."

"Yes."

Lu Beigu cleared his throat and said, "Assuming this method is implemented, first, many small and medium merchants will, as before, purchase Well Salt Salt Certificates to obtain Sichuan well salt. However, since there were no restrictions on payment methods previously, this cannot alleviate the copper coin shortage in Sichuan. But after ceasing to accept iron coins and cloth and silk, the inflow of copper coins into Sichuan will increase significantly."

"Of course, if the sole purpose is the normal sale of Sichuan well salt, it is impossible for the volume of copper coin inflow to reach a level capable of alleviating the coin shortage."

"But if there is a regulation stating that 'the segmented transport of military grain east of Kaifeng every few years shall be bid for by merchants based on the quantity of Well Salt Salt Certificates they hold to undertake the qualification for segmented grain transport,' then, in order to profit from grain transport, powerful merchants will certainly strive to bid for the transport rights of a certain segment."

Here, an extra note: 'bid for' itself is a system widely used in Song society.

And Lu Beigu's conception is merely to bid for the qualification to transport military grain to the northwest in segments via water transport, not to bid for the water transport itself.

The scope of water transport is extremely broad; besides military grain, water transport is also responsible for delivering bamboo, wood, rattan, handicrafts, miscellaneous daily goods, copper and iron ware, ambergris, ivory, and other luxury items, local specialties and tribute, firewood, fodder, and various other items from the southeast to Kaifeng, and then, with Kaifeng as the center, transporting them to various places in the north.

Then you ask why the segmented transport rights for military grain water transport east of Kaifeng should be bid out?

That is certainly because having merchants undertake segmented transport through bidding saves far more money than the court transporting it itself!

The route of southeastern water transport is not a straight line at all, but a vast network!

If the court itself coordinates the purchase of grain and then transports it along different waterway tributaries to certain waterway junction nodes before continuing to transfer it, the tangible and intangible costs incurred are quite high.

But if subcontracted to a merchant, with hard indicators set, using water transport nodes as acceptance checkpoints, an interest game will form between them and upstream and downstream merchants; even if the merchant is greedy, they can at most earn a portion from it.

However, regarding water transport, if the Transport Commission and the Dispatch Commission continue to manipulate matters year after year, the losses simply cannot be counted!

The twists and turns within this, the two great figures will not fail to understand.

Zhang Fangping seemed to have figured something out at this moment; he directly asked Zhao Bian.

"How does the loss compare to the original water transport?"

Zhao Bian stated affirmatively, "It will definitely be far less than if the Transport Commission and the Dispatch Commission continue to undertake the northwest military grain water transport."

As the Transport Commissioner of Yizhou Circuit, Zhao Bian had personally rectified tax collection and naturally knew the ins and outs of this matter very well.

And Zhang Fangping's attitude also changed at this moment; he unconsciously sat up straight.

Lu Beigu continued along the train of thought, saying, "At this time, the great merchants will need to input a large amount of copper coins they have hoarded into Sichuan to exchange for a large quantity of Well Salt Salt Certificates, using them as chips for bidding in the 'bid for' process. With this periodic copper coin input occurring every few years, the copper coin shortage in Sichuan will naturally gradually ease."

"It sounds feasible; it can indeed alleviate the copper coin shortage in Sichuan."

Zhao Bian pondered for a moment and raised the question that concerned him most as a Transport Commissioner: "Then, in order to seek profit, will merchants steal, deduct, or replace grain with inferior quality?"

Lu Beigu explained, "When bidding, merchants must be required to undertake segmented grain transport. There is a fixed number of how much grain is transported to the next segment. Losses here are certainly unavoidable, but they must all be borne by the merchant. If they steal, deduct, or replace grain with inferior quality, and the merchant responsible for the next segment fails to detect it or make up for it, it will cause the merchant of the next segment to suffer losses or be investigated. To avoid losses, the merchants bidding for each transport segment will form an interest game with their upstream and downstream merchants."

The meaning here is not that Merchant A, located upstream on the river, buys one thousand shi of grain, transports it to the middle reaches of the river, and then hands it over to Merchant B to continue transporting it to the lower reaches.

Rather, Merchant A, responsible for military grain transport on a certain tributary, purchases one thousand shi of grain, transports it to the confluence of two tributaries, where a checkpoint inspects the quality and quantity. If the inspection is correct, this batch of grain is handed over to Merchant B. Merchant B himself has also purchased one thousand shi of grain. Merchant B needs to transport these two thousand shi of grain from the confluence of the two tributaries to a transfer node where the tributaries merge into a main river, and then undergo inspection again.

The entire process is like the root system of a great tree.

At this time, perhaps a clever person would ask, then if merchants cannot steal, deduct grain, or sell military grain for money by replacing it with inferior quality, why would they be willing to do this thing?

Actually, the qualification to bid for segmented military grain transport, although the surface benefits do not seem very large.

For merchants, it is a very profitable matter.

On one hand, segmented military grain transport, according to the Song Dynasty's bidding system, certainly will not let merchants operate at a loss. Perhaps the profit is not very large, but as long as luck is not particularly bad, frequently encountering river bandits robbing grain or ships sinking, the accumulated bidding rights over several years will be a stable income item that is guaranteed profit with no loss, requiring no excessive risk.

On the other hand, segmented military grain transport also has an implicit benefit: one can utilize the special nature of military grain to carry some other goods along the segment they have bid for to try to earn extra money. Of course, it would be carrying some relatively valuable small items; large items definitely cannot be transported with the ship, after all, checkpoints all conduct spot checks. Military grain transport having fewer spot checks does not mean no spot checks.

Overall, even bearing certain operational and inspection risks, merchants will still flock to it.

And re-bidding every few years, even if merchants reach secret deals among themselves, still involves a game with extremely many variables, making this system not quickly rigidify.

"You continue."

Zhang Fangping became completely serious.

(End of this chapter)