Chapter 539: The Salt Merchant

"I wonder, how much silver does Mr. Wang think my shipping company can earn?"

"General Pang, for your enlightenment: the Great River Silver Bank lends silver to the shipping company, the company earns money and repays the interest to the bank, and the bank can then pay interest to its depositors — this is how money begets money. But to my knowledge, the company's boats are either Anqing's old grain transport ships, or boats brought in by the Boat Dock Masters joining the company. For the most part, it's for the convenience of river travel. Aside from using banknotes for transactions, the money earned still belongs to each owner. These past two years, of the new boats Anqing built at Shimen Lake, only half are grain transport ships, the other half are scout boats. The boats bought from the Qingjiang Shipyard number twenty or thirty. That may be enough for policing the river and catching bandits, but relying on so few boats to ship cargo and earn money is absolutely insufficient for one million taels."

Pang Yu laughed in spite of himself. "Mr. Wang has come well-prepared. The workshop on Shimen Lake is indeed my workshop. The boats built there are truly half grain transport ships and half scout boats, only enough for the Water Army to clear the river. But if I can effectively clear the river, that is enough for me. Thousands of businesses along the river must all pass over its waters. If I control the channel, there are many, many ways to earn money. For example, there are many places along the coast where salt can be sun-dried. Ship it to Zhenjiang and hand it over to the shipping company. Docks above Zhongjiang will only permit the company's salt boats to come ashore. Earning a million taels a year should be achievable. Pang can even pay the salt tax on their behalf."

Wang Ranming's expression shifted slightly, but he kept his smiling face. Pang Yu's words left not the slightest room — this was completely cutting off the financial lifeline of Huai Salt. It was not merely targeting the Hui Gang, but confronting the Canal Transport Governor and the River Defense Commander. Wang Ranming had not expected Pang Yu to say such things.

He mused, "I feel that General Pang would not undermine the court's salt administration."

"Last year, the Lianghuai salt tax was only half fulfilled, less than four hundred thousand yin. I have not, to this day, sought a single sliver of profit from Huai Salt. Those undermining the salt administration are likely someone else."

Wang Ranming knew Pang Yu was obliquely mocking the Hui Gang for smuggling private salt themselves, but he did not get angry. Instead, in a mild tone, he said, "The main destinations for Huai Salt are Huguang, Jiangxi, Nanzhili, and parts of Henan. Ever since the Roving Bandits crossed south at Mianchi, these places have suffered terribly. Jiangxi, two years prior, also had the Lantian Miners. The sales regions are in ruins, and thus Huai Salt sales have stagnated. Naturally, the salt tax is far below what it once was. It is not a deliberate undermining of the salt administration. I imagine General Pang would not do such a thing either."

"If Mr. Wang does not believe it, I myself dare not believe it either," Pang Yu said leisurely. "But now the Roving Bandits are resurgent. North of the river, local bandits are swarming everywhere. Chaohu already has many River Bandits entrenched. There are some things this official will not do, but they dare. The River Defense Commander can control this official, but he cannot control the River Bandits."

Wang Ranming's eyes narrowed. In the past, the main smugglers of private salt were salt bandits and river bandits. The Water Camp itself also smuggled a little on the side. Generally speaking, it was all done privately and on a small scale. In normal times, no one dared disrupt the salt administration like this. But now, north of the river is in ruins, nowhere is peaceful, and the river section Anqing controls reaches all the way to Zhenjiang. Pang Yu truly has the conditions to smuggle private salt himself. A Zhongjiang Water Camp going to the Lower River to smuggle private salt into the Upper River — this sounds somewhat bizarre, very much like a verbal threat. But at this moment, Wang Ranming dared not completely disbelieve it, and even less dared to provoke this general who had just returned with merit.

Anqing had detained the transport merchants' boats and already held a bargaining chip. So the Hui Gang exchanging two hundred thousand banknotes in Huai'an was an implicit threat — increasing their chips to maintain parity in the negotiations. Today, neither man had mentioned this matter. Pang Yu seemed not to have taken it to heart at all. But Wang Ranming still considered it an effective chip; the two sides were at a draw.

Now, Pang Yu had first played the card of lowering interest rates at Bai Men Silver Bank. However, Bai Men Silver Bank was still small in scale, and it was only useful to those in the Hui Gang who ran money shops. For a transport merchant like Wang Ranming, it was useless. It could only be considered a slight upper hand.

But just now, Pang Yu had thrown out the Anqing Battalion smuggling private salt — a bargaining chip conjured entirely out of thin air. Wang Ranming found it absurd, yet dared not completely disbelieve it. Pang Yu then shifted to the Chaohu River Bandits, which for Anqing had very high operability and posed a great threat to a transport merchant like Wang Ranming, completely seizing the advantage.

Pang Yu remained silent for a moment, his body relaxing against the back of the long chair. The corridor fell quiet for a while.

Wang Ranming deliberated for a moment, then lowered his tone further. "General, for your enlightenment: to sell private salt to various regions is far from achievable merely by controlling the river surface. As for the so-called Chaohu River Bandits ploy, that is even more a case of mutual destruction."

Pang Yu nodded. "Wang Xiong speaks reason. Therefore, regarding the earlier question of how the shipping company can earn money, the answer I gave is not the answer, because I will not do it that way. Pang will offer two other points for Mr. Wang's consideration. The Anqing Battalion dominates Zhongjiang, protects the Upper River, and aids the Lower River. The Hui Gang's foundation is in Huai'an and Yangzhou. But the largest markets for Huai Salt are in Huguang, Jiangxi, and Jiangbei. Last year, Huai Salt sold only four hundred thousand yin, all because the Roving Bandits have ravaged the salt distribution regions. If the Roving Bandits are allowed to block the roads and destroy the population, the Hui Gang will only earn less and less."

Wang Ranming did not interrupt, assuming an expression of earnest listening. Pang Yu pointed at himself. "I am a military officer. Protecting the territory and pacifying the people is my duty. Fighting the Roving Bandits and fighting the Eastern Invaders are all handled by me. But the silver the court provides is insufficient. The silver I earn is not for my own pleasure, but to support the army for the court. Only with an army can we protect the Grand Canal, and thus protect the livelihoods of everyone in Huai'an. Protecting Huguang, Jiangxi, and Jiangbei is protecting the sales channels for Huai Salt."

Wang Ranming furrowed his brow. Pang Yu's rambling discourse had now rationalized his control of the river. He earned the silver, yet it seemed the Hui Gang should thank him for it. Wang Ranming slightly raised a hand, about to speak, when Pang Yu raised his own hand to stop him.

Taking advantage of Wang Ranming's momentary pause, Pang Yu continued, "Mr. Wang need not worry. The Hui Gang has run the salt business with great success for many years and naturally possesses unique expertise. I do not wish to deal with the various local Inspection Offices and Salt Inspection Stations, nor do I wish to negotiate with the sitting merchants one by one. Every trade on the river has its own ways. If I did it myself, I would certainly not match you. Therefore, what I have in mind has never been to destroy an industry, but to help the industry prosper. It is just that the Anqing Battalion, entrusted with heavy responsibilities by the court and entrusted by all parties, must defend the river and suppress bandits. There must be rules on the river, and the rations and pay must have a source. Yet it is not convenient to directly collect from each of you. I can only manage the river well, make the region peaceful, and allow all goods to flow freely. When your business is easier and you earn more money, I should rightfully take a cut. How the cut is taken, Wang Xiong may or may not know. But this official can guarantee, it is absolutely not taken directly from your purse."

"Could the General enlighten me? The banknotes carry interest; it is a money-losing venture. And if you do not earn from the shipping company, the Hui Gang's genuine silver is taken away — not a small sum. Especially these past two years, with Huai Salt sales stagnant, no one can withstand storms. I merely wish to understand clearly."

Pang Yu said calmly, "Currently, banknotes circulate everywhere and can be exchanged all along the river. Though your assets are many, the silver and coin in transactions is only a small portion. You can take the banknotes back to Huai'an and exchange them immediately, simply forgoing the interest. I operate businesses across a thousand li of the Great River, not for this bit of ready silver from your Hui Gang. If the Hui Gang is truly unwilling, I will not force it. We shall proceed and see."

Wang Ranming was silent for a moment. The cards Pang Yu had played today put great pressure on him, far exceeding his expectations. After a long while, he finally said, "General Pang, for your enlightenment: business always requires benefit for both sides to continue."

"Business also requires concessions from both sides to continue. It cannot be only one side conceding. Therefore, every time a deal is settled, it is always sweet with a bitter aftertaste."

Wang Ranming laughed twice, paused for a moment, then said, "The Hui Gang can assist the General, but we also hope the General will aid the Hui Gang."

"Mr. Wang, please speak plainly."

"Since the Roving Bandits ravaged Jiangbei, neither the water nor land routes are peaceful. Local government offices are broken down, and private salt smugglers are countless. I have a thought: the Jiangbei region is too close to the Huai Salt production areas; the private salt there is difficult to control, so we will not speak of it. But goods to Jiangxi and Huguang must both pass through the vicinity of Anqing. If the General blocks both the water and land routes at Anqing, that alone would be a great help to Huai Salt. If the Water Army could be used to suppress private salt, the Hui Gang would certainly use banknotes for all transactions."

Pang Yu placed both hands on the back of the long chair, his fingers tapping lightly. This was the Hui Gang's true condition. Pang Yu pondered for a moment, then spoke. "The cost of private salt is less than thirty percent of official salt. The profit margin, depending on the season, ranges from fifty percent to two hundred percent — enough to make men risk their lives. Among the desperate outlaws along the river, salt bandits are the foremost. For how many years, even the full power of the court could not eradicate them. Nearly half the Huai Salt distribution regions have been destroyed by the Roving Bandits. But if the profits from private salt can be seized back, it can compensate for this missing portion. If Mr. Wang wants the Anqing Battalion to deal with the salt bandits, my Water Army's costs will increase several times over. Using banknotes for transactions alone is not enough; additional benefits must be added."

Wang Ranming pressed his lips together, thought for a moment, and said, "Within the Hui Gang, there are some who handle both Huai Salt and money shops. When not issuing official loans, that silver sits idle. And the General's Great River Silver Bank offers interest. As long as the suppression of private salt shows real results, the Hui Gang will deposit an additional five hundred thousand taels in the Great River Silver Bank. This would be a matter of mutual benefit. I may be able to arrange it."

Pang Yu said without hesitation, "First deposit one million taels, and only then will I begin the suppression. After one year, if results are seen, increase it to two million. The deposit term is five years. Anqing will suppress private salt on the Zhongjiang. The waters above Zongyang will have no more salt bandits. The land routes above Anqing will have no private salt passing through. South of the river, from Wuhu to Chizhou, no private salt will filter through. The costs and risks for salt bandits taking detours will greatly increase, and the volume of private salt will naturally decline. Within one year, if Huai Salt reaches five hundred thousand yin, that will be considered effective."

"Six hundred thousand."

Pang Yu hesitated a moment. "Fifty-five."

Wang Ranming followed up, "What is the annual interest on the deposited silver?"

"Annual interest, five percent."

"The General previously offered everyone one Mace."

"For their deposits, I don't have to fight desperate outlaws to the death."

"When withdrawing silver, no banknotes. Deposit physical silver, withdraw physical silver."

"Deposited silver is calculated at a seventy percent purity discount. Withdrawn silver is given as silver coins, guaranteed at seventy percent purity."

Wang Ranming's eyes narrowed. "The General is swift and direct. I must go and discuss this."

Pang Yu had long guessed there were other Hui Gang members present. He nodded, about to speak, when he suddenly sensed someone approaching. Looking to the left, he saw two women walking over.

Wang Ranming stood up. Seeing this, Pang Yu also rose. Pang Yu quickly sized them up. The woman in the lead wore a long cyan robe that completely concealed her figure. Her face bore a hint of a slight smile. Her features were delicate and lively, her eyes very spirited. As she looked at Pang Yu, there was a trace of curiosity and boldness, a temperament entirely different from the ordinary women he usually encountered.

The woman beside her was clearly a maid. The look she directed at Pang Yu, however, carried a trace of anger.

Pang Yu ignored the maid. The woman in cyan soon arrived before them. Wang Ranming extended a hand and said, "Brother Liu, this is Society Friend Pang, a member of the Restoration Society from the Upper River. He is in the... shipping business."

The woman directly cupped her hands in salute. "Your female brother, Liu Yin, greets Brother Pang."

Hearing this form of self-address, Pang Yu was slightly surprised. However, the Jiangnan region had liberal customs, and all sorts of eccentric people and strange events were not uncommon. Pang Yu took it in stride and promptly returned the salute.

After they had exchanged a few pleasantries, Wang Ranming said to Pang Yu, "One cannot visit Hangzhou without going to West Lake. Today, I invite the General to tour Buxi Garden on West Lake. Brother Liu and Little Friend Pang, please chat for a moment. I will go and make arrangements."

Pang Yu knew he was going to consult with the Hui Gang members. He stood up to see Wang Ranming off. When he turned back, Liu Yin was gazing at him intently. As a Handsome Youth, Pang Yu was thoroughly accustomed to women's attention and thought nothing of it.

He heard Liu Yin say, "Mr. Wang mentioned that Brother Pang is in the shipping business and did not mention family, which suggests it is a venture you founded yourself. Brother Pang is young and accomplished. Might I ask if there is a secret?"

Pang Yu had nothing else to do. Having just dominated the negotiation with Wang Ranming, he was in an excellent and expansive mood. At the same time, he found this woman's style unique. He gestured for Liu Yin to sit and said with full confidence, "Secrets are generally not shared with others. But since Brother Liu asks, Pang will naturally speak without reservation. The most important things in business are four words: integrity and responsibility. Achieve these two points, and business will naturally improve more and more."

"Then Brother Pang's business must be thriving, surely with boats traveling everywhere. May I ask if you have ever sailed a boat to Suzhou?"

Pang Yu answered without thinking, "I have indeed been there."

Liu Yin raised her eyes to look at Pang Yu. "So it was that kind of small boat you operate. May I ask if Brother Pang has recently sent any more drift bottles?"

Pang Yu replied offhandedly, "I have no interest in that. Only people with empty souls need such things. My days are excessively full; I truly have no use for them."

Liu Yin gave a low "Oh." "Brother Pang is so fulfilled, it must be because your heart cherishes lofty aspirations. May I ask if those eight bandits have already fled in defeat?"

"Of course. Not only have they fled in defeat, the eight bandits now flee at the mere sight of me, flee at the mere rumor of me, haha." Pang Yu laughed twice, then suddenly stopped and turned to Liu Yin. "I am in the shipping business. How does the lady know that I have a feud with the eight bandits..."