Chapter 91: Acquiring Dachang

Liao Daxing was summoned and informed of these matters one by one. He said, “It is very thoughtful of you, masters! I’m sure Manager Feng would be grateful if he knew in the afterlife. But there is one thing the masters have overlooked—”

In any business family, financial matters are managed by the head of the household. When the head dies, all debts, both owed and owing, must be settled immediately. This is a very large sum. At this time, collecting debts is very difficult, but creditors come knocking immediately. This often leads to cash flow problems, and eventually, the family has to sell off their business.

Many businesses seem prosperous when the head is alive, but once he dies suddenly, their credit is completely ruined. After the funeral, the family is often left in ruins.

“Not to mention anything else, just take the warehouse receipt left by Manager Feng. His widow and orphans won’t be able to get the price of three taels and eight qian per shi. They will most likely have to sell it cheaply to other sugar companies. If the other party has some conscience, they might be willing to pay two taels and five qian. If they are greedy, they’d be lucky to get one tael and seven or eight qian per shi!”

“So ruthless?!” Everyone was shocked. Was there no sense of professional courtesy?

“It’s not ruthless, it’s always been this way.”

“In that case, give his family three hundred taels of silver as a condolence payment. And—” Chang Shide thought for a moment, “the guild will send someone to handle the settlement of his accounts, to prevent anyone from getting any ideas. If silver is needed for the settlement, Huanan will advance it.”

Liao Daxing also nodded. “A thoughtful idea, master! I will arrange this immediately. But as for the person from the guild—”

“Let your brother go,” Chang Shide thought of Liao Dahua. Liao Dahua was also a merchant by trade and was familiar with this kind of accounting. “He is the manager of the Qiwei Escort Agency’s branch. I will also give him the title of a guild official. This way, he has no conflict of interest and can legitimately interfere.”

And so it was settled. Indeed, with Huanan’s strong intervention, all the sugar companies that had designs on Richang Ji backed off.

The first operation of the Leizhou Sugar Industry Guild showed its uniqueness. Many people saw in this matter that the new guild truly protected the interests of everyone—helping an orphan and a widow was unlikely to bring any substantial returns.

Chang Shide used this as an opportunity to drastically reform the original trade guild.

All sugar companies participating in the sugar guild would each have a director’s seat on the board and participate in discussions. Daily affairs would be handled by the newly established “Standing Committee.”

This committee consisted of five standing deacons. Each deacon was responsible for a specific matter, and the head was the “Secretary-General”—a position that Chang Shide naturally took.

The operating expenses were paid from the sugar guild’s membership fees. Each sugar company paid a proportional share of the fees based on their capital, which was used for all expenses. The total annual fee was ten thousand taels.

The most significant change in this system was the introduction of a completely modern financial system, ensuring that the destination of every expense was clear. This financial transparency caused a great sensation among the guild’s directors.

For Chang Shide and the others, this system was a preparation for the future joint-stock company. Once they gradually became accustomed to the transmigrators’ business model and philosophy, forming the Leizhou Sugar Co., Ltd. would be a natural progression. Then they would no longer need a blood transfusion of silver from Guangzhou and could openly use the capital of these sugar merchants for their operations.

To speed up the acquisition, Wen Tong borrowed a large number of experienced clerks from the various sugar companies through the sugar guild to help at Huanan. Their wages and meals were all paid by Huanan.

“Although there are a thousand things to do right now, the transport of sugar cannot stop for a single day,” Wen Tong said. “Don’t forget that the Guangzhou station took out high-interest loans for us. The longer we delay, the more disadvantageous it will be.”

“Yes, but we promised these sugar merchants three taels and eight qian. What if we can’t get that price in Guangzhou? Although we have a monopoly on Leizhou sugar sales, it’s useless if the demand is low.”

“In Guangzhou, the price last week was already three taels and nine and a half qian. The British are willing to pay four taels per shi. The price won’t drop in the short term.”

“And we can also sell to Vietnam,” Chang Shide said with confidence. “Wu Yujia there has no silver, but he has plenty of rice. We’ll just trade it all for rice and then talk business with Boss Zhu of Dachang.”

Bringing the Dachang Rice Company in as a partner was Chang Shide’s idea. In a document sent to Lingao, he argued that although Huanan would profit much more by opening its own rice company, they lacked experienced and reliable managers. That was one reason. Secondly, Huanan was already “famous” in Leizhou. If they were to openly enter the rice business after taking over the sugar industry, it might create fear in the local business community and lead to resistance. There was no end to making money; winning people’s hearts was more important.

The Dachang Rice Company was the most friendly to Huanan among the local businesses from the beginning. It wasn’t that Dachang’s owner, Zhu Fusheng, had any extraordinary foresight, but his sense of smell was sharper than other rice companies, and he had the most capital. As soon as the immigrants organized by Huanan arrived, he had shrewdly come to sell them grain, offering excellent terms: Huanan could take grain at any time, settle accounts at the three major festivals, and there was a discount for buying rice—buy twenty shi, get one free. This solved the problem of organizing a large supply of grain, which had been a headache for Wen Tong and the others.

To hold on to this major client, Zhu Fusheng did his best to meet all of Huanan’s requests and was very helpful during Huanan’s confrontation with the Haiyi Guild. Of course, he had his own selfish motives; after all, Huanan still owed him several thousand taels for grain.

With this foundation of trust, cooperation would be easier. Moreover, Liao Daxing himself had been a clerk at Dachang, which made negotiations even more convenient.

However, Liao Daxing’s first visit was a failure.

Chang Shide was surprised. “Why not?” he asked.

“Boss Zhu’s family is having some trouble,” Liao Daxing said. “He doesn’t seem to be in a good mood. He just said he was interested but couldn’t make the decision yet and needed to wait.” Since he was dealing with family matters, he naturally wouldn’t be interested in cooperating with Huanan. Whether they talked or not was irrelevant.

“Is the first wife fighting with the second wife?” Wen Tong was curious.

Liao Daxing didn’t know what a “second wife” was, but he understood the meaning. He shook his head. “No, Boss Zhu only has one wife. I tried to probe a few times, and it seems to be a matter between relatives, also involving the rice company.”

“I’ll have someone look into it right away,” Chen Tianxiong said.

The next day, he reported the following: first, the Dachang Rice Company was a traditional Chinese joint-stock enterprise with a total of twenty-one and a half shares, each initially worth one thousand taels; second, the shareholders were basically all members of the Zhu clan or relatives, aunts and uncles of all sorts; third, the recent family trouble was that the clan members felt the dividends were too low; fourth, Dachang’s business was doing quite well.

“That’s what’s giving Zhu Fusheng a headache,” Chen Tianxiong explained. “His clan members are not very capable and all rely on this rice company. They pester him every other day.” Their demands were either to increase the bonus or to have their own children hired to receive a salary without working.

“Actually, the returns for Dachang’s shareholders have been very good over the years. The annual bonus is five or six thousand taels. One share can get two hundred taels—”

“Wait, it should be two hundred and thirty taels per share,” Chang Shide said.

“The dividends are distributed based on twenty-three shares. The other one and a half shares are for the manager and all the clerks as labor shares.”

“That’s a pretty good return, isn’t it?” Wen Tong remembered Yu E’shui saying that a middle-class family of four or five could live well on fifty taels of silver a year.

Chen Tianxiong nodded. “Yes, but people are never satisfied.” He turned a page in his notebook. “I investigated the shareholders. Among all the shareholders, Boss Zhu himself owns eleven shares. The remaining ten and a half shares are held by more than ten small shareholders, with the smallest share being only half a share.”

It was conceivable that even if Boss Zhu welcomed Huanan’s investment, the small shareholders would not want to give up their shares. With Dachang’s profits so high, they wanted to get more money, so why would they sell?

“This is a bit tricky,” Wen Tong said, scratching his head.

Chang Shide was full of confidence. “It might have been difficult in the past, but since Zhu An is finished, there will be no obstacles to whatever we do now. I’d like to see who is so bold.”

“Doing it that way is easy, but it will harm our reputation. I have an idea, but we need to talk to Old Zhu first. Like this—”

Before long, a terrible rumor spread through the streets and alleys of Xuwen County: the Huanan Sugar Company was about to open a rice company! This news struck fear into the hearts of all the grain merchants in Xuwen and even Leizhou. The rice industry guild was in chaos. The rotating chairman and the owners of the main rice companies all came to visit, trying to get some information from Wen Tong.

Wen Tong’s answer was firm: no, Huanan was not planning to open its own rice company. This was not true.

But the street talk about this topic became more and more heated. These rumors were all spread by Xiao Zhanfeng. What Huanan’s next target was became a hot topic among the common people of Xuwen.

The terrifying signals kept appearing: a strange flat-bottomed boat had brought in three thousand shi of rice at once and was unloading it at Haian Street; Manager Wen was surveying wasteland everywhere and inquiring about land prices; Liao Daxing was in the teahouses where the rice company clerks gathered, asking if there were any unemployed rice company clerks…

All this indicated that Huanan opening a rice company was a done deal. The grain industry in Xuwen was suddenly in a state of gloom. The other party was rich and powerful, and not afraid of trouble. If they really opened a rice company, would there be any room for others to survive?

In this tense and uncertain atmosphere, the agents directed by Chang Shide easily bought ten and a half shares from Dachang’s small shareholders at a price of one thousand eight hundred taels per share, becoming Dachang’s second-largest shareholder overnight.

With the shares in hand, the matter of opening a rice company naturally vanished. Wen Tong personally went to the rice industry guild to clarify the rumors and solemnly announced that Huanan would not open a rice company.

When this news came out, the rice company owners and clerks were naturally relieved. Those who had sold their shares were surely kicking themselves, but the shares could not be bought back.

The silver for this acquisition was provided by Boss Zhu. In return, Huanan would provide Dachang Rice Company with twenty thousand shi of coarse rice at a preferential price of one tael per shi.

The Dachang Rice Company was still managed by Boss Zhu. Boss Zhu was very happy—he had finally gotten rid of his greedy relatives and clan members, and he had secured a cheap source of goods. As soon as the share transfer contract was signed, Huanan became his main supplier, currently supplying at a price of one tael and two qian per shi, which was about the same as the price he would pay if he bought it himself, but it saved him the transportation costs and risks, making it very profitable.

“Letting Boss Zhu of Dachang make some money is no big deal. Let him be happy counting his money for now. We can just collect more personal income tax from him later.”

“And consumption tax, second wife tax, servant tax…” Chang Shide chuckled. “And finally, a property tax. The Transmigration Kingdom, a kingdom of ten thousand taxes!”

“Old Zhu is very enthusiastic. He said that with such a stable and cheap source of goods, he can expand his business and plans to open more branches,” Wen Tong said with a smile. “We should support him. Guangdong has a large area dedicated to cash crops, which has affected grain production. The grain trade has great potential.”

Chang Shide said, “Although Leizhou has sugar, it also suffers because of sugar. Everything is expensive. We not only need to secure the source of wealth from sugar, but also import more daily necessities to withdraw some of the silver and curb inflation.” He thought for a moment. “I wonder if Indian cotton cloth will sell well here.”

“We can organize the supply. We just need to report the demand,” Wen Tong said. “I want to buy up all the land near the south gate sugar factory, build shops, and rent them out. The market here will get better and better.”

After discussing for a while longer, they all went their separate ways. Wen Tong returned to his courtyard and called for Ah Zhu.

“Go take a shower!” This was Wen Tong’s signal for them to sleep together. Ah Zhu, who had not been favored by her master for many days, was originally a little anxious. Hearing the master’s command, she was overjoyed and hurried to wash up.

That night, Wen Tong, who had been too busy with work to have any fun for many days, was both powerful and fierce. As he thrust vigorously, he would always recall his image in the Haiyi Guild hall—calm and composed, commanding with ease, unperturbed by the changes… A series of idioms floated through his mind, and he felt a surge of vitality.

After the storm had passed, Wen Tong was lying limp, about to rest, when Ah Zhu snuggled up to him.

“Master, Ah Zhu has a favor to ask of you.”

“What is it?” Wen Tong said nonchalantly.

“Ah Zhu has a sister, also from a fishing family—”

“And later became a pirate?” Wen Tong teased, thinking of her origins. He didn’t notice that Ah Zhu’s expression had changed. She forced a smile.

“You’re joking, master. Her parents were poor, so she was sold as a maid to a rich family when she was young. Recently, she lost her place and is looking for a new master. She is beautiful, has a good temper, and is skilled at needlework…”