New Han Dynasty 1834

Chapter 38 Nanyang Trading Company

In the summer of the second year of Tai'an, although a large number of maritime merchants fled to Luzon, the markets of the two foreign trade ports of the Han Dynasty, Shanghai and Bao'an, remained basically stable.

At the time, the merchants simply went out to avoid trouble, but the old business channels did not stop operating.

However, by late autumn, the time when people should be planning their new year's product procurement, most of the channel merchants who were still operating during the summer had simply disappeared.

When winter came, the merchants finally learned that the imperial court had sent a large army south to Luzon and arrested the merchants who had sought refuge there.

At the same time, the imperial court also officially announced a new edict regarding future import and export trade management measures.

The Imperial Han Bank began exchanging Han Dynasty silver coins, and the Imperial Han Trading Company began organizing export trade guilds.

For a businessman, any one of these pieces of news would be devastating.

Several reports broke out almost simultaneously, letting all merchants know the court's determination to crack down on smuggling and that the market would inevitably remain sluggish, with no guarantee of recovery.

After the beginning of the first year of the Hanchang era, both foreign trade ports fell into an unprecedented depression.

As a result, the surrounding commercial towns and cities have also become noticeably quieter.

The once bustling Pudong Foreign Firm Street is now almost deserted.

Of the many trading companies, large and small, that were shut down last year, not a single one has reopened yet.

Most of the foreign firms' buildings already had "For Sale" or "For Rent" signs posted on their doors.

However, the seller's name was not the original owner or trading company, but the government-run Huanghan Trading Company.

In other words, after the original owners of the foreign firms were arrested, their businesses were also confiscated by the imperial court.

Of those businesses that weren't shut down at the time, several later closed down on their own.

They were probably unable to accept the new management methods of the imperial court, or unable to resolve the issue of price increases caused by seigniorage with suppliers.

Of the foreign firms still in operation today, less than a quarter of what they used to be.

Moreover, they all completed a batch of goods purchases last year and rushed to load the last batch of goods onto ships before the Lunar New Year. After the Lunar New Year, there was no substantial commercial activity; they opened their doors but did not operate.

In the restaurants and teahouses where local merchants used to gather, many people from all walks of life were gathered together to discuss the matter, but the atmosphere was one of widespread anxiety.

At the entrance of the largest restaurant on Pudong Foreign Firm Street, Luo Baolin, the former Han Chinese manager of the Din Di Trading Company headquarters, Cui Cheng, the Han Chinese manager of the Russell & Co., and Qin Wenyuan, the former Han Chinese manager of the Jardine Matheson & Co., met.

The owners of Jardine Matheson, Dent & Co., and Russell & Co. were indeed involved in smuggling contraband behind the scenes.

However, their publicly disclosed businesses do not directly involve contraband.

Even the senior executives working in their trading companies, especially the Han Chinese executives who were in charge of welcoming and seeing off guests, mostly did not directly participate in specific smuggling activities.

Luo Baolin and Cui Cheng's former employers were both imprisoned at the Gewu Academy, yet the two of them were never arrested.

Jardine Matheson was driven to a mental breakdown and admitted that Qin Wenyuan was not involved in smuggling.

After Qin Wenyuan and a group of Chinese employees of Jardine Matheson & Co. were arrested by the Shanghai police, they were thoroughly investigated for several months.

Those who were found to have participated in smuggling, or even just had any knowledge of it, have been dealt with.

However, including Qin Wenyuan, there is indeed a group of people who were not involved, and at least so far no evidence or testimony has been found.

But they were ultimately convicted of aiding and abetting smuggling and sentenced to one year of hard labor in Shanghai.

Liu Yulong officially ascended the throne, and the edict of amnesty was sent to Shanghai, finally releasing Qin Wenyuan and the remaining staff of Jardine Matheson.

There were networks of connections among the foreign merchants who invested in Da Han, and the Da Han people who served as senior managers for these Western merchants also had their own various circles.

After Qin Wenyuan was finally released from prison, Luo Baolin and Cui Cheng chose a familiar place to welcome him back.

The three former "senior executives of the foreign firm" paused at the door and glanced at the situation in the restaurant's main hall.

Then, led by the waiter, we slowly made our way to the reserved private room next to the lobby.

After entering the private room, the three of them did not close the door to discuss their own affairs.

Instead, he opened the windows, stood on the windowsill and in front of the door, and continued to listen to the various discussions in the lobby.

"The imperial court's silver coins are quite well made, much more exquisite than those Mexican silver dollars, but the 30% fire loss is terrifying."

"The imperial court already had a 20% commercial tax rate, and now it's been increased to 50%. Who would still want to buy things?"

"They still won't let us lower the price. From now on, if we want to do business with Westerners, we'll have to pay 1,000 strings of cash to join the Imperial Han Company's guild. The key point is that they'll raise the price by another 50%..."

"This is equivalent to a 50% price increase for everyone. In the end, our profits won't change much, so we can accept it. But this is treating Westerners like suckers."

"Weren't all those Western merchants arrested by the imperial court? Their properties in Shanghai were all confiscated. Who would dare to do business in the Han Dynasty now?"

"The current emperor is a young man who has ruled the country. He is still young and impetuous. He cannot tolerate even the slightest imperfection. He would rather send a large army to Luzon to arrest those smugglers and has set up a whole bunch of rules."

"If you're not deaf and blind, you can't run a business. These Westerners come here to do business, and the imperial court receives several million taels of silver in customs duties every year. Do you really think the imperial merchants can just ignore this money?"

"Now look what's happened! This place is as deserted as a ghost town. Who knows if it'll ever become lively again..."

Luo Baolin and the other two listened carefully for a while until the dishes started to be served in the private room. Only then did they close the doors and windows and begin to eat and discuss amongst themselves.

Former manager of Russell & Co., Cui Cheng, spoke first, expressing his feelings:

"This street lined with foreign trading companies is deserted, but the restaurants seem to be quite crowded."

Luo Baolin said with a forced smile:

Everyone is watching the winds, wondering if the Western merchants will come again, and if the Emperor will change his mind and be a little more lenient...

"But I have carefully read the imperial edict, and the new rules are very detailed."

"This shows that the emperor and the court did not make this decision on a whim, but after thorough investigation and consideration."

"Now that we've gone this far, it's impossible to go back on our word so easily."

"Even if these industries were truly ruined, the imperial court might still forcefully maintain them..."

Upon hearing this, Cui Cheng couldn't help but shake his head:

"To be honest, if they are like this, aren't we the same?"

"The profits from maritime trade are so huge that anyone who has been involved would never want to give it up completely."

"Moreover, the fact that the imperial court confiscated those foreign firms might not be a bad opportunity for us."

"Everyone just doesn't know what to do, so they're all going around making visits and waiting to see how things develop..."

After they finished speaking, they both glanced at Qin Wenyuan.

Qin Wenyuan sat in the chair, took a deep breath, and chuckled dryly as he muttered:

"Thirty percent of the fire loss... that's called seigniorage, it's nothing at all."

"Silver coins are still silver at least. If the court asks you to exchange silver for paper money, wouldn't that be equivalent to losing 100% of the silver?"

"Do you want to exchange it? Most people have no choice but to exchange it if they can buy the goods."

"Silver coins only need to be exchanged once; the others can be exchanged by others. When you sit in the shop and collect money, you can just accept silver coins."

"If they insist on payment in silver, then we'll add the fire loss fee."

Cui Cheng nodded with a complicated expression:

"That makes sense, but the key question is, with the price increased by 50%, will Westerners still come to buy?"

Qin Wenyuan said with a smile:

"Don't add 50%. Even if you double the price, people will still do this business."

"Our Han tea, silk, and porcelain are considered playthings for kings and nobles in Europe, not everyday items."

"No matter how high the price, this kind of thing can still be sold, and it might even sell for a higher price."

Luo Baolin generally agreed with Qin Wenyuan's statement:

"I have heard about these things, but I don't think that's the key issue right now."

"The key is that His Majesty acted swiftly and decisively, arresting almost all the British merchants and reportedly sending them to the Imperial Academy to be used as medicine."

"As a result, all the old trade routes and connections were paralyzed."

"We can only continue this business once other Western merchants come to the Han Dynasty and connect with their networks."

Qin Wenyuan leaned forward slightly and began to mutter in a deep voice:

"Actually, there is another way. Instead of waiting for Western merchants to come here, we can find our own way to Europe."

"At least you can go to Malacca, or India."

"The imperial court arrested Western maritime merchants from within the Han Dynasty, but European merchants in Malacca and India were not harmed."

"Even if we can't trade directly with them, we can ask them to contact European merchants."

Cui Cheng was somewhat surprised after hearing this, but he also began to seriously consider it:

"We have considered going abroad ourselves, as there are many people from Fujian and Guangdong provinces who make a living in Southeast Asia."

"They all know that once they leave the borders of this great Han, the Westerners will run rampant."

Qin Wenyuan said without hesitation:

"The emperor has already sent troops to occupy Luzon, and I think this is a sign of the changing times."

"The wealth and land that the Spanish had accumulated in the area were all confiscated and became the spoils of the emperor and his army."

"Even just considering the indigenous slave laborers, it's estimated that around 100,000 people were arrested at once."

"This harvest will definitely be much more profitable than conquering places like the Mongolian Plateau and Baikal."

"If the emperor and his army have tasted success, they may well continue to seize places like Borneo, Malacca, and Java."

"That means robbing the Dutch and Britons. Collecting taxes is nowhere near as profitable as robbing..."

Cui Cheng didn't care much about these things:

"What does all this have to do with us? The imperial court wiped out all the Westerners in Luzon in one fell swoop. If the court continues to kill other Westerners like this, how are we supposed to do business with them?"

Qin Wenyuan immediately said:

"Of course it's related. In the past, Westerners were lawless in Southeast Asia because the imperial court had no interest in Southeast Asia."

"Now that the imperial court has wiped out a group of Westerners in Southeast Asia, it will serve as a warning to other Westerners, and they will not dare to act so lawlessly again."

"It would be much safer for us to go to Southeast Asia, or even India, in person."

"The key point is that after this battle, the imperial court not only did not withdraw its troops, but also continued to recruit immigrants from Zhejiang, Fujian and Guangdong provinces to reclaim wasteland."

"The imperial court is turning Luzon into a military prefecture or even Luzon province; this is the real trend."

"The imperial court's territorial expansion in the north has finally come to a basic halt. If the current emperor is not prepared to stop territorial expansion like the late emperor, he will likely continue to wage war in the South Seas."

"The imperial army is relatively disciplined now and generally won't rob legitimate merchants. They still need us merchants to help them sell their goods."

After a long silence, Luo Baolin finally asked a direct question:

"Brother Qin, why don't you just tell us what you're thinking and let's see if this deal is worth doing?"

Qin Wenyuan sat up straight and stated his true thoughts in a very serious manner:

"Let's jointly invest in and establish a 'Nanyang Trading Company'. We'll take advantage of the imperial army's expeditions to Southeast Asia to do business directly with Western merchants in places like Malacca and Batavia."

"If the imperial army really attacks, then we will buy up the spoils of war from the soldiers and sell them to the surviving Westerners elsewhere."

"During this time, we'll cultivate good relationships with the soldiers and our men will travel all over the country to find out where Westerners' wealth is concentrated. We might even be able to persuade the army to launch an attack..."

Qin Wenyuan had already laid enough groundwork, clarifying the current situation and potential risks and profits.

Luo Baolin felt that this was very similar to his own judgment, and after listening, he agreed without much hesitation:

"I have always trusted Brother Qin's judgment. Although these businesses are certainly much riskier than our old way of running a shop, the profits are also much greater than simply buying and selling."

Cui Cheng was a little confused, so he hesitated for a moment, but under the watchful eyes of Qin Wenyuan and Luo Baolin, he gritted his teeth and shouted:

"Fortune favors the bold, let's do it!"