Chapter 617

The great merchants from the four commanderies of Qi were already standing outside the hall doors—twelve men in all. Judging by their dress, one would take them for menial servants and lackeys; no one would ever imagine that every single one of them was a wealthy merchant with household assets of several hundred jin of gold.

These men were no strangers to one another. Common peddlers and hawkers are usually confined to a single village or town; middling merchants only make their name within a commandery or county. But to reach the level of "a hundred jin" and join the ranks of great merchants, one inevitably had to deal with peers in the trade.

Thus among them were partners who had cooperated, and rivals who had past grievances. But now, they all exchanged greetings with perfect civility. In the marketplace, the only thing pursued is profit; better to resolve enmity than to deepen it. What was more, ever since Qin extinguished the Marquis of Qi, the merchants' greatest enemy had become one and the same: the government!

After the pleasantries, they began discussing the topic on everyone's mind: "Today the Governor of Jiaodong Commandery suddenly sent invitations, summoning us here for a banquet. What could it be about?"

"I fear this banquet bodes no good."

Guan Yan, a merchant from Langya, looked worried. The Qin dynasty's policies toward merchants in recent years had taught him that whenever the government came calling, it was basically never good news!

"Indeed. The Qin people detest merchants most of all."

The others chimed in agreement. The Qin dynasty was ruled by Legalists, and ever since the era of Shang Yang, they had loathed merchants intensely. Shang Yang held that merchants loved to drift about everywhere and were the least obedient. One merchant succeeding in a secondary occupation would cause ten farmers to neglect their fields; therefore, commerce had to be suppressed.

First, all commodities vital to the state's fortunes, such as salt and iron, were placed under government monopoly. Commercial taxes were increased, and heavy duties were levied on wine, meat, and the like, rendering those trades profitless.

At the same time, the legal codes lowered the status of merchants. Among the seven great powers of old, Qin's merchants were the most despised, ranked alongside live-in sons-in-law. Whenever there was corvée labor or war, merchants were always the first conscripted. Qin military regulations explicitly stated that no mercy need be shown for the lives of merchants and their descendants; whatever dirty, grueling, or dangerous work there was, they were to be sent to do it!

Under these conditions, Qin's commerce was essentially controlled by the government. Only in the borderlands beyond government reach did great barbarian merchants like the Wu clan and Ba Qing emerge, but even they were eventually co-opted by the court and became red-hatted merchants.

The reason Heifu's family had succeeded with their Nan Commandery brown sugar was that they had based themselves in the virgin territory of Jiangnan and exploited a loophole in the law. But even that freedom lasted only a few years; now, every sugar workshop across the Jiang-Huai region had been confiscated and turned into a state enterprise.

The eastern state of Qi, however, had followed a completely opposite path. As far back as the era of Taigong Wang, Qi occupied a coastal region of saline-alkali soil unsuitable for farming. They adapted to local conditions, using industry and commerce to drive the economy, and ultimately became the land of fish and salt.

In the time of Duke Huan of Qi, Guan Zhong further advanced the view that "the root gives rise to the branch." Scholars, farmers, artisans, and merchants were all pillars of the state. He established townships for industry and commerce and encouraged merchants to transport fish and salt to Liang and Chu, earning extra revenue for Qi.

Although the Tian clan were ministers and grandees, they too had used sea fish and timber to win the people's hearts, and they were very tolerant toward merchants. For two hundred years, Qi merchants spread throughout the lands east of the Pass. Great magnates could treat enfeoffed lords as equals, and it was not uncommon to see them openly parading through the streets in purple robes…

But this golden age of commercial prosperity ended with the destruction of Tian Qi. The Qin dynasty transplanted its Guanzhong policies to Qi territory, issuing decrees forbidding merchants from wearing silk or riding in carriages, barring merchants and their descendants from holding office, and stipulating that merchants must pay a doubled head tax…

When the First Emperor toured the east, he even had the words "Exalt Agriculture, Eliminate the Secondary" carved into the Langya Terrace, proclaiming it as state policy to the whole realm!

The good days for Qi's merchants were over. For ten years, whether they dealt in agriculture, herding, fishing, mining, smelting, or luxury goods, merchants had struggled at every step. Their social status had plummeted, and they lived in constant fear, dreading that the government might arrest them on some trumped-up charge at any moment.

That was why today, these thirteen great merchants were dressed more shabbily than common folk! …

But a centipede does not stiffen even when dead. Qi's eight-hundred-year tradition of valuing commerce could not be changed overnight. These anti-commerce policies had not completely crushed the merchants of Qi. On the contrary, a saying circulated throughout the region:

"To go from poor to rich, farming is not as good as craft, craft is not as good as trade, and for a woman, handiwork is not as good as selling her charms…"

Although Qin suppressed commerce, artisans and farmers were hardly faring better. With crushing taxes in place, honestly working a craft or tilling the fields still left one impoverished; the returns from speculation and profiteering were actually greater.

In Qi, because Qin officials were scarce, the government could not control the grassroots the way it did in Guanzhong. The markets and wards remained the domain of merchants. In great commercial cities like Linzi and Jimo, there were at least thirty-odd trades, and each trade had its monopolistic great merchant, whose annual income far exceeded Heifu's "two-thousand-dan" salary by tenfold or a hundredfold!

"When the sheep grow fat, they are slaughtered. When the chives grow long, they are cut!"

Guan Yan, the Langya merchant, was more than a little resentful toward the Qin dynasty. He said coldly, "Gentlemen, do not forget the matter of the Suanmin tax!"

Everyone sighed. Originally they had still been able to turn a profit, but ever since that policy was introduced, doing business had become profitless.

The wealth of Qi's merchants had been noted by the First Emperor during his eastern tour. Last year, after the Emperor returned to Xianyang, in addition to forcibly relocating some Qi merchants to the west of the Pass, he also, at the proposal of Chancellor Li Si, promulgated a new policy targeting merchants.

All owners of industrial and commercial enterprises, usurers, hoarders, and the like, regardless of whether they were registered as merchants, were required to report their property figures to the government. It was stipulated that for every two min (one min being one thousand cash), one suan—that is, two hundred wen—was to be levied. For ordinary small artisans, one suan was levied on every four min. This was called the "Suanmin."

Aside from officials, elders, and soldiers, anyone owning a horse-drawn carriage was levied one suan per vehicle. For the light carts of itinerant traders, two suan were levied per vehicle. For boats of five zhang or longer, one suan was also levied!

Anyone who concealed and failed to report, or who reported falsely, would have their entire property confiscated and be sentenced to one year of garrison duty on the frontier!

This was an open imposition of a "property tax" on merchants. Once this policy was issued, the merchants of the realm wailed in despair. Trades with larger profit margins could still manage, but those with thin margins immediately found themselves unable to cover their expenses.

Many began to entertain the thought: "Is it not possible to simply stop being a merchant?"

But the Qin dynasty also strictly prohibited land annexation, blocking the possibility of using money to purchase fields and real estate. Merchants were caught in a dilemma and found that their only option was to sell their businesses cheaply to the government, transforming them from private enterprises into state-run ones.

Guan Yan said pessimistically, "Summoning us here this time is probably for exactly that! I have heard that when the Emperor previously issued the Suanmin decree, it was to raise funds for the southern campaign, the northern war, the Mausoleum at Mount Li, and the Great Wall. Now that war has broken out on both the northern and southern fronts simultaneously, and the Mount Li mausoleum seems to have added another hundred thousand laborers, they need even more money. They are sure to take the knife to us again!"

The merchants all nodded, though a few with more agile minds questioned: even if they wanted to harvest chives, couldn't they just do it in Linzi and Langya? What was the point of summoning them all the way to Jiaodong?

"Have you all forgotten? That Commandant-Governor is the army supervisor for the northern expedition! For all we know, he has laid out a banquet, and once you enter, unless you come up with a million in military funds, no one will be allowed out that door!"

Guan Yan was somewhat indignant: "A common man is guilty by virtue of possessing a jade disc. In the eyes of the government, our crime is having money, is being wealthy!"

In Qi merchant circles, Guan Yan's words carried weight. He was not only a great merchant of Langya but also a descendant of Guan Yiwu, the Chancellor of Qi from several centuries ago!

Although Guan Zhong had assisted Duke Huan of Qi in assembling the feudal lords nine times and bringing order to the realm, his descendants had fared miserably. The family declined early on, scraping by in a small town. After the Tian clan usurped Qi, they lost even that small town and could only take up their ancestor's old trade, beginning to engage in commerce. Perhaps the family truly did possess a talent for business, for within a hundred years, they had become one of Qi's great merchant houses, with household wealth of several hundred jin.

With Guan Yan speaking this way, the dozen-odd merchants grew increasingly anxious, feeling as though this doorway led straight to the Yellow Springs and the Barren Wastes, and that Heifu was the black-faced ghost bailiff come to claim their lives…

Just then, a discordant voice rang out.

"Master Guan is mistaken. Commandant-Governor Wei of Jiaodong has always treated the four classes of people equally and has not wantonly persecuted the merchants of his commandery. In fact, when the court issued the Suanmin policy, he even submitted a memorial of remonstrance, preventing the Emperor from adding a supplementary Gaomin statute. That statute would have stipulated that anyone daring to inform on others would be rewarded by the government with half of the confiscated property! Had that law been implemented, we would have long since been reported, convicted, and sent to the borderlands for hard labor. Now that the Governor has summoned us, before we even know what he will say, is it not improper for you gentlemen to slander him so recklessly?"

Everyone turned to look and saw a merchant in his forties, sporting a handlebar mustache, hands tucked into his sleeves, smiling as he regarded them.

Someone laughed. "I wondered who it was. So it's Dao Jian."

This Dao Jian was a native of Jiaodong and also one of the great merchants, though he had started out in the bonded servant trade.

Qi's merchants were fond of raising household slaves, but they all regarded slaves as the most worthless of possessions, inferior to cattle and horses. They often mistreated them, casually sold them off cheaply or gave them away, discarding them like weeds.

But Dao Jian was different. He treated these slaves as treasures, traveling everywhere to purchase clever and capable slaves. He did not directly exploit them for menial or heavy labor; instead, he taught them skills. Beautiful young slave women were instructed in the arts of the bedchamber and gifted to local officials to cultivate good relations. Strong male slaves were trained as warriors to protect his trade. Intelligent bondservants were taught to read and do arithmetic, then set to managing his enterprises and generating profit.

In this way, relying on bondservants, Dao Jian became the foremost magnate in Jiaodong. He treated his slaves generously, and their lives were better than those of ordinary commoners, so much so that they would "rather forgo noble rank than leave Dao"—meaning they would rather not change their slave status or enjoy the freedom of commoners than leave Dao Jian…

Although Dao Jian was a great merchant of Jiaodong, he was looked down upon by the other merchants. What drew even more criticism was that after the Suanmin decree was issued, when the wealthy were all scrambling to hide their assets and planning a united resistance against the policy, Dao Jian defected. He went to Jimo and voluntarily donated one-third of his family fortune to military expenses.

Ever since then, Dao Jian had become a regular guest at the Jiaodong Governor's mansion. After the new sea route to Haidong was opened, Heifu summoned him almost every month. The Pang clan and other Qi merchants all felt that Dao Jian was most likely helping the government scheme how best to carve them up…

Guan Yan had only complained because the butchering in recent years had been too brutal. Although he had cursed Dao Jian plenty behind his back, now, seeing the man in person, along with the two Qin officials following behind him, he immediately lost his nerve. Cupping his hands, he said, "Master Dao, you have dealt with me often enough. I may be loose-tongued, but I had absolutely no intention of slandering the Governor."

"Master Guan, you are a descendant of Guan Yiwu, the foremost merchant of Langya, and also my senior. I naturally know your character. However…"

Dao Jian smiled. "However, walls have ears. It is best to speak such words sparingly! Gentlemen, the Governor has summoned you here this time to announce a great piece of good news! The Governor will arrive shortly, so please, come with me quickly to pay your respects!"

"A great piece of good news?" Everyone looked at one another in bewilderment.

Dao Jian, acting as though he were Heifu's appointed agent, made a gesture of invitation, ushering everyone into the hall.

…

The merchants' political status was low. Although the hall was furnished with tables and mats, no one dared sit until an official spoke.

Those in high positions always arrived last. After a while, Heifu finally made his belated appearance. His expression was genial as he told everyone not to stand on ceremony and to be seated. But then he immediately said something that struck at their very hearts.

"Gentlemen, your complaints about the court's state policies just now, your dissatisfaction with the Suanmin law, and your speculations about my purpose in inviting you here—this official heard every word!"

"This…"

Aside from Dao Jian, who acted as if it had nothing to do with him, everyone else in the hall was so frightened they scrambled back to their feet, each protesting that they hadn't said it.

And that Langya merchant, Guan Yan, was so terrified he threw himself flat on the floor, bitterly regretting his momentary loose tongue. The "slander statute" promulgated during the First Emperor's eastern tour was still in effect, and he kowtowed without pause:

"This lowly one spoke carelessly in a moment. I beg the Commandery Governor to forgive my offense and spare my life!"

Heifu, however, laughed and said, "Forgive your offense? Spare your life? Everything you said was the truth. The court is shearing wool, harvesting leeks, draining the pond to get the fish — what fault is there in that?"

"Huh?"

The thirteen magnates below the dais were all dumbfounded. They exchanged glances, each thinking they had misheard. How could Commandery Governor Heifu, a high-ranking frontier official, suddenly speak ill of the court?

"Dao Jian, read them my memorial!"

The Jiaodong merchant Dao Jian actively sought to align himself with the authorities, and Heifu reciprocated the gesture, making him his agent in merchant circles.

Dao Jian took the copy of the memorial and began to read it aloud.

"Your servant, Heifu, Governor of Jiaodong, bows twice and speaks. I have heard that the Chancellor proposes to implement the Suanmin tax. This is a method to stabilize the realm, which can force treacherous and cunning merchants to yield their private profits to fund the state. However, your servant believes that while the Suanmin tax may be implemented throughout the empire, Qi alone must be exempted..."

Upon hearing the phrase "Qi alone must be exempted," every merchant raised their head, eyes wide. Could it be that Dao Jian had not been wrong? Was this Commandery Governor truly speaking up for them, a group of merchants trampled into the mud?

Dao Jian continued reading: "The bandit uprisings in Qi have only just been quelled, and the people's livelihood has not yet recovered. Merchants and trade allow the people to exchange what they have for what they lack. It is inadvisable to impose excessively heavy taxes that would drive up commodity prices. This is the first reason."

"The bandits and raiders east of the sea have not yet been pacified. Government ships transporting grain and troops are already stretched to their limits. Your servant wishes to have the merchants assist in this; they have contributed considerable effort. Therefore, the Suanmin tax should not be applied. This is the second reason."

"The customs of Qi differ greatly from those of Guanzhong. In ancient times, when the Grand Duke Wang was enfeoffed at Yingqiu, the land was saline and barren, and the population sparse. Thus the Grand Duke encouraged women's crafts, promoted technical skill, and facilitated the trade of fish and salt. As a result, Qi's clothing, headwear, and footwear spread throughout the realm. Later, when the state of Qi fell into decline, Master Guan restored it, establishing the Nine Treasuries, and the border markets were inspected but not taxed, making Qi prosperous and powerful down to the reigns of King Wei and King Xuan."

"Nevertheless, the people of Qi value commerce, which makes their generals and soldiers campaign as if they were selling their strength in the marketplace — these are troops that bring a state to ruin. Yet if Qi merchants can indeed generate vast profits, and if their strength can be united and harnessed for the government's use, it will enrich the state above and enrich families below. The profit gained will surely be several times that of the Suanmin tax! This is the third reason!"

"Though Your Majesty wishes to transform customs and habits, governing a commandery must also be adapted to local conditions. Why not make the various commanderies of Qi a special case, temporarily exempting them from the Suanmin tax? Order the merchants to obey the Privy Treasury and the Gold and Cloth Bureau, and have them seek profit for the state in the lands east of the sea and southern Liaoning. Given time, they may perhaps generate for the state vast profits rivaling those of the Wu clan and the Widow Qing of Ba. The wealth and goods from east of the sea can also flow into Xianyang..."

When Dao Jian finished reading, the crowd was already greatly stirred. Heifu immediately followed up:

"And His Majesty's reply was... 'Approved!'"

Of course, that single word from the First Emperor could be interpreted as: You may try, but if the attempt fails, you black wretch can roll back here and accept your punishment!

The court was now desperately short of money. The Privy Treasurer, Li Si, and the Privy Treasury had begun collecting property taxes out of sheer necessity. Heifu reckoned that if things continued this way, the Privy Treasury would go so mad as to directly convict and confiscate the property of wealthy merchants across the empire.

Although this crowd was not exactly clean, draining the pond to get the fish was no long-term solution, and it also ran counter to Heifu's plans.

Therefore, Heifu proposed that by utilizing the merchants of Qi, the court could obtain even greater benefits than direct taxation. Considering the increasingly depleted treasuries, the First Emperor, though reluctant, had agreed.

At this moment, the assembled merchants were already kowtowing to Heifu: "Lord Governor truly treats the four classes of commoners with equal regard!"

Heifu said flatly, "If the farmer does not produce, there is a shortage of food; if the craftsman does not produce, there is a shortage of goods; if the merchant does not trade, the three treasures cease to circulate; if the forester does not work, there is a scarcity of resources. I have relatives in my own family who engage in trade. This official understands this principle well enough!"

"Lord Governor is wise and enlightened!"

At this, even the constantly complaining Guan Yan offered sincere thanks. Two hundred cash out of every thousand meant that for every million they earned, they would have to hand over two hundred thousand cash to the authorities — and this did not even include the already exorbitant border and market taxes. One could say it had given the merchants a huge reprieve.

But they still had concerns.

Because everyone had understood that this was not a simple cancellation, but a wager...

Yet now, Heifu had already made the decision for them, and it was too late for regrets.

They then heard Heifu say: "His Majesty has issued an edict. Starting from the first month, the four commanderies of Qi will differ from the other commanderies and counties of the empire. The Suanmin tax will be temporarily suspended, and this will serve as a special zone where the government takes the lead in trading overseas. From the second year onward, they must earn more money than the Suanmin tax would have brought in, using the profits from the seacoast to relieve the shortfall in the treasuries!"

"Therefore, it shall be called a 'Special Economic Zone'!"

"Special Economic Zone?" The thirteen magnates below the dais stared at each other, completely baffled by this strange term, but men like Chen Ping and Xiao He had long since grown accustomed to it.

Heifu, however, sat on the dais, indulging in a self-satisfied fantasy:

"Will there be a song like this in later ages?"

"In the spring of the thirty-fourth year of the First Emperor, a big swarthy fellow drew a circle on the eastern coast of China..."

PS: Only one big chapter today.

(End of chapter)