Xinshun 1730

Chapter 1393 Bubble
Of course, because the large East India companies in various European countries were forced to death by Dashun, European commercial capital completely lost its technical restrictions, and would quickly flow to shipping and comprador businesses, thus strangling many European industries.

But the core of this principle applies in Europe.

In Dashun, the same applies, although the problems faced are different.

With the basic signing of the Treaty of Versailles, Dashun will also face a problem of "capital flow".

In Persia, India, and East Africa, Dashun monopolizes trade rights in these directions, and the rate of return on capital increases rapidly.Especially in the direction of India.

In addition, these places, unlike Dashun, have various restrictions: the most basic one, the restrictions on Dashun’s local big businessmen buying and hoarding land are very large, making Dashun "the highest rate of return, The safest and safest investment, that is, land purchase, has become a very awkward investment in Dashun, which is forcibly distorted and restricted by administrative power.

This also makes it necessary for Liu Yu to need some means to make a large amount of financial capital flow in the direction that Liu Yu wants to go.

Naturally, this direction is the immigration of North America.

Liu Yu had thought about it before, and he felt that the experience of the British South Sea Company and the French Mississippi Company was very good.

It's nothing more than a "small" problem with the two companies, and the deception is too big. In the end, the drumming and spreading the flowers can't go on, and the bubble just exploded.

But only from the perspective of raising funds, the effect is remarkable. A large amount of funds were raised in a short period of time, and the amount of funds was enough to basically solve the financial hole left by Louis XIV.

And he also said before that the war against Europe will bring a very special social awareness: if you find the right direction, the return rate of investment in industry and commerce can be higher than that of buying land; and early entry and early benefit.

Historically, interest rates in the UK have been reduced from around 10% to 3%; British people have gradually formed the idea that investing in stocks in industries is actually similar to buying land and hoarding land...It is not innate, it is a little bit of pressure, A little bit slowly reversed by social presence to social consciousness.

Social consciousness lags behind social existence, and Dashun is gradually changing this situation, but the premise is that there must be such a social existence.

Today, the war is basically won.

All previous doubts disappeared, and trade continued to develop, even greatly.With the spring breeze of the "Treaty of Versailles", Dashun's industry and commerce will usher in a golden age.

This is a physical matter.

But at the level of consciousness, in Gyeonggi, Songsu and other places, there is a trend of "believe in the judgment of the court, believe in early entry into the market and early investment in the future, and big profits in the future", as well as the idea that "stocks and bonds may not be inferior to land".

Those who invested in textiles, shipping, and shipbuilding at the beginning all made a lot of money this time.

It can be said that Dashun has won a very high degree of trust by winning one victory after another and accurately grasping "trade" time after time.

Reflected in the emperor, it is prestige.

Embodied by Liu Yu, it is his "suggestion" on investment. Everyone will think that this is not a suggestion, but a way to make a fortune.

It should be said that Liu Yu relied on this kind of prestige and trust, and planned to learn from the South Sea Company or the Mississippi Company.

When the "Treaty of Versailles" has been basically confirmed and capital is about to flood into India in large quantities, use his reputation, the prestige of Dashun, and the investment frenzy created by the realization of industrial and commercial development brought about by the European war to forcibly distort the market flow of funds.

Simply put, if he doesn't twist.

Then, out of 100 yuan of hot money, 30 yuan will be invested in local industries; 30 yuan will flow to cotton land in India; 40 yuan will be used to buy land or store it in cellars.

But now, after his distortion, 30 yuan may be allocated to immigrants in North America.

As for whether it will end up as a South Sea bubble or a Mississippi bubble, that doesn't matter.As long as the people arrive and the land is cultivated, it doesn't matter if you can't play drums and pass flowers in the end. If it blows up, it will blow up.

Money doesn't just disappear for no reason.

If the bubble explodes in the future, then, before the explosion, money will flow in the direction of "mercury mining", "shipbuilding", "agricultural machinery", "livestock husbandry", and "navigation".

Because this is the pre-investment for mining gold in North America.

They are all real industries, not simply stepping on the right foot with the left foot. Even if the financing bubble finally explodes, it doesn't matter.

Roughly speaking, the routine is as follows:
Through the investment boom created by the First World War, Dashun’s hot money is waiting for the court to reveal the wind, because the previous court’s judgment was correct, and those who believed and got on the bus at that time all prospered after World War I.

At this time, Liu Yu spread the rumor that "Fusang has a large gold mine, at least 1000 million taels of gold"—basically, it was a copy of the Mississippi company's big flicker. John Law used this kind of flicker to hold the so-called government endorsement The high rate of return of more than ten percent directly created a big movement in the scale of tens of millions of taels of silver.

The difference is, Mississippi has no gold.

But San Francisco, Vancouver, Seattle and other places really have gold.

As a result, a franchise company franchised by Dashun Royal was established. In order to pay tribute to the "predecessors", the company was directly named Bubble Company.

No dividends will be paid within five years.

After five years, at least 15% annual dividends are guaranteed, and the yield is very high.

The concession granted by the imperial court only includes the concession of mining gold and silver, these two minerals.

Similar to the Spanish model, 15% of mining goes to the national treasury; 5% goes to domestic funds.

The rest will be distributed by the company.

Official supervisors, commercial offices, following the story of Songsu, the first five years are made by the official supervisors, and the board of directors will take over the power after five years.

The imperial court will have a governor to manage civil affairs, protect security, etc., and the company needs to pay some annual fees to the imperial court to garrison troops.

Since gold is to be mined, the company needs food, military strongholds, etc.

Then, all land in North America is completely nationalized, not privately owned, and privately owned.

Therefore, in the early stage, the company needs to invest in immigration, reclamation, military base construction, shipbuilding, etc.

For two purposes.

One is that Dashun issued a batch of national bonds for the sake of war in the early stage.But the redemption period has not yet come.Therefore, if someone wants to seize the time to enter this bubble company, for the sake of super high dividends in the future, then at this time, they must quickly convert the national debt into cash.

The price will fall, and the Dashun court took the opportunity to repurchase a batch of national bonds sold at a low price, which is equivalent to reducing the debt.

The other is that the initial investment is huge. In fact, it is consumed in advance by relying on the gold and silver from "San Francisco and the old silver mine", and it is dug out in the future to pay for the current consumption.

And in view of the fact that if you wait for the gold and silver to be dug up before consumption, most of them will go home to stockpile land, invest in India, lend usury, and so on.

Before digging it out, raise funds to spend the money, and then the money will flow to immigration, reclamation, agricultural machinery, shipbuilding, canvas and other industries in a controllable manner.

Similarly, this money will be used to purchase state-owned land at the administratively distorted land price during the previous period of "land price under administrative distortion".

This means that 120 acres of land in North America cannot be sold at the price of 3 taels of silver.

However, through the administrative order to forcibly distort the price, 120 mu of land can be guaranteed, which is enough to sell for 30 taels.

And when the population gradually increases, the industry gradually develops, and the population continues to multiply, it is obvious that the price of this land will one day reach 30 taels without administrative distortion.

However, everything is difficult at the beginning.The difficulty lies in how to sell the land when administrative orders must be used to distort the land price in the early stage?
Waiting for the population to multiply, the industry to develop, and the demand to stabilize in the future, there is no need for any means and strategies. 30 taels of silver and 120 acres of land, will there be people robbing?
And this difficult beginning, Liu Yu used this method to solve it.

That is to say, the financing of this bubble company was used to do immigration, which is beneficial for thousands of years, and bought the land of Fusang at a "high price". sum of money.

For example, in the early stage, 5000 households were resettled first, and the land of these 5000 households was all state-owned land purchased by the bubble company.

As for whether these people should repay the company's immigration ticket and land purchase money, how to pay, what to pay, in kind or market price grain... etc. These are details and can be discussed slowly.

The key point is that the large amount of money for the 5000 migrants, boat tickets, initial investment, etc., will be paid by the company.

Of course the company doesn't want to come out.

But not out.

Because this is a monopoly franchise guaranteed by the administrative order, just like Liu Yu's trade with Japan, you either do it or you don't do it.

If you do it, you have to fulfill various additional obligations.

If you don’t do it, just don’t pay for shares.

For example, Dashun's trade company with Japan is a partnership between Dashun, Suguo Japan, and the shogunate trying to obtain monopoly profits.

But if you get this monopoly, don't think about free trade, and honestly fulfill the obligations of shipbuilding, heavy ships, training sailors, registering ships, and recruiting in time of war.

It's the same here.

You want to bypass the company and supervision, privately recruit four or fifty people, and go there to mine gold?

No no no, don't get caught.

If caught, he will be hanged, and the gold will belong to the captor and informer.

If you want to mine gold "freely", there is no door.

As long as you go to mine gold, you must be within this exclusive monopoly company, that is, you must fulfill these obligations that can be said to be "very heavy".

From the economic point of view of pure capital gains, this is contrary to freedom and inefficient.

Because, the most efficient system should be to release the mining. If you have the ability, you can get 50 or [-] people. If you dig gold, you will get a lot of money, and the expenditure will be small.
In this way, the profit rate is the highest, the efficiency is the highest, and there are no messy additional obligations, just to dig for gold.

However, the problem is that for Dashun, digging for gold is not the goal.Therefore, this efficiency is meaningless.

For Liu Yu, immigration is the goal, and gold digging is just a means to facilitate this immigration.

Then, it must be clear what this "efficient" is.

Is it efficient to mine gold?
Or efficiently immigrate?
In fact, Liu Yu is still a compromise choice with Xi Ni.

It is neither the most efficient gold mining in theory, nor the most efficient immigration in theory.

Theoretically, the most efficient way to dig gold is to announce whoever digs it, and the capital will hire someone to dig it.That's definitely the most efficient.

Theoretically, the most efficient immigration is to increase the centralization of power, boost the revenue of the treasury, equalize the land to remove middlemen, and use immigration as a national policy like building the Great Wall and canals to move wildly, garrison land, and guard the system.

Liu Yu's current compromise is only a relatively balanced and feasible choice under the existing conditions, including the constraints of technology, supervision, administrative efficiency, and transportation level.

What is determined by social reality cannot be completely based on theory.

Even if it is to imitate the propaganda of the South Sea Company and the Mississippi Company to make money, or to say that this "bubble" can be blown, it must rely on the existing social reality-the two big bubbles of the South China Sea and Mississippi can be blown, provided that the previous This kind of monopoly company can really make money, and it has a high rate of return.Without the bedding of the messy franchise companies before, it would be impossible for this bubble to blow up. Even if a lot of hot money in Europe in the past 20 years has been invested blindly and has nowhere to go, if there is no social awareness shaped by the previous foreshadowing, it will be impossible. It will not blow up the bubble of investment in franchised companies, but may be in the form of tulips.

Dashun is also learning about bubbles, and its foundation is the high rate of return of the franchise companies in the past 30 to [-] years as a foreshadowing, so that the bubbles can blow up.Whether it is fried or not is another matter.

However, the theoretically most efficient immigration method of the Radical Practical School lacks such a social foundation, social awareness, and lack of foreshadowing.The rural areas are far from being exhausted, where even the sons of the landlords can’t survive, the landlords’ workshops are generally bankrupt, and the rural areas where tax wars are raging have completely collapsed and cannot be reformed.

(End of this chapter)