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“Haha, Big Brother, long time no see!”
Wang Chong faintly smiled, clearly not minding that he had been called by his actual name. He pointed at a nearby table and chair and indicated that Yang Zhao should sit.
A maid came over to pour new tea and serve a new set of pastries.
“Big Brother, you seem extremely worried over something. Just what has you in such a state? Have the Confucians also started to censure you as well?”
Wang Chong took a light sip of his tea and smiled.
“Worthy brother, I don’t have a single shred of military authority, and it’s not like I’m enemies with them, so why would they pay any attention to me? But if I don’t handle this matter well, I fear that the Confucians might actually censure me.”
Yang Zhao sighed, his brow creasing in worry.
Wang Chong raised an eyebrow and his expression immediately turned serious.
“It sounds rather serious. Just what has happened?”
“This is actually related to you. You remember the gold yuan certificates you proposed to His Majesty?”
Yang Zhao’s brow was creased in worry as he brought up the proposal Wang Chong had made to the Bureau of Revenue a long time ago.
“Whether it’s gold or silver, small households and establishments really don’t care, and they can get by just carrying around a few loose pieces of silver. If they need to travel to a faraway place, they just get a cloth bag and tie it to their belt. But the Great Tang is currently thriving and prosperous, and countless tycoons and merchants crisscross the empire. Every day, the amount of silver going in and out is like a surging river, and it truly feels like they spend money like water. This is no small sum. This is particularly the case with a few of the noble clans. After several hundred years of inheritance, they’ve come to control many caravans that can influence commodity prices throughout the Nine Provinces. A single deal can involve tens of thousands of taels of gold or silver. Carrying this much gold or silver around is extremely inconvenient. Thus, the Imperial Court adopted your proposal and began to heavily promote the use of gold yuan certificates. Later on, after many twists and turns, His Majesty gave this matter over to me to handle. At the start, the policy managed to resolve quite a few things, but problems started to crop up.
“For some reason, many factions have begun to reject the use of gold yuan certificates. If paying with actual gold or silver, they will take the stated price, but if paying with gold yuan certificates for the same thing, they will demand an additional twenty or thirty percent, sometimes even more than that. Gold yuan certificates are losing more and more of their value now; many factions are no longer so happy to take them, and use of gold yuan certificates is avoided wherever possible. They’re even more willing to carry around heavy chests of gold and silver, taking the risk of being robbed by bandits, than accept the gold yuan certificates issued by the Imperial Court.
“You also understand that the Imperial Court’s promotion of gold yuan certificates is soft in nature, and if they don’t accept it, there’s nothing we can do. Not only that, it was only the noble clans on the borders that were rejecting gold yuan certificates at first, but later on, even the great clans of the capital began to resist them. Privately, some people have already begun to trade gold yuan certificates amongst each other, even though the Imperial Court has stressed again and again that they shouldn’t. If this continues, we’ll have a major problem on our hands! Once you’ve shot an arrow, there’s no getting it back, and the Imperial Court has already expended a great deal of time and effort into promoting the gold yuan certificates. If the gold yuan certificates are completely rejected, the Imperial Court will immediately suffer enormous losses, and this is highly likely to affect the welfare of the people. After all, a problem with gold yuan certificates is a problem of money. Pulling a hair can cause the entire body to move, and this effect isn’t something that can be stopped if the Imperial Court recalls all the gold yuan certificates. This could even have major economic ramifications!”
The more Yang Zhao spoke, the more worried and depressed he became.
“Worthy brother, you also know that many people privately aren’t happy that I was made Chamberlain of Palace Revenues. Countless people in the court, even the officials of the Bureau of Revenue, are keeping a close watch on me. If I show the slightest weakness, they’ll immediately drag me off my horse and make sure that I never recover. I feel like I’m sitting on a bed of nails! You were the one who thought up the idea of gold yuan certificates. No matter what, you have to help me!”
Yang Zhao suddenly clutched Wang Chong’s arm like he was a drowning man clutching onto a straw, his expression fraught with panic.
Wang Chong said nothing, instead beginning to carefully examine Yang Zhao. He had heard some things about Yang Zhao’s current circumstances. Given his status as cousin to Consort Taizhen, no one in the palace dared to directly criticize him. However, quite a few people criticized him in private, with the majority of the criticisms aiming at his family background and his proclivity for gambling. But Wang Chong also knew that Yang Zhao did not enjoy the favor of the Sage Emperor merely because of his connection to Consort Taizhen. Although he was not born to a very good family and had his various problems, he possessed astonishing talent when it came to numbers and finances. That he could recognize that the problem of the gold yuan certificates was not an isolated problem and could have hidden economic effects was already proof enough of his talents in this field. Moreover, Wang Chong also knew that Yang Zhao had relied on his skill in economics to rise through the ranks of officialdom.
“Let me ask you, just how many gold yuan certificates have been printed?” Wang Chong bluntly asked.
“This… it- it shouldn’t be that many…” Yang Zhao immediately began to stammer.
“Hmph, not that many? If it wasn’t that many, would we have the current situation? If you want me to help you, you have to tell me the truth.”
Wang Chong’s sharp eyes seemed to bore into Yang Zhao’s soul. No matter what he was hiding, it seemed like it could never escape Wang Chong’s gaze.
“This… We did print quite a lot. But it’s only around eight hundred million taels of gold,” Yang Zhao said with a trembling voice.
“If you say eight hundred million, then you’ve probably printed at least one billion’s worth. In not even two years, you’ve printed one billion taels in gold yuan certificates. Did you really think that this was some sort of money tree! That you could print however many you wanted!” Wang Chong coldly said.
He had seen at a glance the root of the gold yuan certificate problem. The Great Tang pursued a policy of long-term prosperity for the people. Thus, despite the wealth of the country, the Imperial Court brought in little tax revenue—less than one hundred million taels of gold a year. By printing one billion taels’ worth of gold yuan certificates, Yang Zhao had printed off ten years’ worth of tax revenue. The consequences were easily imaginable.
Yang Zhao had still been too greedy! Although he was exceptionally talented when it came to finances and economics, when he saw a treasure trove like the gold yuan certificates, his gambler nature immediately broke out. He had taken this policy meant to serve as a convenience for the common people and a way to enrich future generations, and made it into a tool to get rich.
Although the majority of the money he had printed went into the Imperial Court’s treasury and was used for the welfare of the people, his way of doing things had completely ruined Wang Chong’s original intentions when he had made the proposal to the Imperial Court!
This sort of printing of paper currency that increasingly caused it to lose value and even be speculatively traded on a ‘black market’ was known in another world as ‘monetary inflation’. In more casual terms, it could simply be called printing too much currency.
When he was making this proposal to the Imperial Court, Wang Chong had stressed the need to be cautious when printing gold yuan certificates and that they could not be excessively printed. Alas, all of this had still occurred.
“You were too greedy!” Wang Chong sternly said, his expression cold and aloof. “It would be fine if you hadn’t distributed the gold yuan certificates, but now that they’re out there, it’s too late to take them back. It’s hard to gather up spilled water, and there are some things that, once done, are impossible to reverse. Do you know what will happen if the matter of the gold yuan certificates is not handled properly?”
Yang Zhao said nothing, but his face paled.
“You don’t seem to understand the specifics, so I will tell you. First of all, you said that when using gold yuan certificates to purchase items, you need to pay twenty to thirty percent more than you would with actual gold. Let me tell you that this is only the beginning.” Wang Chong closed his eyes and began to slowly narrate the future disaster. “Gold yuan certificates will soon begin to rapidly shed value, and a gold yuan certificate nominally worth one hundred taels of gold will only be worth fifty, and that’s a conservative estimate. Once this occurs, the great clans will start to purchase gold yuan certificates en masse and then go to the Imperial Court to exchange them. The common people might not have the channels to do this, but the great clans will. The gold yuan certificates were issued by the Imperial Court, and in order to preserve the Imperial Court’s reputation, the Imperial Court will have to honor the face value of the gold yuan certificates no matter how many the great clans want to exchange. Meanwhile, gold yuan certificates will become more and more worthless.
“By the end, gold yuan certificates will be worth no more than the paper they were printed on. The one billion taels’ worth of gold yuan certificates you have printed will throw the currency markets of the Great Tang into chaos. The common people would have products that they couldn’t sell while the merchants would have money that they couldn’t use to buy anything… The efforts of decades, of generations, of hundreds of thousands of people working day and night, would become nothing. And that would be an absolute calamity. The prosperity of the Great Tang would go up in smoke in a single night!”
Before Wang Chong had even finished speaking, Yang Zhao had already broken out in a cold sweat. As the Chamberlain of Palace Revenues, he was the primary director of the empire’s financial policy. If such a thing really happened, not even Consort Taizhen would be able to protect him, and popular discontent would mean that his death would be imminent. The Son of Heaven would be punished the same as a commoner if he committed a crime. For small problems, Consort Taizhen would be completely capable of protecting him, but not for something like this.
“Worthy brother, save me! No matter what, you must save me!”
Cold sweat trickled down Yang Zhao’s forehead as he grimly clutched Wang Chong’s arm, the veins on the back of his hand bulging from the force he was applying.
No one understood more than him the situation he was in. He had managed to maintain some of his composure in front of Wang Chong, but the true situation was far more severe than he had said, and the situation was worsening much faster than he had first imagined. Three months ago, Yang Zhao had barely paid any attention to the reports he was receiving.
But three months later, Yang Zhao was forced to seek Wang Chong’s help.
“…Is it because I printed too much? I’ll stop printing the gold yuan certificates right now, and if I need to take some of them back, I’ll have them back immediately!”
Yang Zhao was in shambles, seeking out any remedy for his illness.
Recalling the gold yuan certificates was something that Yang Zhao only wanted to do as a last resort. After all, it was money! But he no longer had any options.
“This will only treat the symptoms. Even if it solves the problem in the short term, the problem will still break out in the future.”
Wang Chong shook his head, rejecting the idea.
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