Chapter 429

The north wind howled as a mounted column moved along a repaired road — the main highway from Changyi to Qingzhoufu. On either side of the Changyi road stood many fortified villages, so these stretches had all been repaired.

Road-building in ancient times was really just compacting the roadbed — pounding the rammed earth solid; the better ones had a layer of fine gravel underneath. Dengzhou's roads followed the same pattern, with drainage ditches dug along both sides. In truth, there had been little rain in recent years, so they were probably rarely used. Road-building could stimulate commerce and also improve army mobility, and the wages paid could further drive consumption, so Chen Xin still insisted on doing it.

The roads inside Denglai were far better than those in Qingzhou, Jinan, and elsewhere. From a defense standpoint, Dengzhou Garrison could gain an excellent advantage in interior-line mobility.

Chen Xin and Liu Minyou were riding at the front. They had set out from Pingduzhou and reached this spot in just one day, still twenty li from the factory. This was where Kong Youde had escaped back then, and Chen Xin remembered the place vividly.

Liu Minyou had also been to Changyi before. The fortified villages there were very well run. Apart from a small number of owner-peasants, the gentry's land could hardly find tenants anymore. Now the Land Reclamation Office was negotiating with them, preparing to buy their surface rights at a rent of one dou per mu. Liu Minyou had approved this approach. For Dengzhou Garrison, the surface rights alone were enough, and this method could also reduce the sharp conflicts between Dengzhou Garrison and the gentry.

After traveling another ten-odd li, a vast stretch of factory buildings appeared by the river. This area lay between the Wei River and the Jiao River, with highly developed water transport. Downstream along the river were many fishing villages, and there had long been quite a few wharves that could also accommodate sand junks; many smuggling boats set out from here.

This region had always been poor, but because it was near the river, the food supply was somewhat richer than inland. The inhabitants were generally taller. After being managed by Dengzhou Garrison, fortified villages had also been built here. No one controlled the sideline of fishing — whatever they caught was theirs to keep. The low-priced salt sold in the village shops allowed them to turn fish into salted fish. What they could only eat themselves before could now be exchanged for silver.

After a large cluster of factory buildings suddenly went up here this year, the female dependents of many fishing households found a place to go — as textile workers. The local labor force still could not meet the demand, and over two thousand women came here from Pingduzhou and other places, making the area look like a kingdom of women.

More refugees were being settled here in succession. These refugees had already exceeded the absorption capacity of Dengzhou's fortified villages, so they were placed here. The men took on jobs like portering and loading, while the women entered the textile factory.

Although the factory zone had just been established, business opportunities had already emerged, because there were so many people here. Besides the workers inside, there were also road-building corvée laborers, dockworkers, boatmen, and dye-works workers. Moreover, the people in those service trades themselves also needed to consume. The total number of people in the factory zone plus local residents had already surpassed twenty thousand. Dengzhou's general stores were setting up points here one after another. Traveling merchants from Pingdu, Qingzhou, Dengzhou, and elsewhere were also here looking at shop spaces, buying land from local owner-peasants to build storefronts, and the place looked set to become more prosperous than Changyi county seat.

With so many people suddenly flooding into this patch of land, even firewood became a problem. On the road, Chen Xin and his companion personally witnessed two brawls between locals and outsiders — and they were actually over the woods where people gathered firewood. In this era, only the better-off could afford charcoal; ordinary households mostly relied on firewood for cooking and heating the kang. Even the children in a family had to shoulder this duty. As the refugees increased day by day, all kinds of resources across Denglai were growing tight, firewood included. There were plenty of children who walked over ten li every day to gather firewood. After the outsiders arrived, the workers could eat in the canteens, but the children and elderly in their families still cooked for themselves. The firewood had to be gathered from farther and farther away. The locals later demarcated their own spheres of influence and forbade those outsiders from gathering firewood. The outsiders had nowhere to gather it, so even gathering firewood became something worth brawling over.

The Third Battalion troops garrisoned at Changyi had been transferred to Lushun, so maintaining public order here could only rely on a temporarily mobilized company — manpower was far from sufficient.

Everything was newly founded and still somewhat chaotic. Xiao Heling, who was in charge of building the factory, came to receive the two men and led them into the spacious factory grounds, briefing them on the factory's situation along the way.

Liu Minyou asked Xiao Heling, "Have all those new-model spinning machines arrived?"

Xiao Heling pointed to the wharf by the river. "Still short by fifty percent. Both the spinning machines and the looms are newly made, and output can't keep up for the moment. The spinning machines from Wendeng and Weihai are all shipped by sea. Because of the troop drawdown to Lushun, transport capacity is somewhat insufficient. I switched to shipping the spinning machines from the Pingduzhou workshop here. In another month, after the Jiao River freezes over, there will only be overland transport. The Industry and Commerce Office has prepared a batch of silver taels, intended for winter overland transport. The Wendeng spinning machines will be shipped to Lingshan Guard instead — the harbor there won't freeze solid in winter."

Xiao Heling then pointed to the warehouses on the other side. "The cotton purchased from Qingzhou and Tianjin has already been shipped here and can sustain winter production for some time."

As they talked, they arrived at a factory building. Its span could not compare with the factory buildings of later ages, but it was an all-brick-and-tile structure. This kind of brick-and-tile house retained heat better than a wooden one. Once there were many people inside, it would not be excessively cold, allowing the workers' fingers to remain nimble.

Inside, four-spindle spinning machines were packed tightly. Xiao Heling pointed to a female worker operating one and said, "My lords, please look. This single-operator loom uses a flying shuttle. The shuttle-throwing speed is double that of the original hand-shuttle loom, and the weaving labor is half that of Jiangnan. The spinning machine has four spindles, one more than the three-spindle machines commonly used in Jiangnan. Because of the large volume, the cotton purchase price is ten percent lower than the price from Eastern Depot to Jiangnan. For shipping, leaving from Tianjin via the Grand Canal saves the taxes of two customs passes. Jiangnan's cost is one qian six fen per bolt; we only need one qian three fen. The cotton from Pingduzhou and Qingzhoufu is even cheaper — the purchase price is lower than Jiangnan's local price. The spun cost is only one qian two fen. Adding transport expenses, we can wholesale along the Grand Canal for under two qian three fen."

Chen Xin nodded. "Songjiang cloth sells for three qian on the Grand Canal, so that's over twenty percent cheaper."

Liu Minyou added from the side, "And our cloth is finer and denser — that's also an advantage of the flying shuttle. Better quality cloth at a lower price — our competitiveness will naturally surpass Jiangnan's. Moreover, the cotton planting area in Dongchangfu and Yanzhoufu is very large, not inferior to Jiangnan's raw material supply."

Xiao Heling also said, "When the thaw comes in spring and all the water-powered spinning frames along both banks of the Jiao River are completed, labor will be further reduced by a portion, and next year's price will be even lower than this winter's."

After hearing this, Chen Xin praised Liu Minyou, "Minyou, you chose this industry very well. By the first half of next year, we can defeat the small local households in Shandong."

Liu Minyou turned to Xiao Heling and said, "We do have that plan, but Xiao Heling, you must remember: cloth sold in bulk must be something practical for common people's use. The cloth produced must be thick, sturdy, and durable. The thin kind can only be produced in small quantities, not as bulk production. On other matters, you may decide. However, the monthly production plan and sales volume must be reported to the Industry and Commerce Office. The cotton cloth sales are entirely handled by the trading company; the Industry and Commerce Office is not permitted to divert any quota. Remember that."

Xiao Heling was still unaware of the Chen Yijing affair, which involved the Industry and Commerce Office arbitrarily diverting cigarette quotas and also implicated Xu Yuanhua and others. That was why Liu Minyou had decided to revoke the Industry and Commerce Office's involvement in sales.

"I will remember."

"Cotton spinning is a major undertaking for our Dengzhou. You must devote more care to doing it well. The factory zone is a mess right now; you, as the general manager, must also take charge. If you need to transfer people from the workshops and the cigarette factory, send a report directly to me."

After inspecting the factory zone, the two men rested in an empty office. Chen Xin said to Liu Minyou, "I won't go to the Lingshan Guard one. Changyi here is doing quite well. This Xiao Heling has some ability."

"It's just a bit chaotic. The spinning machine and loom technology may only take a year to spread to Jiangnan. To defeat the native cloth in Jiangnan will still take some effort."

Chen Xin propped up his feet and laughed. "Defeating Jiangnan's native cloth in one or two years won't be that easy, but Jiangnan cloth will certainly lose its market in the north. I plan to open another large textile factory in Dongchangfu next year…"

"Linqing is a place where dragons and snakes mingle; the high officials at court all have interests there. If you want to open a factory there, everyone will see the benefits in it."

"That's why the Qingzhou Regional Commander is so important. I'll deploy troops on the Qingzhou border and keep a force in Linxian. Let's see who dares to contend with me for the benefits."

Liu Minyou turned his head. "It's not yet time to tear our faces off with the imperial court. Would you really dare to move troops and coerce them?"

Chen Xin sat up straight. "According to the report you gave me last time, Great Ming's annual cotton cloth output is about two hundred million bolts. Even if we only capture half the market, earning five fen of silver per bolt, that's five million taels. The court gives me five or six hundred thousand a year — why wouldn't I dare to fall out with them? Shandong also has the crucial Grand Canal. Besides, with Wen Tiren and Liang Tingdong looking after things at court, who in the Shandong officialdom would dare to snatch this benefit from me?"

"Five fen of silver per bolt is achievable, but we won't capture half the market in the first year. Thirty million bolts would be about right. I plan to set the price at two qian seven fen; the profit would be seven or eight fen of silver per bolt, which also amounts to several million taels."

"Lowering the price step by step is correct. There's no difference between lowering it by ten or twenty percent — of course, lowering it by ten percent is better. What comes after that?"

Liu Minyou took out a booklet and handed it to Chen Xin. "It's all written in here. In the northern market, we'll always stay ten percent lower than Jiangnan. After the first year, we'll open factories in Shandong's production areas. Within two years, we'll drive Jiangnan cloth out of the northern market. After that, using the funds from the money shops as backing, we'll carry out low-price dumping in Jiangnan, thoroughly crushing the local cloth so they can only use it for themselves. Our cloth will occupy the markets along the Yangtze River line. Once Jiangnan's industrial chain is broken, we'll raise the price again."

Chen Xin blinked and skimmed through it hastily. "A truly grand plan. How do we deal with the local Jiangnan gentry? My troops can't reach Jiangnan for now."

"The trading company will only go down to the prefectural level along the Grand Canal in Jiangnan for the time being. Below that, we'll recruit agents among the Jiangnan gentry, giving them a share of the profits. We'll draw the powerful among the gentry into our commercial interests, split off those commercially oriented gentry, and let them deal with the local clans and the land-based gentry."

Chen Xin clapped and laughed. "In places my army can reach, we'll extend the trading company down to the department and county level. The commercial network is the real killer weapon."

"Shandong, Liaoxi, Mongolia, Beizhili, and Henan all count as within the sphere of your military influence. The populous Lianghu region is still far out of reach, and the funds absorbed by the money shops are still insufficient."

Chen Xin gave a sly chuckle. "Lianghu is a place I must contest. I'll handle these matters beyond commerce myself." (To be continued…)