Chapter 1145: Your Highness, Run—I'll Cover You

"Your Highness! Your Highness!"

Footsteps sounded, and with them came a somewhat familiar voice. Zhu Cihuan, who had been sitting blankly in his study worrying, suddenly raised his eyes and saw the door of his study being pushed open. A short, stocky man dressed as a scholar had already appeared outside the door.

The man was about twenty-five or twenty-six years old, with a particularly solemn square face, already sporting a beard, and eyes that gleamed with spirit—he looked like a person of consequence. In fact, he did indeed have some background: he was Luo Zhichen, the eldest son of Luo Dagong, the Minister of Foreign Affairs. Luo Zhichen and Zhu Cihuan had been middle-school classmates. Luo Zhichen studied hard and had a good mind, and after graduating from middle school he had passed the examination for the economics department of Nanjing University. The so-called economics department was actually the line of finance, banking, and accounting. After graduating, Luo Zhichen returned to his hometown of Shanghai to sit the official examinations, and by the time Zhu Cihuan came to Shanghai to start his business, he was already the deputy chief accountant of the Shanghai Prefecture Tax Office.

The work of the Tax Office accountants was to audit the books of commercial firms within their jurisdiction that paid ad valorem commercial taxes—at present, the Ming dynasty's local commercial tax collection methods were divided into two types: contract taxes and ad valorem taxes.

The firms that paid contract taxes were mostly in retail and service industries—businesses that did not need to issue invoices to customers and did not need to move funds through banks or money houses. Such businesses were hard to audit by volume, so a one-size-fits-all contract tax was simply set according to the size of the business premises or the size of the operating equipment (vehicles, boats).

Those that paid ad valorem taxes were mostly industries that, in the course of their operations, had to issue invoices and move funds through banks and money houses—according to the current Commercial Law and Tax Law, whenever bulk goods had to pass customs, whether through maritime customs or inland tax barriers, they were required to produce invoices uniformly printed by the Ministry of Revenue. After the customs tax officers checked the invoices against the goods, they would collect the transit tax based on the amount on the invoice.

If goods had no invoice (having no invoice did not necessarily mean tax evasion), then when passing through customs and tax barriers they had to be truthfully reported, and the tax officers at the barrier would issue a barrier invoice and additionally levy an invoicing tax.

All firms paying ad valorem taxes were required to retain large numbers of invoices and receipts, and to prepare running accounts according to the requirements of the Commercial Law and Tax Law, ready at all times to withstand inspection by the accountants of the various local tax offices.

And although Zhu Cihuan's stock brokerage did not need to pass through customs tax barriers, all of its capital movements had to go through banks and money houses—a stock brokerage could not absorb deposits, and clients' margin funds were all managed by designated banks and money houses. The stocks held by the brokerage also had to be deposited with the exchange. Only when a client needed to collect a certificate could a stock broker, bearing an application letter signed and sealed by the client, go to the exchange to collect the stock certificate—that is, stocks that looked just like silver notes, one by one.

Therefore, the accounts of a stock brokerage were generally very clear, and it could be subject to ad valorem taxation—naturally, it was an object of audit by the local tax office accountants.

Because of this matter of auditing accounts, Luo Zhichen had renewed his acquaintance with Zhu Cihuan, whom he had not seen for many years, and they had even become good friends for a time.

The reason it was only "for a time" was that Luo Zhichen had fallen out with Zhu Cihuan more than two months earlier. The reason for the falling-out was that the accountants under Luo Zhichen had discovered that Zhu Cihuan's Chongqing Stock Brokerage was making irregular loans to clients—this was a violation of the Securities Law!

Of course, Luo Zhichen was the deputy chief accountant of the Tax Office, not the deputy chief accountant of the Shanghai Exchange (the Great Ming still had no securities regulatory commission, so the exchange itself bore the functions of supervision and punishment), so he could have ignored this matter that was none of his business. But he was "an upright official," so he first solemnly pointed out the problems at the Chongqing brokerage to Zhu Cihuan, and then demanded that Zhu Cihuan immediately rectify them.

After Zhu Cihuan refused to rectify the situation, he very unfriendlily reported the Chongqing brokerage to the exchange, causing the Chongqing brokerage to be fined by the exchange and to face further review. If the review failed, the Chongqing brokerage would lose its qualification as a member firm of the exchange!

In the end, because the Chongqing brokerage's accounts were too chaotic, and Zhu Cihuan was very uncooperative, the exchange's accountants were also having a headache. Before they had time to finish the audit, the stock market crashed!

If the exchange's accountants had audited a little faster and revoked the Chongqing Stock Brokerage's membership early on, Zhu Cihuan might have been left with a family fortune of over a hundred thousand taels. At the very least, he could have preserved the Retired Emperor's retirement money!

Now it was a disaster. Most of the loans the Chongqing Stock Brokerage had made to clients could not be recovered! This loss alone was enough to bankrupt Zhu Cihuan completely.

Seeing Luo Zhichen, Zhu Cihuan remembered his warning from more than two months ago. If only he had listened to him then—how could it have come to this?

"Zhicheng (Luo Zhichen's courtesy name), my friend, I—I am finished." As Zhu Cihuan said this, his tears could no longer be held back.

Seeing Zhu Cihuan like this, Luo Zhichen grew anxious too. He stamped his foot and said, "Your Highness, why are you still at home?"

"I—if I'm not at home, where can I go?" Zhu Cihuan asked blankly.

He could no longer deal with the mess at the Chongqing Stock Brokerage—the money owed to the money houses, plus a huge pile of guaranteed-return agreements (the brokerage could manage assets on behalf of clients)—the Chongqing brokerage owed at least a million that it could not repay!

"You—you—you—" Luo Zhichen was so angry at this foolish prince that he could barely speak. "You have to flee!"

"Flee?" Zhu Cihuan stared wide-eyed. "Why?"

Right—he hadn't heard that the roving bandits were coming!

"Because you signed guarantees!" Luo Zhichen said. "Guarantees aren't something you sign casually. All the debts the Chongqing brokerage can't repay will fall on you. Can you bear that?"

"I—I—I—I'm a Commandery Prince!" Zhu Cihuan hardened his heart and gritted his teeth. "I just won't pay. What can they do to me? My third brother didn't pay his debts back then, and those creditors didn't do anything to him either!"

"You—" Luo Zhichen was frantic. This prince had lost his mind! How could he compare himself to the "Loan Prince"? The "Loan Prince" had an army, and those creditors never pressed for repayment at all—those were debts in name but equity in substance. As long as Zhu Cijiong could carve out a position for himself, those creditors would become meritorious officials. Why would they worry about not making their money back?

"Don't say anything else," Luo Zhichen said, no longer wasting words on Zhu Cihuan. "Pack up quickly and leave at once! If you don't leave now... His Highness the Prince of Lu will be coming to arrest you!"

The Prince of Lu, Zhu Yihai, had not become the master of a frontier command like the Prince of Tang, Zhu Yujian, but Zhu Cilang had not shortchanged him either: he had given him the meritorious title "Overcoming Hardship" and had him succeed the deceased Zhu Yousong as the Director of the Imperial Clan, in charge of the Grand Court of the Imperial Clan.

And this Grand Court of the Imperial Clan had judicial authority: whenever anyone registered in the imperial clan rolls committed a crime, they were to be detained and arrested by the Grand Court of the Imperial Clan, which also participated in the trial.

Of course, after Zhu Cilang reformed the imperial clan system, the size of the imperial clan had been greatly reduced. Not everyone whose name was in the jade registers was a member of the imperial clan. Only those who themselves or whose fathers held a noble title could be registered in the clan genealogy and count as members of the Great Ming imperial clan. Otherwise, they could only be listed in the jade registers (the family genealogy) without clan registration, and could only be considered distant relatives of the Emperor, with essentially no special privileges.

"The Prince of Lu is coming to arrest me?" Zhu Cihuan panicked at once. "Wh—why?"

"Why?" Luo Zhichen was angered into laughter. "You've gambled away all of the Retired Emperor's retirement money!"

He was actually trying to scare Zhu Cihuan, because the Chongzhen Code (the criminal law) contained no crime of "fleecing one's father." If a son lost his father's money, the yamen would not intervene—but failing to repay debts above a certain amount could incur criminal liability!

Once the Chongqing brokerage collapsed, all of Zhu Cihuan's muddled guarantees became his debts! As soon as the creditors filed suit, he would face criminal liability. And the Prince of Lu, Zhu Yihai, had come to Shanghai on Zhu Cilang's orders precisely to scare Zhu Cihuan.

That's right—just to scare him. Zhu Cilang did not want to lock his brother up; he only wanted to frighten him into leaving.

So Luo Zhichen had also received a "chicken-feather letter" from his father, Luo Dagong, telling him to find a way to arrange Zhu Cihuan's departure.

The moment Zhu Cihuan thought of the Chongzhen Emperor's retirement money, his whole body began to tremble.

"I—I am unfilial, I am unfilial, I—I—"

At this moment, Luo Zhichen had already handed over several United States stock certificates. "Your Highness, these are five United States stock certificates, exchangeable for 5,000 mu of land. Take them and go to the America Prefecture! Leave the affairs of the Chongqing brokerage to me to clean up!"

(End of Chapter)