Chapter 360: Policies and Regulations

Next, the cadre began to explain the civil laws most relevant to the wealthy families.

The most pressing issue was that of servants. Almost without exception, the families had brought a large number of servants with them. The practice was common in the Ming Dynasty—a Juren would travel with more than twenty servants. In the late Ming, with frequent wars and famines, the cost of keeping servants was extremely low.

The Senate, however, did not welcome private ownership of slaves. The vast majority of servants in feudal Chinese society were used for domestic service, producing nothing while consuming social wealth. Moreover, the ownership of slaves allowed the wealthy to directly control a large population, a situation the Senate found intolerable.

Therefore, the Senate restricted the ownership of slaves through legal means. Not only was the slave trade completely prohibited, but there were also various restrictions on existing servants. Anyone who kept servants under the Senate’s rule had to pay a one-time “servant registration fee” and an annual “servant use tax” per head.

A buzz of discussion erupted. What kind of law was this? To pay taxes for the servants you bought? And to pay it every year!

But that wasn’t all. The Senate had a quota for the number of servants each household could keep. Exceeding the quota resulted in a progressive tax—the more servants you kept, the higher the tax rate.

This policy was not only to reduce the number of servants but also to force large, multi-generational families to divide their households. To pay less tax, they would have to split up, increasing their servant quota and avoiding the higher tax rates.

Seeing the resentful expressions on the faces of those around him, Zhuo Yifan secretly nodded. Though he came from a family of officials and had servants at home, he did not approve of the exploitation and enslavement of large numbers of people.

The short-hairs’ move, while not explicitly prohibiting slave ownership, greatly increased the burden of keeping them, thus restricting it in a disguised way. It could be called a benevolent policy—though a rather commercial one. He felt a mixture of admiration and contempt.

The cadre went on to explain many other important points about life in Lingao. The presentation lasted about half an hour, thorough and clear. When he finished, Zhuo Yifan saw him say a few words to Li Xiaopeng, then hand him a piece of paper from his briefcase. Li Xiaopeng stamped it, tore off half, and returned it. The cadre then left.

Zhuo Yifan was puzzled. A bribe, he would understand. But this business of stamping and tearing paper?

It turned out the “policy briefing” was not free. Giving legal lessons to the rich was not part of the Civil Affairs Section’s duties. The Senate’s immigration policy was “open door.” People from the Great Ming were welcome, but no particular group received special treatment. A fee was charged as a matter of course, paid by the Qiong’an Inn. Li Xiaopeng’s stamp was the proof of payment.

Next, Li Xiaopeng spoke about what the rich cared about most: buying houses and land.

Buying a house was a given. Whether they were immigrating with their entire family or preparing a “rabbit’s three burrows,” they needed a permanent place to live. To continue their luxurious lifestyle and to satisfy their families’ envy of the “Australian-style life,” they had to acquire land and property.

However, Li Xiaopeng’s words once again poured cold water on them. The land policy in Lingao was complex and different from that of the Great Ming. In the Great Ming, as long as the landowner agreed to sell, it didn’t matter what the land was used for. Once bought, you could do whatever you wanted with it: build a house, a workshop, raise pigs, grow vegetables, or use it as a cemetery. No one would interfere. This laissez-faire system persisted until 1949. In the grand city of Beijing, there were still animal pens and poultry sheds in residential areas, with pigs, sheep, cattle, chickens, ducks, and geese. Pigs and sheep were slaughtered openly on the city streets. Cemeteries in the city were not even worth mentioning.

In Lingao, however, land was divided into various uses: residential, industrial, cultural and educational, and agricultural. To buy a piece of land with good feng shui for a cemetery, or a scenic spot to build a villa—under the rule of the Senate, you could only buy residential land. Private individuals could not buy land for a cemetery and build a family tomb.

Unfortunately, residential land in Lingao was particularly scarce. The expansion of industry and agriculture, and the influx of a large number of immigrants, exacerbated this shortage. To provide more housing for immigrants, the Executive Committee was strict in its approval of private residential land purchases, reserving enough land for the construction of apartment buildings and dormitories for sale and rent.

Of course, one could also buy residential land from private individuals. However, very few natives owned private residential land. The entire population of Lingao was originally less than 40,000. The residential land they owned was a small fraction compared to what the Senate had seized from official and barren land.

The housing shortage in Lingao not only resulted in extremely high prices for residential land but also meant that the county’s only construction unit, the Lingao General Construction Company, was fully booked. It was basically impossible to buy land and build your own house.

This was precisely why Li Sunqian’s real estate business was so prosperous. His was the only company in the county that could provide housing that met the needs of these wealthy families and guarantee delivery within a year.

The housing problem was relatively easy to solve, thanks to Li’s real estate company. It was just a matter of money. But “acquiring property” was far more difficult.

According to the thinking of the rich, buying land and collecting rent was the most stable method. In ancient Chinese society, land was the property with the strongest ability to preserve its value. It required no complex knowledge or much effort, and the income was stable. In times of war, you could hide the land deeds and flee. When peace was restored, you could take out the deeds, and no matter the dynasty, the government would recognize them. It didn’t matter if the tenants were all dead; you could just recruit new ones.

Therefore, not only did rural landlords think this way, but also merchants and court officials. After getting money, they would buy large amounts of land and collect rent. Even the Zheng family, the maritime commercial hegemon, purchased a large amount of land and became the largest landlord in Fujian.

When the rich came to Lingao, they naturally had the same idea. However, at this briefing, they quickly discovered that this path was blocked.

The Senate did not legally prohibit the tenancy system, so the old system could still operate. However, from a legal and economic perspective, the Senate had issued several legal documents that imposed many restrictions and suppressed the tenancy system.

After the tax reform, the landlords’ usual practices of concealing land to evade taxes and shifting the tax burden were no longer feasible. The strictly enforced progressive agricultural tax made the burden on tenant landlords very heavy. What they found most difficult to bear was the Senate’s siphoning off of the labor force. State-owned and private intensive farms, and the booming industrial and commercial enterprises, all caused the original tenants to move elsewhere.

Many immigrants entered Lingao, but the right to allocate them was entirely in the hands of the Australians. Free immigrants had too many employment options and were not willing to be the tenants of landlords.

The result was that tenant landlords found it difficult to retain tenants. No matter how much land a landlord had, it was useless if no one cultivated it. To retain tenants, they had to offer better share-cropping ratios and tenancy conditions. Land income plummeted—the Tiandihui had now begun to consciously refuse to provide agricultural services to tenant landlords, and they were completely unable to enjoy the benefits of agricultural technological progress.

In the end, the local landlords either sold their land to engage in industry and commerce, or they invited the Tiandihui, the largest “tenant” in Lingao, to manage their land. Very few landlords who continued to maintain the tenancy system remained, especially small and medium-sized landlords.

It was not too difficult for the new rich to buy land. Though there was little developed and cultivated land, there was plenty of “barren land to be developed for agriculture.” The difficulty was how to manage it. It was obviously not feasible to solve everything by recruiting a few tenant families.

Therefore, Li Xiaopeng proposed a package of investment solutions.

For those who were not seeking high returns and did not want to use their brains, they could buy land or “barren land to be developed for agriculture,” and then directly ask the Tiandihui for a full or partial package…

“May I ask, Master Li, what is a full package, and what is a partial package?” someone asked. The rich were very concerned about acquiring property—this was related to their future survival and development in Lingao.

Li Xiaopeng explained that a full package meant entrusting the land entirely to the Tiandihui for management. The landlord did not have to do anything. They would just collect their share according to the lease. They didn’t even have to invest a single penny; even the taxes were paid by the Tiandihui on their behalf. But in this case, the landlord’s income was quite small.

In the full package management, the Tiandihui would first charge a service fee. Then, the costs of developing barren land, improving the soil and water, buying seeds and fertilizers, hiring long-term laborers and agricultural machinery… all the expenses incurred in managing the land, up to the final tax payment, would be deducted from the land’s harvest in advance. The remaining net income would then be shared with the landlord. The landlord could generally get about 30% of the net income.

If the land was relatively barren or simply wasteland, the initial investment would be very large, and the landlord might not get any share at all in the first few years.