Chongzhen revived the Ming Dynasty

Another reason why Mao Qizon asked Mao Pijiang to come to the capital was that the Ministry of Rites was discussing whether to give college students the qualification to participate in the Shuntian County Examination.

According to the laws of the imperial court, only students from the Imperial Academy in the two capitals were eligible to take part in the provincial examinations in the two capitals.

The reason why many high-ranking officials sent their descendants to prison was to make it easier for them to take exams in the capital.

The difficulty of the Nanzhili provincial examination was well known. When Mao Qizon learned that college students had the possibility of obtaining the qualification for the provincial examination like Taixue students, he immediately sent his newly married son to the north to prepare for it in advance.

In his opinion, even if his son failed to pass the imperial examination, he would have no problem entering other universities. Once a college student qualified for the provincial examination, he could stay in Shuntian Prefecture to take part in the provincial examination next year.

Wu Yingji, a talented man from Jiangnan who failed the provincial examination four times, came to the capital for this reason to take part in the joint examination.

There were many people like him, most of whom were from Southern Zhili who were proud of their talents and believed that if they took the exam in Northern Zhili, they would surely pass the exam.

Because there were too many such people, the northern Zhili scholars were very opposed to it. They did not want people from Jiangnan to come and grab the quota for Juren.

In addition, many of the students were descendants of court officials, and they did not want the provincial examinations in Northern Zhili to be too difficult. Therefore, the Ministry of Rites had been discussing the matter and had not yet made a final decision.

However, as an official of the Taichang Temple, Mao Qizong belonged to the Ministry of Rites, so he was more informed about the matter and knew that the provincial examination next year would most likely add two more subjects, namely, Mingfa and Mingsuan. There might be more places for candidates in these two subjects, allowing college students to take the exam.

Mao Pijiang was a romantic man by nature and had great impatience with etiquette and laws, so Mao Qizon never thought of letting him take the Ming law exam. Instead, he guided him to develop an interest in mathematics and have him take the Ming mathematics exam the next year.

Sure enough, after arriving at the Metal Exchange, all Mao Pijiang saw and heard were monetary figures. Even if he was no longer interested, he became interested in some things.

Pointing to a bar chart on a whiteboard, Mao Pijiang asked:
"what is that?"

"Why is it red in the front and green in the back?"

Mao Qizong glanced at it and said:

"That's the change in the exchange rate between silver dollars and copper coins. Red means it's going up, and green means it's going down."

"This is also the reason why your father asked you to bring silver to the capital. If you don't bring the silver here, it will depreciate like copper coins in a few days."

As he spoke, he pointed to the leftmost pillar and introduced it to Mao Pijiang:
"The column on the left has March written on the bottom and 1000 wen written on the top, which means that in March, one silver dollar can be exchanged for one thousand wen. This is the price when the metal exchange opens."

"Then the silver dollar was recognized by merchants in the capital and began to appreciate in value. It could be exchanged for one tael and one qian to one tael and two qian of silver outside, and one tael of silver outside could be exchanged for about one thousand wen. So when the silver dollar was exchanged for copper coins, the price naturally increased."

"Look, has the price of silver dollars against copper coins been rising since April?"

Mao Pijiang looked at it carefully, nodded, and said in astonishment:
"1100, 1150, 1200... How did it rise so high?"

"Even if silver dollars are more convenient, they shouldn't be this high, right?"

Before Mao Qizong could answer, someone nearby heard his question and said loudly:

"In the past, there were fewer silver dollars on the market, so the price was high."

"There have been more silver dollars in the past two months, so the price has naturally fallen back to 1150 wen."

"Between the rise and fall, the imperial court made a lot of money."

The people around nodded, thinking that the court must have made money. They released a large number of silver dollars when the price of silver dollars was high, and recovered a lot of copper coins.

Now that the price of copper coins has risen again, it means we can make money.

These people actually don’t know that many of the silver coins issued by the imperial court were commissioned by the Royal Mint.

The price of silver dollars was pushed up due to the initial manufacturing difficulties and the need to wait for production capacity to increase, as well as the fact that the Royal Mint initially held on to the silver dollars and waited for them to be recognized.

On the contrary, the silver coins produced by the Ministry of Revenue have been released continuously to be used for paying salaries to officials and other expenses.

By June, when the price of silver dollars for copper coins reached 1,200 wen, it seemed that further rise would result in losses in minting copper coins. The Royal Mint then shipped a large number of silver dollars, which were exchanged for a large number of copper coins, thus pulling the price of copper coins back up.

During this ups and downs, Shuntian Bank, which was responsible for issuing silver dollars, made a lot of money. The Imperial Assets Commission also established an investment institution to specialize in trading on the metal exchange.

The reason why Zhu Youjian planned to set up a stock exchange was that he could make money too quickly in the metal exchange, which made him tempted.

The more than two million silver dollars released since June alone have enabled the inner court to earn more than 100,000 taels of profit.

If a stock exchange with a wider trading scope and a larger capital pool was established, he could accumulate more money by manipulating securities price fluctuations.

The merchants in these exchanges did not know the difference between the inner court and the outer court, and most of them thought that it was the imperial court that was making money.

Mao Qizon actually didn’t quite understand this. After all, he was not an official in the Ministry of Revenue system and didn’t know much about these things.

The reason why he asked his son to bring the money from home was because he heard about something and sensed the same opportunity.

Proficient in Buddhism, he received a task in Taichang Temple a few days ago, which was to organize an exchange meeting between Ming Buddhism and Japanese Buddhism, to support Japanese Buddhism and suppress its native Shintoism.

As a result, he paid more attention to Japan, and then saw the news that one tael of gold in Japan could be exchanged for ten to thirteen taels of silver.

Combined with the ban on gold outflow issued by the General Administration of Customs of the imperial court, he immediately understood:
Gold will definitely appreciate in value!
What does the appreciation of gold mean? It means that silver will depreciate.

(Table of gold-silver exchange rate changes in the Ming Dynasty, Peng Xinwei, History of Chinese Currency, 1958 edition, page 503)
At present, one ounce of gold in the Ming Dynasty could be exchanged for seven, eight, or ten ounces of silver, with prices varying from place to place. After the establishment of the metal exchange in the capital, it was determined that one ounce of gold was worth about nine yuan.

If you buy one tael of gold at the price of nine yuan, take it to Japan to exchange for thirteen taels of silver, and then bring it back to Ming Dynasty to exchange for eleven yuan and eighty cents of silver coins, there is more than 30% arbitrage space, which can be called a huge profit.

Therefore, after the imperial court decided to establish tribute trade with Japan, it quickly issued a ban prohibiting the export of gold.

However, this did not stop merchants from all over the country from buying goods and exchanging them for Japanese silver. Smuggling merchants from all over the country would even bring back Japanese silver.

Therefore, Japan's silver will surely flow into Ming Dynasty quickly, causing Ming Dynasty's silver to depreciate and Japan's silver to appreciate, until the gold-silver price ratio of the two countries is close.

When Mao Qizong saw this trend, he knew that the silver hidden in his home would depreciate. If he didn't change it into gold as soon as possible, it would probably depreciate by about 10% or 20% like the copper coins he had hidden.

That's why he asked his family to send more silver when he already brought silver to Beijing. Unfortunately, his old father Mao Mengling didn't understand these things and didn't agree with his judgment. He only allowed Mao Pijiang to bring 1,000 taels of silver to Beijing, which was the minimum amount he said.

In public, Mao Qizon did not explain to Mao Pijiang in detail why silver was depreciating, but Mao Pijiang continued to talk about it with great interest with the people around him.

One of them mentioned:

"Mr. Huang San from the south of the city is said to have a fortune of ten thousand taels. In order to show off his wealth, he actually hid ten thousand taels of copper coins and even invited people to see them."

"In the past few months, the copper coin has depreciated by 10% or 20%. Mr. Huang's face has turned green. He tells everyone that silver is the real money and that the family cannot have too many copper coins."

"The reason why the value of the copper coin can't return to 1,100 is because there are too many people like him who took out the hidden money."

One silver dollar could be exchanged for one tael and one qian of silver, and one tael of silver outside could be exchanged for about one thousand qian. Normally, one silver dollar could be exchanged for 1,100 wen of copper coins, which was a more realistic price. However, after the exchange rate of silver dollars and copper coins reached 1,150 wen, it could no longer be reduced.

One of the reasons was that many people who had stored copper coins were frightened by the previous 20% depreciation. When they saw the price of copper coins start to rise again, they hurriedly took out the copper coins at home and exchanged them for silver dollars.

Therefore, the price of copper coins naturally could not return to 1100. In fact, there were a few days when too many people exchanged copper coins, and it even dropped to around 1160. This also made many people who were worried that the price of copper coins would drop back to 1200 quickly take out their copper coins.

This was actually a deliberate fluctuation created by Zhu Youjian in the investment fund of the Imperial Assets Committee in order to get people to take out more copper coins so that the Armory Bureau could recycle the copper coins to cast cannons and make shells.

In the future, the price of copper coins will remain low, and may even drop occasionally, making people afraid to save copper coins and take out their hidden copper coins and copper utensils.

Zhu Youjian also planned to use the same trick to deal with silver, so that the price of gold for silver would continue to rise. He forced the wealthy people who stored silver to take out the silver from their cellars, increase the circulation of silver in the market, and alleviate the silver shortage brought to the Ming Dynasty by the Thirty Years' War in Europe.

After Spain entered the war, it shipped more silver back to Europe for use in the war. The amount of silver flowing into the Ming Dynasty decreased accordingly, and the value of silver in the market increased.

Under this trend, people who deposit silver will hide their silver even more tightly, making the silver shortage in the market even worse.

The inability of the copper coin price to rise back to 1,000 yuan was also a sign of a silver shortage. People did not have a clear understanding of this before, but after the establishment of the metal exchange, more and more people noticed this trend and began to hide silver instead of copper coins.

The reason why Zhu Youjian requested to trade with Japan was also to use the silver flowing into Japan to stop this phenomenon and alleviate the silver shortage in the Ming Dynasty.

Now that the international gold-silver price ratio is significantly higher than that of the Ming Dynasty, he needs to steadily promote the depreciation of silver in the Ming Dynasty, force out the stored silver, and then implement the gold standard in the future.

Mao Qizon, who worked in the imperial court, saw this trend and took out the silver from his home and bought gold for storage before others.

But Mao Pijiang did not understand this. After seeing that the price of silver in exchange for copper coins was generally rising, he said to his father:
"Dad, the price of silver is rising. We should keep the silver in our house. Why should we take it out?"

Mao Qizong glanced at him, then looked at the people around him, and did not say that silver would depreciate. He said to his son:
"It's more convenient to buy things only if silver is exchanged for silver coins."

"Weigh it and check the quality. Who in the capital is willing to trade with you?"

As soon as this was said, people around him echoed it. Now merchants in the capital are generally reluctant to accept silver bars, because they have to exchange them for silver coins after receiving them. If there is any loss in the process, they still need to bear it themselves.

But silver coins were different. One silver dollar was worth one dollar. Even if they were worn out, the court would accept them and treat them as one dollar. As long as the silver coin was not damaged intentionally by cutting off the corners, it was worth one dollar.

Merchants who could not smelt 925 standard silver and did not have that much silver could not sell their silver at the metal exchange. The only way for them to exchange silver coins was through banks, silver shops, and money houses.

Although Shuntian Bank did not charge any handling fees in order to issue more silver coins, the exchange was still troublesome and one had to bring documents such as household registration booklet to successfully exchange them.

Therefore, many people still choose to exchange silver in silver shops and money houses, which costs them some money in handling fees.

This made merchants in the capital generally unwilling to accept silver bars, and also unwilling to accept copper coins that were easy to depreciate. They preferred to accept silver coins, and there were discounts for paying with silver coins.

Many people who know about fen coins have been calling on the court to issue fen coins, or even li coins, to completely replace copper coins.

The merchants in the exchange were accustomed to pricing in silver dollars. They were active supporters of this matter and naturally supported people exchanging silver for silver dollars.

However, Mao Pijiang still didn't understand, so he asked again:

"One thousand taels of nine hundred and twenty-five taels of standard silver, containing nine hundred and twenty-five taels of silver."

"One silver dollar contains one ounce of silver, so nine hundred and twenty-five dollars contains nine hundred and twenty-five ounces of silver."

"This is the exchange rate of the imperial court. Why would anyone pay more than 925 yuan to buy it at the metal exchange?"

Mao Qizong couldn't explain this matter clearly, and a person who knew the inside story said:
"I don't know that, the 925 standard silver set by the imperial court is not set casually."

“Only silver bars containing 92.5% silver and 7.5% copper are standard silver.”

"This type of silver is hard, not easy to deform, and not easy to change color. The silver content of the imperial silver dollar is roughly this ratio. So we have been purchasing 1,925 taels of standard silver at a price of 925 yuan. You don't have to worry about selling your silver. At least it won't be lower than the bank's exchange price."

"The higher prices are offered by some shops that make silver jewelry and silverware. They also need 925% standard silver to make jewelry. People in Beijing only recognize this. If you use pure silver, it will be too soft and will turn black easily."

"When the store doesn't have enough silver, these jewelry stores will spend more silver dollars on the exchange. Anyway, they can't lose money when they sell the jewelry."

"Some people even specialize in this business, buying up 925 standard silver and selling it to jewelry stores."

As he was speaking, Mao Qizong saw that someone was offering 926 yuan for the 1,000 taels of silver he had put up for sale.

This did not reach his psychological price, so he chose not to sell it.

It was not until someone offered a high price of 930 yuan that he agreed to sell it and took Mao Pijiang to go through the handover procedures.

In order to attract more people to trade here, the Metal Exchange now does not charge any handling fees, but only charges a storage fee if the items are stored for a long time.

Mao Qizong's silver was sold on the same day, without having to pay a penny to the exchange, so he could get all the 930 yuan.

But this is not the end, because although the exchange does not charge any handling fees, the Taifu Temple Taxation Bureau dispatched officials to supervise and let the exchange collect stamp duty on its behalf.

The tax rate was not high, only 0.01%. After 0.93 cents was deducted from Mao Qizong's 930 yuan, the rest was transferred to the account.

With the increasing volume of transactions at the Metal Exchange, the General Administration of Taxation received more and more stamp taxes. This exchange has become one of the important sources of tax revenue directly controlled by the court, and therefore the Ministry of Revenue supports the establishment of a stock exchange to collect more stamp taxes. (End of this chapter)