A Man of Science and Engineering in Troubled Times Wandering in the Late Qing Dynasty

Chapter 653 Difficult Situation

Not long ago, during the Paris Peace Conference, Zhan Tianyou went to Northeast China to participate in the International Conference on Joint Supervision of the Far East Railway to prevent foreign powers from seizing the railway in the name of protecting the road. During this process, his old illness recurred. Although he was transferred to Hankou for treatment, he was still unable to recover.

Wuhan, Shanghai, Beijing, Guangzhou, Tianjin and other places immediately launched public memorial activities.

Shanghai's business community took this opportunity to gather together.

Li Yu and Liu Hongsheng arrived wearing black suits, bowed and presented flowers.

Zhang Jian on the side said: "Juancheng (Zhan Tianyou's nickname) was a national scholar. It is a pity that he passed away suddenly. I heard that he didn't leave much property after his death."

Li Yu said: "What's even more pity is that he failed to fully realize his ambition. Since the Republic of China, the government has not been able to devote much money to railway construction."

Zhang Jian, who once served as the Director-General of Agriculture, Industry and Commerce, said: "The top management is in a complete mess. The Director-General of Communications changes frequently and has no control over financial allocations. The Ministry of Agriculture, Industry and Commerce, which is able to raise funds, has had nearly ten Director-Generals in eight years. Except for Tian Wenlie, each Director-General has an average tenure. But in June and July. How can they come up with a set of laws to ensure construction?"

Li Yu said: "All forces are fighting against each other. Although industry, commerce and transportation have developed, their foundation is still fragile. Once the warlords go to war, they will almost be broken at a touch."

Zhang Jian sighed: "The Beiyang government can't come up with money, and it doesn't even invest in education, so how can we talk about railways."

Until the Northern Expedition in 1926, during the entire period when the Beiyang government was in power, the railway mileage was only more than 3700 kilometers, less than 250 kilometers per year.

Even so, the railway was a cash cow for the Beiyang government and the basis for the existence of the transportation bureaucracy. The annual railway surplus is as high as more than 4000 million yuan, while the total annual revenue of the Beiyang government was only about 4 million yuan, accounting for a huge 10%.

In addition to railway revenue, the main revenue that the Beiyang government can control is customs and salt taxes.

The customs and salt taxes had been controlled by the great powers since the beginning of the Republic of China, and taxes needed to be deposited in foreign banks. The collection, management and control rights are in the hands of the General Taxation Department and the Salt Audit Office, and are mostly used to guarantee various domestic and foreign debts.

The Beiyang government can only get the balance after repaying the debt, which is the so-called "Guanyu" and "Yanyu".

Ironically, it was precisely because of the intervention of the great powers that warlords in various places did not dare to easily withhold these two taxes, so that the Beiyang government could rely on the great powers to obtain a stable and reliable income.

Yu Qiaqing was also present. After bowing and laying flowers, he came over and said, "You don't have to be so pessimistic! According to the statistics I collected at the Shanghai General Chamber of Commerce, the business community has almost reached unprecedented heights. During the European War, Mr. Li Yu made many arrangements. We are also developing vigorously, and our overall strength is estimated to be at least two or three times higher than before the war."

He was talking about the actual situation.

Before World War I, there were only 700 domestic industrial enterprises, with total capital not exceeding 4 million and total workers not exceeding 30.

After several years of development, the number of domestic industrial enterprises at this time reached more than 1700, the total capital was about three times that before the war, and the number of workers reached million. Much better than historical data.

This growth rate is almost 30% (20% in history), which is definitely a miracle.

If the Beiyang government doesn't play tricks and fights year after year, domestic industry and commerce can really reach very high heights.

But if nothing else, the accident is coming.

Li Yu smiled bitterly and said: "When the war is over, the shortcomings that were previously covered up will definitely surface one by one. Although Germany and Russia have basically withdrawn from our market, when Britain and France calm down, foreign goods will once again sweep into the domestic market on a large scale. ”

Yu Qiaqing shuddered when he thought about it, and said: "I have signed a letter with several people from the business community to request the Beiyang government to lower the tax rate. I hope that the exorbitant taxes and miscellaneous taxes that were cleverly named before the war can be reduced by a few percent."

Li Yu said to Zhang Jian: "Brother Ji Zhi, you have been the director of industry, agriculture and commerce. Do you think it is possible?"

Zhang Jian shook his head: "I just talked with Brother Shucai. The Beiyang government lacks funding sources, and warlords in various places are more difficult to control. They can only exploit domestic industry and commerce. Although the general tax rate for domestic products is only 3%, which does not seem high, but every time A 2% levy is charged at each checkpoint. From the time the goods leave the factory to being shipped to various places, they have to go through more than ten customs clearances. Coupled with various other inexplicable taxes, the total tax burden often accounts for half of the value of the goods. Commander, you have merchant ships on the Yangtze River, so you should be familiar with them."

Yu Qiaqing said: "It's okay to take the water route. If we take the land route, there are 800 tax cards in the more than 20 miles from Chongqing to Chengdu. If a batch of goods is transported, the tax paid will already exceed the original value of the goods."

This situation of numerous tax cards and fragmented markets is most unfavorable to economic development.

It's simply a stumbling block for yourself.

Zhang Jian said: “Looking at foreign goods, the Beiyang government has clearly stipulated that foreign-invested enterprises only need to pay 2.5% mainland tax, and the rest of the taxes are exempted.

“If they are imported foreign goods, they only need to pay a 7.5% tariff, and sometimes even this tax rate is not reached.

“Such a setting will do great harm to domestic products, which are heavily taxed and unable to compete with foreign products.

"For example, the sugar that people usually buy, the sales price of locally produced sugar is higher than that of Japanese sugar. Even if the people boycott Japanese goods and are patriotic, but the Beiyang government is killing people's enthusiasm, sooner or later they will still be invaded by Japanese goods. "

Liu Hongsheng on the side said: "I am familiar with the coal business. I have worked as a comprador for the British Kailuan Coal Mine for many years and I am familiar with prices. The cost of coal in Kailuan Coal Mine is 1.5 yuan per ton, and the tax is only 0.2675 yuan, accounting for about 17.8% of the cost.

“However, the Baojin Coal Mine in Shanxi Province, which should be quite competitive, has a coal cost of 2.021 yuan per ton and a tax of 1.731 yuan, accounting for 85.7% of the cost.

"In the past, industries in various places were developing rapidly, and they may not be so sensitive to this price. But once the economic development slows down slightly, the coal advantage of British companies will be infinitely magnified."

Flour king Rong Zongjing added: "Not only industry and commerce, but also agriculture is not optimistic. Originally, wheat from Anhui and Henan could be transported directly to Shanghai via Jinpu Road to supply the raw materials needed for the flour industry. But from Bengbu, the freight per load is 2 Two, and the time cannot be guaranteed, sometimes it can take up to a year! However, the freight of American wheat across the Pacific is only 4 yuan. Even if you have not seen a world map, you should know that the United States is thousands of miles away. absurd!

“Even if rail capacity is tight, trains can always be freed up, but I have never heard of the Department of Transportation approving this.”

Industry and commerce are always better than agriculture. Business leaders like them are complaining and overwhelmed. You can imagine the situation of ordinary farmers.

Land tax is easy to estimate, easy to collect, and farmers have nowhere to escape. It has always been a large source of fiscal revenue for the Beiyang government, and is naturally an important financial source for the warlords.

Among them, the most harmful thing to farmers is the so-called "pre-collection" of land taxes, which means collecting land taxes in advance. Can you believe it?
It can range from a few years to more than ten years. Some counties in Sichuan have conducted advance recruitment for 30 years.

Under the exorbitant taxation, a large number of farmers turned to tenant farmers, and the rural economy was severely damaged.

Zhang Jian talked about his most successful Dasheng yarn mill and said helplessly: "Nowadays, Japanese capital has entered the domestic cotton textile industry with great force, which has had a great impact on us. Domestic cotton originally provided a sufficient supply of raw materials, but millions of tons of cotton have to be exported every year. , most of which are shipped to Japan or Japanese-owned textile factories, so that we have to import cotton, which greatly increases the cost." Yu Qiaqing asked: "I heard that the Chinese Cotton Mills Federation has written to the Beiyang government to ban the export of cotton. , is there no point in protecting Chinese businessmen?”

Zhang Jian said: "The Beiyang government just wanted to ban cotton exports, but it was opposed by the envoys of various countries and could only announce the abandonment of the ban."

Zhang Jian's cotton mill is now gradually beginning to feel the pinch. According to the historical process, it will be in trouble and collapse within a few years.

He was also quite helpless. He couldn't even do it with his status, and it was even harder for ordinary people to do business.

The cotton textile industry was the most important industrial field in the Republic of China. But after World War I, we had to start using a large amount of imported cotton. The annual import amount was one million quintals. In the early stage of the Northern Expedition, it reached nearly two million quintals, worth about 7000 million, ranking among the top three imported goods in China.

This was the difficult situation of domestic industry and commerce during the Republic of China.

The Beiyang government is unable to protect local national enterprises and does not even have tariff autonomy, so it can only be at the mercy of others.

In international trade, there is a huge trade scissor gap between the trade of industrial products and raw materials. If you rely mainly on the export of raw materials, the price increase will lag far behind the price increase of industrial manufactured products.

——It will be treated as a leek and kept being cut.

Of course, this is the situation that the West most wants to maintain.

They like to sit high and enjoy their gains, while many developing countries act like cows and provide them with a steady stream of funds. If you want to break through and engage in upstream industries or high technology, I'll do it for you.

Too many people in India, the Philippines, and Bangladesh have been deceived by the West, and they are still suffering a hundred years later.

In the eyes of the West, other countries only deserve to drink soup and can only engage in low-end manufacturing forever, allowing them to enjoy high welfare and envious eyes.

It is difficult to break through this situation. If we cannot break through, many developing countries will have to sell hundreds of millions of pairs of pants to buy a Boeing aircraft like we did back then.

Li Yu had nothing to do, it was not something he could control personally.

In the 20s, the purchasing power index of China's export items dropped by about 20 percentage points on average compared with 10 years ago. Therefore, the great powers were able to obtain more products in China at the same price.

At the same time, the warlords started another melee, including the Zhi-Wan War, the first Zhi-Feng War, the second Zhi-Feng War, etc., and they were fought in confusion. Wherever the army went, traffic was blocked, causing great harm to industry and commerce.

Zhang Jian said: "Brothers Shucai are smart enough to be able to do business as a foreign company. This advantage is beyond our reach. With low taxes and a little bit of management, we can be like Mobil and British American Tobacco. Become a business tycoon."

Mobil Company did very well in the Republic of China. They relied on the convenience of low tariffs to sell kerosene. They established 5 branches in domestic big cities, 20 branches in medium-sized cities, and 500 dealerships and agency stores in counties. All over urban and rural areas.

As a result, Mobil became almost synonymous with kerosene, and it became a daily necessities that ordinary people could not live without during the Republic of China.

The quantity of kerosene imported into China soon increased to more than 6000 million yuan, ranking among the top three imported items.

Therefore, Li Yu has always taken it for granted that these American businessmen's funds are used to develop education in China. They have made an unknown amount of money from the Chinese, but as long as they do a little good deeds, it seems that they must be grateful to them.

Hey, this is also a very strong conspiracy.

On the other hand, Japan is so bad that it doesn't want to do any good things. It is so pure and unadulterated. All he could think about was plunder and invasion, all left over from what the Angsa people did more than a hundred years ago.

But in any case, after Germany's defeat and the Russian October Revolution, they withdrew from the economic competition in China. Britain and France fought too hard in the First World War and their vitality was severely damaged. Their economic expansion in China slowed down greatly. Therefore, the United States and Japan took advantage of the situation and became rivals among the great powers. The protagonist of China’s economic aggression.

After World War I, Japan's total trade value with China accounted for about 1/4 of China's total foreign trade value, ranking first among all countries, with the United States in second place and the United Kingdom (excluding India) relegated to third place.

In addition, because the Beiyang government could not find a good source of income, it could only continue to borrow money.

As a result, foreign capital continued to increase its influence on China's economy and continued to expand. By 1920, the output value of foreign-invested enterprises accounted for half of the total output value of China's industrial, mining, and transportation industries, and many important economic sectors were controlled by foreign capital.

However, the Beiyang government really has no choice in this regard and can only develop asset-heavy industrial categories through foreign investment. It's just that they don't have the ability to grasp the overall situation.

Li Yu didn't know much about business, so he relied on his vision beyond the times to take some advanced paths. When it came to implementation, he still had to rely on that part of the US funding.

Therefore, he has long planned to put Americans at the forefront of East Asia's industries, not only to deal with the Japanese, but also to deal with domestic warlords.

——I’m really helpless. I have to guard against the Japanese as well as my own people.

It is more comfortable and worry-free to engage in scientific research...

Li Yu knew that Zhang Jian's Dasheng Cotton Factory would soon be in trouble, so he said: "Brother Ji Zhi, I am a bit weak in Salt Bank and Citibank. If you encounter difficulties in the future, please contact me at any time."

Zhang Jian clasped his fists gratefully and said, "With these words of brother Shucai, I feel relieved."

Yu Qiaqing said: "Several other banks have made huge profits because of public bonds, so they should also help the industrial and commercial community."

Li Yu said: "It stands to reason that the important purpose of banks' existence is to help enterprises develop, but over the years they have been operating the public bonds of the Beiyang government, but have neglected their original business. I dare not say about other banks, and the Salt Bank will definitely We will vigorously provide loans to help you.”

Zhang Jian said: "Brothers Shucai don't have to apologize. Public bonds have their own risks. Even Bank of China and Bank of Communications cannot stay away from speculation in public bonds. If the bank fails, the harm will be even greater."

Li Yu said: "Now that the war is over, there is no need for banks to be trapped in public debt. It is time to return to business. It is just that the Salt Bank is only one company and has limited power. I hope you can forgive me."

Zhang Jian said: "That's enough."

Li Yu actually knew that the warlords were about to start a melee and it would be difficult to make a profit on the public debt of the Beiyang government, so it was better to let the Salt Bank withdraw.

(End of this chapter)