Chapter 490: Results

Outside the small conference room of the Dengzhou Regional Commander, guards stood in tight layers. Inside, nearly ten people sat around the circular conference table. The men were all puffing smoke, while the only woman present, Wang Daixi, frowned and waved a hand in front of her nose before continuing her financial report.

"This year's fiscal revenue breaks down into the following main categories. The Four Seas Trading Company is the largest source of income, with projected year-end profits of 4.9 million taels. Roughly two million of that comes from recent fluctuations in grain prices. After setting aside what is needed for turnover and expanding commercial operations, the maximum that can be drawn is 2.3 million taels. The second portion comes from spoils gained in successive military campaigns: 1.7 million taels from Zhangjiakou, plus goods valued at 500,000 taels; and approximately 200,000 taels seized in the battle at Zhubokou. The third portion is military funding allocated by the imperial court, which nominally should be 1.03 million taels, but after deducting the shares taken by officials in the capital and in Denglai, the actual amount received is 630,000 taels. The fourth portion consists of miscellaneous income from maritime trade, coin minting, ironware, commercial taxes, Denglai, private salt, and consolidated retail operations, totaling a profit of 530,000 taels, with maritime trade being the largest single item."

Chen Xin listened with immense self-satisfaction, tilting his chair back and rocking it gently. All his various schemes were beginning to yield returns, and the army's campaigns had also earned quite a bit of silver. In the past two years, there had been two major battles. The first was the bandit suppression in Henan, where the main gain came from the battle against Zijin Liang, netting 700,000 taels in spoils and 300,000 taels in goods. The second was this year's strike on Zhangjiakou. As expected, seizing money was the fastest way. Without a trusted strong army of his own, the Chongzhen Emperor had it far harder than Chen Xin.

Wang Daixi coughed twice, choked by the smoke. Liu Minyou cast a helpless glance around the room. Dengzhou depended on cigarettes to make money, so he and Chen Xin always claimed that cigarettes had only benefits. As a result, nearly everyone smoked, and even many women were never without a cigarette in hand. Fortunately, Wang Daixi detested the smell of smoke and had not picked up this foul habit.

After taking a sip of water, Wang Daixi continued, "The four denominations of payroll notes issued by the bank currently total 1.35 million taels. They have entered civilian circulation primarily through military pay and various workshops, and are now widely used throughout Denglai. No new counterfeit payroll notes have been discovered so far. Most small-scale trade is conducted with payroll notes, and some traveling merchants also accept them, though they generally do not hold them long-term and will exchange them for bank drafts or cash silver when leaving Denglai. Currently, the bank has redeemed about 330,000 taels' worth of payroll notes, giving the bank nearly a million taels in additional reserves. The Four Seas Bank has established credit along the Grand Canal. Many traveling merchants, even those not coming to Denglai, are willing to use Four Seas bank drafts and do not carry cash silver on their person. Before these drafts are redeemed for cash, all this silver can be deployed by the bank. Next year, the bank's plan, in addition to continuing its existing business, is to issue newly minted gold and silver coins in Denglai and along the Grand Canal. Each will have four denominations, with a gold or silver content of seventy percent, yielding a seigniorage profit of thirty percent."

Chen Xin took careful notes. Although the bank's current profits were not particularly high, its advantage lay in the enormous volume of capital. Payroll notes were mainly for internal use in Denglai. All military pay and wages in Dengzhou were disbursed through the bank. Soldiers' pay was registered by the Military Affairs Office, and when they needed to use it, they received payroll notes from the office, while the cash silver was held in custody by the bank. Now, fewer and fewer people were redeeming payroll notes for cash, and this cash silver became a portion of funds the bank could temporarily deploy.

Externally, the main instruments were silver certificates and bank drafts, both of which also brought in massive amounts of capital. During the grain shortage, Wang Erya merely spread a rumor along the Grand Canal that the Jianzhou Bandits were about to breach the passes, and many officials in Jingshi rushed to deposit their cash silver into various banks, with the largest share going to the Four Seas Bank. Because the Four Seas Bank had strong backing along the Grand Canal and in Shandong, with branch offices all the way to Nanjing, and was bolstered by the formidable image of Dengzhou, it appeared the most trustworthy. At the very least, everyone believed Denglai would not fall to the Jianzhou Bandits. Moreover, deposits of over three thousand taels in a single transaction earned some interest. So, within the first half-month after the rumor began, the Four Seas Bank in Jingshi saw an increase of two million taels in deposits. Most of the bank drafts designated Dengzhou and Yangzhou as redemption points, clearly indicating that those capital officials and wealthy merchants were preparing to flee by sea or along the Grand Canal.

Because of the interest factor, once people deposited money and got a taste of the benefit, no one would withdraw it in the short term. After the bank established its credit, these people would not be so foolish as to take out interest-bearing silver and leave it sitting at home. This was when the bank could deploy the funds for other purposes. That was why Liu Minyou could easily mobilize large sums of silver to speculate on grain prices along the Grand Canal and in the north, while still having the spare capacity to drive up the price of cotton cloth.

After completing these speculative operations using the funds, Liu Minyou began expanding the cotton mills, building a large new cotton spinning factory in the northern part of Qingzhou Prefecture. A cotton spinning factory in Linqing was also in the planning stages. All of this benefited from the enormous volume of capital. Once the gold and silver coins were issued next year, they would certainly become widely popular among the populace. The four characters "Four Seas Bank" on them would be the best advertising medium. As its creditworthiness continued to rise, even more capital would flow in. Coupled with the blow dealt to Zhangjiakou, the overall credit of Shanxi banks had been downgraded a notch, since no one knew when they might be raided. Therefore, in the eighth year of Chongzhen, the bank could likely absorb even more funds, creating a virtuous cycle. With the bank as a foundation, commodity prices along the Grand Canal would be under Dengzhou's control. Once Grand Canal prices shifted, prices in Jingshi would have to follow suit.

In the plans of Chen Xin and Liu Minyou, the eighth year of Chongzhen was a pivotal year for Dengzhou. The most critical tasks were to establish absolute dominance in cotton spinning and banking. To guarantee this economic dominance, military strength also had to continue expanding to deter all other powers.

Wang Daixi's briefing on the bank was relatively concise. In truth, those present, including Liu Pojun, Zhou Shifa, and Song Wenxian, did not fully understand it either. The people in this room were the innermost core of Dengzhou, but they genuinely did not grasp the bank's function very well. In any case, they understood that Lord Chen could use it to make money, and that was enough.

After listening, Chen Xin looked up and smiled. "Having heard Daixi's report, I feel much more assured. That's why, at every year-end meeting, we always let Daixi, who manages the purse strings, speak first. Having money is truly a fine thing."

The others all laughed along obligingly. After speaking, Chen Xin turned to Zhou Shifa and Song Wenxian, who were seated diagonally opposite him. "Having silver is a good thing, but not all of it can be drawn out for use. Moreover, we have more and more to deal with. There are no outsiders here. You two, tell everyone about the situation around us, so that everyone has a clear picture."

Song Wenxian deferred to Zhou Shifa to speak first. Zhou Shifa stood up, bowed to Chen Xin and Liu Minyou, and said, "Your subordinate will now report on the latest intelligence. The most important item is news from Jingshi. According to Zhang Dahui, His Majesty sought out Liang Tingdong, intending to establish a permanent Shandong Regional Commander post in Jinan Prefecture, Shandong, and to add a special operations battalion. He also wanted to expand the river defense troops originally stationed in Dezhou into a reinforcement battalion. Shandong lies in the interior, with no direct external threats on any side. The target of these new battalions is self-evident: it is our Dengzhou. However, the Ministry of War has yet to find a source of funding and provisions. The Analysis Division believes that Xu Congzhi was badly frightened by Geng Zhongming this year. If Xu Congzhi learns of this news, he may push the matter forward. But the current difficulty remains money and grain. The court has roving bandits and the Jianzhou Bandits to deal with at present, and to guard against our forces in Lin County, they have also added a Mobile Corps Commander in Zhending Prefecture. It will be very difficult to spare silver to further strengthen Shandong's military forces. So, in the short term, it is impossible for all three of these battalions to be established. The threat level to the west of Denglai and Qingzhou is relatively low. But once the roving bandits are annihilated, there could be five thousand to ten thousand troops transferred to Jinan Prefecture or along the Northern Grand Canal."

Several military personnel showed expressions of disdain. Even ten thousand border troops would not amount to more than five thousand actual soldiers, and their elite retainers would not exceed fifteen hundred. They probably could not even capture a single fortified village. The only thing to fear was them using cavalry to harass Qingzhou Prefecture or cut off Shandong's trade routes.

Song Wenxian looked up and asked Zhou Shifa, "After the Zhangjiakou and Jiang Yuegui affairs this year, has the court increased its vigilance against our people in Jingshi?"

Zhou Shifa replied calmly, "That is certain. Some covert surveillance posts have appeared near Zhang Dahui's residence. The Intelligence Bureau's lookouts providing cover around his residence have also spotted some individuals who may be from the Embroidered Uniform Guard. These people have mediocre skills, far inferior to Jiang Yuegui or Li Yongfang. According to information later obtained from the Embroidered Uniform Guard, the Emperor did indeed order Cao Huachun and Luo Yangxing to monitor Zhang Dahui's movements. Luo Yangxing deliberately assigned some incompetents to this task. However, the Embroidered Uniform Guard does not have many experts to begin with these days."

Chen Xin asked Zhou Shifa pointedly, "Does the Intelligence Bureau have any countermeasures?"

"In the short term, Zhang Dahui will reduce his actual activities, but he will go out as usual and carry on with his usual amusements, putting on a show for the Emperor in the open. The intelligence line has been severed from Zhang Dahui. Several contact points have been relocated. Your subordinate plans to send Zhang Dong to Jingshi temporarily to take charge of the intelligence line. My lord..." Zhou Shifa turned to Chen Xin and said, "Your subordinate believes Zhang Dahui should be transferred back to Denglai. He has been in Jingshi for many years, and many people in the Embroidered Uniform Guard recognize him. Judging from the current situation, it may be dangerous for him to remain in Jingshi."

Wang Daixi raised her head. Zhang Dahui was the one who had begged with her as they entered the pass. Now that Hai Gouzi was already dead, her heart immediately tightened when she heard that Zhang Dahui might be in danger.

Liu Minyou frowned and said, "Would the court turn hostile and move against him?"

Zhou Shifa replied respectfully to Liu Minyou, "Moving against Zhang Dahui is a possibility. Zhang Dahui himself holds no official post; he is merely a military householder registered in a guard battalion. Although many in Jingshi's official circles know him, he has no clear subordinate relationship with Dengzhou. After the Jiang Yuegui affair, the Eastern Depot still lost face. Cao Huachun's current attitude is unclear, but he has suddenly refused to see anyone from our Dengzhou and no longer accepts gifts. Therefore, if the Eastern Depot wants to reclaim its face, the most likely target would be Zhang Dahui."

Liu Minyou thought for a moment and said to Chen Xin, "Zhou Shifa has a point. We haven't torn off all pretense with the court. If the Eastern Depot truly moves against Zhang Dahui, it would be very difficult for us to respond. We wouldn't even be able to find a reason for retaliation."

Chen Xin tapped his fingers lightly on the table. Wang Daixi watched him with rapt attention. After a pause, Chen Xin said, "There shouldn't be a problem for the time being. Dahui has been in Jingshi for many years and knows the situation best. The circumstances in Jingshi are complex, with various powers intermingled, and the situation can change in an instant. Zhang Dahui has always done an excellent job. Many details cannot be fully conveyed to a successor, so he still needs to remain in Jingshi. However, it is indeed no longer appropriate for him to operate openly. Have him go underground."

Wang Daixi was slightly disappointed. Her eyes shifted to Liu Minyou, and she pursed her lips slightly. Liu Minyou, somewhat awkwardly, gave Wang Daixi a look, signaling that they would talk later. Their relationship had been privately arranged by Chen Xin, and no one else knew about it, so in public they maintained their previous demeanor.

Just as the two were exchanging glances, Chen Xin suddenly turned to Liu Minyou and said, "Minyou, it's your turn to speak on the Civil Affairs Department's matters."

"Ah?" Liu Minyou jumped in surprise and hurriedly looked down at his booklet. He cleared his throat and addressed those present, "Then I shall report on the Civil Affairs Department's main work this year."

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