Chapter 1800 - Eve of Issuance

The letter was addressed to his patron, Young Master Liang. The Liang family had always been his backstage supporter and most important major client. As soon as whispers of this currency reform had emerged, Young Master Liang had taken great interest, instructing him to monitor the Australians' movements closely.

In the letter, Liang Chenlong detailed the meeting's proceedings and everyone's attitudes, specifically noting Gao Ju's wholehearted efforts to champion the Australian cause. It seemed the Australians' currency reform was indeed imperative. At the meeting, everyone had reached preliminary agreement. The guilds of various industries would share the quota for exchanging new currency according to their scale and capital strength. The Money Industry Guild had the largest quota, obligated to exchange two hundred thousand silver dollars. The guild internally considered this figure acceptable—after all, the Australians' exchange conditions were fair, calculated by weight and fineness. Exchanging white silver for silver dollars wasn't really a loss.

However, Liang Chenlong also confided his worries in the letter. He feared that exchanging white silver for silver coins was only the first step, and the next would be forcing them to accept a certain amount of silver dollar circulation notes.

Writing to this point, he sighed deeply. The step after that would inevitably involve exchanging collected copper coins for subsidiary coin notes—this was almost certain. Though copper coins weren't particularly valuable, they were still money. The thought of exchanging them for pieces of paper pained him genuinely.

After finishing the letter, he sealed it, stamped it with a secret seal, summoned a confidant, and whispered several instructions.

The letter was not sent to the Liang residence as usual, but to Miss Yuewan at the Visiting Spring Brothel. Yuewan had been "combed" by Liang Cunhou—deflowered and henceforth his kept mistress in the brothel. Many matters that could not be handled openly were conducted through her.

The servant took his orders and departed. Liang Chenlong watched his receding figure and couldn't help but exhale slowly.

Liu Xiang sat at his desk, studying the latest population statistics table. Based on the first household registration conducted after establishing the Guangzhou police system, he knew the exact population of the Guangzhou Special Municipality for the first time.

According to the administrative divisions of Nanhai and Panyu—the two attendant counties left by the Ming Dynasty—plus areas outside the city expected to be included in the "suburbs," including Henan Island and surrounding localities, the registered population totaled 283,700 people. This included all permanent residents with fixed abodes in Guangzhou. It did not include "floating populations" such as the Guan Di Temple group—these numbered at least over ten thousand.

The new household registration did not distinguish between non-agricultural and agricultural populations, because in the seventeenth century, this distinction was far from clear-cut. Besides shop assistants and craftsmen in the city returning to their hometowns to help during busy farming seasons, and farmers from the countryside entering the city for short-term work, there were also genuine farmers living within Guangzhou city itself, cultivating land inside the walls. Therefore, only broad occupational categories were registered—after all, in this era, a person's occupation was basically lifelong.

These figures did not include the Tanka population. The data received from the River Police Station was very old, dating from the Zhang Juzheng era. According to this outdated information, 22,000 Tanka people were registered. But retained clerks at the River Police Station said the actual number was far greater. Since the Tanka had no fixed abode and drifted constantly, accurate counts were difficult, but those active on the waters of the Xijiang and Pearl Rivers outside Guangzhou for extended periods would number no fewer than 40,000.

Thoroughly determining the Tanka population would require making them go ashore and settle. The Guangzhou Municipal Government's first large-scale practical project for 1950 was to construct Tanka housing, allowing them to live on land and thereby controlling this group that had drifted outside mainstream society for the first time.

Controlling the Tanka people and registering them as commoners would greatly benefit public security on the Pearl River water system and even throughout Guangzhou itself—since ancient times, rivers and waterways had served as natural hiding places for lawless elements.

But currently, Liu Xiang's Guangzhou Special Municipal Government lacked the capacity for this undertaking. He had to temporarily abandon attempts to control the Tanka people and focus his main energy on the new currency issuance.

The credit of new currency depended on whether its purchasing power could be guaranteed. Liu Xiang understood clearly that once the new currency began circulation, banknote issuance would spread like a flood breaking its dikes.

First was the demand for currency circulation in the Guangzhou market itself. The actual figure remained unknown—the Great Ming possessed neither a Statistics Bureau nor banks in the modern sense. No one could clearly determine how much silver and copper coinage currently circulated. The Ministry of Finance could only roughly estimate that about one million yuan of circulation notes would be needed. Fearing this insufficient, they had already ordered the Hong Kong Mint to print millions more. Second were the expenditures of the Guangzhou Municipal Government. Compared to the former Guangzhou Prefecture, the Municipal Government's expenses had expanded more than a hundredfold. Building numerous new organs and maintaining operations, rapidly expanding public servants, absorbing old personnel, relieving disaster victims, municipal projects... plus unabated military expenditure demands. All of this sharply amplified the quantity of new currency needed. After rough estimation, Liu Xiang and the Ministry of Finance special commissioner group already harbored concerns about inflation.

Liu Xiang picked up another secret report—the latest statistics on Guangzhou's grain inventory. After abolishing broker houses and establishing two large bulk goods wholesale markets, mandatory regulations required all bulk grain transactions to occur within these markets. Long-distance grain transport merchants, farmers and landlords selling grain in batches, and local grain banks engaged in wholesale and retail all had to operate within the markets. The Senate's state-owned grain enterprises—the Cooperatives and Dachang Rice Shop—also opened business offices within the markets as windows for operating and intervening in the grain trade.

Simultaneously, through the Federation of Industry and Commerce and trade guilds, inventory statistics were collected from large and small grain banks and shops engaged in wholesale and retail throughout the city. With this, the municipal government roughly determined Guangzhou's bulk grain reserves. The total inventory of brown rice held by transporters, local wholesalers, and retailers was approximately 2,600 tons. This figure could supply the entire Guangzhou market for about one month.

According to the municipal government's previous population estimates, 2,600 tons couldn't even support a full month. However, Lin Baiguang believed those estimates were unscientific. Though the total population estimate and actual statistics didn't differ greatly, the grain consumption figure of fourteen kilograms per person per month was too high. First, the elderly and children couldn't consume that much; second, eleven kilograms monthly was barely sufficient for urban residents. The poor population in this city exceeded half the total, and their daily grain consumption simply couldn't reach eleven kilograms per month. Additionally, Guangzhou's major households mostly maintained considerable stored grain—this was convention at the time; wealthy families often hoarded enough for two or three months' consumption. Furthermore, they could obtain grain supplies from suburban tenants. Grain supply was not problematic. Since gentry and wealthy household registrations also included large numbers of servants—households ranging from twenty or thirty to several hundred people—this considerably alleviated supply pressure.

In addition, the official treasury granaries left by Guangzhou's former prefecture and two counties, plus grain from confiscated "rebel properties," added up to seven or eight hundred tons in various bits and pieces. Part of this had already been allocated for staff salaries and Guangzhou Municipal Government funds. Approximately 200 tons remained.

Besides these local grains, warehouses at Guangzhou Great World and on Hong Kong Island stored 10,000 tons of brown rice transported from Southeast Asia and Hainan over the past three months. This was the trump card in the hands of Liu Xiang and the Ministry of Finance—reserved for dealing with grain speculation.

Every major currency reform was almost always accompanied by frenzied speculation in necessities like grain. Especially given Guangzhou's situation, even Liu Xiang, who had never been a merchant, recognized the opportunity for grain speculation.

Guangdong's grain depended on supply from Guangxi. June and July in the two Guangs marked the early rice harvest. In previous years, grain prices should have fallen by this time, but Guangdong itself lacked grain, and Guangxi remained under Great Ming rule—Wuzhou had already established water checkpoints forbidding all boats from passing—so grain trade through Wuzhou had ceased. Under normal circumstances, merely the news of suspended grain transport at Wuzhou would be sufficient to trigger skyrocketing prices.

Fortunately, the Senate received reciprocity from the Chaozhou-Shantou Grain Gang for abolishing broker houses and clearing their debts. Though the wholesale price of grain in the market rose slightly, the Chaozhou-Shantou Gang remained stable. They also used their merchant network's advantages to transfer grain from other parts of Guangdong to supply Guangzhou. This greatly alleviated supply pressure, allowing Chen Ce, who was in full charge of economic and monetary policies in Guangzhou, to avoid using reserves on a large scale, instead occasionally releasing small quantities of grain through cooperatives to suppress price rises.

However, relying solely on the Chaozhou-Shantou Gang's "return" was insufficient. Merchant morality is profit-seeking. Their current sacrifice of profit represented both reciprocal gratitude and recognition that the Senate's enforcement capabilities far exceeded the Great Ming's. But once profits grew large enough, neither conscience nor fear would matter. Therefore, curbing speculation and guaranteeing currency value had to rest on the Senate's own foundation.

In addition to stockpiling large quantities of grain on Hong Kong Island, the Planning Commission simultaneously transported edible salt, cotton and linen fabrics, pickled and dried seafood products, and tea leaves from various regions to Hong Kong Island, ready for transfer into Guangzhou at any time to stabilize prices.

To ensure sufficient distribution channels, beyond wholesale outlets, Commercial Cooperatives, Dachang, and Wanyou rushed to open more than forty branch stores throughout Guangzhou city through transfers, direct purchases, and other means. The retail network basically covered the entire urban area and major suburban towns. To ensure supply in townships, twenty mobile vending boats were refitted and equipped with shop assistants and goods, ready to travel downriver for mobile vending in townships that had been basically pacified. Zheng Shangjie instructed the vending boats that they could also purchase rural local products at market prices, further enlivening the rural economy and preparing for currency penetration into the countryside.

End of Chapter