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The earliest joint stock company system in the world was born in the East India Company established in the Netherlands in 1602. After the emergence of the joint stock company as a form of corporate organization, it was soon widely used by Western countries and became one of the important forms of corporate organization in European countries.
Companies like the famous British East India Company are similar to joint stock companies.
With the birth and development of joint-stock companies, the way of raising funds in the form of stocks has also developed, and the demand for buying, selling and transferring stocks has arisen. This has led to the emergence and formation of the stock market, and has promoted the improvement and development of the stock market.
In 1611, shareholders of the East India Company were trading stocks on the Amsterdam Stock Exchange, and later there were specialized brokers to match transactions.
The Amsterdam Stock Exchange formed the world's first stock market. Today, in the West, joint stock companies have become one of the most basic forms of corporate organization; stocks have become an important channel and method for large companies to raise funds, and are also the basic choice for investors to invest; the stock market (including the issuance and trading of stocks) and the bond market have become important basic contents of the securities market.
If you count carefully, the stock market has existed in Europe for forty years, but the economic scale of those European countries is limited, and the development of the stock market is relatively slow. After forty years, it is still in its infancy.
But in any case, joint-stock companies have brought tangible benefits to Europe. It is hard to imagine that a small country like the Netherlands could develop into a behemoth like the East India Company in such a short period of time if it were not for the operation of joint-stock companies.
By issuing stocks, companies can quickly raise much-needed funds, thereby growing rapidly while also distributing risks.
In Qin Mu's opinion, risk sharing is even more important than raising funds quickly at a time when the economy is running relatively slowly.
For example, many Qin merchants engaged in overseas trade would buy a ship, hire some boatmen, prepare goods and then go out to sea for trade. Once they were in distress at sea, the ship was destroyed and the goods sank, even if they did not die, it would be difficult for them to turn over a new leaf after returning.
If it is a joint stock company, it is different. After the risk is shared, its ability to resist risks will naturally become stronger. Even if one or two ships sink, it will not be doomed.
In addition, with the arrival of the Qin envoy headed by Zhang Haoran in Europe and the successful launch of a series of diplomatic activities in Europe, the time when Qin's merchant ships will sail directly to Europe is not far away.
If we continue with the current model of going it alone, it is hard to say how many people are willing and able to fly directly to Europe. In terms of competitiveness alone, it will be difficult to compare with large European companies such as the British East India Company.
These realistic considerations made Qin Mu feel that it was very necessary to launch a stock market in Daqin. With hundreds of years of experience, he believed that once Daqin's stock market was launched, it would definitely be more perfect than the European stock market, which was still in its infancy.
At least laws like the Anti-Bubble Company Law will not be enacted after a huge bubble economy is formed. In terms of financial auditing and supervision of listed companies, there will definitely be fewer detours. In addition, with the huge economic volume of Daqin, it is no problem to catch up with Europe, which has been developing for decades.
The court was on holiday, so Qin Mu had fewer military and political matters to deal with every day, so he had some time to think about this matter.
This matter really needs to be carefully considered. Because in addition to the two positive functions of stocks, namely financing and risk sharing, there is also a dark side, which is more cruel than cutting one's throat with a knife.
But no matter what, everything always has its pros and cons. The key is how to seek benefits and avoid harm.
In Qin's view, in order to promote the industrial revolution more quickly, in addition to the support of a financial system such as banks, joint-stock companies and stock exchanges are also indispensable.
In the past, when Chinese people got rich, they liked to bury their money underground, or use the money to buy land. This would cause the economy of the entire society to develop in a distorted direction.
As society remains stable for longer, wealth will inevitably become more and more concentrated. When wealth is concentrated in the hands of a few people, and they are keen on hiding their money at home or simply burying it underground, what will happen
First of all, it is difficult for those who want to develop production to raise funds.
Second, if it is serious, there will be a shortage of money. Social goods are produced, but there is not enough money to support the circulation of goods. Deflation will lead to economic regression, which will in turn cause social conflicts and eventually inevitably lead to unrest... .
If we can change this original habit of hiding money and allow more funds to circulate in society, there will undoubtedly be more benefits.
In the Huagai Palace, Qin Mu called Xu Yingjie and Xu Yongshun, and the three of them were discussing the matter in a casual chat.
The festive mood of the New Year was still there, the Huagai Hall was newly decorated, and the atmosphere inside the hall was quite harmonious. Xu Yongshun listened to the news about stocks and seemed a little excited, praising them repeatedly.
“Your Majesty, although we can get a loan from the bank now, we have to bear a heavy interest. For some industries with low profits, just repaying the loan will take up a large part of the operating income, which is very disadvantageous for the growth and development of the enterprise.
If the required funds can be raised from the private sector by issuing stocks, the company will no longer have to bear bank interest, which is very beneficial to the development of the company.
In addition, the emergence of a large number of stock companies can change the previous relatively decentralized economic model. After the decentralized funds are concentrated, the economic model will inevitably shift to an intensive, large-scale, and efficient form. This is of great benefit to saving resources and manpower, technological innovation, etc.
To put it in an analogy, this is like changing from individual farmers raising livestock to large-scale farm-style operations, which can save a lot of manpower and increase the ability to resist risks. "
Xu Yongshun enumerated the advantages of stocks, and even the words he used were very trendy. From this point, we can see how great an influence Qin Mu had on them.
Xu Yingjie thought for a moment and said, "Your Majesty, the bank's deposits are increasing, and have reached 750 million dragon coins. Although the interest on deposits is very low, or even zero, it is not a good thing to have so many deposits piled up in the bank.
At present, banks can still balance their income and expenditure by lending to individuals, workshops, and trading companies and earning interest. If stocks are launched, a large number of trading companies and workshops can raise funds by issuing stocks, then the bank's loan business will definitely be greatly impacted, and the risk of imbalance in bank income and expenditure will inevitably increase. "
Qin Mu smiled and said, "Xu Qing's worries are not unreasonable. I know what you want."
Xu Yingjie complained first, of course, he had other intentions, but Qin Mu saw through it at a glance, so he simply laughed and said, "Your Majesty is wise, I will not hide anything, what I just said is indeed not alarmist, Your Majesty, think about it, if the bank wants to avoid too many bad loans, the loan objects must be those workshops and trading companies that have good development or perhaps have development potential.
Once the stock model is introduced, these well-developed or potential factories and trading companies can easily raise funds from the stock market. Why would they be willing to bear the bank interest
The biggest source of income for banks is lending. If this happens, it will be difficult for banks to maintain a balance between income and expenditure. Therefore, to ensure that banks can continue to survive, they must be allowed to invest part of their funds in the stock market.
Qin Mu said: "The banking system is the cornerstone of finance. Don't worry, Xu Qing. I will not watch the banks being squeezed out. Banks and stock markets actually belong to the same financial system and can complement each other in many ways. Xu Qing, let those who specialize in finance in the bank study it and slowly launch some financial products. As for investing part of the bank's funds in the stock market, this can be considered, but it must be done with caution.
In addition, Xu Qing also organized people to formulate the rules of the securities market and the financial supervision system. First of all, we must prevent the bubble economy from spreading. It is foreseeable that companies will exaggerate their performance and create bubbles in order to raise funds;
In order to put an end to these phenomena, we can only improve the financial audit and supervision system. Another thing is to formulate corresponding laws to impose penalties. Therefore, this matter still needs to strengthen communication with the Dali Temple responsible for legislation. "
When Xu Yongshun heard this, he was a little disappointed. According to what the emperor said, it seemed unlikely that a stock exchange would be established soon.
First, the Dali Temple must have corresponding legislation, and then the Ministry of Revenue must formulate a corresponding financial review system. I am afraid that it will take at least a year or so to go through all these procedures. (To be continued...)
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