Chapter 1131: To Fight a War, First Raise Money (Please Subscribe)

Old Mountain, Tangquan Town, the Executive and Deliberative Office of the United States of Xinzhou.

The main building of this office was likewise a half-Chinese, half-Western edifice, four stories high, fifty or sixty zhang long, and eleven or twelve zhang wide, imposing beyond compare. It had originally been intended as the headquarters of the Royal Chamber of Commerce, but when construction was finished, the United States of Xinzhou had just opened for business and needed a grand and dignified building for its headquarters, so this building was rented and hung with the union's golden signboard — a genuinely gold-wrapped signboard; at a glance it radiated strength!

The executive government and the deliberative assembly of the United States of Xinzhou were now both housed inside, hence the name Executive and Deliberative Office.

In the great assembly hall of this Executive and Deliberative Office, a shareholders' meeting was being convened at this moment — no, it should be called a deliberative assembly.

The assemblymen in attendance were all extraordinary figures, either ennobled meritorious officials or the wealthiest men of the southeast. The nobles wore python robes and black gauze caps, their bearing lofty and proud, needless to say. There were also assemblymen from the great cities of Shanghai, Nanjing, Suzhou, Yangzhou, Quanzhou, Guangzhou, and Ningbo, every one of them a magnate of his region, each with a private fortune of a million taels, all dressed in the great red official robes and black gauze official caps bestowed by the Emperor. Nobles and great merchants ought by rights to have been two classes as distinct as noble and base; whatever secret collusion went on in private was one thing, but on the surface they should never have sat down openly under one roof in separate seats — before a company of nobles, where was there a seat for a great magnate?

Yet Zhu Cilang had gone and created just such a union that recognized money and not persons, letting a crowd of dukes, marquises, earls, and viscounts sit happily together in council with a band of million- and ten-million-tael magnates. A few years earlier, no one would have believed such a thing possible, but Emperor Zhu could actually pull it off — truly one could not help but admire him.

And Zhu Cilang's method, when spelled out, was simple: he ran two rounds of "venture capital," the first for the nobles, the second for the great magnates.

The union shares the nobles now held were all discounted — not by twenty or ten percent, but directly by ninety percent!

One million taels for one large share; first fifty thousand taels were paid, then another fifty thousand, altogether only one hundred thousand taels. Including the thirty large shares subscribed by Emperor Zhu himself, the union had issued a total of one hundred large shares, with actual funds raised of only ten million taels.

After this ten million taels had arrived, Zhu Cilang presided over the convening of the union's deliberative assembly, which passed a resolution converting the "large shares" in the nobles' hands into non-transferable special shares (inheritable, but not transferable). Then came a one-for-ten split, each large share being split into ten special shares.

At the same time it was stipulated that shareholders holding these "special shares with unpaid capital" could defer payment of all the capital due for fifty years!

After this, the union began raising funds for special shares requiring full payment of the subscription price (likewise inheritable but not transferable), at one hundred thousand taels per share, raising a total of one hundred shares and ten million taels.

And the targets of this round of fundraising were not limited to nobles; anyone who could produce one hundred thousand taels of silver was eligible.

One hundred thousand taels was no small sum!

Although the Great Ming now had many rich men, no one's money was blown in by the wind, and it was no easy matter to rope that money in.

Fortunately, Zhu Cilang was a senior expert in the money-raising trade — his old profession! How could he not be familiar with it?

And Emperor Zhu's method was also quite creative. He did not use the high premiums of a secondary market to raise money — what liquidity could a stock worth one hundred thousand taels a share have? Emperor Zhu set such a face value on union shares precisely because he hoped investors would hold them long-term and participate in the union's construction and development. So Zhu Cilang's method was to attach several special rights to the union's special shares.

First, holding one special share conferred a union barony; holding three shares conferred a union viscountcy; holding five shares conferred a union earldom; holding ten shares conferred a union marquisate. Each title came with a grant of land.

Of course, these titles and lands could not be redeemed immediately, but only after the union's Executive and Deliberative Assembly and its king had all moved to the Prefecture of America. But before redemption, anyone holding one union special share (for special shares with unpaid capital, only every ten shares could recommend one assemblyman) could possess a seat in the union's deliberative assembly and a union noble title.

Second, since the kingship of the union was currently held concurrently by Zhu Cilang, the magnates holding shares obtained the right to "audience with the sovereign" and to "submit memorials."

These two rights were not to be underestimated. Zhu Cilang did not much like summoning petty officials; civil officials below the sixth rank were not even qualified to attend the grand court audience. Although in theory they could request an audience, in practice they basically could not see the Emperor.

Officials with the "right to submit memorials" were somewhat more numerous; in theory any official could submit a memorial, but except for the very few officials with the right of secret memorials, all other officials' memorials were forwarded by the Office of Transmission to the relevant bureaus. If a bureau deemed it necessary to pass one upward, it would be sent to the Grand Secretariat, the Grand Marshal's Office, the Censorate, the Palace Office, the Imperial Academy, and other offices with the right of audience and memorial, and then forwarded to Emperor Zhu.

But the assemblymen of the union's deliberative assembly, like the assemblymen of the Great Ming's deliberative assembly, possessed the right of audience and memorial!

Of course, this right of audience and memorial was not unlimited; it required a certain number of assemblymen to sign jointly, and there was an overall quota, because Zhu Cilang did not like reading too many memorials either.

Third, magnates holding seats in the union's deliberative assembly also had the right to recommend talented scholars for admission to schools (assemblymen of the Great Ming's deliberative assembly had the same right). They could recommend a certain number of "talented scholars" for admission to the Great Ming's best primary schools, middle schools, and universities!

Of course, in recommending the worthy one need not avoid one's own kin! Recommending one's own sons and grandsons for admission was also permissible. However, the quotas were limited, so please recommend with care!

With these three great attached rights, was one hundred thousand taels of silver still a problem?

What one hundred thousand taels of silver bought was not shares, but a ticket into the Great Ming's top circle of power and privilege!

Once inside this circle, one might perhaps be bullied by the truly top-ranking powerholders, but the petty local officials would no longer dare provoke you.

Moreover, Zhu Cilang's credibility was very high; he had always done what he said and was relatively reasonable, so the magnates who paid for their tickets did not worry about being slaughtered like fat pigs by him.

As for the true powerholders, their contempt for the one hundred "newcomers" who had squeezed in was certain, but they would not go so far as to kick them out. Because this union was still burning money, and it had to rely on the Great Ming's magnates to keep contributing funds for the union to continue operating.

If they were kicked aside, the union's business would collapse — these powerholders all had worthless profligate sons at home waiting for the union's titles and lands!

And the matter to be discussed at today's deliberative assembly was the continued raising of money!

The chief executive of the union's executive government was Zheng Zhilong's nephew Zheng Cai, who in a Minnan-accented Mandarin laid out the budget for reinforcing the Prefecture of America to everyone, and then proposed the third-phase share issuance plan.

What was to be raised this time were common shares with a face value of one thousand taels, with a planned issuance of thirty thousand shares — that is, thirty million taels to be roped in!

The rights of a common share were equivalent to one percent of a special share — that is, one hundred common shares equaled one special share. Unlike the special shares, which were inheritable but not transferable, these common shares could be bought and sold on the market.

However, common shares did not carry the "special rights"; shareholders holding common shares could not directly enter the deliberative assembly, had no union noble titles, and could not recommend talented scholars for school admission.

Of course, the union would also reward common shareholders, in two ways: first, by paying land to redeem the shares; second, by paying a fixed dividend.

A union common share with a face value of one thousand taels could be exchanged within the territory of the Republic of Xinzhou for one thousand mu of arable land in flat areas or three thousand mu of pastureland. After obtaining arable land or pastureland by virtue of the stock, one could also receive a five-year tax exemption (referring to the land tax).

If shareholders holding union common shares were unwilling to exchange them for land, then beginning in the fifteenth year of Hongxing, they could receive from the union's executive government a fixed annual dividend of sixty taels per share. The return was not especially generous, roughly comparable to the interest on feudal bonds.

(End of Chapter)