Chapter 179: Commercial Taxes

"One two three four, two two three four, switch positions, one more time."

Early the next morning, Chen Xin hummed a work chant, swaggered back to the inn, and pounded heavily on Liu Minyou's door. "Get up, let's go eat breakfast."

Liu Minyou opened the door. Chen Xin went in and sat down, smugly recounting last night's woman, still not satisfied. Liu Minyou drew water and washed his face himself, not mentioning to Chen Xin that he had also gone there last night.

The two waited until Hai Gouzi returned, went out for breakfast, then made their way into the city of Yangzhou. They toured the city casually. Though Yangzhou lies north of the river, its scenery and customs are comparable to Jiangnan, and it is equally prosperous, not losing to Nanjing.

Chen Xin and the others idled until noon, then met up with Zhou Laifu and Song Wenxian's group at the bell and drum tower. Song Wenxian had bought a few more books this time; as soon as they stopped, he was muttering to himself while reading off to the side, occasionally tilting his head up and squinting as if calculating, seeming to find it quite strenuous. Zhou Laifu had also only taken a cursory turn in the morning; he still hoped to buy a shop front by the canal. Chen Xin recalled that Ding Ding from yesterday and led everyone back to the customs gate, where they saw Ding Ding waiting there.

Chen Xin invited Ding Ding to a tea house, with Zhou Laifu, Song Wenxian, and Liu Minyou sitting at the same table. Ding Ding, intent on seeking patronage, was even more deferential than the day before. Seeing that the others were all trusted confidants, he very politely greeted each one.

Chen Xin first introduced his own group, simply saying they were wealthy merchants from Dengzhou, then smiled and asked Ding Ding, "Regarding the matter we discussed yesterday, has Brother Ding given it proper thought?"

"In reply to the Young Master, this humble one knows the Young Master comes from a wealthy and noble family, but as to what specific task, I must ask the Young Master to instruct me. If it is something I can do, then I can agree; otherwise, delaying the Young Master's affairs would be a grave matter."

Chen Xin said, "Brother Ding speaks rightly." He nodded to Zhou Laifu.

Zhou Laifu said to Ding Ding, "My master intends to open a trading shop here, selling southern goods and also purchasing certain other supplies. If Brother Ding is willing to come, he would serve as the shopkeeper here, responsible for sales and purchasing. However, the money will be managed by the accounting office. The monthly wage can be discussed with me. In addition, there is an annual bonus based on profits. For the specific bonus method, I have the regulations here."

"What about the transport on the canal?"

"In the initial stage, none of it will be managed by us. The southern goods will be shipped here by others. If traveling merchants come to buy, they will be responsible for the transport themselves."

Ding Ding listened, lowered his head in thought for a moment, then asked Zhou Laifu, "That would be acceptable then. However, having been here a long time, I know some ship owners. If they encounter difficulties, this humble one could also help them make connections."

Zhou Laifu did not yet know Ding Ding well and took this opportunity to ask, "That would naturally be even better. With Brother Ding having these connections, were you originally working as a broker here?"

Ding Ding nodded and said, "Exactly." As he spoke, he took out a license and showed it to Zhou Laifu. After looking at it, Zhou Laifu passed it to Chen Xin.

Chen Xin flipped through it and smiled. "So Brother Ding holds a broker's license."

Liu Minyou, whose dealings in Tianjin were mostly direct sales, with Deng Keshan handling the canal business, was not too familiar with these canal brokers. He took it, looked it over, and asked, "May I ask Brother Ding, must all sales in Yangzhou go through a broker?"

Ding Ding cupped his hands. "I dare not presume to be asked for guidance. According to the trade rules here in Yangzhou Prefecture, for all fish, salt, beans, grain, carts, boats, mules, and horses, no transaction may proceed without a broker's negotiation. Furthermore, for all trades, purchases, sales, and the payment of commercial taxes, it is all reported by the brokers."

Chen Xin's expression shifted slightly. Hadn't these brokers essentially become co-administrators of the tax bureau? He asked, "I won't hide it from Brother Ding. Our business was originally in the north, where we had patrons, and no one dared to mention commercial taxes. But here in Yangzhou, we are just starting out. I must ask Brother Ding to explain the broker business in detail."

"Since Young Master Chen asks, this humble one will naturally speak without reserve. Brokers are divided into official brokers and private brokers. Official brokers also hold licenses, mostly relatives and associates of officials. Someone like me is a private broker. In Yangzhou, Yizhen, and Guazhou, there are over a thousand of us. The broker's license is renewed annually, with a license fee of five qian of silver."...

Ding Ding continued, "The most common task for brokers is helping traveling merchants buy and sell, taking a commission from it. Another is calculating commercial taxes based on the goods and reporting to the superior officials for inspection. But nowadays, much is concealed and not reported; the tax silver is split between the broker and the traveling merchant by negotiation."

Chen Xin was someone who had never paid taxes in the Great Ming. As soon as he arrived in Weihai, he had backing; Yang Yunong couldn't even collect the land tax, let alone commercial taxes. Later, Zhou Hongmo set up checkpoints to collect, but that was basically a type of road toll. He had always thought about levying industrial and commercial taxes in his jurisdiction in the future. Hearing Ding Ding mention this now, he couldn't help but ask, "Can the brokers alone swallow it all?"

Ding Ding respectfully said, "Naturally not. The broker's silver must be shared with the various officials of the prefecture and county, mostly ending up in the pockets of these lords. Some large brokers earn tens of thousands annually. Someone like me also has to pay several dozen taels a year. If the payment is too little in some months, the superior officials become displeased and threaten not to issue the broker's license for the next year. So sometimes, even without business, I must pay the silver out of my own pocket. These are all private matters. On the surface, one must also pay the broker tax annually."

Chen Xin smiled. "That doesn't sound like a small amount."

Song Wenxian interjected, "Coincidentally, I heard about this matter last time in the capital. The annual broker tax in Northern Tongzhou is over four thousand taels. If calculated this way, with so many departments and counties across the realm, the annual broker tax must be at least five to six hundred thousand taels."

Ding Ding said, "There certainly is."

Liu Minyou said in surprise, "This is outside the land tax. Why does the imperial court always owe us... always have no silver?"

"Young Master Liu does not know. These broker taxes are all retained locally; they are not part of the forwarded revenues."

Chen Xin clapped his hands and said quietly to Liu Minyou, "It's just a local tax." Liu Minyou nodded. It wasn't that the Great Ming didn't collect commercial taxes. From what this Ding Ding said, at least along the canal, quite a bit was collected. It was just that it all went into the pockets of various lords through these brokers. Elsewhere, there were even more tax checkpoints on land routes, setting up barriers for things that should and shouldn't be taxed, just as Zhou Hongmo had done back in Wendeng. So, those who could engage in commerce locally were all gentry and officials. Ordinary people could only be peddlers or retailers; otherwise, these checkpoints along the road would bankrupt them.

Countless merchant ships traveled north and south on the canal each year. Since there was the grand banner of commercial taxes, there was room for maneuvering below. No wonder Zhou Hongmo fought tooth and nail to compete for the Linqing Assistant Regional Commander post; the benefits were likely considerable.

Zhou Laifu listened and thought that using a local was a good move; otherwise, just dealing with this broker system would be difficult. He recalled the ship owner yesterday mentioning paying taxes at the customs gate and asked, "And how is the customs gate tax paid?"

Song Wenxian answered on his behalf, "The customs gate is not a commercial tax. The customs gate taxes must all be sent to the capital. But it's not a matter of collecting however much there is. Each year, the Ministry of Revenue first sets a quota, distributed among the seven customs gates. If the full amount isn't collected by year's end, the performance evaluation is deemed unsatisfactory. During the Wanli reign, it was sometimes two hundred thousand, sometimes four hundred thousand, not fixed. Now it's set at around four hundred thousand. As for the detailed inspection and collection per ship, I do not know."

Ding Ding added, "What the gentleman speaks of is the customs gate tax paid by the ship owners. It's also not paid in silver based on the goods. This is all because it's difficult to maneuver on board and impossible to inspect the quantity and value of the goods. Therefore, the goods are not taxed; the customs gate silver is collected based on the ship's materials, measured by the width of the grain transport ship's beam. Silver is calculated for every five chi, with the excess not counted."

Chen Xin nodded. Through Ding Ding's explanation, he had a clearer understanding of the canal ecosystem. Most of the canal commercial taxes went into the pockets of officials and brokers. The traveling merchants also benefited, because they themselves could pay less. The only one losing out was the imperial court, but the court never seemed to have the awareness that it was losing out.

Chen Xin said to Ding Ding, "Brother Ding has explained clearly. Just now, Shopkeeper Zhou has already described our business. I wonder if Brother Ding has made up his mind?"

Ding Ding hurriedly said, "Many thanks to Young Master Chen for thinking highly of this humble one. Having a trading shop and trade routes is naturally better than being a lowly broker like me. This humble one is willing to serve under the Young Master."

Chen Xin smiled. "That is very good. Discuss your monthly pay and bonus with Shopkeeper Zhou. From now on, your own broker license fee and broker tax will be paid by the shop. You can work for me with peace of mind. Yangzhou is a major thoroughfare and great town. If you do well here, this official will have greater uses for you in the future."...

Once it was clear that Ding Ding would seek patronage, Chen Xin referred to himself as "this official," letting Ding Ding know his background. Upon hearing this, Ding Ding immediately knelt and said, "This humble one will certainly work diligently for the Proprietor."

Chen Xin said to Zhou Laifu, "You and Shopkeeper Ding will look for a shop front nearby this afternoon. Settle it as quickly as possible. I'll give you one day at most. We still have to go to Linqing. You must also thoroughly explain our shop's regulations to Shopkeeper Ding."

Zhou Laifu quickly agreed and called over his assistant, an accountant trained at the clothing shop. After all, Ding Ding's background was unknown, so the money would be managed by their own people, and this man's family was all in Weihai, serving as a form of hostage. The three of them walked out of the tea house together. Ding Ding, having long loitered near the customs gate, was very familiar with the streets and shop fronts; with him leading the way, it would be much easier to find one.

Chen Xin and the others continued drinking tea in the tea house. Song Wenxian asked with some concern, "Yangzhou is too far from Wendeng. This subordinate feels we should still set up a hollow outpost, not turn it into a solid one."

Liu Minyou agreed, "Exactly, a hollow outpost. The investment isn't too large. Besides, this place isn't far from Nanjing; it could also serve as a stopover for coming and going."

Chen Xin smiled and said, "There's only one trading shop here, and our official connections haven't been established. We can't go find Xu Xinsu or Zuo Changhao for help. Also, it is indeed too far from Wendeng. Let's first set down a hollow outpost; it will be easier to handle when we want to turn it into a solid one."

Song Wenxian flattered greatly, "My lord is far-sighted and has boundless prospects. Sooner or later, you will become the Regional Commander of Denglai or the Regional Commander of Shandong. At that time, we can turn this hollow outpost into a solid one."

Chen Xin laughed heartily. Seeing Song Wenxian still holding a book, he asked, "Mr. Song has been holding this book all day. What rare book might it be?"

Song Wenxian handed it over with a smile. "My lord, feel free to look. It's not the likes of the Biography of Ruyi Jun. It is indeed a great and rare book of ancient and modern times, and it has always been a banned book. Yesterday, while strolling in the city, I originally intended to look at military classics for my lord, but I saw this book being sold openly in a small bookshop, so I bought it to study."

Chen Xin found it very interesting and quickly took it. He first looked at the cover; it seemed somewhat familiar. He opened the pages and began flipping through. Song Wenxian did not explain. He turned to Liu Minyou and said, "Brother Liu, if you have nothing to do, would you like to look at the Romance of the Western Chamber?"

Liu Minyou agreed. Since there was no entertainment in ancient times, reading was the only option. Song Wenxian indeed had quite a few books. He took it and began reading. It was indeed the Romance of the Western Chamber, but the illustrations inside were somewhat erotic.

Liu Minyou shook his head. "Even the Romance of the Western Chamber can have illustrations like these."

Song Wenxian smiled. "If we speak of the decline of public morals, our present dynasty can be considered the extreme. Even monks and Daoist priests are the same, especially those wandering monks and priests. People all call them lustful demons among men, not abstaining from wine and women, and no one finds it strange. Among them are those who practice the arts of the bedchamber. The scholars and officials all delight in wild Zen. Therefore, without such illustrations in the books, how could they be sold?"

Liu Minyou flipped through casually to pass the time until dinner. Zhou Laifu and Ding Ding returned. Song Wenxian called Ding Ding to go eat dinner together. Liu Minyou called Chen Xin to go out. He called several times, but Chen Xin did not respond. Liu Minyou turned to look at him; he was staring blankly out the window in a daze. Liu Minyou leaned over and shouted loudly. Only then did Chen Xin come back to his senses, put on a smiling face, and said, "Let's go."