Chapter 247: The Saltpeter Fleet Returns

Lin Qian smiled and said, "No matter, have a seat and we'll talk."

He Kai replied in a low, respectful voice, "This student would not dare."

"If you're standing, it's inconvenient for us to converse. Do sit down."

He Kai acknowledged with a sound, sitting only on the front edge of the chair, back straight, hands placed respectfully on his knees.

Seeing this, Lin Qian smiled faintly. He had long grown accustomed to the degree to which Ming people revered teachers and valued education, which was precisely why he personally served as headmaster of the Naval and Army Academy—to maintain the loyalty of the military.

That He Kai behaved this way now was also good.

He was, after all, someone Lin Qian intended to entrust with great responsibility. Treating him with the rites of master and disciple was far more stable and loyal than treating him with the rites of sovereign and subject.

Thereupon He Kai gave his answer to Lin Qian's question about black tea, replying in a perfectly middling manner.

But this era's greatest scarcity was economic talent, and for He Kai to answer as well as he did was already no small feat.

Lin Qian then explained to He Kai what monetary policy meant and what fiscal policy meant, and then asked He Kai, given the current situation in Fujian and Guangdong, how macroeconomic regulation ought to be carried out.

Naturally, He Kai could not answer.

Lin Qian then answered himself: "Suppose the silver in official and private treasuries is stock silver; the silver circulating in the market is called flow silver. Then what monetary policy needs to do is convert flow into stock, reduce circulation, and stabilize prices—this can be achieved by raising deposit interest rates.

At the same time, the official treasury, limited by the flow silver it has absorbed, invests in the sphere of production, fundamentally expanding supply.

Additionally, silver must be spent in other provinces—large-scale procurement of timber from Guangxi and Sichuan, cotton cloth from Jiangsu and Zhejiang, raw silk from Huguang, and grain from the South Seas. This entire combination of measures is called contractionary monetary policy paired with expansionary fiscal policy.

Among these, the implementing body of fiscal policy is the Nan'ao Government Affairs Hall.

And the implementing body of monetary policy is the central bank—an institution not yet established, one that affects the financial lifeline of Fujian and Guangdong. A reliable person must be chosen to hold the reins, and policy must be deliberated with the utmost caution.

This is the reason I summoned you today. Do you have confidence that you can do it well?"

He Kai's eyes went wide. The scholar's lofty pride and solitary arrogance had been shattered into pieces on the floor.

Before listening to Lin Qian's teachings, faced with such an invitation, He Kai would certainly have smiled faintly, confident that none but himself was worthy.

But having heard Lin Qian's words, He Kai instead hesitated.

He wavered for a long while before rising and bowing: "Every word you have spoken, Master, is a thunderclap that awakens the deaf and illuminates the blind—all of it is language this student has never heard before. This student is foolish and shallow, has not grasped the essentials, and dares not overreach. I fear I am unequal to so great a charge. I beg you, Master, to select another worthy talent."

Lin Qian also knew that what he had said was indeed something He Kai had never heard before.

After all, the people who had proposed these theories and concepts had not even been born yet.

Among Ming Confucian scholars, one who could avoid being bound by the doctrine of emphasizing agriculture and suppressing commerce, who could observe that the silver-to-coin exchange ratio and the corvée and tax system would affect the people's livelihood—such a person was already rare. Those who could propose palliative measures were even rarer than phoenix feathers and unicorn horns.

He Kai was already the best of a bad lot—the most suitable candidate.

His lack of confidence was, in fact, a good thing.

As Lin Qian had said, in a financial system, the most important thing is stability.

Because He Kai held reverence and awe in his heart, he would not recklessly make sweeping changes.

Lin Qian smiled and said, "It's settled then—you. In two months, prepare to take up your post."

"Huh?" He Kai doubted his ears had heard correctly.

Lin Qian added, "The central bank will have the Nan'ao Commercial Bank under it. The head office will be in Zhangzhou, with only three branches established: Guangzhou, Quanzhou, and Fuzhou. In the early phase, there will be only three operations: taking deposits, making loans, and inter-regional remittance.

The reserve requirement is set at eighty percent, and deposit and loan interest rates will accept the guidance of the Household Affairs Bureau of the Government Affairs Hall.

The bank will establish an accounting system with periodic reporting and auditing."

An eighty percent reserve requirement was already absurdly high. Lending out only the remaining funds, the interest rate spread would most likely fail to achieve positive returns.

But with the precedent of the Yuan and Ming dynasty paper currency before them, these early losses were the price that had to be paid to establish credit.

The overall institutional design of the bank was a single word: stability. Better to accomplish nothing than to disrupt the economy.

He Kai starting as president of the commercial bank would also allow him to accumulate experience for later succeeding to the presidency of the central bank.

Seeing that Lin Qian's mind was made up, He Kai accepted the commission.

By this time the evening meal had been cleared away, and a bright moon hung high beyond the hall.

Lin Qian had also more or less finished explaining his conception of the commercial bank, and He Kai reckoned it was time to take his leave.

But before he could voice it—

Lin Qian said, "The broad framework is just this. As for the details, please come to the study for a thorough discussion. This way, please!"

With that, he led the way toward the study.

He Kai was dumbfounded, gaining a clear understanding of Lin Qian's work style.

Once the two entered the study, Lin Qian produced a draft of the banking regulations, on which every principle and rule of the bank was annotated in exhaustive detail. Lin Qian explained them item by item.

Take, for example, the clause on deposit and loan interest rates: demand deposit rates are benchmarked to attracting deposits and are permitted to fluctuate freely, with relatively loose limits on the range of fluctuation. But loan rates are strictly capped—usury and compounding interest are absolutely forbidden—and there are also restrictions on the purposes of loans.

Small agricultural production loans carry the lowest rates, handicraft industry next, commerce and maritime shipping after that, while loans used for annexing farmland are completely prohibited. For large loans, the bank must conduct credit investigations and track where the funds go.

The various regulations were dense and intricate, yet every single one happened to strike precisely at the critical point.

Many of the provisions—had Lin Qian not written them—He Kai could have racked his brains and never conceived of them.

This conversation went straight on until dawn broke and the birds sang.

He Kai's head was groggy and muddled, yet Lin Qian remained bursting with energy, which could not help but astonish He Kai greatly.

At last, the final clause was finished.

Lin Qian handed the draft regulations to He Kai, telling him to refine them before taking up his post, and also to investigate and survey the private money houses of Fujian and Guangdong provinces. He Kai received them respectfully with both hands and was just withdrawing from the study when Lin Qian called him back.

Lin Qian said, "Let me give you one sentence: 'Wealth itself is not power; the institutions that govern wealth are.' Institutions are the plumb line of the bank—they must never be broken."

He Kai made a deep bow and said, "Thank you for your instruction, Master. This student will remember it well."

After leaving Lin's residence, the morning light fell upon his body, and only then did He Kai feel how utterly exhausted he was—yet his spirit was highly excited, his heart both tense and expectant. After leaving Lin's residence, He Kai found a secluded spot, knelt with reverence, and performed the ceremony of acknowledging a master.

Though Lin Qian had not formally accepted him as a disciple, he had nonetheless received his teaching, and in his heart He Kai already regarded Lin Qian as his teacher.

After three kowtows, He Kai rose and walked toward the docks.

After He Kai left, Lin Qian returned to his room and rested briefly for four hours.

After rising, he again convened the Nan'ao Government Affairs Hall to discuss the construction of the Guang'ao Road and the expansion of production in Foshan.

During the meeting, Geng Wu stepped forward and whispered in Lin Qian's ear: "Helmsman, Zhong Aqi is back."

"Oh?" Lin Qian grew interested.

Zhong Aqi had gone to Bengal in the second month of the seventh year of Tianqi to buy saltpeter.

The fleet had two yachts; if all went smoothly, the harvest should be tremendous.

Since the Guangzhou investment matter was basically settled, Lin Qian left the remaining details to others, rose, and walked toward the harbor. Approaching Front River Bay, Lin Qian spotted from afar a man directing crew members as they unloaded cargo.

The man had dark skin, bare feet, and a bare torso with knotted muscles; daggers were strapped to both his waist and ankles. It was Zhong Aqi.

This man had been brought out of the Naozhou pearl grounds by Lin Qian, and was among the earliest owners of Sea Wolf ships. Later, in the battles against Li Kuiqi, the raid on the Lin estate, and the two campaigns to Liaodong, Zhong Aqi had participated in every single one without fail — his merits were truly outstanding.

Seeing Lin Qian, Zhong Aqi grew very excited and clasped his hands in salute: "Helmsman!"

Lin Qian stepped forward and patted his broad shoulder: "Good to have you back. How was the harvest on this trip?"

Zhong Aqi pointed at the cargo crates, speaking with brimming pride: "Helmsman, please take a look!"

The subordinates beside him, quick on the uptake, fetched a crowbar and pried open the crate. Inside was a layer of oiled paper; beneath the oiled paper were five or six tied-off burlap sacks. Zhong Aqi casually untied one of the sacks, revealing pale yellow crystalline matter that looked like sugar that had absorbed moisture and yellowed.

Zhong Aqi said: "Helmsman, this is Bengal saltpeter. I asked around — over there, the saltpeter is all in the soil. The locals boil the earth and can extract saltpeter from it. Compared to how we scrape walls and dry latrines to make saltpeter back home, it's far more convenient."

Bengal was the world's famous saltpeter-producing region; its reserves were so vast and extraction so easy that it could almost be compared to Middle Eastern oil.

Lin Qian looked out — over a hundred such crates were piled up at the cargo station, with more still being unloaded from the ships in an endless stream. Lin Qian said: "How much saltpeter did you bring back this time?"

Zhong Aqi smiled slightly, quite self-satisfied: "Not much, not little — four hundred thousand jin."

Lin Qian did some mental math: at a 75% saltpeter ratio for black powder, this could make five hundred thirty thousand jin of black powder.

Using modern heavy trucks with a six-ton load capacity, it would fill more than forty trucks!

By consumption standards, the largest battle fought between Ming and Qing forces in the late Ming was the Song-Jin Campaign, where both sides committed over two hundred thousand troops combined. This five hundred thirty thousand jin of black powder would be enough to fight two Song-Jin Campaigns!

Currently, the Nan'ao navy's main artillery was the twelve-pounder cannon, which required four and a half jin of powder per shot. This powder was enough to fire nearly one hundred twenty thousand shells! Given the current intensity of warfare for the Nan'ao forces, this powder would last two to three years.

Lin Qian thumped Zhong Aqi on the chest: "Not bad at all!"

"Heh heh." Zhong Aqi rubbed his head with a simple grin.

"For getting this batch of powder through, you deserve a second-class merit!"

When the Nan'ao military merit system was established, Zhong Aqi had still been overseas and didn't know what a second-class merit meant — but having merit was good enough.

Lin Qian looked at the saltpeter piled before him like a mountain, and his ambition grew further. The Special Agricultural Reclamation Company's pace of development was still too slow; immigrants were desperately scarce. Perhaps it was time to take the next step.

Besides Water Chenla, Borneo had gold mines and diamonds, and was also suitable for immigrant development.

Then there was Sumatra, which commanded the strategic chokepoint of the Strait of Malacca, and also had the legal claim of the Old Port Pacification Superintendency — territory that must be seized as well. Java had the most Chinese and the most developed agriculture; if colonization succeeded, returns would come without much investment.

There were also Siam and the Toungoo Dynasty — two top-tier sources of teak and grain. Previously, with insufficient saltpeter, they naturally couldn't be considered. Now that munitions were abundant, colonizing them became possible too.

But before colonizing, Lin Qian still needed to confirm the stability of this trade route.

"Bring me the ship's log," Lin Qian said.

Zhong Aqi had someone fetch it, then said with some awkwardness: "Helmsman, if you want to know about the route, let me just tell you instead." Nan'ao navy regulations required all captains and ship owners to write a daily ship's log in the prescribed format.

But judging by Zhong Aqi's rough-and-ready manner, it was clear he probably hadn't followed the regulations much.

Since he had rendered great service, Lin Qian didn't want to pursue the matter, and said with a smile: "Very well."

As Zhong Aqi began his account, Lin Qian had people bring over a table and chairs, brewed some black tea, set it up on the dock, and listened while he watched.

"Following the helmsman's orders, my fleet used the Banker as flagship and the Cargo Receipt as escort ship, departing from Guangzhou harbor in the second month of the seventh year of Tianqi. We stopped to resupply at Hoi An in the third month, and resupplied at Pattani in the fourth month..."

Pattani was a major port in the middle of the Malay Peninsula.

Geographically speaking, the shortest route for the fleet after leaving Hoi An would have been to sail directly south and pass through the Strait of Malacca; stopping at Pattani was somewhat of a detour.

But this era had no GPS after all. When exploring unfamiliar sea routes, it was safer to hug the coast as much as possible.

Zhong Aqi continued: "In the fifth month, the fleet crossed the Strait of Malacca. That strait is extremely narrow, with a powerful state on each side, north and south, holding their own against each other.

In the north, occupying the city of Malacca, were the Portuguese.

In the south, occupying the island of Sumatra, was a country called Aceh.

Before crossing the strait, I heard people in Pattani's taverns... ahem, markets, saying that both these powers were black-hearted, charging exorbitant passage fees.

Though the two ships carried plenty of silver, that was all money the helmsman gave us to buy saltpeter.

Only the incompetent pay passage fees!

The strait is huge — they can't possibly blockade all of it. So I picked a moonless, windy night and took both ships straight through the strait at full speed, heh heh!"

At this proud moment, Zhong Aqi let out two gleeful chuckles, but seeing Lin Qian's displeased expression, he immediately stopped.

Covering for himself, he added: "Helmsman, rest assured — I only dared to run the blockade because the ships were empty. On the return trip, I didn't dare take such risks. Saltpeter is important; even I, Aqi, can tell that much."

Lin Qian scolded: "Wrong! Compared to the lives of you, Zhong Aqi, and your crew, what is saltpeter? Crossing an unfamiliar strait in the middle of the night — did seawater get into your brain?"

"Yes, helmsman..."

On board ship, Zhong Aqi's word was law; along the way he had chopped off who knows how many sea bandits' heads, and in others' eyes he was no different from a demon king. Yet scolded by Lin Qian, he obediently lowered his head and admitted his fault — none of his arrogance, ferocity, or overbearing brutality was visible; he looked instead like an honest, simple fisherman. This scene astonished quite a few of the new crew members.

Though scolded, Zhong Aqi felt warm inside. After grinning foolishly for a while, he continued: "Anyway, the fleet made it out of the Strait of Malacca like that. By then it was already the sixth month of the seventh year of Tianqi, and we caught the southwest monsoon.

The voyage was long, but the wind and waves were favorable. There were lots of whales in that area — we often saw them surfacing beside the hull to spout water.

There were dolphins too — often several of them would swim at the bow, as if guiding us."

Lin Qian smiled and explained: "Those dolphins were surfing the bow wave, not guiding you."

Zhong Aqi continued: "Oh right! We also passed through a stretch of sea that glowed blue. That night there was no moon, and the wake off the stern and bow all shimmered blue — it was a beautiful sight."

"That's from a kind of luminescent algae in the sea. This happens in the Great Ming too, just not commonly."

Zhong Aqi was filled with admiration and flattered: "Helmsman, if only you'd been on the ship then — you could have explained it to those lads. Not like me, who could only say, 'Damn, that's pretty.'"

Zhong Aqi continued: "The fleet stopped to resupply once at Syriam port in the Toungoo Dynasty along the way.

In early August, we reached Bengal. The names of the cities there are all strange, the people's names are strange too, and they look even stranger — not like Han people, not like barbarians, but like a mix of Han and barbarian.

Bengal's cities are all built along a great river called the Hooghly; the towns include Satgaon, Hooghly, Kalikata..." These strange names were all read by Zhong Aqi from the ship's log — had they not been written down, his brain could never have remembered them.

"The fleet followed the river and bought saltpeter in these cities. That godforsaken place has strict rules — everyone demands silver before they'll do anything.

The Portuguese, Dutch, and English barbarians we usually see are all present in Bengal, and they hold even more power there.

"And there's a new breed, called... uh..."

Zhong Aqi flipped through his log: "They're called Danes! They also have an East India Company."

By this point in his account, Zhong Aqi's mouth was already parched.

Lin Qian handed him a cup of tea. Zhong Aqi took it with both hands and drained it in one gulp. Still not satisfied, he poured himself two more cups.

While he drank, Lin Qian glanced at the crew unloading saltpeter. Many faces were unfamiliar—some were clearly Southeast Asian sailors. It seemed this voyage had cost them no small number of men.

After quenching his thirst, Zhong Aqi continued: "To be honest, the English bastards treated us pretty well. Buying these two shiploads of saltpeter, they helped us out plenty. Those city-states are all under that son-of-a-bitch Mughal Empire, and to buy saltpeter you need a special charter."

"Damn it—for one charter, the local provincial governor directly quoted us one hundred thousand taels of silver! That's darker than outright robbery."

"I wanted to save the money, so I went to the Portuguese. They wouldn't touch it."

"Then I went to the English. Didn't expect them to actually agree to help with the purchase. They took a service fee, sure, but they were far more conscientious."

Portugal was an old colonial empire. In Macao, Portuguese power had waned, so they naturally let Lin Qian push them around.

But in India, the Portuguese had a Governor-General in Goa with considerable strength. It was only reasonable they wouldn't show Lin Qian any face—and they might even bear a grudge over his seizure of Macao, waiting for a chance at revenge.

Thinking it over that way, the outrageous quote of one hundred thousand taels suddenly seemed to have a logic behind it.

Lin Qian called over Ran Qiu and instructed: "Get paper and brush. Write down this matter of the one-hundred-thousand-tael charter."

"Yes." Ran Qiu acknowledged.

Zhong Aqi didn't understand what Lin Qian meant, so he continued: "Besides saltpeter, that place has fine cotton cloth too. I specially brought back a few bolts for the Captain."

As he spoke, he had his crewmen bring out the cloth.

There were over ten bolts of cotton cloth in total, all with fine, delicate fibers—light, breathable, and covered in intricate, lavish patterns. They could truly be called works of heavenly craftsmanship.

Zhong Aqi said: "Besides saltpeter, those barbarians love buying this cotton cloth most of all. The English said that hauling a single bolt back to their homeland could fetch five to ten times the price.

The bolts I brought back are all top-grade goods. Over there they also have plenty of coarse cloth—the kind for slaves to wear—dirt cheap."

In this era, northern India lay under the Mughal Empire, a powerful and prosperous nation at the peak of its ascendancy—its national strength even surpassing that of the Great Ming.

It was vastly different from the filthy, chaotic India of later ages that endured two centuries of colonial plunder.

Its wealth could be glimpsed from the flourishing trade in saltpeter and cotton cloth.

Even the finest Songjiang cotton of the Great Ming, compared to Indian cotton cloth, fell slightly short in lightness, dyeing technique, and cost.

Its production cost was so low that even after a long sea voyage back to England, it still sold for less than cloth made in England itself.

Lin Qian calculated inwardly: Songjiang cloth was thick and sturdy—it could serve as military uniforms in the Great Ming.

Indian cotton was breathable and light—perfect for tropical military uniforms.

At the same time, because of its vast market, ease of standardization, and production processes that could be broken down and centralized, it was naturally suited to mechanized production and factory-style management. Thus the cotton textile industry was the most suitable sector to spark the Industrial Revolution.

Once large-scale factory production advanced, India would unquestionably be the best source of raw materials and the best market for dumping goods.

Lin Qian set the Indian cotton cloth aside and gestured for Zhong Aqi to continue.

"Over the following months, the fleet kept taking on goods in Bengal while waiting for the monsoon.

In the second month of the eighth year of Tianqi, the fleet sailed south with the northeast monsoon, returning by the same route.

In the fourth month we passed through Malacca, where the kingdom of Aceh levied a tax on us before letting us through.

Then the fleet replenished water and provisions at Pattani and Hoi An harbor, and rode the summer monsoon back."

Lin Qian nodded: "You've worked hard along the way."

Zhong Aqi scratched his head: "All in the line of duty, Captain."

"Now—tell me, from beginning to end, every grievance you suffered and every humiliation you endured along the way. Leave nothing out, not a single word."

Lin Qian's tone was stern and brooked no argument.

Zhong Aqi looked a bit guilty: "Why does the Captain ask about all that? They're just things that sour the mood."

From the scars on the hulls of the Banker and the Bill of Lading, from the many new faces among the crew, and from Zhong Aqi's evasiveness in reporting only the good and hiding the bad, Lin Qian had already read between the lines. This year-and-a-half voyage was nowhere near as easy as Zhong Aqi made it sound.

The crew must have crawled and clawed their way through the whole journey.

In this era there was no international convention or law of the sea. A merchant convoy outside the protection of a fleet was nothing but fat delivered to one's doorstep—every demon and monster who saw it would have to take a bite.

Lin Qian said with a stern face: "This is an order. Not a single word omitted. Speak."

"Yes." Zhong Aqi acknowledged.

"On the way there, the Burmese at Syriam port were the most arrogant and overbearing. Those bastards claimed we were Siamese spies, seized ten of our crewmen, and insisted we pay ten thousand taels of silver before they'd release them."

Syriam port lay under the Toungoo dynasty, which bordered the Great Ming. From the Wanli era onward, it had been in constant conflict with the Great Ming and was extremely hostile toward Han commoners.

Lin Qian asked in detail for the names of those who demanded the bribes, the threats they made, and whether any armed conflict had occurred.

Then he said to Ran Qiu: "Write it down."

"Yes." Ran Qiu picked up his brush, and in a short while had filled more than ten pages.

Zhong Aqi watched with a face full of astonishment, and only continued his account after Lin Qian prompted him.

In Bengal, the fleet was mainly harassed by Mughal officials, while the Dutch and Portuguese competed with the fleet in bidding for saltpeter. On the return voyage through the Strait of Malacca, the Sultanate of Aceh, under the pretext of selling passage permits, extorted another enormous sum.

By then, the convoy's silver had been mostly spent on saltpeter in Bengal.

Unable to pay the exorbitant passage fee demanded by Aceh's officials, fifty thousand catties of saltpeter were seized in compensation.

And even that was only obtained after Zhong Aqi begged and pleaded like a grandson. Had he not greased palms everywhere, likely the entire fleet's saltpeter would have been confiscated. After passing through Malacca, the fleet returned to Pattani, where Zhong Aqi thought they could finally rest easy.

But the Treaty of Water Chenla had just been signed not long before. The Siamese royal court was furious, and a wave of suspicion against the Han swept through the country.

The moment the fleet anchored, they were directed to a designated mooring, then boarded for inspection and interrogation of the crew—no different from being imprisoned.

When they saw the ships were carrying saltpeter, Pattani's suspicion deepened, and they began to entertain the idea of seizing the ships.

Seeing the situation turn bad, Zhong Aqi ordered the ships to weigh anchor and forced their way out.

Pattani couldn't compare to Nan'ao, but on the Malay Peninsula it counted as a maritime power. Its warships carried cannons—dozens of ships chased Zhong Aqi's two, and after nearly an hour of cannon fire that killed over a dozen crewmen, they finally escaped with their lives.

Lin Qian said: "Write it down. Write it all down."

Yahei

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