Chapter 588 - Wudaokou Financial Meeting
Another effect of visiting the church was to put Li Luoyou's mind at ease. He had secretly suspected that the Australians worshipped devils and drew their extraordinary powers from the netherworld. But seeing such a magnificent church—the cross, the priest—his suspicions evaporated. He immediately attributed their remarkable abilities to the extraordinary wisdom and power bestowed by God. At last, he could depart Lingao with a tranquil heart.
It was a calm and unhurried day. The Bairen Industrial District continued belching smoke of various hues, and wastewater flowed ceaselessly from the treatment plant's drain into the Wenlan River. Temperatures climbed steadily, and the river seemed greener than in years past—and now carried a faint stench. Water in certain diversion channels had grown so foul that daily cleaning crews were required.
In a relatively remote quarter of East Gate Market—for yes, East Gate Market had by now developed into proper city blocks, no longer a single street as in earlier days—new cross-streets sprouted from the Central Avenue as it extended outward. Fresh blocks took shape; plots of land were enclosed by fences, marked with signs bearing strange foreign text. Some sites already bustled with construction of new buildings; others lay fallow, left for commoners to plant vegetables.
At the intersection of Fifth Street—colloquially known as Wudaokou, or "Five Way Crossing"—stood a newly completed teahouse. The ground floor sold tea leaves, while the second and third stories offered seating for patrons. This establishment was a new venture opened by the Cooperative. Tea was a mass-market daily necessity, and consumption in Lingao was rising sharply. The island produced no tea itself; every leaf was imported from Fujian. The Cooperative had opened this teahouse not merely to regulate people's livelihood but also as a mechanism for withdrawing currency from circulation.
Both the Executive Committee and the Standing Committee had agreed that private capital could be cautiously introduced into non-critical industries. This teahouse had received investment from several Tiandihui clients, who now held forty-nine percent of total capital. These same clients were planting tea, an economic crop, in the surrounding hillsides under official guidance—working to eventually meet domestic demand.
The guest seats on the upper floors were immaculate and well-furnished, attracting a steady clientele. Most patrons were local small landlords and merchants who had recently prospered, along with indigenous employees from the various expanding departments.
The most frequent customers of the Wudaokou Teahouse, however, were Elders from the fiscal and financial systems. The establishment stood very close to the newly opened Delung Bank Head Office, and many wandered over to chat and relax during breaks. Gradually, this place supplanted the cold, angular lounge in the original Financial Commission compound back in Bairen City, which was all primary-industrial simplicity and concentration-camp ambiance.
The tea leaves arrived from Fujian and underwent simple sorting, reprocessing, and packaging at the Light Industry Ministry's tea factory. Nearly every famous Fujian tea of this spacetime could be found here. The most popular was Oolong tea, which had already appeared by this era.
This teahouse was a microcosm of the intersection between diligent, simple pioneering Celestial merchants and the new forces of Lingao: Fujian tea, Lingao-style packaging and service, cooperation between indigenous merchants and monopoly state enterprises. The operation ran naturally and smoothly. Since the Wudaokou Teahouse opened, it had gradually become the gathering spot for Elders in the fiscal and financial sector. Even indigenous upstarts who came for tea understood that the third floor was not a place for them.
The leisure lives of Elders were generally not very stimulating, and finance people spent their days drowning in reports and numbers. To adapt to a future fiscal system that might one day lack computers, subordinate departments of the General Fiscal Directorate were pushing what they called "Manual Accounting." This deliberate regression aimed to ensure that if computers ever disappeared entirely, the ability to aggregate reports would not vanish with them. Current computer systems were reserved only for relatively complex accounting work.
Days spent reading reports, clicking abacuses, cranking hand-calculators, and sliding slide rules drove everyone to endless complaint. Adding to their misery, every Elder had been assigned apprentices—apprentices who, rather than lightening the load, initially increased it.
The more tedious the work, the greater the emphasis on leisure and relaxation. Hence this place became a daily pilgrimage for many—not only for idle chatter, but sometimes even for holding actual work meetings.
The long-term gatherings gradually crystallized the fiscal and financial Elders into several informal cliques: primarily the "Accounting Clique," the "Bank Clique," and the "Fiscal Tax Clique." The lines between cliques were never sharp; personnel frequently overlapped. These minor factions loosely coalesced, later forming what would be known in the Senate as the "Wudaokou" faction. This system lacked the scale of the Law Club, the rigorous thinking and organization of legal professionals, or the grand ambition of the Marxism-Leninism Institute to dominate all things. Instead, various small factions stood like trees in a forest, mutually contemptuous of each other's financial, economic, and fiscal philosophies, and unwilling to defer to anyone. Consequently, at the Second Congress, the Financial Group failed to secure a larger slice of power—and achieved correspondingly less than the Law Club.
Within the primary coal-iron complex, finance—or rather, the fiscal department under the current system—was indispensable but far from paramount. Everyone understood the limited prospects for expanding their influence.
"We are a service unit." On this point, the Fiscal-Financial Clique maintained perfect unanimity.
The fiscal, financial, and tax systems had just undergone comprehensive restructuring following the recent Second Plenary Session. The former Fiscal and Financial Committee had been divided and adjusted into multiple departments. The new system finally had a formal Ministry of Finance; the awkwardly positioned Cheka finally received formal status; and the tax department, which had long lacked clear standing, was formally established. In addition to assuming control of the County Grain Collection Bureau—a compromise product of the old Ming system—a new Tax Bureau was also being organized.
The original Delung Grain Bank had been split into two entities. One retained the old name—Delung Grain Bank—and continued to handle grain purchase, storage, and sales. The currency issuance and financial business portions were spun off to become Delung Bank, which presently played a three-in-one role as central bank, specialized bank, and commercial bank.
The new Fiscal Comptroller, Cheng Dong, never came to Wudaokou, but he supported his subordinates discussing professional issues here. The teahouse was an informal setting where conversation flowed freely, unlike the formality of official meetings. Many things could be said openly. Thus it gradually became an important venue for operational departments to hammer out and formulate policy.
The third floor consisted entirely of private rooms, with thin bamboo curtains hanging at the doorways and green plants adding decoration. Some rooms were tiny, accommodating only four or five people for casual conversation; others were large enough to host gatherings of more than twenty for a working meeting. An indigenous waiter guarded the stairway entrance—both to prevent uninformed natives from stumbling onto the third floor and to tend to the thermos bottles and tea supplies.
At this working hour, most private rooms sat empty. Only one was filled with guests: seven or eight people gathered around a circular table, trading jokes with each other. Their exchanges touched mainly on departmental business issues and then, inevitably, the maid welfare that seemed tantalizingly within reach. Occasional bursts of knowing laughter—"you know what I mean"—drifted out.
Hot tea and plates of fruit sat on the table. The skylight in the roof was propped open; smoke from several cigarettes and cigars curled slowly upward. This tableau of ascending green smoke had earned them the nickname "Immortal's Gathering" from the natives.
"I hear the quality of maids after training is quite impressive—far better than when they first arrived," said Yi Fan, head of the Cheka. A hint of frustration showed in his somewhat dissolute manner. "I'd truly love to get one early and train her personally."
The Cheka had been established for months now, yet it hadn't landed a single "big fish." Yi Fan was deeply disappointed. His audit work crawled forward at a snail's pace due to a chronic shortage of suitable personnel. Everything had to be built from scratch—and competition for resources was fierce. Consider the most basic accounting training class needed for auditing: he had championed its large-scale launch with the utmost urgency, but trained accountants were promptly intercepted by various departments. The Executive Committee had apparently awoken to a new reality—to have departments and enterprises keep proper records and perfect their financial systems, accountants were essential.
And so Yi Fan ultimately received fewer than ten people. Adding in apprentices he personally supervised and civilian staff who didn't require accounting or audit knowledge, he barely scraped together enough for a football squad.
With this skeleton crew learning as they went, Yi Fan expended ten times the effort he would have spent doing everything himself. His fledgling auditors made mistakes constantly; every document demanded his personal review. The result: he still hadn't straightened out the accounts of enterprises under Wu Nanhai's Agricultural Committee. His famous declaration—"Drag the Elder out and shoot him"—had become an object of mockery.
Ji An bit into a mango. "The good-looking ones have to be won by lottery bid. They're deliberately squeezing every last drop from our pockets."
"I couldn't care less," said Wu Di, flicking cigarette ash. A perfect cylinder of ash sailed into a glass cup already brimming with butts. He was about thirty, medium build, well-proportioned and muscular, rather handsome—the sort who drew attention in any crowd.
"What are indigenous maids, anyway? They're nothing special to look at, all short and small." Wu Di expressed his disdain openly. "Never mind their looks—open their mouths and there's zero common ground with modern people. I have absolutely no interest."
"Then why did you claim the maid welfare fund?"
"Everyone gets it. Why shouldn't I?" Wu Di said indifferently. "Besides, buying one to do housework isn't a bad idea. That kind of 'life secretary' is really only good for that."
Transmigrators had rarely brought wives or girlfriends. Only Wu Di had not only brought along a young and beautiful wife but had also managed to abduct his sister-in-law. He made no secret of his ambiguous relationship with the latter, sometimes appearing in public with all three in tow—drawing sidelong glances from everyone. Du Wen had privately cited his wife and sister-in-law multiple times as textbook examples of "women voluntarily placing themselves in patriarchal shackles, reduced to male appendages."
"You are truly the proverbial well-fed man blind to the starving man's hunger—" Every time Yi Fan saw Wu Di, he genuinely wanted to audit his accounts and find some excuse to drag him out and shoot him, thereby preventing one man from monopolizing too many resources. Unfortunately, the Credit Department of Delung Bank where Wu Di worked hadn't yet transacted enough business to justify an audit. The idea had to be shelved.
"Ahem." Jin Zhijiao coughed beside them. As the only woman present, she found such topics deeply uncomfortable—and harbored a private unease: would Old Hu want a concubine too?
Yi Fan noted her reaction and hastily steered the conversation elsewhere. Not out of respect for women, but simply because Jin Zhijiao was currently one of his most important generals; he needed to keep her in good standing.
Jin Zhijiao was the wife of Hu Muye, an engineer at Lingao Telecom. Having graduated in accounting, she excelled at statistics and currently served as second-in-command at the Cheka.
"Any new policies lately?" Yi Fan asked casually, flicking ash.
Chen Ce, Director of the Delung Bank Planning Department, looked at him and stubbed out his cigarette.
"Are you genuinely unaware, or merely pretending? The General Office of the Executive Committee issued a document on monetary system reform. They've asked us to supplement a detailed plan based on our last report."
"That draft for comment?" Yi Fan said. "Isn't that the report you submitted previously?"
A few months earlier, Chen Ce had submitted a report to the First Executive Committee regarding fiscal and financial system reform. Besides advocating restructuring of the Fiscal and Financial Committee and the separation of finance from taxation, he had also raised the question of monetary reform.
"Correct—still largely the framework I proposed. But one can tell the Executive Committee is completely adrift on how to reform the monetary system. They're wavering badly."
"Not bad, though. At least the current fiscal system reform owes a great deal to your report. Delung was separated out—tell me, was the ultimate goal of your report to split Delung in the first place?"
In the grain bank era, power within Delung had been held primarily by Planning Committee people; financial and accounting personnel were essentially worker bees.
Once the split occurred and the grain bank business was spun off—with a proper banking system established—those who ate from the financial and accounting trough immediately rose in status. A whole cohort ascended to middle management positions.
"Ha! I wouldn't put it quite that way—it was simply the natural course of events," Chen Ce replied smoothly. "A grain bank doing finance is absurd; the name didn't fit the reality. Can you imagine the People's Republic of China's Ministry of Grain issuing banknotes?"
So-called base money is the liability of the central bank. The central bank purchases Treasury bonds to issue currency. Hence the first step in Chen Ce's proposed fiscal reform had been to transform Delung Grain Bank into Delung Bank. That step was now complete—which explained why he was proposing monetary reform.
"Didn't the PRC Ministry of Grain issue food stamps for decades? Though we are admittedly more thorough—we combined two systems into one outright." Yi Fan offered his commentary.
"You studied finance as well. You understand better than anyone the flaws of our so-called circulation notes."
"Indeed. That's why I approved when you proposed that Cheng Dong use grain as the standard." Yi Fan nodded. Using rice as a general equivalent for fully convertible paper money was workable during the initial startup phase. In an underdeveloped region like Lingao, only rice could provide sufficient credible credit backing, and through foreign trade, rice prices—and thus currency value—could be stabilized within an acceptable fluctuation range.
"The biggest problem with pure grain circulation notes is that they function essentially as grain bank exchange receipts. The restrictions are too rigid; other assets must first be converted to grain before they can become currency. This no longer matches our current socio-economic development." Yi Fan summarized the situation. "However, the reason your proposal passed back then was largely because your approach appealed to Director Ma—that 'Industrialism' fanatic." Yi Fan laughed. "I suspect Director Ma fundamentally doesn't understand currency, but harbors intense hostility toward finance. And he craves complete control over the financial system."
"Director Ma is a planned-economy zealot," said Wu Di, lighting a fresh cigarette. "He's also concocted a new monetary system plan of his own."
"Oh? I'd like to see that. I didn't know Director Ma had developed an interest in finance and fiscal matters."
"It's extremely long," Wu Di said. "I can summarize his thinking for you."
"I'm listening with respectful attention."
"Director Ma's monetary system, in essence, amounts to controlling world currency issuance by controlling trade channels," Wu Di explained. "His theory is: as long as you monopolize the logistics industry, you can monopolize the definition of currency. The pound sterling and the US dollar became international currencies in succession because they monopolized commodity circulation."
He pulled a notebook from his pocket. "Let me read you a passage from his original text:
"...Purchasing things requires two prerequisites: A) someone must be selling, and B) a channel to buy must exist. With only farmers, you cannot buy rice; with only factories, you cannot buy clothes. Currency must be used, and the logistics industry must handle the transfer. Therefore, monopolizing logistics means monopolizing the definition of currency. The pound sterling and the US dollar became international currencies sequentially; the key point is that both countries controlled sea power. Mastering sea power has two meanings: first, owning a monopoly merchant fleet that others cannot compete with, so that all bulk trade passes through your hands—naturally giving you the right to set prices. Second, possessing the world's preeminent navy, capable of halting any trade route at any time without fearing retaliation. The US and UK both followed this model. The US need not care who extracts Middle East oil or who manufactures half the world's industrial goods—as long as these things are priced in dollars..."
"Of course, if this could be achieved, it would be beneficial in the short term—look at the old spacetime's America," Chen Ce observed. "His abacus clatters along the same lines as the Americans: relying on international currency credit to accumulate infinite debt. Most of the over-issued currency spins endlessly in the world market."
"He has a four-phase scheme in this plan," Wu Di continued. "Phase One: let this new currency—call it the 'Australian Dollar'—purchase our materials. We already have circulation notes; just swap them directly. Phase Two: require Australian Dollars to purchase others' materials, exchangeable with gold and silver. Phase Three: require gold and silver to be priced in Australian Dollars. Phase Four: require everything to be priced in Transmigration Currency."
"The Director is a true believer in 'planning as panacea, materials uber alles,'" Chen Ce said with a wry smile. "To him, finance is essentially heresy."
(End of Chapter)