Facing Colin's sharp question, Maester Sonny immediately calmed down from his frenzy.
He has realized that although the Guardian of the North in front of him is young, he is not so easy to fool.
So, he slowly sat across the dining table, nodded solemnly, and said:
"That's right, this new farming and animal husbandry system that I have high hopes for does have several fatal flaws."
Surprised, Vera immediately put down the knife and fork in her hand, wiped her mouth with a napkin, and prepared to listen carefully.
Bachelor Sonny seemed worried that the two important figures in front of him would lose confidence in his agricultural reform plan, so he quickly comforted him:
"But please rest assured, I have been thinking about these flaws for so long, and I already have some solutions."
Colin nodded noncommittally, and said, "You should talk about the defects first."
"Okay." Bachelor Sonny cleared his throat and said frankly, "First of all, sweet potatoes, in fact, they have one of the most fatal flaws, that is, they are difficult to store for a long time.
Barley, wheat, and rice can be stored for three to five years as long as the method is correct. But sweet potatoes, even if dried, can only be stored for half a year at most. "
Vera tilted her head and said doubtfully, "It's not a big problem. After eating the sweet potatoes, we can eat bread. It's not like we don't want to grow wheat anymore."
Bachelor Sonny shook his head and said, "Your Excellency, the problem is not with this, but with taxes!"
"Taxes?" Vera was a little confused.
Colin stared, and immediately realized what problems this would bring.
The taxation method in this world is very backward, and it is generally tax-deductible in kind.
For example, if the lord of Winter Spring Town implements a "tithe tax" in the territory, that is to say, all the output of the people here must give one-tenth to the lord.
Those who grow wheat will pay one-tenth of the barley, and those who raise cattle and sheep will hand over one-tenth of the cattle and sheep, or cowhide, wool, etc. If it is promoted, the farmers in this system will hand over one-tenth of the sweet potatoes and pork.
But this involves a serious problem-sweet potatoes are difficult to preserve for a long time.
The lord collected these taxes, of course, not for his own food, no matter how many members of his family there were, they couldn't eat so much.
These taxes are either used as strategic reserves, used as military rations, or put on the market to exchange for the goods they want... In short, all of these require that the collected taxes must be able to be preserved for a long time.
But sweet potatoes have a very fatal flaw at this point.
It's no wonder that Bachelor Sonny's seemingly beautiful agricultural reform plan has been so severely resisted in Yulong City. The nobles don't want all the sweet potatoes they collected to go bad in a short time.
After some explanations from Bachelor Sonny, Vera also understood, but then she asked again: "Then can you let the citizens exchange sweet potatoes for copper coins, and then use copper coins to pay taxes?"
"I'm afraid not." Maester Sonny shook his head in denial.
"Why?"
"Because there are not enough copper coins."
"Not enough copper coins?" Vera was even more confused, so she looked at Colin as if asking for help.
Ke Lin also nodded solemnly, and said: "Indeed, if the lords are required to pay taxes with copper coins, it seems more convenient for the lord, but in fact, this will greatly reduce the copper coins circulating in the market.
On the other hand, because farmers who adopt the new farming and animal husbandry system cannot store sweet potatoes for a long time, they will inevitably sell some of the sweet potatoes that cannot be eaten up, and then buy wheat that is easier to store. As a result, the demand for copper coins in the market Instead it increased.
The demand for money is increasing, but the supply is decreasing. The more successful this new agricultural and animal husbandry system is, the greater the blow to the existing monetary system will be, and it will even cause deflation. "
Colin is almost certain that deflation will happen.
Because the natural economy is the main body in this world, farmers hardly need copper coins on a daily basis, because they all farm the land by themselves, and the income from the harvest is excluding taxes, and they eat by themselves, and there are not many transactions.
But the new agricultural and animal husbandry system is different. Farmers must trade, otherwise the sweet potatoes will be eaten up and spoiled, which will greatly stimulate the activity of the market. If the money supply does not keep up, the consequences will be extremely bad.
But Vera didn't understand these things at all, she blinked her lovely big eyes, and became even more confused.
Bachelor Sonny was also curious about Colin's new term: "Deflation? Lord Viscount, what does it mean?"
Ke Lin coughed a few times, and said lightly: "That is to say, there is not enough currency in circulation, and copper coins have become rare objects. Their value has risen sharply, and prices have fallen. People who hold copper coins are unwilling to exchange them, and finally the entire trading market cannot operate normally. go down."
Bachelor Sonny gave Colin a surprised look, as if he didn't expect the young Viscount to study the economic operation so deeply.
"Then can't we mint more copper coins?" Vera asked again.
Bachelor Sonny nodded, and said: "That's right, this is indeed a solution, but the right to mint coins of the Glorious Empire is in the hands of the royal family, and you must first obtain the royal family's consent.
Also, I must remind you that minting copper coins is actually a thankless job. Because the casting cost of copper coins is higher than its value. "
People in this world may not understand the operation of the economy as well as Colin, who is only half-baked, but they also understand the importance of minting rights.
Therefore, it is not a simple matter to obtain the coinage right from the royal family.
The rejection of Bachelor Sonny's new farming and animal husbandry system showed that the royal family did not want to change the current currency system.
In fact, even if he got the right to mint copper coins, Colin didn't want to do it, because as Bachelor Sonny said, minting copper coins is a thankless task and will only increase the burden on the St. Hilde family.
However, to solve the problem of currency shortage, Colin has other ways.
This is also thanks to the fact that in his previous life he was used to all kinds of flamboyant operations by businessmen in a developed market economy.
So, he smiled and said, "We don't need to mint copper coins."
Bachelor Sonny stared at him, and quickly asked, "Master Viscount, do you have a better solution?"
Colin smiled and nodded, "That's right, we can borrow money from merchants!"
"Borrowing?" Maester Sonny suddenly looked puzzled. He didn't understand what the loan had to do with increasing the money supply.
Colin smiled confidently, and explained leisurely: "We can use the name of the St. Hilde family to borrow money from major merchants in the northern border, and what we borrow is food!
Taking advantage of the famine in the north before, I know that many businessmen have secretly hoarded a large amount of grain, preparing to wait for the price of grain to rise before making a fortune. I originally wanted to rectify these guys who want to make money for the country when I return to the northern border this time.
But now it seems that a more moderate method may be adopted, and a large amount of grain can be obtained from these merchants by means of borrowing. "
Vera couldn't help wondering: "Colin, but does this have anything to do with what we're talking about now?"
"Of course, listen to me slowly." Colin smiled and comforted, "When these merchants lend us grain, the St. Hilde family will issue a batch of bills with the family crest, um, called bonds alright.
Moreover, you will also publicly declare as the Duke of the North that anyone who holds these bonds can come to Lion's Roar Castle in exchange for equivalent grain after the debt is due. "
Vera was still confused, she blinked at Colin with her big cute eyes, as if she didn't know how to ask the question.
However, Maester Sonny seemed to realize something, and his eyes became brighter and brighter.
Colin smiled and continued to explain: "In this way, these bonds are equated with grain, and they are guaranteed by the credit of the St. Hilde family. They have the characteristics of general equivalents. Simply put, It can be used as currency.
After that, we announced that from then on, the taxes in the north must be turned over to currency, or equivalent bonds. Once there is a shortage of copper coins, believe me, people will definitely use this bond as a medium of exchange.
In this way, although we have not minted new coins, we have actually increased the supply of money circulating in the market. "
Bachelor Sonny stood up excitedly, his face flushed, and he said loudly, "Master Viscount, you are truly a genius!"
After speaking, he paced back and forth in the dining room, and he should be thinking carefully about the feasibility of this method.
Vera wrapped her hair between her fingers, and seemed to understand what Colin meant.
But Bachelor Sonny walked back and forth for a while, then suddenly stopped, and asked in a concentrated voice: "Master Viscount, I think there may be a problem with your method."
"you say."
"The loans that the St. Hilde family borrowed from merchants have to be repaid, and once they are repaid, don't these bonds go out of the market?"
"Who said that the loan must be paid off?" Ke Lin said in a low tone, "We can borrow new debts, repay old debts, and maintain this debt forever."
Maester Sonny froze.
Vera was also a little hesitant, because in this world, borrowing money is not an honorable thing, especially for the nobles, it can be said that it is a shame to let them owe money to those lowly merchants.
Now that the situation in the northern border is special, it is reasonable to ask the St. Hilde family to borrow some money for emergency relief, but if the debt is allowed to continue, the prestige of the St. Hilde family may be dealt a huge blow.
Ke Lin watched the changes in the faces of the two of them, and secretly smiled inwardly.
He knew that a certain number one rogue country on the planet had also borrowed a huge amount of debt, but would anyone dare to underestimate it
"Believe me, reasonable debt is not a burden, it is a blessing!"
Colin uttered the famous words of Hamilton, the first Secretary of the Treasury of the United States.
In fact, Colin bypassed the royal family's right to mint coins by issuing bonds in this way, which was actually equivalent to issuing currency in circulation privately.
And if the right to issue currency can be held in his hands, how much profit and influence will be generated, of course Ke Lin knows it well.
Why does the Federal Reserve like to buy U.S. bonds every time there is a financial crisis
Isn't it just to inject a large amount of liquid dollars into the market in this way, increase the money supply, and cause inflation, so as to harvest the whole world.
Also known as quantitative easing.
In fact, it is printing money like crazy.
But there is no way, you can’t directly accuse the other party, after all, in this way, the Fed is indeed repaying the debt...
Colin's inspiration actually came from this. He borrowed food from merchants to issue bonds of equivalent value, and then endorsed the reputation of the St. Hilde family, plus they could be used as tax credits. These bonds also have function of money.
In this way, the St. Hilde family is using this method to dilute and reap the wealth of the northern merchants and even the nobles of the entire empire.
But with the superficial understanding of finance among the nobles in this world, they probably still can't understand the true power of this method.
Of course, the world is still dominated by the natural economy, not the market economy, so the power of manipulating the right to issue currency cannot be fully exerted.
But as long as this method can be implemented smoothly, Ke Lin is confident that the northern border can quickly recover from the famine and war, and even quickly widen the gap with the other three realms.
Vera looked at the confident Colin. Although she did not fully understand the true meaning of this plan, this did not prevent her from fully supporting her husband as always.
As for Bachelor Sonny, this guy can't wait to implement his new farming and animal husbandry system in the northern border. Even if he still has some doubts about Colin's solution, he won't say it at this time.
Seeing that the two of them no longer had any objections, Colin immediately sent a formal invitation to Bachelor Sonny with great contentment:
"Scholar Sonny, I wonder if you are willing to go to the north to serve as the agricultural consultant of the St. Hilde family?"
Bachelor Sonny's complexion became serious, and he finally looked at Colin with respect and respect from the bottom of his heart, and said solemnly:
"I do!"
(end of this chapter)