Chapter 438: Politics and Commerce

"Since you're both free today, I've called you here to report on the Intelligence Bureau's affairs. Zhou Shifa, start with a summary of recent major events. It happens that Director Song has returned today — Foreign Affairs and Intelligence have been cooperating on some matters lately, so I've invited him to listen in as well."

Chen Xin spoke in his study to Zhou Shifa and Zhang Dong, who stood before him. Song Wenxian smiled and cupped his hands in greeting to the two men.

Zhou Shifa opened his notebook, bowed to Chen Xin, and began: "The major event in Dengzhou recently has been the complete roundup of the spies recruited by Li Yongfang. Through cross-examination and screening, we eliminated those who slipped through the net. In total, twenty people were captured — five from Wantong, three from Li Yongfang's residence, one from the Industry and Commerce Division, one from the calligraphy and painting shop, three from Chen Yijing's household, three from the fortified village, and the rest were implicated merchants and boatmen. Most have already been executed. Li Yongfang's head was sent to Wang Tingshi and forwarded to the capital for verification under the name of Deng-Lai. The other heads have been hung up and displayed at various locations throughout Deng-Lai."

Chen Xin nodded slightly as he listened, acknowledging Zhou Shifa's report. The Li Yongfang affair had come to an end. The capture of this number-one Han traitor would strike a blow against those in the Nine Border Garrisons who thought surrender was an option. The imperial court would surely send his head on a tour of the Nine Borders as a warning to others — this could also be seen as one aspect of the shifting strategic situation between the Great Ming and the Later Jin.

So Chen Xin believed that Huang Taiji's decision to send Li Yongfang had been a misstep. The best approach would have been to let Li Yongfang live out his old age in Liaodong. Now that he had been captured, although the impact on Later Jin's Han generals was limited, it would significantly raise the psychological threshold for Ming border commanders considering surrender.

Zhou Shifa continued: "According to the locations Li Yongfang disclosed, the Later Jin spies were primarily active in Liaoxi, along the border walls of Xuan-Da, and along the Grand Canal near the capital, reaching as far as Kaifeng in Henan and other places. I have already dispatched field teams to each location. We will preserve the inland safe houses and carry out targeted killings at the individual establishments near the border walls. Two locations in the capital will be retained so that newly arrived spies can be detected in the future. However, in places like Liaoxi and Zhangjiakou Fort, powerful local merchant houses are involved. The spies were all hidden in these merchants' shops or homes, and these merchants all have close ties with local officials and gentry, or the establishments are simply run by border commanders themselves. Some cannot be touched for the time being — especially Zhangjiakou Fort, where most of the major merchants on both sides of the border pass have murky relationships with the Jianzhou Bandits."

Chen Xin smiled. "You handle the specifics. If they can't be touched for now, then leave them be. The border-pass trade is enormously profitable — the gentry and princely estates all benefit. It's truly not wise to make too many enemies." He turned to Zhang Dong. "Speaking of Zhangjiakou, Zhang Dong, you went to Shanxi last time to set up stations. Tell us about the situation at Zhangjiakou."

Zhang Dong bowed. "On this trip, I first went to the capital, then passed through Huailai, Bao'an, and Xuanfu to Zhangjiakou Fort, setting up intelligence stations along the way. Last year, the Later Jin briefly raided Xuanfu, and many places were looted. But I found that the area around Zhangjiakou Fort was completely intact. The Later Jin troops clearly did not pass through this area, yet it is extremely prosperous — why would the Later Jin turn a blind eye to it? That is the suspicious point. Inside and outside the fort, shops are everywhere, bustling and flourishing no less than places like Linqing. According to my rough inquiries, most have official backgrounds — mainly military and civil officials and gentry from Xuanfu, Datong, and the Wanshan Regional Military Commission, as well as relatives of high officials in the capital. The connections are deeply intertwined. Every day, mule and horse carts leave the border in long lines. There are even Mongol settlements outside the border wall that specialize in receiving goods exported from Zhangjiakou Fort."

"How large is the volume of border trade?"

Zhang Dong flipped through his notebook. "At Zhangjiakou, the official horse market alone purchases around twenty thousand horses annually (Note 1). The private market trades three times the official volume in horses from the Mongols each year, and the number of cattle and sheep exceeds even that of horses. In addition, there are northern goods such as sheepskins and otter pelts — these come into the pass from the Mongols. What goes out through Zhangjiakou includes inland cotton cloth, silk, needles and thread, salt, miscellaneous goods, pepper and grains, as well as some foreign goods like pepper, and also ironware. Since ironware can be refashioned into weapons, its sale was previously subject to quotas. During the Wanli era, the export of iron woks from Guangdong was limited to five hundred per year, causing the price of ironware among the Mongols to soar. Now, with lax supervision at the border passes, smuggled ironware is rampant and has long gone unchecked."

Chen Xin asked with keen interest, "So Zhangjiakou trades tens of thousands of horses every year. What are the prices roughly?"

"Between seven and twelve taels, varying. It is said that before the Longqing era, the horse markets were forced open by Mongol pressure, and they often passed off inferior goods as quality ones, compelling the Great Ming to buy. After the Longqing opening of the passes, the Mongols traded honestly in the official markets. Now that the Tumote have submitted to the Jianzhou Bandits, the border markets there have become chaotic again. Only those powerful merchant houses can obtain good horses. These large merchant houses are often not limited to Zhangjiakou alone — their branch shops are spread throughout Shanxi, Northern Zhili, and beyond, with the farthest extending along the Grand Canal. Besides trade income, they also widely operate money shops and engage in usury, and so on."

Song Wenxian said to Chen Xin, "That fellow Wu Xiang has made quite a bit of silver off us. He prices every warhorse he delivers at twenty taels of silver. He must have connections with powerful merchant houses — even if he were swapping horses, it wouldn't exceed around ten taels."

Chen Xin laughed. "In the past, we didn't have this channel, so we had to let others earn their profit. We've earned quite a bit off him too — those heads were a capital-free business. Since Zhangjiakou has this advantage, we might as well try trading with these powerful merchant houses."

Song Wenxian asked seriously, "The question is how we establish contact with those people. These merchant firms have deeply intertwined influence in Shanxi. If we want to engage directly in border trade, we have no entry point for the moment. Who knows how long it would take to work through all the connections."

Chen Xin looked at Zhou Shifa. "Has the screening of the captured Mongols been completed?"

"All screened and sorted — divided into four major groups: Khalkha, Kharchin, Tumote, and Khorchin."

Chen Xin turned to Song Wenxian. "These thousand-plus Mongol captives are our way to make contact. The Khalkha and Khorchin people can go through the Liaoxi route, and the Tumote through Zhangjiakou. Send some men together with the Trading Company people and Zhang Dong to make a trip to Zhangjiakou. Find a few of the most powerful houses. For the Tumote, we can release some through them and establish direct commercial ties. Best of all would be to have the Tumote people come to Deng-Lai themselves. What we want is still warhorses, but we can earn quite a bit of silver in other areas as well."

Song Wenxian nodded, mulling it over in his mind. But Zhou Shifa hesitated and said, "Yet the Tumote are outer vassals of the Jianzhou Bandits. They may not dare to trade with us."

Chen Xin shook his head and smiled. "Over ten thousand Mongols participated in the Battle of Lushun. The thousand-plus Mongol captives in our hands are clear proof of our military strength. The Mongols only acknowledge power. Vassal or not, it all depends on how strong your military force is. In the past, our commercial goods reached the Mongols after passing through several hands, and we still earned plenty of silver. What we want to do now — earning money is secondary. Through these captives, we establish a line to the Mongols. Then the Later Jin won't dare trust them, and the fighting strength of the outer-vassal Mongols will naturally be discounted. More importantly, if the Tumote and Kharchin become unstable, then the Chahar will have cause for concern. As long as the Later Jin cannot swallow the Chahar, even if we lose a little money, we've still come out ahead."

After Zhou Shifa and Zhang Dong left, Song Wenxian and Chen Xin continued drinking tea and chatting. Chen Xin also told Song Wenxian about the Yanggu Gang matter, letting Song Wenxian know that he was not the type to burn bridges and turn on old employees — it was just that these particular old employees were not very honest. This was to prevent Song Wenxian from harboring suspicions.

Song Wenxian naturally understood the ways of Lu Chuanzong and his group. Chen Xin had never been able to accept the Yanggu Gang penetrating both the military and civilian lines — this was something even Liu Minyou had never done. If Liu Minyou could temporarily assume military authority, it was only under circumstances authorized by Chen Xin. The Yanggu Gang, on the other hand, relied on the bond of fellow townsmen, with Er Tun's shop serving as the bridge. Now they had even stretched their hands into the Trading Company, exploiting the route through the ladies in Chen Xin's household. It would have been strange if Chen Xin had not dealt with them.

Song Wenxian shook his head and said to Chen Xin, "Lu Chuanzong has always considered himself the most senior. He does have some ability in battle, but nothing outstanding. Now it seems his vision is rather shortsighted. It's better for you, my lord, not to keep such people under you. Going to be the head of the military academy, however, would be suitable."

"I hope none of these Yanggu people stir up any more trouble." Chen Xin narrowed his eyes and sighed. "Mr. Song, you know I am someone who values old ties most. For ordinary flaws, as long as they don't harm the greater good, I often let them slide. But what Lu Chuanzong was doing harms the very foundation of Deng-Lai. The reason we can surpass others lies in the division of duties — even if someone wants private gain, it's hard to find a handhold. Commerce is even more critical. Mr. Liu is currently planning next year's scheme to support Deng-Lai's industry and commerce, and then they come and pull something like this. The harm of Er Tun's shop isn't in the tens of thousands of taels of silver, but in the example it sets for all officials. If everyone uses the power in their hands to seize commercial interests, then one day they will become the very same kind of officials we have in the imperial court now."

Song Wenxian sat up straight and said, "My lord, you see far and plan deeply. Since we're on this topic, I happen to have some insights, also concerning Zhangjiakou Fort and the Shanxi merchants. Would my lord care to listen?"

"Shanxi merchants? Mr. Song, you have some understanding of them?"

"In fact, ever since the Wanli era, these Shanxi merchants have had many entanglements with the court. I traveled often in the capital. Shanxi, with its mountains and rivers forming natural defenses, is a strategic stronghold of the north, so I paid extra attention. Once my lord hears this, you will understand how many ties they have within the court, and also know that Zhangjiakou Fort is far more than just a border pass. And it is from this that I feel my lord's handling of the Yanggu faction was entirely reasonable."

Chen Xin smiled. "I enjoy listening to Mr. Song's analyses most of all — your reasoning is always so clear."

Song Wenxian lowered his head to organize his thoughts, then began: "Shanxi is called a land of mountains and rivers, yet its many mountains are not necessarily a blessing for the common people. In places like Puzhou, the farming methods cannot supply a family's needs, so the people turn to commerce. In Puzhou alone, as many as nine out of ten people travel far to engage in trade, reaching across the entire realm, and not a few possess fortunes of tens of thousands. Yet although the Shanxi merchants were wealthy, they long remained distant from the halls of power. The real influence of Shanxi merchants on court politics began with the Longqing Peace Negotiations."

Chen Xin listened attentively. Seeing Song Wenxian lick his lips, he casually refilled his tea. Song Wenxian and he had known each other a long time and knew Chen Xin did not stand much on empty ceremony, so he simply cupped his hands in thanks and continued.

"Before the Longqing Peace Negotiations, Altan Khan frequently attacked the border passes. In the twenty-ninth year of the Jiajing era, he besieged the capital with his troops. Our Great Ming and Altan Khan fought back and forth continuously. The border markets of Xuan-Da were opened and closed intermittently, so although there was smuggling, it was often constrained by the ravages of war. In the fourth year of Longqing, Wang Chonggu became Viceroy of Xuan-Da. Altan Khan's grandson, Bakhana Ji, suddenly defected and fled to Xuanfu. Wang Chonggu used this as an opportunity to begin negotiations with Altan Khan. My lord may not know this Wang Chonggu, but his nephew through his sister was the later Senior Grand Secretary Zhang Siwei, who at that time was already Vice Minister of Personnel. The Longqing Peace Negotiations were most actively pushed by the faction of Wang Chonggu and Zhang Siwei."

"You mean Wang Chonggu and Zhang Siwei were both representatives of the Shanxi merchants?"

"Precisely. Among Wang Chonggu's relatives, three were major merchants. His second elder sister was Zhang Siwei's mother. Zhang Siwei's wife also came from a Puzhou merchant family. The wives of Zhang Siwei's second and fifth brothers were also from Puzhou, their families also being major merchants. The children of Wang Chonggu and Zhang Siwei, in turn, intermarried with Minister of War Yang Bo, who came from a Puzhou merchant background, and Grand Secretary Ma Ziqiang, who came from a Shaanxi merchant background. Through these complex marriage ties, the great Shanxi merchants were all connected to these two men to some degree.

By the time of Zhang Juzheng's cabinet, Wang Guoguang, who came from a merchant background in Yangcheng, Shanxi, replaced Minister of Revenue Zhang Shouzhi, who opposed the border trade. From then on, key court positions were largely controlled by officials of Shanxi merchant origin. Outside the court, there were also people like Duke of Dingguo Xu Wenbi lending their support. Thus, those engaged in commerce at Zhangjiakou were far from limited to the local people of Zhangjiakou Fort itself, but came from all over Shanxi. And behind them, one could mostly see the influence of princely estates, high nobles, powerful court officials, and major regional officials. Tell me, my lord — which border official in Shanxi would dare to regulate the border-pass trade? Let alone the fact that these people are themselves profiting from it."

Chen Xin nodded. "In the end, it all comes down to profit. For the sake of this profit, even genetically modified... but the Longqing Peace Negotiations did bring some benefits to the court. At least we didn't have to fight Altan Khan every year. And what became of Zhang Siwei later?"

"In his later years, Zhang Juzheng ruled with absolute authority, the cabinet firmly in his grip. He also used the Performance Evaluation Law to concentrate ministerial power in the cabinet and control the localities through performance evaluations. This put him in considerable opposition with the Junior Grand Secretary Zhang Siwei. As soon as Zhang Juzheng died, Zhang Siwei instigated Censor Li Zhi — who came from a salt-merchant background in Datong, Shanxi — to impeach Feng Bao, using this as an opening to begin the denunciation of Zhang Juzheng. Then Zhang Siwei's father passed away, and he lost power due to the mandatory mourning period. Shen Shixing, who came from Jiangnan, succeeded him as Senior Grand Secretary. Only after that did the Donglin faction, representing the Grand Canal and Jiangnan merchants, take control. However, the border-trade profits at Zhangjiakou Fort have been enormous. Over these past few decades, the entanglements with the court have only grown compared to the Wanli years."

Chen Xin fell silent for a moment after hearing this. Ming-dynasty commerce was highly developed, and superior family circumstances gave their sons better conditions to study for the imperial examinations. Many officials in the court were in fact representatives of commercial interests. The vast domestic market itself held enormous profits, and coupled with the inherent flaws of the early Ming system, the government gradually lost control over the grassroots level. The absence of regulation made these merchants insatiably greedy.

The period of Zhang Juzheng's administration was a time when centralization strengthened control over the localities. The key was not the Single Whip Tax Law, but the Performance Evaluation Law under the cabinet's control. The central government reinforced the power of the Provincial Governors and Regional Inspectors to control local government offices. This allowed the cabinet not merely to draft rescripts based on local reports, but to supervise the localities through performance evaluations. This was precisely why, after Zhang Juzheng's death, the majority of officials supported the purge against him.

What Zhang Juzheng had hoped for was a top-down political system of centralized power. The Donglin faction, because so many of their interests lay at the grassroots level, put forward theories about the so-called "public good of all under heaven" and the like. Li Sancai even proposed a new theory of monarchical power — nominally striving for power for all under heaven, sounding grand and righteous, but in reality striving for their own commercial and land interests. Generally speaking, it was a bottom-up approach. However, this "all under heaven" only included their own group, not the common people of the realm. The Donglin faction was in fact the embodiment of commercial and land interests seizing the power of discourse, and the monopoly formed by the union of commerce and power also deprived late-Ming merchants of the enterprising spirit of their Western counterparts.

Once Zhang Juzheng was dead, the groups representing the commercial interests of Shanxi and Jiangnan, as their representatives, carried out a personal purge against Zhang Juzheng, and then went further to overturn Zhang Juzheng's Performance Evaluation Law. The central government once again lost control over the localities — this was also the political reason for the later financial and military difficulties.

Chen Xin turned to look at Song Wenxian. "Everyone has their own private interests. Mr. Song, what do you think those court officials are really about? What we can see clearly — can the Emperor not see it?"

"I believe the Emperor does understand. When the Emperor had just eliminated Wei Zhongxian, he needed the Donglin faction to stabilize the court situation, so he let them have their way for two years. In the blink of an eye, the Jisi Incident arrived. Wen Tiren accused Qian Longxi, Wang Qia, and Yuan Chonghuan of colluding to lure the Jianzhou Bandits into the pass to sign a treaty beneath the city walls. But I don't really believe the Donglin faction would do such a thing. What I do believe is that the Donglin faction's minds were simply not on state affairs at all."

Chen Xin laughed heartily. "What Mr. Song means is not that they didn't want to defend, but that their ability was simply somewhat lacking."

"Far more than somewhat lacking, rather. These people are experts at power struggles in the court, each one speaking more beautifully than the last. But when they seize power and actually have to do real work, they don't know where to begin. So the Emperor quickly grew disappointed with them. Using the Jisi Incident, he suppressed the Donglin faction and propped up Zhou Yanru and Wen Tiren, who styled themselves as a lone faction, letting them and the Donglin faction check each other. This is the sovereign's way of maintaining balance. But Zhou Yanru clearly did not understand the Emperor's intent. Instead, he wanted to ally with the Donglin against Wen Tiren. His current fate is thus predictable. Wen Tiren's victory lies not in his cunning, but in his understanding of his own role."

Chen Xin smiled and nodded repeatedly. "Listening to Mr. Song's words has cleared my mind like breaking open a thatch. If the gentlemen of the cabinet had Mr. Song's caliber, our Great Ming would not be in its current state."

"My lord flatters me too much. Even if I went to serve as Senior Grand Secretary, the Great Ming would still be in its current state. This is not something one man can change. Such is the great trend — what can be done about it? Zhang Juzheng was a heaven-sent genius, yet before his bones were cold, his eldest son was killed and his home was confiscated. No matter how shrewd I may be, compared to Zhang Jiangling, I am still far behind."

Chen Xin stood up, took a few steps, then cupped his hands toward Song Wenxian and smiled. "I have gained much today. I do think that it is not impermissible for officials' families to engage in commerce — what is impermissible is relying on the power in their hands. Otherwise, although commerce appears vibrant, it is in fact entirely in the hands of official merchants. In the end, both upstream and downstream have no profit to speak of, while the circulation itself is the most lucrative. Minyou once said: farming yields one part profit, manufacturing yields two, but commerce yields five. This in itself is deeply unreasonable. What is hateful is that these people still go to every length to evade the meager commercial taxes. Those whose mouths are full of morality can be utterly shameless in the face of commercial profit. Today, every part of the realm follows this pattern — it cannot be changed without an earth-shattering upheaval. I also thank Mr. Song for still speaking frankly without reserve. When you and I first met, we associated as friends. Whatever I may become in the future, I ask Mr. Song to always remain this way. There are not many people left with whom I can speak freely now."

Song Wenxian stood and bowed. "That is because you yourself, my lord, have not changed, and also because I have simply spent more time with you. Others meet you only occasionally, and your official rank has risen again and again — to say they are not at all intimidated would be false."

Chen Xin shook his head. "Please remember what I've said today. No matter what I become, I will always remember Mr. Song's assistance when I was at my humblest. In the days to come, the realm is vast, and there will be many more matters to keep you busy. Please also take care of your health. Yesterday we received intelligence that the roving bandits crossed the Yellow River at Mianchi. It is now confirmed that they did not head west toward Tong Pass, but have advanced into the heartland of Henan. Henan, Huguang, and Southern Zhili are all possible directions they may enter. Mr. Song's affairs may increase even further."

Song Wenxian lowered his head. "My lord has also given me the opportunity to put what I have learned into practice. Had I not met you, my lord, I would merely have grown old in obscurity in some private secretariat. Though the tasks now are many, they are indeed what I wish to do. Even with Shanxi being so complex, I find it all the more interesting."

"Now the smuggling routes from Deng-Lai to Liaodong are all under our control. Saltpeter, sulfur, and ironware cannot get through. The border-trade smuggling at Xuanfu is the largest source of supplies for the Later Jin. For our influence to enter Shanxi, in the near term we may still need to rely on the power of Wen Tiren and Liang Tingdong, taking the hidden route. The Later Jin's decline is already evident. If these Shanxi merchants know what's good for them, we can trade using commercial benefits. If they don't, then they are making enemies of Dengzhou Garrison, and we won't need to reason with them in the future."

"Then I shall bear it in mind and send men to Shanxi soon to handle the matter of the Mongol captives. Speaking of which, there is an old acquaintance in Xuanfu."

"An old acquaintance?" Chen Xin furrowed his brow. "I truly can't recall. The Trading Company may know someone through commercial dealings, but I don't seem to have any familiar person there."

"My lord must have forgotten. Last year we did manage to send Zhu Wannian away — at the time, only Xuan-Da had an opening. As it turns out, he is now serving right in Yanghe, Xuanfu, as the Military Defense Circuit Intendant."

Chen Xin slapped his forehead. Laizhou Prefecture was now quiet, but Xuanfu had gained an adversary. "Pay him no mind. Our activities in Xuanfu aren't about seizing territory. If Zhu Wannian still deliberately makes trouble, then he's forcing my hand — that would be him courting death. If we don't give him a taste of suffering, who will fear Dengzhou Garrison in the future?"

Note 1: Reference to "Wang Chonggu's Memorials." After the Longqing Peace Negotiations, the official annual horse trade volume at Zhangjiakou Fort in the early Wanli era was approximately 18,000, with the three garrisons of Xuan-Da totaling around 35,000. Private transactions are not included in these figures. According to Wang Chonggu's statistics, private trade included not only horses but also cattle, sheep, and mules combined, with the total being over three times the official volume — at Zhangjiakou Fort, four times. Considering that Wang Chonggu's statistics could not have been comprehensive, the estimated volume of the private horse market should be about three times that of the official market. (To be continued...)

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