Chapter 179: Financing

Pang Yu took out a sheet of paper and handed it over. "I have over thirty properties in Tongcheng, some large, some small, plus over a thousand mu of farmland — two hundred seventy mu of upper fields, four hundred mu of middle fields, and the rest lower fields and fish ponds. In Zongyang, I have two newly purchased riverfront shop fronts. My brother had Liu Ruogu estimate a value. Brother Tang, see if it's enough."

Tang Weimin took it, astonished. "Brother Pang, how do you have so much land?"

Pang Yu waved a hand and smiled. "Those gamblers at Bai Shun Tang mortgaged them to me — all this sort of thing."

Tang Weimin examined it carefully for a while, then said, "In a normal year, it would be enough, with some to spare. But this year, after the roving bandits passed through, no one is interested in farmland. In the city, many are dumping houses. If you really need cash urgently, Brother Pang, and find yourself short, these things won't be easy to sell off quickly."

"Then how much does Brother Tang think they're worth?"

"Only seven thousand taels, and that's being generous. The county office's pre-collected annual commuted taxes total sixteen thousand taels — still nine thousand short."

Pang Yu said calmly, "Nine thousand taels. What does Brother Tang think of the Anqing Baitong Hall? It's still open, business isn't what it was, but it can still earn two or three thousand taels a year."

Tang Weimin narrowed his eyes. "Brother Pang is truly willing to part with it."

"It's only a mortgage. I've never considered the possibility of not being able to repay."

Tang Weimin pondered a moment, then said, "The shop front, furnishings, and decor of Bai Shun Tang add up to no more than two or three thousand taels in value. What's truly valuable is, of course, the name. But now that Brother Pang is no longer in Tongcheng, what if Fang Yingqian, Liu Xiucai, and the others open another gambling den and surpass Bai Shun Tang?"

"That's precisely why I made a special trip back — to get Ruan Jin appointed as Two-Shift Squad Leader. Tongcheng's other gambling halls won't catch up to Bai Shun Tang so easily. And once it's mortgaged to the county office, with the county office looking after it, naturally no one else will be able to compete."

Tang Weimin laughed heartily. "I've long known Brother Pang has a meticulous mind. Let the collateral be as you say. Even if it falls slightly short, His Honor likely won't find fault."

Pang Yu raised his wine cup and clinked it with Tang Weimin's. These Tongcheng assets were not easy to liquidate; aside from mortgaging them, it was very difficult to convert them all to cash, and what he lacked most right now was ready silver. Mortgaging Bai Shun Tang to the county office bound the county office and Tongcheng Baishuntang together, which would naturally suppress other gambling halls and spare him the distraction of dealing with potential struggles over Tongcheng.

After setting down his cup, Pang Yu said flatly, "Then let's talk about the interest."

Tang Weimin looked at Pang Yu. "In the past, we lent at three percent monthly interest, which makes the annual interest thirty-six percent."

"That does match the Great Ming Law's three percent monthly limit. But just now I spoke of current market value. Brother Tang, that thirty-six percent of yours — that only existed in the very best years, and it was lent out month by month; you couldn't necessarily keep it fully lent every month."

"In good months, it could reach seven or eight percent. If Brother Pang is borrowing on an annual basis, I can offer around thirty-one or thirty-two percent."

Pang Yu smiled. "In the past, the pawnshops and grain shops could produce that kind of interest. But this year, after the roving bandits swept through, the great families in the city have been relocating one after another. Most of the well-capitalized pawnshops and grain shops have closed. Brother Tang, that sixteen thousand taels in your hands hasn't been fully lent out; perhaps some of the principal hasn't even been recovered — because two borrowers outside the city were killed by the roving bandits. Naturally, when the man dies, the debt dies with him. I'm taking the entire loan; there ought to be some adjustment."

"Nothing can be hidden from Brother Pang. How about twenty-eight percent?"

Tang Weimin knew that Pang Yu also owned two grain shops in Tongcheng and understood the market. In Tongcheng's lending market this year, the great families had all gone to Nanjing. There wasn't much silver in the market; many wanted to borrow, but even fewer dared to lend.

Most of those borrowing in the city were struggling to survive. The mortgaged houses in the city were hard to sell off, and pawnshops were now very cautious about accepting collateral. In past years, lending to the countryside had been the bulk of it, with farmland and that year's harvest as collateral. But this year the countryside was devastated, and restoring production everywhere was extremely difficult. If the roving bandits came again during the autumn harvest, those loans would certainly be money thrown into the water.

Though the pawnshops of this era had no formal risk control, this kind of risk-avoidance instinct was innate, so Tongcheng's lending market was extremely cold. The silver in Tang Weimin's hands was indeed not fully lent out.

Tang Weimin lowered his head in thought. Seizing this moment, Pang Yu spoke again. "When Brother Tang calculates the interest, there's one more thing to factor in. By taking on this entire loan, I am reducing Brother Tang's risk. If you had lent it to a dozen or so households as in past years, this year I'm afraid you'd have to worry much more about people absconding. Even if the others gave you thirty-two percent, if one or two households cost you the principal, you'd lose all the interest. With me, there is no such worry."

Tang Weimin raised his head, looked at Pang Yu, and said, "Then I'll concede a bit more. Annual interest of twenty-five percent — that's a fair price."

Pang Yu thought for a moment, then said, "Brother Tang, that price of yours hasn't factored in the great benefit of me risking my life to come to the rescue of Tongcheng when the roving bandits besiege the city in the future. Additionally, there's a small benefit. I plan to give Brother Tang, personally, an extra two percent interest. Brother Tang, please consider it carefully, then give me a final offer."

Tang Weimin rubbed his hands together, somewhat troubled. Pang Yu was using both threats and inducements, pressing step by step, even using the rescue of Tongcheng as a bargaining chip. Giving Tang Weimin two percent per tael amounted to over three hundred taels — an extra sum for Tang Weimin personally, not a small amount, but it would certainly only come out of the concession on the rate.

After a moment of silence, Tang Weimin spoke. "Twen…ty percent. The two percent is separate. No lower."

Pang Yu silently calculated. The annual interest on sixteen thousand taels was three thousand two hundred taels; adding the two percent for Tang Weimin made it three thousand five hundred taels. This interest was not low, but neither was it outrageous.

At present, lending rates in Anqing were even higher than this, especially when transacting in silver. The amount of gold and silver on the market showed a trend of growing ever scarcer. To be able to borrow such a large sum at this rate — Pang Yu could barely accept it.

"As Brother Tang says."

Both men breathed a sigh of relief. At last, it was mutually acceptable. Tang Weimin had cut the interest considerably, but he should be able to account for it to Yang Erming. The pre-collected commuted tax of sixteen thousand taels included not only the regular levies and the Liaodong Military Tax, but also the customary fees for the officials and clerks in the yamen. Tang Weimin absolutely dared not let anything go wrong, and lending to Pang Yu carried the least risk.

Moreover, it would strengthen the ties between both sides — after all, the entire city was counting on Pang Yu to come to the rescue when the city was besieged.

For Pang Yu, he only needed to pay the county office the profits from Tongcheng Baishuntang, which would basically cover the interest. It was equivalent to obtaining sixteen thousand taels in long-term capital. With this silver, he could recruit several hundred more soldiers and equip some of them with armor. He Xianya would also have the capital to go to Nanjing and expand the newspaper business.

"I toast General Pang — may you rise step by step, and henceforth soar straight up, a journey of ten thousand miles upon the wind."

After the business discussion ended, the atmosphere in the side hall relaxed again. Tang Weimin raised his cup attentively, and Pang Yu politely expressed his thanks. No trace of the earlier contention could be seen.

The weather in the sixth and seventh months was stiflingly hot, even at night. Quite a bit of sweat had appeared on Tang Weimin's forehead. He had negotiated business with many shopkeepers but had never been this tense. After wiping it with his sleeve, Tang Weimin took out a folding fan and fanned himself a few times; the wind was hot too. If he were at home, he would long ago have been lying in the courtyard on a bamboo recliner, cooling off, with his newly taken concubine waving a fan — nothing like here at Pang Yu's, where there wasn't even a maid to wave a fan.

Tang Weimin glanced at Pang Yu across from him. Pang Yu was also wiping away sweat; the upper part of his open long gown revealed a white round collar. Tang Weimin couldn't help thinking of those soldiers in the Garrison Battalion. When they formed ranks, they wore red battle tunics, but when they arrived at the Ye Family Old Residence, they changed into that kind of white round-collared short-sleeved shirt. He had never seen that style before; it seemed to be made of cotton and looked very cool.

The two drank several more rounds, chatting idly about trivial matters. Then Tang Weimin, unable to bear the spartan conditions at Pang Yu's place any longer, stood up and said, "In that case, I won't disturb Brother Pang's rest any further. I shall take my leave. The full sum of sixteen thousand taels cannot be assembled until two months from now. Where shall the transfer take place?"

Pang Yu cupped his hands. "Right here in Tongcheng. I'll have Liu Ruogu bring the house deeds and land deeds. Next month, I need to receive the first ten thousand taels."

Tang Weimin gave Pang Yu a puzzled look. He still didn't understand why Pang Yu needed money so urgently. From the information he had gathered, Pang Yu had several funding channels — military pay, Anqing Baitong Hall, the Great River Shipping Company — and was certainly richer than the average military commander.

But he had no mind to inquire further. He hastily bid Pang Yu farewell.

Once Tang Weimin was out the door, Pang Yu quickly shed his outer robe, revealing the white short-sleeved shirt underneath. He grabbed a palm-leaf fan and fanned himself vigorously for a while. He hadn't seen Tang Weimin for some days; it wouldn't do to be too casual.

Just then, the door to the second courtyard creaked. Pang Ding ambled out slowly, leaned close to Pang Yu, and said in a low voice, "Just now, Ruan Jin was at the side gate. He said Liu Xiucai went to Jiao Guozha's house. What they talked about hasn't been found out yet."

Pang Yu grunted, showing no other reaction, as if he had no interest in the topic.

Pang Ding looked at the wine cup Tang Weimin had left behind and said, somewhat ruefully, "Young Master, you're giving them over three thousand taels in interest every year. What a pity. That's enough to feed the troops for two or three months."

Pang Yu fanned himself a few times with the palm-leaf fan, and once he had cooled down a little, said, "This trip is precisely to dispose of assets. After suffering this bandit calamity from the roving bandits, all assets in Tongcheng are distressed assets. If we don't dispose of those houses and fields now, they'll be worth even less later. The current price is acceptable. By mortgaging Bai Shun Tang, we're essentially getting several years of Bai Shun Tang's profits all at once. This is using future money to fight today's war."

"But we still have to pay several thousand taels in interest every year. Over a few years, won't that be over ten thousand?"

Pang Yu set down the palm-leaf fan, had Pang Ding sit across from him, and smiled. "The shop front and decor of this Bai Shun Tang are worth just over two thousand taels. Yet now Tang Weimin is willing to accept it as collateral for nine thousand. Do you know why?"

"Naturally, because Bai Shun Tang can make money."

"Bai Shun Tang was able to surpass all the other gambling halls because I, your young master, was the squad leader before, and now I'm even the Anqing Garrison Commander. Tang Weimin believes Bai Shun Tang won't collapse, and that I can repay these sixteen thousand taels. This shows that your young master's credit is increasing. What we need to do is establish credit, expand credit, and then convert that credit into cash. Right now, what is the most reliable form of credit?"

Pang Ding said blankly, "Silver."

"It's violence." Pang Yu winked at Pang Ding. "War is the best hotbed for finance. So, do you know what the next step is?"

"I don't know."

"The next step is to return to Anqing, ask Prefect Pi to act as intermediary, and borrow Huaining County's pre-collected tax silver as well — and Wangjiang County's too, and also from those boat dock masters."

Pang Ding stared, dumbfounded. "Young Master, you only have the Anqing Baitong Hall left. That's not enough collateral for three loans."

"Your young master has already calculated it. Mortgage the Great River Shipping Company to the various boat dock masters for a loan of thirty thousand taels. Mortgage the Anqing Baitong Hall to Huaining County for a loan of thirty thousand taels. Use the Land Battalion's military pay as guarantee for a loan of ten thousand taels from Wangjiang County. Add in Tongcheng, and that's eighty-six thousand taels. I still have ten thousand taels on hand myself. That way, in a very short time, I can recruit two thousand soldiers, equip half of them with armor, and have them use the finest Su Steel spearheads and Su Steel blades."

"Th-then what?"

"Then that will be the most reliable credit." Pang Yu stood up, somewhat excited.

"What if the roving bandits don't come…"

"I've roughly estimated that I can wait one year for the roving bandits. If they still haven't come after a year, my money will be about to run out. If I can't continue financing, then I'll just have to go find them. But that situation won't happen. I believe I can wait at least two years." Pang Yu snapped his fingers. "Because your young master still has Jiujiang."

Pang Ding's head spun — the young master actually wanted to borrow eighty thousand taels of silver in one breath, a figure he had never even dreamed of.

By now Pang Yu had already reached the gate of the second courtyard. Pang Ding shouted after his retreating figure, "Young master, have you calculated how much interest you'll have to pay every year?"

"Seventeen thousand taels… or more."

Pang Yu's silhouette vanished through the gate. Pang Ding's hands actually began to tremble. He turned to look at the cup Tang Weimin had left behind, then suddenly buried his face in his hands and burst into loud sobs.