PFC Chapter 44 Deflation
Chapter 44 Deflation
In fact, to deal with deflation, Yuan Tan could also follow Dong Zhuo's example and issue self-made copper coins.
Or increase taxes on goods.
However, this can easily have side effects.
Moreover, it can easily damage the credibility of the government.
Therefore, after careful consideration, Yuan Tan chose to open a money shop to revitalize existing funds.
Xinpi also hurriedly tried to dissuade him:
"My lord, please reconsider! This policy may seem beneficial to the people, but it is like drinking poison to quench thirst! Where will the interest come from? If it cannot be paid on time, the people will be unable to redeem their tickets, leading to chaos and a collapse of credit, which would be worse than having no money at all!"
Faced with the doubts of the crowd, Yuan Tan was already confident.
He looked at Guo Jia, the most intelligent of the group:
"Fengxiao, what do you think?"
Guo Jia did not answer directly, but closed his eyes and pondered for a moment before opening them and slowly saying:
"My lord's strategy is not about amassing wealth, but rather... using a borrowed hen to lay eggs, turning stone into gold! Jia seems to understand something."
He looked at Yuan Tan.
"Does my lord intend to use this to amass wealth hidden among the people for my own purposes?"
"Indeed!"
Yuan Tan nodded approvingly.
"Fengxiao knows me! Why do people hoard money? Because they fear risk and have nowhere to increase their wealth. I will offer them a small profit and protect their principal, so they can feel at ease. Then, the people will flock to hoard their money! At that time, the money shop will hold a huge amount of wealth and can do three things."
"Firstly, to solve the immediate crisis: the collected money was used immediately to pay wages and maintain circulation, which is called 'using money to generate circulation'."
"Secondly, generating profit through lending: Salt merchants and artisans who wish to expand their businesses can borrow from money shops, only needing to mortgage their land, houses, or salt certificates, and pay interest rates higher than those on deposits. The interest rate difference is the money shop's profit, more than enough to cover deposit interest payments! This is called 'generating profit through circulation'."
"Thirdly, control the economy: Once the credibility of 'paper money' is established, people will no longer need cumbersome copper coins for transactions, but will use lightweight 'paper money'. At that time, the paper money issued by my Qingzhou bank will be quasi-currency! It will be accepted by all coastal states! This is what is meant by 'controlling the situation through profit'!"
Yuan Tan's profound discourse elucidated the fundamental principles of modern banking—deposits, loans, and remittances—in language that the ancients could understand.
As a prominent businessman, Zhen Yao was the first to react:
"Brilliant! Brilliant indeed! If this plan succeeds, wouldn't it... wouldn't it create countless riches out of thin air? Qingzhou will never have to worry about money again!"
It was clear that Zhen Yao didn't fully understand, but he did grasp one thing: wasn't this just lending money?
However, the principal was obtained from ordinary people.
What a clever scheme to get something for nothing!
Sinpi remained cautious:
"The principle is sound, but its implementation is incredibly difficult! Trust is paramount! If the people don't trust us, no one will deposit money, and everything will be for naught. If loans cannot be recovered, or if there's a bank run, then everything will fall apart!"
"George's concerns are absolutely correct."
Yuan Tan's expression was solemn.
"Therefore, this matter must succeed; failure is not an option! The initial capital will be secured by the remaining funds in the government treasury and a portion of future salt profits. Furthermore, strict laws must be established: the money shop must operate independently, its accounts must be transparent, and the government must not misappropriate funds arbitrarily! Credit must be paramount!"
He looked at Wang Xiu:
"Shuzhi, you have always been honest and upright. You will serve as the first manager of this money exchange! Your primary task is to convince the people that depositing money here is safer and more profitable than hiding it under their beds!"
He then looked at Zhen Yao:
"Master Zhen, your Zhen family enjoys an outstanding business reputation. You should take the lead in saving money and spread the word widely, guiding other merchants to follow suit!"
Then, Yuan Tan explained the specific implementation plan one by one.
Perhaps because this theory was too groundbreaking, the people in the hall gradually fell silent.
Even Guo Jia, whose emotional value is off the charts, was completely bewildered at this moment.
It turns out we really lack experts in internal affairs.
Even if I were to articulate a specific framework...
However, such reforms are complex and multifaceted, and it is certainly not possible to accomplish them by oneself alone.
Yuan Tan rested his chin on his hand and looked out the window. The sunset was infinitely beautiful!
I wonder how well Wu Yu has managed to train those women.
I don't know if I need a model, but I'd be happy to do it myself.
"Xian Si seems a bit tired."
Zhen Yao couldn't understand these theoretical concepts at all. He could at first pretend to give a few perfunctory replies, but in the end, he was completely baffled.
Fortunately, seeing that Yuan Tan also seemed somewhat distracted, he called out to him.
I want to end this meeting as soon as possible.
Hmph, it seems the old man is backing out.
However, Yuan Tan was already in a bad mood at that moment, and was just about to announce the end of the meeting when...
Suddenly a guard came to report:
"Lu Zijing and Chen Changwen of Xuzhou request an audience with our lord!"
Upon hearing this, Yuan Tan's eyes lit up. He had just been thinking about a master of internal affairs, but unexpectedly, someone had come knocking on his door so quickly.
However, it's understandable that Lu Su is currently out of power.
You, Chen Qun, are still an official under Lü Bu, so why are you here?
……
Qingzhou is an official road outside Linzi city.
It was early summer, and an oxcart was slowly making its way along the official road.
The carriage curtain was lifted, revealing two faces with very different temperaments.
The older man, around thirty years old, had a refined appearance and calm gaze; he was none other than Lu Su, a chivalrous strategist from Jiangdong.
The young man, in his early twenties, possessed the refined and meticulous air characteristic of aristocratic families; he was Chen Qun, a renowned scholar from Yingchuan.
The two met by chance in Xuzhou.
Lu Su wanted to travel north to Qingzhou to investigate the mystery of refined salt.
Chen Qun, on the other hand, wanted to break away from the increasingly decadent Lü Bu.
Seeking another wise ruler, I heard that Yuan Tan of Qingzhou was rising in reputation.
Therefore, we came to investigate and traveled together.
However, the closer they got to Linzi, the capital of Qingzhou, the more uncontrollable their shock became.
"Brother Changwen (Chen Qun's courtesy name), look at this road!"
Lu Su pointed out the window, his tone full of disbelief.
"So wide and flat, carriages and horses can gallop without any hindrance. What's even stranger is that there are very few refugees along the way, and mostly caravans coming and going, with very few people looking hungry. Is this... is this really the Qingzhou that was repeatedly ravaged by the Yellow Turbans and Lü Bu last year?"
Chen Qun also had a solemn expression and nodded slightly:
"This is indeed quite different from the rumored scene of bones exposed in the wilderness and not a rooster crowing for miles. What's even more astonishing is the expression on the faces of these people. Although they are weary from their labor, they show no signs of malnutrition, and their eyes... even have a light in them?"
This was nothing short of a miracle for Chen Qun, who was used to seeing chaos and turmoil in the Central Plains.
When they arrived outside Linzi city, they were even more shocked by the scene before them!
The once dilapidated city walls have been reinforced, and the city gates are bustling with traffic in an orderly manner.
Even more surprisingly, all sorts of shops lined the outskirts of the city.
In the distance, along the coast, vast salt pans gleam in the sunlight.
Countless laborers were working there, creating a bustling and vibrant scene.
"How could boiling seawater for salt develop into such a large-scale industry? And these displaced people, instead of being driven away, were organized and turned into salt workers?"
Lu Su muttered to himself. Coming from a wealthy merchant family, he was well aware of the astonishing organizational power involved.
Chen Qun, however, paid more attention to details. He pointed to a building with a long queue not far away.
A plaque reading "Qingzhou Pingzhun Money Exchange" hangs in front of the gate, and the people hold bamboo tallies or cloth coupons, their faces full of anticipation.
"A money exchange? What kind of institution is this? How can it make people willingly queue up? Could it be another innovation of Yuan Xiansi, like the refined salt?"