Chapter 305: Sweet Port Turbulence — Sugar Industry Guild

"We lack a leader with influence who can speak with authority," Wen Tong summarized.

Zhu An possessed prestige and served as the leader of the Haiyi Guild. If he could be persuaded to cooperate, the effort would be halved.

"However, unless this storm concludes with a head rolling, it cannot be considered truly settled," Chen Tianxiong observed. Ambiguous victories carried substantial danger.

"Besides, even if he cooperates, he'll eventually contend for leadership within the joint-stock company."

A man accustomed to wielding power, even if he submits temporarily, will never remain content. Any disturbance would spark dissent, generating endless trouble.

Feng Guangfeng was a decent man but looked down upon due to his status, so his influence was limited. They didn't know the other guild members well enough.

"I don't think we need to search around for someone," Chang Shide reflected for a while. "Since they dispatched Feng Guangfeng as a liaison, it demonstrates they trust him. Let's simply befriend him and utilize him as an intermediary. He doesn't need to issue a rallying cry—just convey our meaning accurately."

They sent Liao Daxing to the Dachang Rice Shop to contact Boss Zhu.

The following evening, Feng Guangfeng arrived as arranged.

"South China Sugar will not alter the acquisition price," Wen Tong stated directly. On the question of conceding to the Haiyi Guild on pricing, everyone had agreed to stand firm, ensuring they understood clearly who the overlord of Leizhou sugar now was.

Feng Guangfeng's expression turned grim.

"Please, managers, reconsid—"

"Say no more," Wen Tong interrupted. "Ever since establishing scales in Xuwen, South China Sugar has maintained 2.5 taels. We cannot destroy our own credibility."

Merchants valued trust above all else. Crushed by this principle, Feng Guangfeng had nothing to say.

"However, we understand your difficulties," Wen Tong continued. "You were incited by Zhu An and fell into a misunderstanding with my firm. My employer is magnanimous. As long as everyone makes a clean break with Zhu An, my employer will naturally look after you!"

Feng Guangfeng understood the condition being set: they had to abandon Zhu An. But he still failed to see the benefit. Even if the colleagues agreed to raise the price to match South China Sugar's 2.5 taels, given the Haiyi Guild's ruined reputation, they wouldn't collect much—South China Sugar's renown for benevolence had spread throughout Leizhou. Unless they paid even more, which the merchants were unwilling to do.

"My employer's intention is this: South China Sugar can acquire sugar on behalf of the firms. The price remains 2.5 taels—farmers endure hardship too; 'if the skin is gone, to what can the hair attach'? Everyone needs a means of survival, correct?"

The words were gracious. Feng Guangfeng could only nod repeatedly and say "yes." He himself felt the Haiyi Guild's price suppression had harmed farmers excessively and was unkind.

"Each firm simply hands over the silver. We will acquire as much sugar as there is silver to purchase. We won't take a cut; consider it a gratuitous service."

Feng Guangfeng's mind worked rapidly. This was indeed a workable approach. But would South China Sugar truly serve without remuneration? He turned the thought over and immediately said:

"Then the two-percent discount per shi of sugar shall be offered by our colleagues as South China Sugar's labor fee!"

This was a very graceful gesture. With over a hundred thousand shi of sugar involved, the two-percent discount represented a substantial profit.

"That is for later—" Wen Tong nodded. "However, this proxy acquisition carries a condition."

The condition was that firms must purchase sugar from South China Sugar with cash; no credit.

"That presents no difficulty," Feng Guangfeng nodded readily. "Acquisitions are customarily conducted in cash anyway."

"Good." Wen Tong continued: After payment, South China Sugar would issue warehouse warrants to each firm recording the amount of sugar calculated at 2.5 taels per shi.

However, after payment, the sugar firms could not withdraw the goods themselves. All sugar would be transported and sold out of Leizhou by South China Sugar. After the sale, accounts would be settled according to the figures inscribed on the warrants.

"The current market price in Guangzhou is 3.8 taels per shi. It may rise or fall," Wen Tong explained. "Regardless of fluctuations, we will settle accounts based on this rate. Whatever the warrant indicates, that's the silver you receive."

Feng Guangfeng was taken aback. This clearly meant South China Sugar intended to monopolize the sales rights of Leizhou sugar. The Haiyi Guild had never ventured into this territory. Their ambition was vast indeed.

Yet he couldn't say "no." Not that he didn't wish to, but he dared not. Since the other party had opened their mouth so wide, they clearly had nothing to fear. Thinking of the rumored eleven heads, Feng Guangfeng felt a chill course down his spine.

However, upon deeper reflection, the firms wouldn't suffer loss: selling in Guangzhou themselves yielded similar margins. Though the market might rise, it might equally fall—uncertainty in either direction. Transporting it themselves meant bearing freight and travel costs, which were considerable. Encountering storms or pirates meant heavy losses or total ruin.

For small firms specifically, these terms were advantageous. Small firms lacked the capacity to transport and sell independently; they consigned through large firms. Not only did they pay commissions, but they also absorbed losses during transport—large firms routinely shifted wastage onto small firms or invented various fees.

If they could close transactions locally in Leizhou at 3.8 taels, everyone would likely accept gladly.

In contrast, South China Sugar's risk was considerably greater. Even if the Guangzhou price held, they had to absorb freight and expenses. If it declined, they would sustain substantial losses.

Since they offered such terms, they obviously anticipated a surge in sugar prices. But price fluctuations depended heavily on "foreign hong" demand, which was notoriously difficult to predict.

Feng Guangfeng considered for a moment before asking cautiously, "Doing this naturally benefits the colleagues greatly, but sugar prices fluctuate wildly. If the market proves unfavorable, your employer will suffer tremendous loss. How can we accept this in good conscience?"

"You needn't concern yourself with that." Wen Tong proceeded to flatter him. "Among the twenty-one firms of the Haiyi Guild, it is rare to find someone as reasonable as Boss Feng: caring for both self and others!"

"I wouldn't presume—" Though he recognized it as flattery, Feng Guangfeng, customarily looked down upon within the guild, was gratified to be appreciated. "Manager Wen praises me excessively."

"When Zhu An wanted everyone to suppress prices, only Boss Feng spoke up for the farmers. This was no small thing." Seeing the approach was working, Wen Tong continued the flattery as planned. "'If the skin is gone, to what can the hair attach?' The people of the Haiyi Guild lacked even this elementary insight; truly a waste of Boss Feng's good intentions."

Hearing this, Feng Guangfeng felt moved. He had repeatedly urged the guild not to harm farmers while fighting South China Sugar—it was detrimental to Leizhou sugar in the long term. He had endured cold looks and insults for speaking these words. Unexpectedly, these "Australians" appreciated his views so highly. Mixed feelings rendered him momentarily speechless. He felt he had encountered kindred spirits.

"We have our reasons for doing this as well." Seeing his expression shift, Wen Tong knew the persuasion had succeeded. He spoke earnestly:

"My employer's intention is simply this: since the sea ban was lifted, more ships are trading overseas. Beyond goods being shipped out, foreigners are arriving to trade. Some maritime merchants, seeking quick profits, deliberately undercut prices. If one lowers the price, it becomes difficult for others to raise theirs. Foreigners are shrewd; if you quote a high price, they find someone else—there's always someone willing to sell. Ruining ourselves through mutual undercutting—is it not lamentable?"

Feng Guangfeng had visited Guangzhou. Though he hadn't engaged directly in "foreign hong" trade, he knew Wen Tong spoke the truth.

"Thus, South China Sugar wishes to unite the Leizhou sugar colleagues to advance and retreat together." Wen Tong concluded. "That is our original intention."

Feng Guangfeng nodded. "If we advance and retreat together, we should share profits and losses. With the current arrangement, your risk is excessively high."

"True. But we are newcomers to this precious land and unfortunately clashed with our colleagues. Although it was Zhu An's doing, grudges linger and must be dissolved gradually. If hearts aren't united, even good intentions can be misconstrued. So this time, we will assume a larger share of risk."

"It is rare indeed for Manager Wen to be so candid!" Feng Guangfeng's impression improved considerably. "I will do my utmost to persuade the Haiyi Guild. But—" He inquired carefully, "Do firms only need to hand over acquisition funds? Are there other costs?"

"None, except the two-percent discount fee." Wen Tong said. "I know this benefit belongs to the sugar firms. But we haven't collected anything for months, so we request the firms to concede it for now."

"I can decide this on my own authority." Feng Guangfeng nodded. "But monopolizing all sales involves numerous parties and will surely encounter complications."

Wen Tong proposed inviting the heads of all firms to a meeting to discuss the charter and address doubts directly. Feng Guangfeng thought it a sound idea but worried about incomplete attendance—some were timid, and South China Sugar's "prestige" was intimidating.

"That doesn't matter. The meeting won't be held at our factory," Wen Tong had already planned. "Two days hence, how about 'drinking flower wine' at Sister Ai's?"

"Excellent!" Feng Guangfeng agreed enthusiastically. This "private brothel" was connected to the county yamen; no one dared cause trouble there. It was as though the yamen itself guaranteed everyone's safety. He admired their thoughtfulness. Compared to the Haiyi Guild members—either pedantic traditionalists, ignorant hedonists, or frogs in a well—even Master Zhu couldn't transcend greed. The difference was like clouds and mud. He sighed and took his leave.

For the next two days, Feng Guangfeng traveled about persuading hesitant colleagues to attend. Not everyone accepted; the timid declined, saying, "You go discuss; I'll follow whatever is decided."

A few others—formerly close to Master Zhu—felt it inappropriate to defect publicly and politely excused themselves.

None refused outright.

Of the twenty firms invited, eighteen responded—Riyicheng had no place in the future blueprint of Leizhou sugar. These firms were the first shareholders of the future Leizhou Sugar Industry Co., Ltd.

The de facto inaugural general meeting of shareholders convened three nights later in Sister Ai's flower hall. South China Sugar spent lavishly, booking the entire courtyard and all the girls.

After feasting and drinking, Chang Shide addressed the gathering, explaining all the benefits of their proposal. They could enjoy high profits without risk, merely advancing silver.

Naturally, entrusting hard cash required guarantees. Chang Shide proposed that the participating firms organize a "Leizhou Sugar Industry Guild," register with the county yamen's Revenue Section, and inscribe the conditions into a contract. Each paying family would receive a copy as evidence.

"Does this mean however much silver I pay, South China Sugar provides me the equivalent shi of sugar in warrants?"

"We are acting as an agent," Chang Shide clarified. Theoretically, silver is exchanged for sugar, but with half the season elapsed, it depended on how much the farmers retained.

According to estimates, farmers held approximately 130-140 thousand shi. The Transmigration Group couldn't purchase it all—besides the Guangzhou Station's funds, they relied on spot sales to recycle cash. Only a two-pronged approach could satisfy the acquisition cash flow.

To monopolize Leizhou sugar sales, local capital had to be mobilized. This was the principal reason for hastening to form the guild and offering agent services.

The attendees remained unaware of the transmigrators' underlying calculations—South China Sugar's performance in crisis had instilled in these merchants an illusion of its omnipotence.

"Fine. I'll pay fifty thousand taels upfront. I want warrants for twenty thousand shi tomorrow!" The speaker was Liu Yulin, proprietor of Risheng Firm, a major player.

"Agreed." Chang Shide nodded. He turned to Liao Daxing: "Record it. Risheng Firm, twenty thousand shi."

Liu Yulin's stance surprised the assembled merchants. Although twenty thousand represented half his usual volume, handing over fifty thousand taels to South China Sugar demonstrated considerable boldness. The crowd buzzed with discussion.

(End of Chapter)