Chapter 883 972 Gold Price

"Brother Uncle, the current predicament of the court cannot be solved overnight. There is no other way but to increase revenue and reduce expenditure.

I have also read Brother Uncle's article "There is a Great Way to Make Money", 'It is the way to make money to save money.'

Unfortunately, the court spends too much and cannot make a surplus at all. For this reason, it can only find ways to collect all the money that should be collected.

In Shandai's opinion, the use of treasure notes to pay taxes can be completely abandoned.

When Taizu discovered the treasure notes, it was mainly because of the shortage of copper materials in our Ming Dynasty. Printing treasure notes facilitated the circulation among the people. As for the future, that is another story.

Although copper materials are still in short supply today, what you said just now made me brighten my eyes. Now that overseas silver is pouring in, the court is making money, and it seems that silver can be used to make money."

The silver money that Wei Guangde mentioned is not the silver and money circulating in Ming Dynasty at this time, but the plan to make silver dollars directly in Ming Dynasty.

One of the important reasons why the Song, Yuan and Ming dynasties turned to paper money was the shortage of copper. The previous dynasties had not reached the level of commercial prosperity of this era, so a small amount of copper coins could meet the needs of commodity circulation, and the previous dynasties would use cloth as a payment medium for bulk commodity transactions.

In the Song Dynasty, iron coins were issued by the court due to the shortage of copper. These actually show that when the economy developed to a certain level, the currency was restricted by the supply of materials and could not meet the needs of the market.

Wei Guangde didn't know how much gold and silver the Ming Dynasty had at that time. This data was really difficult to estimate, but he knew that after Longqing opened the sea, a large amount of silver from all over the world flowed into the Ming Dynasty, and it was said that the total amount exceeded hundreds of millions of taels.

With such a huge influx of silver, Wei Guangde certainly felt that the Ming Dynasty should abandon the past model of ignoring silver transactions and should start to use silver coins as legal tender.

Of course, this actually also had the interests of the court.

You know, the previous coins were not made of pure copper, but copper alloys, which were mixed with other metals.

In Wei Guangde's idea, the silver coins minted by the Ming Dynasty could be made of 80% to 90% silver, and the remaining raw materials could be minted with copper, so that the cost of minting coins and the money earned by the court would be out.

Moreover, the silver coin does not necessarily have to weigh one tael in full, but can be as heavy as twelve or thirteen qian, which can be used as one tael.

In addition, smaller denominations such as one qian and five qian can be issued. According to the current exchange rate circulating in the market in the Ming Dynasty, one qian of silver is seventy wen, which can also make up for the problem of insufficient copper coins.

However, to do all this, a very important step is that the court can receive sufficient silver ingots and melt these silver ingots into silver coins.

As for the release, it is actually very simple, such as the official salaries of officials, military pay, etc.

As for whether the people accept it or not, just like the policy of Zhu Yuanzhang at the beginning, prohibiting the trading of gold, silver and copper coins, and only allowing the use of treasure notes, now it has become prohibiting the private trading of gold and silver among the people, and only allowing the use of silver coins.

Even in the future, it can be considered that the court collects gold and issues gold coins.

Wei Guangde explained his idea to Zhang Juzheng, and Zhang Juzheng changed from being careless at the beginning to concentrating on thinking later.

To put it bluntly, the court could get 20% to 30% of the profit by the silver in and out of the court, which was a relief for the Ming court in financial difficulties.

"Make silver coins with 80% to 90% silver mixed with copper, and implement it in the form of laws. Although the method is good, the court still lacks silver. The silver in the warehouse is only one million taels, and even the inner court is estimated to be no more than this amount."

Zhang Juzheng was moved, and soon thought that although promoting this method has many benefits, especially solving the financial problems of the court, but considering the specific implementation process, some problems are difficult to solve.

"Jiangxi and Nanzhili have implemented the "One Whip Law", which converts all physical goods into silver. If all provincial governments do the same, the court will probably earn no less than 10 million taels of silver every year.

By minting coins, the court can earn an additional 1 or 2 million taels of silver, which is enough to make up for the current fiscal deficit."

Wei Guangde said immediately, "In addition to ensuring that the physical goods are sufficient for the imperial court and other necessary grain, if they can all be converted into silver.

As far as I know, the physical goods collected by the court every year have also suffered a lot of losses due to improper storage. It would be better to keep enough necessary grain and a part of the grain for disaster relief, and convert all of them into silver to be delivered to Beijing, which can also increase the silver income."

He remembered that the Ming Dynasty began to silverize during the Wanli Dynasty, which was essentially a silver standard. All fiscal and tax expenditures were quantified in silver. This was undoubtedly the best time to fix the Chinese monetary system.

Wei Guangde had long discovered that the Ming Dynasty's fiscal revenue was not the 2 or 3 million taels of silver per year as later generations said. Including physical goods, it was at least 20 or 30 million taels, but most of them were physical goods, and the proportion of gold and silver was very small.

Don't expect to convert all of it into silver, as long as a part of it is converted into silver, it will be enough for the Ministry of Industry to work.

However, Wei Guangde didn't know that his doing so actually buried a huge hidden danger. The root cause was that the Ming Dynasty did not produce enough silver and copper materials, and it relied entirely on external imports.

In the context of the Ming Dynasty's products being sold all over the world, there would naturally be no problem with the huge influx of silver. On the contrary, the influx of silver would activate the Ming Dynasty's economy at the beginning, but it would cause severe inflation in the later period.

The biggest crisis is that once the Ming Dynasty cannot absorb enough silver inflows, an economic crisis may form in the country.

In fact, later scholars also believe that the deep-seated reason for the demise of the Ming Dynasty is related to the globalized economy during this period.

Since its founding, the Ming Dynasty has always been on the path of small peasant economy and self-sufficiency, but this is only a general explanation.

With the continuous development of global history, the beginning of the European Renaissance and the arrival of the Age of Discovery, the Ming Dynasty has joined the globalized economy and trade without knowing it.

As early as the time of Emperor Chengzu and Zhu Di, Zheng He's large-scale voyages to the West began. It can be said that after the middle period of the Ming Dynasty, it had become more and more closely connected with the world economy, and could no longer be completely defined as self-sufficient. The small-scale peasant economy route.

The economic development of the Ming Dynasty was relatively complicated. In the early Ming Dynasty, paper money was used, and later copper coins were used. Later, silver also became the currency in circulation. This complex transformation is closely related to the increase in global silver production.

In the middle and late Ming Dynasty, silver has become the most important trading currency in Eurasia. Because merchants from various countries trade with each other and do business with each other, everyone must reach a consensus and select a currency as the recognized currency for global circulation. currency, and this recognized currency is silver.

At that time, most global trade was settled in silver, and the demand for silver was increasing day by day in many countries, including the Ming Dynasty.

When the demand for silver skyrocketed, Europeans discovered the largest silver mine so far on the American continent. The increase in silver production also stimulated the improvement of smelting technology. The silver coins minted in Europe had less loss, were more exquisite in shape, and had higher purity. high.

Large amounts of silver from the Americas were continuously shipped to Europe, then minted into silver coins, and then shipped non-stop from Europe to China in the East, where they were used to purchase various commodities of the Ming Dynasty, mainly luxury goods, such as porcelain, silk, etc.

The financial collapse of the late Ming Dynasty coincided with the religious reform in Europe, which was known as the "Thirty Years' War".

This war was a war between the two major camps of European Protestantism and Old Christianity, and the war lasted for thirty years. During this period, Europe's demand for silver surged, and naturally there was no time to consider trade with China.

At that time, the Ming Dynasty was in an inflationary period with rising prices and falling silver prices. The demand for silver surged.

During the Longqing period, silver was relatively scarce in the Ming Dynasty, so its value was relatively high.

With the opening and closing of Yuegang, the amount of silver flowing into the Ming Dynasty was huge, and the speed was too fast, which inevitably led to rising prices, followed by inflation, currency depreciation, and silver prices began to fall.

Until the silver price of the Ming Dynasty was equal to or even lower than that of overseas markets, those "arbitrage" merchants felt that it was no longer profitable, and the silver of the Ming Dynasty began to flow out in large quantities, which was equivalent to a large amount of hot money pouring out of the market.

At this time, the outflow of hot money, that is, the outflow of silver, could be said to be a catastrophic blow to the Ming Dynasty's economy, causing the economy in the middle and late Ming Dynasty to fall directly into deflation.

To put it bluntly, an economic crisis caused by silver broke out in the Ming Dynasty.

In later generations, there were various restrictions on economic overheating and severe inflation, such as raising interest rates and reducing loans, so as to reduce hot money in the market and cool down the economy.

There are not many ways to deal with deflation. Most of them can only be alleviated by issuing more currency and attracting foreign investment. The main thing is to rely on its own economic development to get out of the predicament.

But under the silver standard, the Ming government could not release liquidity to the market to alleviate the crisis like today's central bank.

Because the Ming Dynasty could not increase the supply of money by printing paper money, because silver is non-renewable, the Ming Dynasty did not produce much of its own, and mainly relied on external imports.

Therefore, a financial crisis in the Ming Dynasty triggered a systemic economic crisis in the entire society, which led to a series of subsequent crises, such as corruption, increased private taxation, peasant uprisings, etc., which led to the collapse of the dynasty. .

"All in silver?"

Zhang Juzheng fell into thinking at this time. This was not a trivial matter for the Ming Dynasty.

Prior to this, the income of the Ming Dynasty's household department consisted of a large amount of physical objects plus a certain amount of gold and silver and a small amount of treasure notes. According to Wei Guangde's intention, the physical objects, especially grain, could only meet the needs of the court and part of the emergency grain, and all of it was shipped to the capital in the form of silver.

These silver ingots were made into silver coins and then distributed. The trading of silver ingots was prohibited on the market, and all silver coins were used instead.

According to Wei Guangde's calculations, the profits gained from coinage can really make up for the court's deficit.

"The changes have been too great, and I'm afraid a ministry meeting will be called."

Zhang Juzheng said hesitantly.

"If a whip method is to be implemented all over the world, it will have to reach this point sooner or later. That is to break silver. Otherwise, how can it be implemented?"

Wei Guangde saw Zhang Juzheng's hesitation, so he continued.

Zhang Juzheng just nodded when he heard this, indicating that he knew about it.

In fact, regarding the whipping method, Zhang Juzheng naturally had his own considerations, that is, taxes were still levied in kind according to the rules established in the early Ming Dynasty, and taxes were collected in cash, and the government recruited labor to do it, leaving the farmers in the fields and no longer rushing there. Served in corvee service.

"Actually, what I'm worried about is the lack of silver on the market. This is why it was only trialled in Jiangxi and South Zhili and not rolled out across the country."

After a long time, Zhang Juzheng said again.

Wei Guangde knew that in the past few years and for some time to come, Ming Dynasty would receive massive amounts of silver, which would flow into the country and flood cities and villages, so Zhang Juzheng's worries actually did not exist at all.

However, he couldn't say these words. After all, he couldn't tell how he got the news.

Then Wei Guangde smiled and said: "What I said just now is just what I thought after hearing He Qing's words. Some of them have been thought about before, but I only understood them after talking to you.

Uncle, brother, please think again about the imperial court's casting of silver coins. Let's discuss it again when we have a chance, okay? "

Wei Guangde also felt that it was a bit ahead of time to implement the silver standard in the Ming Dynasty. At least before Zhang Juzheng saw a large amount of silver circulating among the people, he was afraid that he would not have the confidence to do this, so he simply said.

Moreover, Wei Guangde vaguely remembered that after the Republic of China began to implement the silver standard, it seemed that because of the change in the silver policy of the United States on the other side, a large amount of silver dollars flowed out, and finally had to give up the silver dollar to issue legal tender.

It seemed that he had to sort out the relationship between them. After Zhang Juzheng's cautious response, Wei Guangde also reacted and seemed to have been really hasty.

Although he did not think that his proposition was wrong, especially the method of minting silver dollars, it must be correct, but there must be something he did not consider.

On the way out of Zhang Juzheng's office, Wei Guangde was still thinking about this problem. When passing by Lu Diaoyang's office, Wei Guangde suddenly realized what he had missed.

Yes, in fact, Wei Guangde knew about this before, but he just didn't think deeply about it. That is, the current gold price in the Ming Dynasty is six or seven taels of silver, but Wei Guangde remembered that in the early Ming Dynasty, the gold price should be four or five taels of silver.

Knowing this is mainly because Wei Guangde's merchant ships have been secretly engaged in transactions with Japan. The gold price in Japan is higher, about the price of ten taels of silver.

Thinking of the gold price, it is also all due to Lu Diaoyang's previous mention that the barbarians exchanged silver for the gold of the Ming Dynasty.

Although Wei Guangde has been doing this, that is, the goods they shipped out are mostly purchased with gold, silver and copper coins, and in Japan, in addition to the special products of Japan, the rest are silver and copper materials.

The copper materials transported back to the country are mostly used to cast copper coins. In addition to purchasing goods, silver is exchanged for gold, made into various exquisite ornaments and then exported to Japan in exchange for more silver.

The changes in the prices of gold and silver shocked Wei Guangde.

In principle, transporting the gold of the Ming Dynasty to Japan can be exchanged for more silver.

Now a large amount of silver is flowing in, which actually means that the barbarians are taking cheap silver to the Ming Dynasty to buy goods.

When the Ming Dynasty is full of silver, the price of gold will inevitably rise. Whether there will be a large amount of gold and silver flowing in at that time depends on the overseas market of Ming Dynasty goods.

If the gold price in the Ming Dynasty exceeds ten taels of silver, it is afraid that the situation of silver outflow will not form. People will bring gold to purchase goods next time and exchange them for silver.

The Ming Dynasty implements a silver standard monetary system. The large outflow of silver will definitely affect the economy and cause a reduction in taxes. Will it be changed to the gold standard at that time?

Wei Guangde returned to the duty room and pondered for a long time. In the end, he concluded that he had to think about it carefully, but this did not affect his writing letters to his family and exchanging the silver he received for gold for storage. (End of this chapter)