Chapter 321: Commercial Taxes Mean Getting Rich Together

Commercial taxes? Customs duties? What is all this about?

Zheng Zhilong was utterly baffled. He glanced at Zhu Cilang and found the boy looking back at him with a wicked grin — no matter how he looked at it, the kid was clearly itching to dig money out of his pockets! Then he looked at the Chongzhen Emperor, who seemed to be taking a certain schadenfreude in it all. Your son is about to become a rapacious tyrant, and you're not going to rein him in?

Of course the Chongzhen Emperor was not going to rein him in. Commercial taxes! What an uproar his imperial grandfather, the Wanli Emperor, had stirred up by collecting a little in commercial and mining taxes! Now this rebellious son of his dared to entertain such an idea before he had even usurped the throne. Just wait — wait until everyone rises up against him! Then We can make Our comeback and take all power back into Our hands.

Zhu Cilang knew perfectly well that commercial taxes were a hornet's nest!

Hadn't the scholar-officials of the Great Ming grown rich precisely by evading taxes? With a xiucai or juren degree to their name, they could use it as a shield against taxation — evading not only the land tax but the commercial tax as well. No one knew when it had started, but the customs houses throughout the Ming had adopted the principle that officials paid nothing, eunuchs paid nothing, juren paid nothing, and xiucai paid a reduced rate. And these fellows not only evaded taxes themselves but helped other merchants evade them too!

The xiucai, juren, and jinshi gentlemen of the Ming would almost all lend their credentials to merchants, allowing them to evade taxes openly and brazenly. The mechanics were much the same as fraudulent land registration and tax shifting. With so many xiucai, juren, and jinshi gentlemen in the Ming, all working together with one heart to dodge and evade taxes, how could the court not be impoverished to death?

And Zheng Zhilong, the richest man in the Ming, had never even known, from the day he began doing business until now, that the Great Ming had such things as commercial taxes and customs duties. Weren't taxes something only peasants clinging to a few meager acres and scraping through their days had to pay? He was the richest man in the land, a Regional Commander of Fujian, soon to be Duke of Quan and the Emperor's father-in-law — did someone as awesome as him need to pay taxes too?

Besides, he had already promised the Crown Prince an annual "tribute" of one million taels, and had also promised a million mu of dowry land. Why did he still have to pay taxes?

"Thousand Years," Zheng Zhilong said with a furrowed brow, "this subject has already agreed to pay an annual tribute of one million taels."

"That is the annual tribute for Quanzhou Prefecture and the office of the Minister for the Southern Seas," Zhu Cilang said with a smile. "The two combined — is one million taels really so much?"

Not much? Zheng Zhilong thought to himself: It's not exactly little either! Besides the one million taels a year, there was also that one million mu of land! The annual rent on that land alone came to around a million taels.

If it weren't for the fact that the Zheng family had recently fallen into favor — his son had become the Crown Prince's "senior fellow disciple," and his daughter was about to become the Crown Prince's chosen consort — which meant the Zheng family's bribes could no longer be delivered, he would never have handed over such a huge sum. A merchant could evade taxes with a clear conscience, but he dared not fail to pay bribes!

So Zheng Chagu and that one million mu of dowry land were the bribe Zheng Zhilong was giving Zhu Cilang!

"Imperial kinsman Zheng, my esteemed father-in-law," Zhu Cilang said, looking at Zheng Zhilong with warm familiarity, "we are family. We have always looked after Our own, and We would never let you or Senior Brother come out on the losing end! If these commercial taxes and customs duties are collected, it will actually be of great benefit to the Zheng family."

Zheng Zhilong thought to himself: My dear son-in-law, could I decline this benefit? I'm not a greedy man in the least!

Zhu Cilang smiled. "First, the money collected will not be sent to the Ministry of Revenue's storehouses to grow mold."

Then where would it go?

The Chongzhen Emperor stared wide-eyed at his son, thinking: Could it be that, like his imperial grandfather, he means to stuff the money into the inner treasury?

"Once the commercial taxes and customs duties are collected, they will all be deposited in the Maritime Merchants' Bank." Zhu Cilang asked, "Father-in-law, has Senior Brother told you about the Maritime Merchants' Bank?"

Zheng Zhilong nodded. "He has. It is like the Salt Merchants' Bank — it does flying-money remittances and lending."

In truth, the Zheng family had always been in the lending and exchange business, only it was not done on a large scale, being confined to the maritime merchants of Quanzhou and Fujian.

"And minting coinage!" Zhu Cilang said. "Minting silver coins like the Folangji cannon — I mean, like the Spanish pieces of eight — and also minting standard copper cash. As long as the commercial taxes, customs duties, and salt taxes can be collected smoothly, the Ministry of Revenue will delegate the right to mint silver and copper coinage to the Maritime Merchants' Bank and the Salt Merchants' Bank! Moreover, the Ministry of Revenue will no longer maintain its own silver vaults; all treasury silver will be deposited in the two banks, and it will collect only a small amount of interest!

Father-in-law, these are all enormous profits! You are a man who knows the inner workings of the Western countries — you must know how profitable their banks are?"

"This..." Zheng Zhilong was somewhat tempted. Not so much because of how profitable banks were, but because of the power to manage the Great Ming's money and mint its coinage!

He had no idea, of course, that Zhu Cilang's true profession was that of an "investment banker," and that he was thoroughly versed in the banking business of later ages. Once the two banks were established, with Zhu Cilang holding both open and hidden shares, and with their head offices set up in Nanjing, it would not be long before both fell firmly under Zhu Cilang's control.

"Money is not only for saving — it is also for spending!" Zhu Cilang continued his pitch. "If the money is deposited in the Maritime Merchants' Bank and the Salt Merchants' Bank, it is guaranteed not to be squandered, and not to be embezzled by corrupt officials. Then comes the question of how to spend it. In the past, the court not only failed to collect money properly, it also failed to spend it properly. Money was not spent where it mattered, and in the process of spending, corrupt officials skimmed at every level.

Such things will no longer be permitted, because We intend to institute the system of Imperial Merchants. Apart from the payment of salaries, military wages, disaster relief, and rewards — matters that cannot be entrusted to merchants — all other expenditures, such as major public works, procurement, the forging of arms and armor, warships, horse administration, and the like, will be carried out through competitive bidding contracted to Imperial Merchants. And the Anping Zheng family will undoubtedly be first among the Great Ming's Imperial Merchants! The commercial taxes the state collects — won't they ultimately be spent through Imperial Merchants like the Zheng family?"

The Great Ming's Imperial Merchants were growing ever more numerous. It had begun with Soy-Sauce Huang and Old Rice Su, who had followed along from Beijing. In Tianjin, Shen Tingyang's sand-ship guild had been added; after reaching Yangzhou, the four great Huizhou salt merchants — the Jiang, Shen, Wang, and Hu families — had joined, along with Yun Shangqian, known as Yun the Third, the Shanxi salt merchant accountant who had been the first to throw in his lot with Zhu Cilang. And now the Anping Zheng family, that giant among giants, had been added as well.

In addition, Cao Huachun's Cao family and Wang Zhixin's Wang family — having always been officials, merchants, and eunuchs all at once — had also been issued Imperial Merchant licenses by Zhu Cilang.

In other words, Zhu Cilang's Imperial Merchant system now comprised the Huang, Su, Jiang, Wang, Hu, Cao, Wang, and Zheng families, plus two Shen families — ten great Imperial Merchants in all, one more than the nine great Imperial Merchants over on the Qing side.

And in terms of sheer strength, Zhu Cilang could trot out a single Shen Tingyang and utterly crush the Qing's nine great Imperial Merchants. If Zheng Zhilong were to take the field, his financial power would leave the entire Qing dynasty several streets behind!

As long as he and Shen Tingyang could give Zhu Cilang their full support, the Crown Prince's southeastern half of the realm would be firmly in hand. Imperial Merchants like Zheng Zhilong and Shen Tingyang were not Zhu Cilang's slaves — they were Zhu Cilang's partners!

So Zhu Cilang had to come up with a "win-win" approach, one that would let Imperial Merchants like Zheng Zhilong and Shen Tingyang profit from the management and disbursement of tax silver once the commercial taxes and customs duties were levied. At the same time, the Ming court had to profit from competitive bidding among the Imperial Merchants.

But while the court and the Imperial Merchants both won, someone was bound to lose! Levying commercial taxes and customs duties ate into the interests of the bureaucrats and gentry, and managing expenditures through Imperial Merchant bidding likewise did serious damage to the interests of officials — civil officials especially!

"Thousand Years," Zheng Zhilong said with a furrowed brow, having now thought through all the interests at stake, "if the court is to levy commercial taxes and customs duties, this subject will not object, so long as the rates are reasonable. The problem is... during the Wanli era, the southeast was thrown into turmoil over commercial and mining taxes. In the end, not much tax was collected, yet the people's hearts were greatly unsettled. It truly was not worth the cost!"

Zhu Cilang smiled. "As long as your heart, Father-in-law, is not unsettled, We have ways to deal with those unsettled hearts! Father-in-law, is your heart unsettled or not?"

"This subject naturally supports Thousand Years in levying commercial taxes and customs duties."

"Good!" Zhu Cilang said with a smile. "When you return, prepare a memorial requesting the levying of commercial taxes and customs duties, and submit it after the Ministry of Rites examination.

Also, do not spread word of what was discussed today. The Ministry of Rites examination is imminent — do not disturb the candidates' state of mind.

By the way, how is Senior Brother's preparation going? He must do well on this examination!"

Do well? On what examination?

Zheng Zhilong was taken aback and turned to look at his son. Zheng Sen smiled. "Father, your son is now a juren, and must also sit for the Ministry of Rites examination. If I can place high, it will bring glory to our ancestors!"

A juren? Zheng Zhilong blinked, thinking: You little rascal, you actually passed the provincial exam and became a juren... Wait, that's not right. The last provincial exam was in the fifteenth year of Chongzhen, and you didn't even sit for it. How did you pass?

(End of Chapter)