Chapter 1134: The Stock Prince Zhu Cihuan (Please Subscribe)

"Doubled? Then wouldn't twenty thousand taels become forty thousand?" The Retired Emperor Chongzhen was taken aback — was silver falling from the sky?

"Right! Right!" Zhu Cihuan nodded repeatedly.

Chongzhen said, "Sell it at once!"

"Already sold — sold right at the opening." Zhu Cihuan said with a smile. "After deducting commission, transaction tax, and interest on the borrowed money, there's still a profit of nineteen thousand taels."

"Good, good, good — Huan'er has finally learned to make money! By the way," the Retired Emperor Chongzhen now remembered Zhu Cijiong and Zhu Cizhao, "Cijiong, Cizhao, did you two buy any of this — what was it — stock?"

"We did," Zhu Cijiong nodded. "This son of yours subscribed to 20 shares when the United States common stock was first offered, and the day before yesterday, when the United States stock was listed in Shanghai, I bought another 80 shares."

Zhu Cizhao also nodded: "This son of yours did the same as Third Brother — subscribed to 20 shares, then bought 80 more at listing, so I now hold 100 shares in total."

"What?" The Retired Emperor Chongzhen was stunned. "When it was cheap, why didn't you buy more? Why wait until the price had risen?"

Zhu Cijiong said, "Imperial Father may not know this, but this United States common stock was not sold openly. This son of yours could only get 20 shares; no more were available."

Zhu Cizhao added, "Right, this son of yours could only get that many too."

Zhu Cixuan, who was trailing behind Zhu Cizhao, also said, "Imperial Father, this son of yours also received 20 shares, but after listing I neither bought more nor sold."

It turned out that the allotment of 20 shares of United States common stock was a benefit given to the princes — everyone received it.

"Cijiong, Cizhao, why did you still buy the more expensive United States stock?" The Retired Emperor Chongzhen still did not understand; he knew nothing about stock trading, nor about investing!

Zhu Cijiong smiled: "Imperial Father, this son of yours wants to open a mule and horse ranch in the America Prefecture and needs to buy land, so I rounded it out to a neat number — 100 shares of United States stock can be exchanged for thirty thousand mu of pastureland, enough to run a medium-sized mule and horse ranch."

Zhu Cilang, standing nearby, heard his brother say this and nodded lightly in approval — the New Continent Republic's demand for mules and horses was practically limitless, so the Prince of Dai's investment could not lose.

Moreover, this prince had chosen the right path by investing heavily in raising plow horses and mules: he held vast pastureland, had men skilled in horse-raising, was close to North China and the Northeast where large farms abounded, and could obtain Percheron breeding stock from his good elder brother (Zhu Cilang). Thus the "Loan Prince" had now become the "Horse Prince."

"Zhao'er, why did you buy?" The Retired Emperor Chongzhen then asked Zhu Cizhao.

"Ah, this son of yours doesn't understand such things." Zhu Cizhao waved a hand and laughed. "It was all arranged by my stock broker, Yao Daqiao."

"Stock broker?" Chongzhen asked curiously. "What does such a person do?"

Zhu Cizhao explained: "He is a merchant who helps clients buy and sell stocks. This son of yours lost schooling in youth, is indolent by nature, and knows nothing, so I could only entrust matters to others. This Yao Daqiao was originally a rice merchant in the Huguang region; because he lived through chaotic times, he went south to the Southern Seas to make a living. I took him into service as an official merchant, and he traveled between Siam, Jinghai, Guangfu, Quanzhou, and Shanghai, trading in timber, ivory, and the like — quite capable."

"Later, when stock and bond trading in Shanghai flourished, he proposed opening a stock brokerage and asked to take the idle money in my hands to Shanghai to breed small profits."

Zhu Cizhao was in truth a hands-off master; the one truly in charge was his consort, Qiu Mengmei. And Qiu Mengmei, being a woman, naturally could not attend to everything personally, so her talent lay in choosing the right people.

Chongzhen asked, "So has this broker surnamed Yao made money in Shanghai?"

"He has," Zhu Cizhao nodded repeatedly. "Over these years he has made quite a lot! All told, it must be two or three hundred thousand taels!"

That much! Zhu Cihuan's eyes instantly went red!

"Does he think United States stock can still rise?" the Commandery Prince of Chongqing hastily interjected.

"It can!" Zhu Cizhao said. "He's not the only one bullish — under him there's a whole group of junior brokers, and all of them are bullish. It can rise at least another two thousand!"

"Another two thousand? That would be..."

Zhu Cizhao laughed: "That would be four thousand taels!"

Sold too early?

Zhu Cihuan's heart gave a thump, and he thought to himself: I must find this Yao Daqiao fellow later and seek his advice...

Chongzhen was half-doubting, half-believing, and turned his gaze toward Zhu Cilang — he had heard that he was the richest man in the Great Ming, so surely he understood stocks?

"Cilang, what do you think?" Chongzhen asked.

"This son of yours cannot see it clearly," Zhu Cilang shook his head. "This son of yours is occupied with ten thousand affairs of state each day; where would I find the time to attend to the buying and selling of stocks and bonds? Besides, these are matters for merchants — the court merely collects taxes and supervises, and asks nothing further."

The princely debt storm of years past was not the end of the Great Ming's capital market, but a beginning!

Although many people lost money speculating in princely debt, after that storm the Great Ming's capital market still developed — only the trading center was no longer Wuhan, but had shifted to Shanghai, where great merchants gathered.

And to protect small and medium investors, Zhu Cilang had raised the face value of stocks and bonds through legislation — the minimum face value of a stock was 1,000 taels of silver, while the minimum face value of a bond was 100 taels of silver.

This was how one protected small and medium investors: according to Zhu Cilang's many years of professional experience in his previous life, small and medium investors had a very high probability of losing money in the securities market, so excluding them was the best protection of all.

Although small and medium investors were excluded from stock trading by the high face values, securities trading in Shanghai, Nanjing, and elsewhere still gradually became active.

First, land certificates had their run of popularity — land certificates could not exclude small and medium investors, and besides, how land caught the eye!

The Industrial Revolution had not yet begun; the Great Ming's capitalism was still in the handicraft workshop stage, and many artisans had not yet forgotten pastoral life, always thinking of the day they might return to the fields.

After the land certificate craze passed, stock trading also gradually became active. This was because, with small and medium investors excluded, the primary stock market became favorable to investors — with no "leeks" left to harvest, big investors became meticulous, hoping that the merchant houses issuing stock could provide sufficient returns. Those big investors all had piercing eyes, so merchant houses that were not of sufficient quality found it very difficult to raise funds from the Great Ming's stock market.

And the merchant houses that could raise funds often gave investors decent returns. Thus, over the many years past, most stock prices had risen continuously.

Otherwise, how could that Yao Daqiao — who had speculated in princely debt and lost everything but half a street — have made money for Zhu Cizhao? It was not that he was so capable, but that the market's overall trend was upward!

And although United States stock was very special — it was not stock in the true sense, but a combination of bond and land certificate — its investment value was still plain to see: it was equivalent to one tael of silver for one mu of land!

For Europeans it meant little; their population was small, and they occupied most of the land in the Americas. But for the more than one hundred million people of the Great Ming, land was worth a great deal of money!

So even if United States stock doubled, reaching two taels of silver per mu, it was still good value.

As for rising to four thousand taels a share, that would be equivalent to four taels of silver per mu of land... that did seem a bit expensive!

But Zhu Cihuan had not thought that far; he was merely regretting having sold his stock too early!

And through Zhu Cizhao's introduction, Zhu Cihuan had also gained a better understanding of stock trading — he now knew about stock brokerages and stock brokers, and knew that there were actually many kinds of stocks listed on the Shanghai Exchange. He had not known any of this before; he had merely subscribed to 20 shares of United States stock through the Maritime Trading Company (which also held a stock brokerage license), and at the time of subscription, on the advice of the Maritime Trading Company's broker, he had filled out a sell order. So as soon as United States stock was listed, the Maritime Trading Company's broker at the Shanghai Exchange sold it off for him, and then sent him a "transaction notice" by express courier — only then did he learn that he had made more than nineteen thousand taels.

Had he not encountered this good brother Zhu Cizhao, Zhu Cihuan's connection with stocks would have ended there. But now, Zhu Cihuan's heart was stirred!

(End of Chapter)