Chapter 67: Sweet Harbor Storm - The Gu Family Pirates

There were several small bands of such fishermen-pirates in the vicinity, and the Gu family’s was considered somewhat powerful. These small bands of pirates were a nuisance in Leizhou, but they were nothing to the Haiyitang. The Haiyitang had its own militia, and whenever the sugar ships set sail, they did so in large groups, with hundreds of sailors and militiamen. They were not something that such small bands of pirates could take on. Not only could they not take them on, but there was also the danger of breaking their teeth.

What the Haiyitang was wary of were, of course, the large gangs like Liu Xiang’s and Zhu Cailao’s, so they paid heavy bribes to buy peace. But they also had to make some token gestures to these small bands of pirates to avoid harassment. Otherwise, no matter how many militiamen they had, they would be exhausted from running around.

However, the so-called token gestures were also very limited. Because although the small bands of pirates operated at sea, they also had to come ashore to rest, repair their ships, buy rice, and place their sick and wounded. They needed a reliable base on shore. Therefore, it was also necessary to cultivate relationships with the local powerful gentry.

Third Master Zhu took advantage of this. Using a combination of soft and hard tactics, he reached agreements with several small maritime forces in the vicinity. They guaranteed that they would not rob the sugar ships sailing from Haian and would not harass Haian Street. In return, the Haiyitang would provide convenience for the shore activities of these few small bands of pirates. This kind of social obligation didn’t cost much, and sometimes they could even be of use.

Over time, although the small bands of pirates in the vicinity rose and fell, sometimes being suppressed, sometimes being pacified, sometimes disbanding, the Haiyitang and these small forces in the surrounding area always maintained a good relationship. This was based on mutual benefit.

Gu Dachun, as the leader of the gang, was quite righteous. Although his relationship with the Haiyitang was one of mutual use, once, when Third Master Zhu’s own fleet encountered a storm at sea, he happened to be taking shelter on the shore. He insisted on sailing out to sea despite the risk and led most of the sugar ships to a safe haven. Third Master Zhu felt that this person was trustworthy and righteous and a very useful asset, so he became sworn brothers with him. After several years of friendship, their relationship deepened, and Gu Dachun married his newly widowed sister to Third Master Zhu as his sixth concubine.

In a sense, this was a political marriage. Third Master Zhu had originally thought so as well. Firstly, the bride was a remarried widow; secondly, she was from a fisherman’s family, so how beautiful could she be? He thought it was just her brother taking pity on her and giving her a stable home. He would just marry her, arrange a place for her, and take care of her food and clothing.

Unexpectedly, it was not so after she married him. Although the sixth concubine was from a fisherman’s family, she was quite beautiful and did not look like someone from the sea at all. It was rare that she was also very considerate in serving people and was skilled in all kinds of needlework and cooking. When he asked, he found out that this sister had been sold as a maid to a local rich family in her early years and had been taken as a concubine. She was driven out by the first wife after the master of the house died. She served the over-fifty-year-old Third Master Zhu very comfortably.

Since he had this connection with Gu Dachun, why not use it? It would be a great benefit to both of them. He made up his mind: he would use strong medicine!

This strong medicine, once used, would naturally make them submit immediately. In his words, it was like pulling the rug out from under them. No matter how powerful South China was, they would be trapped and killed in Leizhou.

“Qiuhan!” he called out. This was the sixth concubine’s name when she was a maid. In the old days, women had no names, so even the name she had as a maid was used.

“What is it, Master?” the woman came in response.

“How is your brother recently?”

Qiuhan was a little surprised. Her own brother, the master rarely mentioned him in front of her. Because her brother was engaged in illegal activities, to avoid trouble, she never mentioned that she had a brother in front of others.

“He’s fine. Master, have you forgotten? Someone came to deliver something a few days ago.”

“Hmm, hmm, right,” Third Master Zhu remembered.

“How are the brothers doing?”

“How can you talk about good or bad! It’s just getting by,” speaking of her own family, Qiuhan couldn’t help but complain. The difference between large and small pirate gangs was huge. A pirate gang like the Gu family’s, even if they wanted to join a large gang for a joint venture, no one would want them—three or four small single-masted boats, not even a single cannon. They were said to be robbing along the coast, but their limited strength could only harm some small boat owners sailing along the coast. Naturally, they couldn’t get anything good.

“Right now, there’s a business opportunity. I wonder if your brother is willing to take it?”

“Really?” Qiuhan was overjoyed. Although Third Master Zhu had taken good care of her family, this was the first time he had said such a thing.

“When have I ever lied to you, Master,” Third Master Zhu said with a smile.

“Thank you for your grace, Master,” Qiuhan curtsied.

“Grind the ink—” he was about to write a letter, but then he thought it was inappropriate. Once this letter fell into the hands of outsiders, it would be a big trouble. It was better to have someone say it in person.

“Go back to your parents’ home—” Third Master Zhu said in a low voice, “tell your brother that there is a big fortune to be made near Haian Street recently.” He then explained about the South China Factory’s sugar ships leaving the port soon.

“The Haiyitang will not have any ships leaving the port recently. Tell your brother that as long as he sees the South China’s sign, he can just do it!”

“Is there such a good thing?” Qiuhan said with pleasant surprise, lighting his silver water pipe.

“That’s right. After they succeed, I will buy all the sugar! He won’t have to worry about it.”

“Thank you for your grace, Master!” Qiuhan curtsied again, this time her joy was written all over her face.

“He’s my brother-in-law, who else would I help if not him,” he said with a grin, stroking Qiuhan’s cheek, but he had already made his calculations in his heart. The price of large quantities of goods stolen by pirates was extremely cheap when they were sold because they were difficult to transport and store. One dan was probably less than two or three qian of silver. This was a huge fortune.

“But,” Third Master Zhu’s tone changed, “these ships are not to be trifled with. Your brother’s gang may not be able to take them on alone. Tell him to get more people to do it together. This is a big fortune! Don’t be stingy!”

“Yes, I understand. I’ll go back tomorrow morning!”

“No hurry, wait a few days,” he stroked Qiuhan’s hand. “There might be ships from Guangzhou carrying silver! But this matter needs to be planned carefully…”

The South China Factory got fifty thousand taels of silver to tide them over, while the Haiyitang was making other plans. The small county of Xuwen was surging with undercurrents. All parties were preparing for a big gamble, and the stake was the four to five hundred thousand taels of silver from South China’s sugar each year. At this moment, Guangzhou and Lingao, the two important bases of the transmigrator group, were also busy with their plans.

After Wu De returned to Lingao, he requested an immediate meeting of the Executive Committee. At the meeting, the proposal from the Guangzhou station to absorb deposits from individual households was approved. The incident with the Leizhou sugar industry had made them deeply understand the meaning of “cash is king.” Without a large amount of ready cash, there would be many similar troubles in expanding the market in the future.

Cheng Dong proposed that they might as well set up a financial institution in Guangzhou to be responsible for absorbing deposits, raising working capital for business, and conducting remittance business, so as to carry out financial penetration into the Ming Dynasty.

“Do you mean to open a bank in Guangzhou?” Ma Qianzhu became nervous.

“That’s right, a bank,” Cheng Dong nodded. “Of course, what we are opening can only be considered a money house or a draft bank in the strict sense, not worthy of the name ‘bank’.”

“How do we do it?” Everyone was a little excited. After all, the word “bank” was much more impressive than the nondescript “grain store.”

“According to the investigation of the Guangzhou station, there is no such financial institution in this time and space,” Cheng Dong said calmly, taking out a rough “Holy Ship” brand notebook. “There are only money changers, that is, shops that deal in silver and money exchange. According to the investigation of the intelligence department, in addition to exchange, these money changers also engage in small-scale lending business, but they do not absorb deposits. They basically rely on the rise and fall of silver and money for profit. The overall scale of capital is not large.”

What the Finance and Economics Committee was interested in was the remittance business. Simple remittance business also existed in the Ming Dynasty. It was mainly for various shops to reduce the trouble of transporting ready cash, carrying out inter-firm and inter-regional remittances. But the scale was not large, mainly to meet the needs of their own shops and industries. An industry like a draft bank that specialized in issuing drafts and remittances had not yet appeared. So this was a blank slate, with great potential.

“The focus of our bank will be on remittances, similar to the business of a draft bank. After a few years of building up our credit, our bank drafts will be able to circulate throughout the country.”

Ma Qianzhu shook his head. “The Ming Dynasty doesn’t seem to have a great demand for remittances!” According to what they had seen and heard, the commodity economy of the Ming Dynasty was just so-so. Although it was not very primitive, it was not very advanced either. The so-called entry into the early stage of capitalism was far from being the case.

“Not so. Although the scale of capital flow is not large, it still exists. The sugar in Leizhou is an example. We believe that at least in the cloth of Songjiang, the tea and porcelain of Jiangxi, the silk of Jiangnan, and the indigo of Fujian, there are large-scale flows of silver and money.” He took a breath. “In fact, even in this remote place of Hainan, according to the investigation of the intelligence department, the annual trade of betel nuts and dried coconuts is worth tens of thousands of taels. This scale is not small.”

Most of the products he listed were particularly seasonal, and the products were often produced in a decentralized manner. Therefore, during the peak season, merchants needed a large amount of capital for procurement. The demand for capital circulation would be great.

The remittance business had two benefits: one was to earn a commission, and the other was to earn interest from the rise and fall of silver prices and the tightness of the money supply in various places. As long as the ready cash could be turned over, there were many other tricks to be played, and money could be made out of thin air.

As for the other purpose of the Finance and Economics Committee in setting up a bank, it was to establish the credit of their own bank drafts as soon as possible. In the future, the economic, political, and military activities of the transmigrator group would spread throughout the country. Whether it was the army, merchants, or intelligence personnel, they could not carry large amounts of silver around. As for the Lingao circulation coupons, which were based on rice, they were only a short-term transition and could not and did not need to be circulated with credit throughout the country. In comparison, bank drafts were much more convenient to carry and use.

“Doesn’t this mean issuing another new currency?” someone questioned. “With the Lingao circulation coupons, it’s too much trouble to create another kind of bank draft.”

“This is a misunderstanding. A bank draft is not a currency. At most, it can only be considered a bill of exchange. Although in the late Qing Dynasty, people often used bank drafts for direct circulation, the scene of casually taking out a handful of bank drafts to pay the bill, as seen in movies and TV shows, is absolutely non-existent.”

This was because bank drafts had different levels of credit. They were different from copper coins and silver ingots. The former was the credit of the government, and the latter was real precious metal. Whether a bank draft could be hard currency in the market and how wide its effective range was depended to a large extent on the strength and credit of the issuing money house or draft bank. Therefore, some bank drafts could only circulate in one place, while others could circulate everywhere. There were many tricks here, and Cheng Dong would not explain them one by one. He also pointed out that if they could establish the credit of the bank drafts, it would be of great benefit in terms of capital mobilization and fundraising in the future.

Wu Nanhai still objected, “The Central Plains will soon be in chaos. To engage in draft remittance business will definitely involve setting up branches. If we invest a large amount of money and manpower, won’t it all be destroyed in a war?”

“No need,” Yan Ming said. “We are not running a modern bank. We don’t need to set up branches everywhere. We can just set up branches in a few places with prosperous commerce and a concentration of officials. If necessary, we can also establish remittance partnerships with powerful local shops.”

The idea of setting up branches was to open up a few key routes. The southwest, northwest, and Central Plains were either barren or would be in constant turmoil in the future, so they were naturally not places to set up branches. The most important was the north-south route, especially from the capital to Jiangnan. Everyone understood this principle: in the last dozen years of the Ming Dynasty, Jiangnan was the richest and most peaceful place. The officials in the capital would inevitably transport large amounts of silver to this paradise to be stored for their future enjoyment. This place was also a major producer of cloth, silk, and tea, and commercial activities were frequent.

“As for the specific cities for setting up branches, the first is South Zhili,” Yan Ming said. “Nanjing, Suzhou, and Songjiang. After stabilizing, we will expand from south to north to Qingjiangpu and Beijing.”

Suzhou and Songjiang were the richest in South Zhili. The two capitals, north and south, were where the officials gathered, so they naturally had to be given priority. As for Qingjiangpu, although it was just an obscure small county town in the 20th century, it was a major hub of north-south transportation in the Ming and Qing dynasties.

During the Ming and Qing dynasties, it was difficult to pass through the locks of the Grand Canal, and sailing on the Yellow River was dangerous. Therefore, most travelers from the south to the north, except for the grain transport boats, would disembark at Qingjiangpu, cross the Yellow River via the “Nine Provinces Thoroughfare Pier,” and then go to Wangjiaying to ride a horse or hire a cart to go north. This place was a transportation hub for the north and south, so its commerce was naturally extremely prosperous. There were also warehouses managed by the Ministry of Revenue and a canal boat factory managed by the Ministry of Works. Many important officials, such as the Governor-general of the Southern Rivers, were stationed there. Every year, the court would allocate a large amount of funds for river management, and the wealth of the officials on the river was also famous throughout the country. With many officials and merchants, the flow of money was frequent, making it a good place for remittance business.