Chapter 1390: Money Talks

Under Zhao Pu's stewardship, the Hall of State Affairs was run with strict and solemn discipline—senior officials and their subordinates each held their positions, each tended to their own affairs, busy yet orderly, giving one an impression of efficiency and organization.

Emperor Liu arrived without warning, walked through the corridor, passed one petition chamber after another, and headed straight for the rear hall. Along the way, seeing this orderly scene, a hint of satisfaction showed in his eyes.

The current Emperor Liu valued rules more and more, and increasingly resembled a stern, rigid feudal patriarch. And in the years Zhao Pu had served as chancellor, he too had established rules and an administrative style bearing his own distinct imprint.

In the hall, several ministers sat calmly, each at their own desk, discussing affairs of state. The arrival of Emperor Liu clearly startled everyone—they hurriedly rose to bow, though without excessive tension or surprise, as of late the Emperor had been visiting the Hall of State Affairs with increasing frequency.

"Sit, all of you, sit!" Emperor Liu waved his hand and took his seat with easy grace, casting his gaze around the assembled men: "It's nearly mealtime—I've come to sample the Hall's cafeteria fare. You gentlemen exhaust your minds and bodies for the Great Han, which is no small matter. If the food here is unpalatable, I shall have the cooks punished!"

A small jest visibly lightened the atmosphere in the hall. Zhao Pu and the others broke into smiles and replied: "To dine with Your Majesty is our honor."

Today the attendance was unusually complete—all the principal chancellors of the Hall of State Affairs were present, save Li Ye. Of course, there was also a new face: Wang Qiwu, recently transferred from the Eastern Capital, who had assumed his post not long ago. And with this appointment, he had become the second most powerful figure, while Uncle Li Ye remained perpetually third.

"Qiwu, you've served in the Hall of State Affairs before—but how does the Western Capital compare to the Eastern Capital? Any differences?" Emperor Liu asked Wang Qiwu with a smile.

Having spent these years stationed in the Eastern Capital, Wang Qiwu was inevitably somewhat distant from Emperor Liu, and so he was all the more cautious, cupping his hands in salute as he replied: "To answer Your Majesty, the weight of the chancellorship lies not in where one sits, but in bearing the duty of assisting the sovereign and governing the people. Whether in the Western Capital or the Eastern Capital, I feel only that my responsibilities are heavy, as if carrying a thousand jun."

Hearing Wang Qiwu's safe, all-purpose answer, Emperor Liu smiled and pressed on: "Surely there's nothing you find difficult to adapt to?"

At the question, Wang Qiwu immediately replied with humility: "I thank Your Majesty for your concern. Thanks to Your Majesty's grace in elevating me, and the steadfast support of all these gentlemen, everything proceeds smoothly!"

His gaze sweeping once between Zhao Pu and Wang Qiwu, Emperor Liu's smile faded, and he sighed lightly to Wang Qiwu: "Since I returned to the capital, the thing I've heard most often is that the treasury is empty, that the court's finances are strapped—I've heard it so much my ears are growing calluses. Qiwu, you now hold the purse strings of the Great Han. That task is no easy one, and managing it well is harder still. I must trouble you to devote extra care to it!"

"It is my duty—how dare I not give my all?" Wang Qiwu declared on the spot, wearing an expression of gratitude for being recognized and favored.

Under Zhao Pu's direction, the work proceeded according to the grand policy of recuperation and restoration, and improving the fiscal system and remedying the dire state of finances was one of its central priorities. Much of the court's current work revolved around this matter.

The chancellors of the Great Han had also come to divide their responsibilities: Zhao Pu held overall management, directly overseeing the Ministry of Personnel while keeping watch over all matters. Wang Qiwu, having returned to the Hall, took direct charge of the Finance Bureau—an experience he'd had back when he served as chancellor in Kaifeng. As for Uncle Li Ye, he was responsible for guiding the work of the Ministry of Rites and the Ministry of Works...

Emperor Liu had always appreciated and trusted Wang Qiwu's attitude and ability. He nodded, then looked to Zhao Pu and said: "I've reviewed the reform measures drafted by the Finance Bureau—they can be put into implementation. The ways to improve the nation's finances are nothing more than increasing revenue and reducing expenditure.

On the expenditure side, there's little that can be done at present, so we should focus our efforts on finding ways to increase revenue! However, salt, tea, grain, and cloth bear directly on the national economy and the people's livelihood—especially the salt reform. I know this is a major source of court revenue, but do not be seduced by vast profits. At all times, meeting the needs of the common people must come first..."

Over these past months, the court had been working tirelessly on fiscal matters, discussing at length, deliberating at length, and finally producing some concrete measures—and the salt affair was one of the more significant moves.

Of the Great Han's annual revenues, salt profits had always been the largest share. However, the court's control had always been extremely strict—from production to transport to sale, the government held absolute dominance. A dedicated salt law had also been enacted, employing extremely harsh penalties to crack down on private salt dealing and salt-related crimes. And the salt price had been held at a very low level throughout. Over the past decade or more, grain prices had fluctuated repeatedly with the changing times, but salt prices alone had remained stable throughout.

And this time, one of the measures the Finance Bureau put forward was to work the salt profits—and the core thrust of the specific plan they drafted was to relax restrictions on the salt trade. Henceforth, the government would mainly handle production, while a portion of the transport and sales channels would be opened up to merchants.

On this proposal, Emperor Liu had offered no guidance or interference whatsoever—it had come entirely from the Finance Bureau itself. And this, it must be said, was a major move.

Though it was only opening a crack, once that crack was opened, the impact on the court, on the merchants, and on the common people would only grow with time. Bringing more merchants into the fold would aid the development of the salt industry, lighten the court's burden, and also create greater profits—the court would eat the meat, the merchants would drink the soup. But the more conspicuous effect would be a rise in salt prices, which would not be so kind to the common folk who consumed salt daily.

Thus, Emperor Liu's words sounded high-sounding and grand, but the visible profits lay right before their eyes—hard not to be tempted. Moreover, the people of the Great Han had eaten low-priced salt for over a decade, and every household was now growing more prosperous by the day. A slight increase in salt prices wouldn't truly affect the people's standard of living, after all—salt wasn't consumed in such vast quantities as grain.

And in many people's eyes, the Great Han's salt system should have been reformed long ago. In the past, they'd sat on a veritable treasure basin while keeping it suppressed. Using salt profits to improve the Great Han's straitened finances was also a sound strategy. One should recall that in the Tang era, salt revenue accounted for nearly half of the court's annual tax income—whereas the current Great Han was merely sitting atop a mountain of treasure without using it.

"Rest assured, Your Majesty—the Finance Bureau has already formulated a comprehensive set of reform measures, with strengthened oversight!" Wang Qiwu replied: "Moreover, it won't be done all at once, but gradually relaxed. As for salt prices, the court will keep a close watch, and should any problem arise, adjustments will be made in a timely manner!"

"As long as you don't rush things, I trust you gentlemen will give me—and the people of the Great Han—a satisfactory answer! I believe in your abilities!" Emperor Liu said.

And through this exchange, the matter was essentially settled. It was easy to foresee that around this major profit chain of salt revenues, a frenzy would soon sweep through the Great Han from top to bottom. Even if the government merely carved off a piece of meat, it would be enough to draw a scramble, and ordinary merchants might not even qualify to participate.

Of course, hidden concerns existed as well. Once this crack was opened, closing it again would be no easy matter—it would only widen further. And the rise in salt prices was nearly irreversible. Once merchants gained sufficient say in sales, might they form a counter-leverage?

By all reasonable logic, that was nearly impossible. The Finance Bureau had guaranteed one bottom line in the salt reform: the most basic salt production would always remain in the court's hands, managed by the salt supervisorates in each region.

But once a new profit chain formed, consolidated, and grew, these institutions would inevitably face erosion. Someone would always be in charge, and where there are people, there is the possibility of corruption.

Of course, everything has its pros and cons, and Emperor Liu was not one to demand perfection. At least for now, he supported the salt reform—and at the same time, it was an experiment in supporting commercial development.

If the salt affair went well, then wine, tea, cotton, and the like could follow the same template and undergo reasonable, appropriate reforms.

"Furthermore, regarding the matter of commercial taxes—don't just think about raising taxes!" Emperor Liu further instructed: "Raising taxes can certainly boost court revenue directly, but it's too crude and simple, hard to sustain, and liable to dampen merchants' enthusiasm—it's a method of draining the pond to catch the fish.

Take the salt reform as an example: under heavy taxation, how many would be willing to participate? And even if they did, in the end, to secure sufficient profits, they'd jack up salt prices wildly, and the ones to suffer would still be the common people.

I know some of you would brand those merchants who raise salt prices as profiteers, and the court could crack down on them, mandating salt prices by decree. But then, what would be the point of the reform? If that were the case, it would be better to keep the status quo and simply raise salt prices directly.

Therefore, where merchants and commerce are concerned, the court should also devise more reasonable laws, regulate and constrain merchant behavior, support those who obey regulations and pay taxes according to law, and crack down on those lawless merchants who evade taxes—so that the government and the merchant class benefit each other mutually. That is the path to lasting success..."

In recent years, the Great Han's commerce had indeed been flourishing vigorously, and the commodity economy had begun to take shape. But the court's guidance and regulation remained at a rudimentary stage.

In terms of ideology and culture, from the court down to the officialdom and the common folk, a certain prejudice against merchants and commerce persisted—scholar, farmer, artisan, merchant remained the mainstream hierarchy.

Had it not been for Emperor Liu's consistently favorable attitude toward merchants, the merchants of the Great Han might not have enjoyed such a relatively relaxed business environment as they did now.

Even so, there had been repeated setbacks—in the past, several instances of "reaping the leeks" had already occurred. This time, the Finance Bureau had produced another commercial tax reform plan, and it was crude and simple: imposing additional and increased taxes on commercial trade activities.

Emperor Liu had no objection to increasing taxes per se—given the Great Han's current circumstances, commercial tax collection was far from thorough, and the court couldn't manage to be too meticulous, lacking both the energy and the manpower.

Thus, over these years, the Great Han's commerce had flourished, and commercial tax revenue had increased annually—but compared to the merchants' profits, it was only a small share. So Emperor Liu was happy enough to reap a wave of leeks at an opportune moment.

But as for the plan the Finance Bureau had drafted—describing it as robbery would be entirely apt. It was too ugly a spectacle, and moreover, Emperor Liu felt it was suppressing and stifling commercial development.

It even seemed more like an act of vengeance—the state's finances were strapped, while some merchants were rolling in wealth, which directly drew the court's hungry gaze upon them. And during last year's northern campaign, quite a few grain, timber, shipping, and various handicraft merchants had made fortunes from the court's military expenditures.

And in the eyes of some Finance Bureau officials, the court's money was the people's flesh and blood—how could it be allowed to be earned by a bunch of merchants? The court's money shouldn't be so easy to make, so they racked their brains to make the merchants cough it back up.

And the final solution? Raise taxes, levy heavy taxes—across the board. On this, Emperor Liu naturally had to offer some guidance...