Chapter 322： Countermeasure

Facing the sharp question from Colin, Bachelor Sonny immediately calmed down from his enthusiasm.

He had realized that although the guardian of the north in front of him was young, he was not so foolish.

So, he slowly sat across the dining table, nodded solemnly, and said:

"Yes, this new agricultural and pastoral system that I have high hopes does have several fatal flaws."

Vera was startled, and immediately put down the knife and fork in her hand, wiped her mouth with a napkin, and was ready to listen carefully.

Bachelor Sonny seemed to worry that the two important figures in front of him would lose confidence in his agricultural reform plan, so he quickly calmed down:

"But please rest assured, I have been thinking about these deficiencies for so long, and there have been some solutions."

Colin nodded noncommitantly, and said, "You should talk about the defect first."

"Good." Bachelor Sonny cleared his throat and said frankly, "First of all, it is sweet potato. In fact, it has one of the most fatal flaws, which is that it is 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 they are dried, can only be stored for half a year at most. "

Vera tilted her head and said in doubt: "This is not a big problem. After the sweet potatoes are eaten, we can eat bread. It's not that we don't grow wheat."

Bachelor Sonny shook his head and said, "My Lord Duke, the problem is not here, but the tax!"

"Taxes?" Vera didn't understand.

Colin's eyes condensed, and he immediately realized what problems this would bring.

Taxation methods in this world are very backward, and taxes are generally deducted from goods.

For example, if the lord of Winterspring implements "tithe tax" in the territory, that is to say, all the output of the lord here must be given one-tenth to the lord.

Those who grow wheat pay one-tenth of the barley, and those who raise cattle and sheep must pay one-tenth of the cattle and sheep, or the recognized equivalent of cowhide and wool. Therefore, if the new agricultural and pastoral system of the Bachelor of Sonny If it is promoted, the farmers in this system will turn in 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 collects these taxes, of course, not for his own consumption. No matter how many members of his family, he can't eat so many things.

These taxes come up, either as a strategic reserve, or used as military rations, or put on the market to exchange the goods they want...In short, this requires that the taxes collected must be able to be stored for a long time.

The sweet potato has a very fatal flaw in this regard.

It's no wonder that Bachelor Sonny, a very beautiful agricultural reform plan, has received such severe resistance in Yulongcheng. The nobles don't want all the sweet potatoes they collect to deteriorate soon.

After some explanation from Bachelor Sonny, Vera also understood, but then she asked again: "Can the people change the sweet potatoes into copper coins, and then use the copper coins to pay taxes?"

"I'm afraid not." Bachelor Sonny shook his head in denial.

"why?"

"Because, there are not enough copper coins."

"Not enough copper coins?" Vera was even more puzzled, so she had to ask for help and looked at Colin.

Colin also nodded solemnly, and said: "Indeed, it seems that it is more convenient for the lord to require the citizens to pay taxes with copper coins, but in fact, this will greatly reduce the copper coins circulating in the market.

On the other hand, those farmers who adopt the new agricultural and animal husbandry system cannot store sweet potatoes for a long time, so they will inevitably sell some of the sweet potatoes that they cannot eat, and then buy wheat that is easier to store. As a result, there is a 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 pastoral system is, the greater the blow to the existing monetary system, and even deflation. "

Colin is almost certain that deflation will happen.

Because this world was originally dominated by the natural economy, farmers almost don't need copper coins in their daily lives, because they all grow their own land, and the income from the harvest is taxed and eaten by themselves, and there will not be too many transactions.

But the new agricultural and animal husbandry system is different. Farmers must trade, otherwise the sweet potatoes will not be eaten and spoiled. This will greatly stimulate market activity. If the money supply does not keep up, the consequences will be extremely bad.

But Vera didn't understand these things at all, blinked her big cute eyes, and became even more bewildered.

Bachelor Sonny was also curious about Colin's new term: "Deflation? Lord Viscount, what does this mean."

Colin coughed a few times and said lightly: "That means that there is not enough currency in circulation, and copper coins have become a rare thing. Its value has risen sharply, and prices have fallen. Go down."

Bachelor Sonny glanced at Colin with a surprised look. He didn't seem to expect that the young viscount would have studied the operation of the economy so deeply.

"Then we can't mint more copper coins?" Vera asked again.

Bachelor Sonny nodded and said: "Yes, this is indeed a way, but the coinage of the Glorious Empire is in the hands of the royal family, and you must first obtain the royal family's consent.

Moreover, I must remind you that minting copper coins is actually a thankless job. Because the casting cost of a copper coin is even higher than its value. "

People in this world may not have as much understanding of economic operations as Colin who is just a half-hearted, but they also understand the importance of coinage.

Therefore, it is not a simple matter to obtain coinage rights from the royal family.

The rejection of the Sonny Bachelor’s new farming and pastoral system at the time indicated that the royal family did not want to change the current monetary system.

In fact, even if he had obtained the power 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 Saint Hild family.

However, to solve the problem of currency shortage, Colin has other ways.

This is also thanks to his accustomed experience in the previous life of the various businessmen's actions in a developed market economy.

So he smiled and said: "We don't need to cast copper coins."

Bachelor Sonny's eyes were fixed, and he asked quickly, "My Lord Viscount, do you have a better way?"

Colin smiled and nodded, "Yes, we can borrow from merchants!"

"Borrowing?" Sonny Bachelor suddenly looked confused. He didn't understand what borrowing had to do with increasing the money supply.

Colin smiled confidently and explained leisurely: "We can borrow from the major merchants in the north in the name of the Saint Hild family, and what we borrow is food!

Before taking advantage of the famine in the north, I knew that many businessmen secretly hoarded a large amount of grain, and were preparing to wait for the price of grain to rise and make a big profit. I originally wanted to wait for this time when I returned to the northern border to take care of these guys who wanted to make a fortune in the country.

But now it seems that a more moderate method may be adopted, using borrowing and lending, to get a large amount of food out of the hands of these merchants. "

Vera couldn't help but wonder: "Colin, but does this have anything to do with what we are talking about now?"

"Of course, listen to me slowly." Colin smiled and soothed. "When these merchants lent us the food, the St. Hild family will issue a batch of bills with family crests. Well, it's called bonds. All right.

In addition, you will also declare in public as the Duke of the North that anyone who holds these bonds can come to Lion's Roar for equivalent food after the debt maturity date. "

Vera was still confused when she heard her, her big cute eyes looked at Colin blinking, as if she didn't know how to ask questions.

However, Bachelor Sonny seemed to realize something, his eyes brightened.

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. Hild family. They have the characteristics of general equivalents. In short, It can be used as currency.

After that, we announced that from now on, taxes in the northern border must be turned in currency or equivalent bonds. Once there is a shortage of copper coins, believe me, people will definitely use this kind of bonds 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 red, and he said loudly, "Viscount Lord, you are such a genius!"

After speaking, he walked back and forth in the restaurant, and he should be thinking carefully about the feasibility of this approach.

Vera wrapped the ends of her hair around her fingers, and she seemed to understand what Colin meant.

But after Bachelor Sonny walked back and forth for a while, he suddenly stopped and asked in a condensed voice: "My Lord Viscount, I think there may be a problem with your approach."

"you say."

"The loans that the St. Hilde family borrowed from the merchants must always be paid off, and once they are paid off, won't these bonds be withdrawn from the market?"

"Who said that the loan we borrowed must be paid off?" Colin said quietly, "We can borrow new debts, repay old debts, and maintain this debt forever."

Bachelor Sonny was stunned.

Vera hesitated too, because in this world, borrowing is not a glorious thing, especially for the nobles, it can be said that it is a shame to make them owe money to those lowly merchants.

The situation in the North is now special. It is reasonable to ask the St. Hild family to borrow some money to save the emergency, but if the debt is allowed to continue, the prestige of the St. Hild family will probably be a great blow.

Colin smiled secretly as he watched the changes in their faces.

He knew that a certain number one rogue country on the earth also borrowed a debt of assholes, but would anyone dare to look down upon it because of this?

"Trust me, reasonable debt is not just a burden, but a blessing!"

Colin uttered the famous words of Hamilton, the first Secretary of the Treasury of the United States.

In fact, through this method of issuing bonds, Colin bypassed the royal family's coinage rights, which is actually equivalent to issuing currency in circulation in private.

And if the right to issue currency can be held in his hands, Colin certainly knows how much profit and influence it will produce.

Why does the Fed like to buy U.S. debt every time a financial crisis occurs?

Isn't it just to inject a large amount of liquidity into the market in this way, increase the money supply, and cause inflation, so as to harvest the world.

It is also called quantitative easing.

In fact, it is crazy printing money.

But there is no way. You can't directly blame the other party. After all, the Fed is actually paying off the debt in this way...

Colin’s inspiration actually came from this. He borrowed grain from the merchants to issue equivalent bonds, and then endorsed them with the reputation of the St. Hild family, plus tax credits, and these bonds were also available. The function of currency.

In this way, the Saint-Hilde family is also diluting and harvesting the wealth of the northern merchants and even the entire empire's nobles in this way.

However, given the superficial understanding of finance by the nobles in this world, they should not be able to understand the true power of this method.

Of course, the world is still dominated by the natural economy, not a market economy, so the power of manipulating currency issuance rights cannot be fully utilized.

But as long as this method can be implemented smoothly Colin is confident that the Northern Territory can quickly recover from famine and war, and even quickly widen the gap with the other three realms.

Vera looked at Colin with a confident look. Although she hadn't fully understood the true meaning of this plan, it did not prevent her from supporting her husband as always.

As for the Sonny Bachelor, this guy can't wait to implement his new farming and pastoral system in the North, 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 out an official invitation to the Sonny with complacency:

"Bachelor Sonny, I wonder if you are willing to go to the north to serve as an agricultural consultant for the St. Hild family?"

Bachelor Sonny's expression became solemn, and his gaze towards Colin finally brought a piece of respect and respect from the heart, and said solemnly:

"I do!"

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