C737 Bond and tax

Xiao Letian shook his head as he broke the crumbs and explained to Zai Chun, "Look, you already own 25% of the shares in Fu Sang Bank. You can use the proceeds from these shares to borrow from the Letian Bank.

"What can be used in exchange for borrowing and interest? "Of course it's profits created from your shares. From now on, I can leave you a portion of the dividends from your shares as pocket money and use the rest to pay off your debts …"

"Then, send 4 million silver coins back to the capital. Other than gaining the prestige of the imperial government, you will also receive 4 million bank bonds. Those are all money owed to the imperial government by the provinces. He can't possibly refuse to pay his debt …"

"Following that, you entrusted these accounts to the Letian Bank for sale. After charging a certain amount of fees and trust fees, the debt of 4 million was broken down and divided into small bonds …"

Saying that, Xiao Letian took out a few pieces of hard paper from his bosom, attracting Zai Chun's attention with just a glance, he had never seen such exquisite paper being printed before.

He had no idea what kind of material this paper was made of, but his fingers made crisp 'ka ka' sounds as they bounced off it. Even if he used all his strength, he wouldn't be able to break it.

There were a total of three types of bonds in front of him. The first one was written with the denomination of one hundred circles, accepting votes at once without recognizing anyone. To the north, there were nine dragons coiling around, imitating the Nine Dragons Wall.

The second denomination was ten circles, still unrecognizable, with the Great Wall painted on the back. The third is a circle with a picture of Tarzan on the back.

Xiao Letian received a piece of security paper and pointed out to Zai Chun, "Look, there is a dragon's mark on the left side of the security paper. This is a very good anti-fake mark, ordinary people can't fake it …"

"This kind of small bond is in fact the dismantling of the Treasury bonds of the Ministry of Revenue. The small denomination is for the convenience of the citizens and merchants!"

"But why do the people and merchants want these debts? That's not right, it's like you owe someone else money. Why should I rush up to buy the debt in your hands and pay it back for you? " Zai Chun asked in confusion.

"Good question, what a good question, my family owes me money and a promissory note, why would your family use cash to buy the white sticks in my hands?" The reason is very simple, interest! "

"This kind of bond has a year on it. According to the agreement, the citizens will be able to receive 30% interest on this bond after ten years. If you can't wait, we'll give you 15% interest in five years. If you only hold it for more than three years, then we can only give you 50% interest …"

"Below three years, Letian Firm will only pay a principal and will not pay any interest …"

"Then what if Letian Bank doesn't have the money? Everyone has already gone to fight for it. Since you guys don't have that much money to pay me back, isn't that just waste paper? " Zai Chun was smart enough to think of the key point in an instant.

Xiao Letian laughed and said, "That's right, there will be such worries, but don't forget, the provider of the white note is not a normal person, but a country! The local daoyin owes the country money, the country owes the bank money, and the bank owes the people money. Since this circular chain contains all the links of economic activity, we can use the bonds as the thread of the necklace … "

"There is another thing that everyone is very familiar with, which is the taxes! "So, don't be afraid that the bond line will break. As long as the tax line continues, the necklace will not break …"

"You mean tax to guarantee the credit of the bonds?" Zai Chun's eyes immediately lit up. "Master is truly a genius, even if I cannot pay the principal and interest, it doesn't matter, as long as the imperial government approves these bonds and is willing to pay taxes, my credit will never waver …"

"This isn't just a piece of scrap paper. Even if commoners don't seek high interest rates, they still won't reject the use of bonds just so that they can pay taxes with this thing …"

Xiao Letian laughed out loud, "That's right, furthermore there is a 10% discount on the bonds, although it is not much, but to Big Merchant, 10% of the bonds are more than enough, for this benefit, they would risk their lives to gather all these bonds from the market, when the demand for the bonds runs out and people rush to buy them, wouldn't credit be born?"

"But …" But the court has never proposed a tax credit? How could the local daoyin give such benefits to the common people? "

"If the daoyin does not give you the location, then I, Letian Bank, will give it to you! If you do not admit this policy, we, the Ryukyu, will admit it! "Right now, the volume of trade between the southeast coast and the Ryukyu is rising bit by bit, as long as they find out that the Ryukyu's tax officials are giving them preferential treatment …"

"Furthermore, when trading with the Great Qing Empire, the merchants of the Ryukyu would also give 10% of the bonds preferential treatment. This means that the money that came out from the preferential treatment was not from the local government. It was from the Ryukyu itself!"

Zai Chun nodded his head, "I understand, the local daoyin cannot avoid trading with you, Master. As long as you offer a discount of ten thousandth of the debt, the local daoyin would naturally be willing to accept these bonds."

"At that time, the citizens would see that the Big Merchant was willing to take these bonds, and even the officials who collect taxes would be willing to take these bonds. Just like the Military Ticket s released by the Tanggu and the Ryukyu, they became the salary of the soldiers even though it was just a piece of paper, and all the merchants did not reject it … "

"Master, what's with your brain?" "He's too smart …"

Xiao Letian took a sip of his wine and said indifferently, "A country's economy cannot rely too much on taxes, it's like a necklace with only one string of silk, the risk is too high, just like how the southern regions have long hair.

"So I'm going to add another thread to the economic necklace, forming a double insurance. It looks a lot more complicated, but it gave the imperial government a chance to make a comeback. The treasury suddenly gained several million silver taels, isn't this the end of the financial crisis?"

Zai Chun finally came to a realisation, he immediately followed suit and shamelessly begged his master, "Good master, since you have such a good method, you should take on selling more bonds!" "The treasury has several tens of millions of taels of silver in notes. If you were a little more generous, wouldn't ten million be enough …"

Zai Chun was clever, he had keenly noticed the important role of the Letian Bank in the bond sales chain. Most mediocre people, once they discovered the opportunity to make a fortune, would think of taking it all for themselves. Especially those overlords who had been flattered until they grew up, they would feel that they were very extraordinary.

Even you, Xiao Letian, can do this, but can't the imperial government do it? If I kick you away, can't I issue my own bonds? When the time comes, I'll earn the money myself.

However, Zai Chun was no longer the emperor who stayed in the palace. It had been more than half a year since he started travelling, and he quickly matured.

He was very clear that the matter of selling the bonds was definitely not as simple as Master had said. With just the trash, such as the Department of Revenue and the Ministry of Internal Affairs, he would definitely not be able to do such a big business.

If he could predict that he would be able to cross the river and bear the risk of failure, then it would be better for him to board his master's ready-made ship. At least, it would be much safer. Zai Chun himself didn't feel it, but he was already relying more and more on Xiao Letian.