Chapter 332: Great Ming, Exactly How Much Money Did It Spend?

Time flew by.

In the blink of an eye, Wu Cheng'en's probationary term was already more than half over.

With the preliminary research concluded, the bank project officially entered an intense, fast-paced preparation phase.

"No, I cannot endorse this proposal."

In the conference room, Wu Cheng'en frowned and voiced his opposition.

He looked across at the fair-skinned, slightly heavyset official seated opposite him.

This official was none other than Yang Sichang, who had gone to the Zhang household for research some time ago.

He had now been assigned by Lu Xiangsheng to work with Wu Cheng'en on advancing the concrete details of establishing the bank.

Hearing this, a flicker of doubt crossed Yang Sichang's eyes:

"Brother Wu, since you believe the merchants can even accept things like auctioning licenses and paying additional security deposits, why do you think this matter is unworkable? Comparing these two things, isn't having to fork over an extra hundred thousand taels of hard silver far more painful for those merchants?"

Wu Cheng'en replied earnestly:

"Brother Wenruo, in the eyes of the merchants, the nature of these two matters is completely different."

"Regarding the security deposit, the merchants naturally don't trust the imperial court either, but at most, they only think the court is just finding another excuse to fleece them one more time."

"They were fleeced once when the licenses were auctioned, and fleeced again when paying the deposit — so be it."

"It's simply one price paid in two installments. Merchants value profit; as long as the numbers add up, they'll hold their noses and accept it. But if, as the Ministry of Revenue intends, we demand they immediately abolish all the private promissory notes circulating within their own merchant guilds and forcibly replace them all with the court's official notes, then the nature of the matter is entirely different."

Wu Cheng'en fixed his gaze on Yang Sichang and said with added gravity:

"That would mean the vast majority of their large-volume trade transactions would have to flow through official notes, and every single account would have to pass through the clearing bureau of the Bank Office for consolidation."

"This is no different from stripping them of all their assets and wealth, laying everything bare in the open for anyone to butcher at will!"

"If this is forced through, panic aside, the rollout of the bank itself would face enormous resistance."

"When that time comes, I fear we won't even be able to auction off the licenses."

Yang Sichang furrowed his brow deeply and voiced his thoughts:

"But Brother Wu, issuing notes through the bank to grasp the financial arteries of the entire Great Ming by the throat, thereby laying the groundwork for all the subsequent reforms — that was precisely His Majesty's original intent in establishing the bank, and it is our fundamental objective."

"Not forcing through the official notes would, in truth, be a departure from that objective."

Wu Cheng'en immediately responded:

"Yes, that is our objective."

"Some of the more astute merchants may also realize this objective of the court. Even if they don't realize it now, they will eventually catch on one day."

"But even if they know, handling this matter rashly versus proceeding gradually will give them a completely different impression. Boiling a frog in lukewarm water is always better than throwing it straight into a pot of scalding water."

Yang Sichang nodded thoughtfully, then shook his head again.

He was silent for a moment, then posed another question:

"What about the other matter proposed by the Ministry of Revenue? Taxing the discount on promissory notes — the Ministry wants to handle it according to the precedent set for pawnshops or brokers. What do you think?"

Upon hearing this, Wu Cheng'en immediately straightened up in his seat and replied decisively:

"On this matter, I stand completely with you, Brother Wenruo!"

"The methods used for pawnshop taxes and broker licenses absolutely cannot be applied to the bank! Otherwise, the establishment of this bank would be as good as nonexistent!"

The Great Ming's methods for taxing pawnshops and licensing brokers, to put it bluntly, were essentially collecting fixed "protection money" based on quotas and scale.

Pawnshops, for instance, were taxed according to a tiered classification system.

One with a capital of ten thousand taels paid fifty taels annually; one with eight thousand taels paid forty taels.

Brokers, meanwhile, had to pay a fixed license renewal fee each year when their business permits were reissued.

This method of "taxing by shop" had low implementation costs for new policies and yielded quick results — it was a common approach for taxing the commercial sector in the Great Ming.

Wu Cheng'en shook his head and continued:

"The Ministry of Revenue is desperate for money, hoping to save effort while also wanting to get tax silver as early as possible to plug the holes in their ledgers."

"But they fundamentally cannot grasp the long-range vision His Majesty has for establishing the bank. This approach of only caring about the small change in front of them, ignoring the overall situation, is truly unwise!"

Only then did Yang Sichang's deeply furrowed brow slowly relax.

On the surface, the two matters they had just discussed appeared to be merely disputes over the implementation details of the bank.

But looking deeper, they were actually an extension of the debates and arguments taking place at a higher level in the court.

The primary assessment metric for the bank was still under debate and had yet to be finalized: first, the coverage rate of official promissory notes among the populace;

second, how much silver tax the Bank Office's clearing bureau could extract from it.

And this debate over the assessment metric, at its root, was yet another extension of the massive fiscal budget for the first year of the Yongchang era.

A new Bank Office was to be established under the Ministry of Revenue, responsible for the overall coordination and clearing operations of the bank.

So, exactly how much fiscal revenue target would this Bank Office need to shoulder?

The Secretariat, in devising and promoting the bank, naturally had grand strategic ambitions.

But the Ministry of Revenue, as the executive agency, under the crushing weight of financial pressure, instinctively leaned toward solutions that brought in money quickly and required less effort.

This was the inevitable result of the two sides' objectives not yet being aligned, pulling and tearing at each other.

One link hooked into the next, leading to today's debate on "whether to force through official notes" and "whether to follow the pawnshop precedent." Yang Sichang finally let out a long, heavy breath and stood up:

"You've convinced me."

"Let's go, we have a meeting with the Ministry of Revenue."

"This time I'll stand with you. Together, we'll push back against this shortsighted proposal from the Ministry of Revenue."

Wu Cheng'en was overjoyed. He rose as well and offered a deep, cupped-hand salute:

"Many thanks for your support, Brother Wenruo."

Yang Sichang looked at Wu Cheng'en, then suddenly smiled, his tone carrying a hint of complex emotion:

"I spent too long idling in the Ministry of Revenue in the past. When I think about matters, sometimes I still tend to lean toward a top-down approach."

"But when it comes to the real ins and outs of the bottom rung, in the end, you still understand merchants better than I do."

Wu Cheng'en smiled, treating it as if he hadn't caught the note of superiority in that remark, and didn't pick up the thread.

He simply extended a hand in a gesture of invitation:

"Let's go, Brother Wenruo. We mustn't miss the hour."

This small meeting in the document-signing room was, in truth, merely a tiny microcosm of the great financial storm that had been battering the Great Ming these past two months.

Over these two months, the Ministry of Revenue, driven half-mad by the colossal budget proposal, had exerted itself to the utmost, exhausting every trick it had.

They tried to unite every force that could be united, while simultaneously, without the slightest hesitation, dragging any passerby down into the water with them.

Guo Yunhou and the officials of the Ministry of Revenue worked until their eyes were bloodshot, striving to use the strength of every department and bureau to plug the enormous fiscal gap of the first year of the Yongchang reign. Day after day was ground away.

On this day… the final draft that the Ministry of Revenue ultimately submitted was at last approved with a nod by the Yongchang Emperor, and formally entered the process of presentation and voting.

Delayed by nearly a month from the scheduled time, the "Fiscal Budget Conference for the First Year of Yongchang" was finally about to raise its curtain.

The great doors of Wuying Hall, after the foreign policy and national strategy conference, opened once more.

Zhu Youjian, dressed in plain robes, took his seat upon the imperial throne.

His gaze swept a circle around the hall, and he spoke directly:

"Begin."

Minister of Revenue Guo Yunhou drew a deep breath.

This great steward of the Great Ming, his eye sockets deeply sunken at this moment, his face full of exhaustion, yet held his frame ramrod straight.

He rose to his feet and strode to the side of the great hall, before an enormous screen.

"This subject, Guo Yunhou, today on behalf of the Ministry of Revenue, presents to Your Majesty and all my assembled colleagues the fiscal budget report for the first year of Yongchang."

"At this present juncture, the situation of our Great Ming is already vastly different from that of the Wanli era."

"In those days, the barbarians on all four borders submitted. Though the state suffered occasional upheavals, it was still relatively stable."

"For that reason, the 'Wanli Accounting Records' of that year could be compiled at a leisurely pace, with the entire realm, starting from the surveying of fields, slowly clarifying the fiscal and tax situation nationwide." "But at this day and hour, after the upheaval east of the Liao, the circumstances are no longer the same."

Guo Yunhou abruptly intensified his tone:

"The greatest of the dynasty's expenditures is none other than the frontier stipends! The most critical matter is none other than the frontier stipends! The most desperately lacking is also none other than the frontier stipends!"

"Therefore, by Your Majesty's instruction, the many institutional reforms and audits of the Ministry of Revenue in the first year of Yongchang shall all begin by taking the knife to the frontier stipends! And from there extend all the way to the totality of taxes and corvée labor across the entire realm."

Inside the great hall, not a sound was heard; only Guo Yunhou's voice echoed.

"But this matter of the frontier stipends is tangled and complex beyond measure."

"If categorized by the use of the stipend silver, it can be divided into old stipends and new stipends."

"Under the old and new stipends, they are broadly divided again into main army stipends and guest army stipends; the detailed line items are even more numerous, including monthly grain, march rations, army horses, garrison forts, military equipment, seagoing vessels, and other items."

"If categorized by the source of the stipend silver, it is even more bewilderingly varied." "There is that transported by civilian corvée, that transported from the capital, that from the kaizhong grain-for-salt system, that produced by military farmland, and also salt-price silver, surplus-salt silver, horse-price silver from the Court of the Imperial Stud, and so on."

The more Guo Yunhou spoke, the tighter his brow furrowed.

"So many accounts, in utter chaos!"

"Some belong to the localities, some to the Ministry of War, some are at the Court of the Imperial Stud, some at the Ministry of Revenue. Over these several decades, no one has been able to see the full picture at all!" "Therefore, the very beginning of this budget must first establish a template that surveys the entire situation and unifies the upper and lower levels, to serve as a starting point."

Guo Yunhou paused, and pointed at the screen:

"And after repeated discussions between our Ministry of Revenue and the Secretariat, the first target selected is precisely the garrison of Xuanfu!"

Quite a few officials below nodded slightly.

Everyone was intelligent, and immediately understood why Xuanfu had been chosen.

First, Xuanfu is close to the capital, making the back-and-forth of auditing accounts convenient.

Second, what borders Xuanfu beyond the passes is the Tumed tribe. This Mongol tribe is now weak and docile, posing no great pressure of border incursions.

Third, Xuanfu's trade is highly developed, and its officers and soldiers mostly rely on smuggling for profit; their own combat effectiveness is feeble.

To put it bluntly, Xuanfu is a soft persimmon.

Even if the auditing of accounts drives them to desperation, this bunch couldn't stir up any mutiny.

Compared to the unruly Song barbarians and Tao barbarians of Shaanxi, or the insufferably arrogant Kharchin tribe at the Ji Garrison, Xuanfu, at this moment, is the most capable of withstanding upheaval.

Of course…

The best choice would be Ji-Liao, since that area concentrates the absolute majority of the court's attention.

But the audit of stipends in Ji-Liao started too late; the Ministry of Revenue simply could not wait that long, and so had no choice but to act alone and first use Xuanfu for practice. At this point, Guo Yunhou's line of argument suddenly shifted:

"However…"

"This subject must state clearly that the Ministry of Revenue has not, at present, conducted an on-site audit of stipends in Xuanfu."

"What we rely upon today is entirely the original account books reported by the locality and preserved by the various ministries."

"How much in these account books is false, and how much is true, the Ministry of Revenue truly cannot guarantee."

"On this item, we can only await the subsequent dispatch of personnel to conduct on-site stipend audits before making a final report."

Guo Yunhou first laid down a thick layer of armor for himself, and only then turned his head to signal the young eunuch beside him, who turned over the first page on the screen. An enormous table was revealed before the assembled ministers.

"Xuanfu Garrison: book-strength of troops — seventy-nine thousand two hundred fifty-eight men; horses — thirty-three thousand one hundred forty-seven head."

"In the past, the annual routine stipend sum transported from the capital through the Ministry of Revenue alone was two hundred ninety-nine thousand taels."

Guo Yunhou drew a deep breath, and announced a figure:

"But after over a month of meticulous checking and verification by the Ministry of Revenue, consolidating and converting all the items just mentioned — civilian transport, military farmland, and the rest — the total expenditure in silver equivalent for the Xuanfu Garrison is, in actual fact—"

"One million four hundred twenty-three thousand taels!"

The words fell.

Throughout the great hall, a slight stir immediately arose.

The core officials who had participated in the early small-scope discussions were all right, but newcomers like Wu Cheng'en, attending such a national-scale, large-ledger conference for the first time, could not help but let out low exclamations of shock.

Two hundred ninety thousand, and one million four hundred twenty-three thousand.

The gap in between was so enormous it made one's heart tremble with fear!

And Zhu Youjian, seated upon the imperial throne, watched the reactions of the officials below; inwardly, he merely sighed softly.

The account books of the Ming dynasty, handed down from the in-kind tax system of the Hongwu era, had been continuously patched and had clauses tacked on along the way to adapt to changing realities, yet they could never fully adapt to reality.

This led, in the end, to the entire fiscal and tax system of the Great Ming turning completely into a colossal "spaghetti-code legacy dump."

And the way the high officials handled it in the meantime was exactly the same as those programmers in later generations who took over old projects.

If it runs, whatever you do, don't touch it!

Whoever touches it dies.

If touching it produces a bug, are you going to take responsibility, or am I? We can't exactly expect the boss — His Majesty — to take responsibility, can we?

Those who truly set their hands to reform usually only did so when they had reached the point where they had no choice, where not reforming meant death.

Therefore, many of the officials present today who had never personally managed border pay had, in all truth, seen the true bottom line and full picture of border pay for the first time in their lives. Guo Yunhou paid no heed to the stirring in the hall. He picked up the wooden pointer resting in the groove of the screen, pointed at the table upon it, and stated item by item: "Within this, military pay is divided into main troops and guest troops."

"Main troop provisions and pay are the regular monthly grain. Guest troop provisions and pay are the marching rations expended by Xuanfu to deal with the spring and autumn defense postings."

— The spring and autumn defense postings were the expenses for border garrisons guarding the frontiers, or for long-distance assignments entering the capital to serve as guards, which were precisely the so-called "marching rations," different from the fixed wages of "monthly grain."

"Let us first address the main troops." "The first item within is the capital transport silver, totaling two hundred and four thousand nine hundred taels."

"Of this, one hundred and twenty-eight thousand taels are directly allocated from the the the Taicang treasury treasury treasury vault."

"The remaining seventy-seven thousand taels come from the salt administration transport offices of Hedong, Changlu, and Shandong, who sell off salt certificates and convert them into silver for delivery."

The so-called salt-price silver meant that, because of their geographical locations, merchants disliked coming to certain salt fields to collect salt, let alone transporting grain to the frontier in order to obtain the salt from these fields.

Therefore, the salt certificates for these places were usually directly sold off at a converted price — you could get them just by paying money — which was precisely the so-called salt-price silver.

The salt fields of Shandong, Hedong — that is, Shanxi — and parts of Changlu fell into this category.

By contrast, salt fields like those of Lianghuai and Liangzhe, with their dense networks of waterways and well-developed river transport, had salt that was in extremely high demand; one had to deliver grain under the kaizhong system and obtain a receipt and warehouse scrip before one could exchange them for salt certificates.

(From this angle, it also serves as evidence that north-south maritime transport at this time was indeed quite undeveloped, since even the coastal salt fields of Shandong were looked down upon.) Guo Yunhou continued:

"The second item: its source is the kaizhong salt certificates of Lianghuai and Changlu. Of these, Lianghuai salt certificates number ninety-seven thousand yin, and Changlu salt certificates number forty-seven thousand five hundred and twenty-five yin."

"Calculated at a conversion of 0.5 taels per yin for Lianghuai and 0.2 taels per yin for Changlu, the total for this item is estimated at fifty-eight thousand two hundred taels." For this type of direct kaizhong salt certificate, by law, merchants absolutely had to actually transport grain to the border garrisons before they could purchase them.

However... with the deterioration of border administration, whether they transported much or little was exceedingly hard to say.

Zhu Youjian had seen some case files.

Some border commanders, taking a mere hundred dan of grain, would circulate and resell it between the military garrison and the merchants, directly pulling off a swindle and exchanging it for several salt certificates in return.

Not to mention, the amount of grain to which a single salt certificate actually corresponded — that figure, too, was frequently manipulated at every level.

Guo Yunhou continued reading:

"The third item is the civilian transport silver. It comes primarily from Shanxi province itself, Shuntian Prefecture in Northern Zhili, Baoding Prefecture, Yanqing Subprefecture, and Bao'an Subprefecture."

"At present, this item is entirely collected in commuted silver, totaling seven hundred and eighty-four thousand five hundred taels. It is the largest source on the account books for Xuanfu's military pay."

Guo Yunhou paused briefly, but did not speak the second half of the sentence.

To say it was the largest source was also to say it was the most wretched source.

The objective of today's meeting was to set the budget framework, not to assign blame for local governance.

So Guo Yunhou did not elaborate.

In fact, in the account books for the seventh year of Tianqi that they had audited, the actual collection rate for this civilian transport silver, which constituted the bulk, no longer even reached seventy percent. "The fourth item is the military farmland of the Regional Military Commission. The grain in kind and the commuted silver together total one hundred and seventy-eight thousand taels."

"Of this, the grain in kind is one hundred and thirty-seven thousand dan; calculated into silver after adding the surcharge for transport costs, it amounts to one hundred and fifty-four thousand six hundred taels. The portion collected directly as commuted silver is twenty-three thousand taels."

The state of the military farmland was, in truth, even more wretched than the civilian transport silver.

The civilian transport silver could at least still be collected at seventy percent; the levies from military farmland often did not even reach fifty percent.

This is not to say that the local military farmland had all fallen into waste.

In fact, endless corrupt practices abounded — military garrison fields being privately rented out by commanders, military garrison fields being concealed and converted into civilian fields — and the great bulk of these fields continued to produce grain.

It was just that they no longer contributed to the Great Ming's fiscal and tax system.

To say nothing of others... Sun Chuanting had even specially written a letter back home to warn his own clan to clean up their landholdings quickly, lest they implicate him.

This was also why, at a time when the kaizhong system was gradually collapsing, the military pay the court dispatched to the border garrisons was still mostly in silver.

This was because, in the local border garrison markets, grain was still available for purchase.

It was just that this balance between grain supply and consumption was growing ever more fragile, and could hardly withstand the risk of a truly major disaster.

Guo Yunhou finally tapped the last two rows of the table with his wooden pointer:

"Lastly, the guest troops item is relatively simple."

"Within it, the the the Taicang treasury treasury capital transport silver is one hundred and seventy-one thousand taels. The Lianghuai and Changlu kaizhong salt certificates total seventy thousand yin, converted to twenty-seven thousand taels."

"The two added together total one hundred and ninety-seven thousand six hundred taels."

(See attached chart: the approximate total grain and pay amount for the single garrison of Xuanfu in the seventh year of Tianqi; in fact, by the first year of Chongzhen, it had increased by yet another hundred thousand-odd taels.) Having reported all the data in one breath, Guo Yunhou set down the wooden pointer, turned around, faced the imperial throne, and bowed deeply with clasped hands.

Guo Yunhou set down the wooden pointer, turned around, faced the imperial throne, and delivered his final summary:

"Since the beginning of the audit, Your Majesty has given constant personal guidance, pointing the way forward on many occasions."

(Budget Proposal for the First Year of Yongchang, Version 9 — a like for this.)

"Only thus was the Ministry of Revenue able to coordinate across multiple parties, continuously refining a host of complex accounts and merging them into a single whole."

"Coupled with the exhaustive efforts of colleagues from all sides, rising early and retiring late, checking every fraction, we have at last been able to glimpse the full picture of these border garrison accounts." Guo Yunhou clasped his hands deeply and bowed low:

"This subject humbly beseeches Your Majesty to take these Xuanfu account books as a template and extend them to the nine border garrisons of the Great Ming and the six northern provinces."

"And to issue strict orders to every prefecture, subprefecture, and county, and to every border garrison, to urgently submit their account books, and to govern them by performance evaluation."

"Given a period of one year, the Ministry of Revenue will be able to lay all of North China before Your Majesty's eyes, as if in the palm of your hand."