Chapter 127: National Joseon Bank (國立朝鮮錢莊). (2)
'Severing the link between tenant farmers and local magnates.'
At Hyang's shocking declaration, a small commotion rippled through Geunjeongjeon Hall. However, that commotion soon subsided.
'His Highness the Crown Prince has done it again.'
This was because whenever Hyang had publicly announced something during this time, events that transcended imagination had occurred in succession, so the ministers were already accustomed to it.
Because it had become a familiar occurrence, the ministers were able to quickly regain their composure and pointed out parts that could potentially become problematic.
"Did you say that a bank would be established to sever the ties binding tenant farmers? Does this mean the bank's funds would be used to forgive all debts owed by tenant farmers?"
Minister of Personnel Heo Jo stepped forward as the vanguard and threw a question at Hyang. With a sharp expression, Heo Jo continued speaking toward Hyang.
"If that is the method, I oppose the establishment of the bank. Although the situation of tenant farmers is pitiable, mere debt forgiveness cannot break their shackles."
At Heo Jo's point, Hyang shook his head.
"Your words are correct. If one thinks that the chain of evil customs can be broken simply by debt forgiveness, that would indeed be a naïve thought. The policy I have in mind is for the creditor of the debts owed by tenant farmers to be not the local magnates, but the bank—in other words, the court."
"The bank becomes the creditor?"
"That is correct. The bank steps forward to pay the debts owed by tenant farmers on their behalf, and the tenant farmers repay those debts to the bank. Hereafter as well, for various reasons, when tenant farmers and ordinary people urgently need funds, they would receive loans from the bank."
"Will tenant farmers and the people use the bank?"
At Heo Jo's question, Minister of Taxation Kim Jeom stepped forward to answer.
"If you make them use the bank, they will. The easiest method is to set the interest rate low."
"Lowering the interest rate...."
"If you listen to the talk circulating among the people regarding the current interest rates on loans, they say, 'If one receives principal-equivalent wealth as one year's interest, it would be fine to call him a Bodhisattva.' So if the bank's interest rate were even 50 percent, the bank's threshold would be worn away."
"Hmm...."
At Kim Jeom's words, the ministers all fell into thought. Watching those ministers, Hyang opened his mouth.
"I anticipate a maximum of 30 percent for one year's interest."
When Hyang mentioned '30 percent,' the ministers' eyes opened wide.
"30 percent!"
"Isn't 30 percent too little?"
When the ministers showed negative reactions to the 30 percent interest rate, Hyang pointed out one fact.
"You must not forget that those in urgent need of loans right now are tenant farmers."
"I know that, but?"
Hyang pointed out one thing the ministers had forgotten.
"Have you forgotten the fact that as soon as harvest ends, at least half disappears as rent?"
"Ah...."
"We've been living only receiving government salaries...."
At the ministers' reactions, Hyang made an expression of disbelief.
'Those noble families who until just the day before yesterday were living on tenant fees!'
The custom of receiving land through the Gwajeon Law and substituting government salaries with tenant fees was changed when Sejong implemented the Gyeongjang reforms, returning the land and receiving government salaries for living instead.
In this process, there could have been opposition from the ministers, but the situation at the time was not one where they could dare to think of opposing. This was because the purge of senior ministers including Ryu Jeong-hyeon had occurred just before.
In the end, the ministers had to spit out all their land while going 'Huh? Huh?'
And, not even a few years had passed since the system was changed like that, yet the ministers had forgotten that fact.
'They say it's human nature to forget once accustomed, but already living in another world, what are they trying to do?'
Forcing down his bitter feelings, Hyang continued speaking.
"Therefore, an interest rate of 50 percent is an enormous usurious rate."
At Hyang's statement, Heo Jo raised a counterargument.
"However, 30 percent is excessively low interest. If you immediately provide loans at such low interest, tenant farmers and the people will be pleased, but there is a high possibility they will forget 'the fear of being in debt' and make unrestrained loans."
"That is why it's 30 percent. 50 percent is too high. Also, competition could arise."
"Competition?"
"From the perspective of local magnates, an interest rate of 50 percent is lower than the interest rate they've been receiving until now, but it's still a tasty interest rate. In that case, they could decide to compete with the bank established by the court."
"Such impudence!"
Heo Jo flared up, but Hyang rather threw a question.
"There is no law currently prohibiting private individuals from establishing banks. Of course, we could create a prohibition law, but if done incorrectly, it could burrow into the shadows and create illegal flows of wealth. What do you think about this?"
'It means underground funds would become enormous!'
"Hnnng...."
At Hyang's point, Heo Jo made a groaning sound and suppressed his anger.
Hyang continued with a more detailed explanation.
"Just like the Taxation Ministry's monopoly bureaus, if we install banks down to the county level, we can gain profits in many ways."
Hyang explained the bank's tasks in order.
1. Loan funds to independent farmers and tenant farmers who need funds.
2. Exchange grain and cotton cloth brought by the people for currency.
"With this second item, if we collaborate with the Taxation Ministry's monopoly bureau, the effect will double."
When Hyang brought up the word 'collaboration,' Kim Jeom tensed up and asked.
"What do you mean by collaboration?"
"The items sold at the monopoly bureau, especially salt, are essential goods for the people. If we decide that the purchase of such monopoly goods must be possible only with currency, currency can definitely take root."
"That would be the case."
At Hyang's explanation, Kim Jeom nodded.
"There are a few more advantages besides that."
Sejong, who had been listening to Hyang's explanation, interjected.
"We will listen with washed ears."
The ministers focused their attention on Sejong.
With the ministers focused, Sejong spoke his thoughts.
"Speaking of the tax bureau newly established in the process of reorganizing the Six Ministries. Make it so that taxes received at the tax bureau are unconditionally paid in currency. Then the use of currency will accelerate further."
"That would be the case."
"And I think the Crown Prince's idea of having the bank exclusively handle the exchange of grain and currency is truly excellent. In that case, the court can gather the grain sleeping in the people's storehouses, and the grain gathered this way can be used as military provisions as well as relief grain."
"Indeed it is so!"
"We are impressed by His Majesty's wise insight!"
"Haha! You praise too highly!"
At the ministers' praise, Sejong answered with a pleased smile.
Meanwhile, Hyang was flipping through the pages of the booklet he was holding for the announcement and grumbling internally.
'That was what I was going to say! Hey! Chichibong!'
Anyway, the existence of the bank that Hyang spoke of was quite a good plan. Since Sejong also showed a favorable reaction, the ministers settled on establishing the bank.
"Establishing the bank is important, but there is something to be resolved first."
"Something to resolve first?"
At Hyang's statement, Sejong and the ministers gathered their spirits again and focused on Hyang.
"First is the problem of usury. We said we would resolve it through the establishment of the bank, but building the building to use as a bank, deploying officials, and preparing funds are all matters that take time. However, those suffering from usury right now are not one or two, so we must first execute measures to relieve these people."
At Hyang's words, Heo Jo immediately picked up the thread.
"That is correct. Since some time ago, petitions about usurious debts have been coming up not only from Hanseong but also from various cities."
"The people of cities are in usurious debt? What is the interest rate on debts that city people incur?"
"Ten times the principal."
"Ten times! And yet they still incur debt?"
When Sejong asked in surprise, Kim Jeom answered.
"Since some time ago, problems with usury arose, and upon investigation, as the number of people engaged in commerce and industry increased, the number of people borrowing seed money increased. In the case of such seed money, the amount borrowed is considerable, and furthermore, since there are many cases where those who start businesses fail, the interest rate is said to be high due to risk burden."
At Kim Jeom's answer, Sejong murmured with a bitter face.
"As the number of people engaged in commerce and industry increases, such problems arise as well."
'Oh no! Dangerous! The probability is low since it's already a path-dependence, but if done incorrectly, it could lead back to suppression of commerce and industry and treating it with disdain!'
At Sejong's words, Hyang hurriedly opened his mouth.
"Father! When attempting new challenges, many people who fail naturally emerge! The problem is those who only think of jumping into commerce and industry without proper preparation!"
At Hyang's point, Sejong nodded.
"The Crown Prince's words are correct. No matter how small and trivial the matter, one must prepare properly to avoid suffering setbacks. So what should we do?"
"We should establish a Business Review Department in the banks created in cities to review those wishing to start businesses and decide whether to approve fund loans."
"Business Review Department?"
When Sejong showed interest, Hyang explained a bit more in detail.
"Yes, Father. If they are officials from the Taxation Ministry who handle tax work for merchant groups and workshops, they would have a considerable grasp of what industries do well and what industries have fierce competition.
Therefore, we select those among the Taxation Ministry's officials who know that work well and assign them to the Business Review Department."
At Hyang's words, Sejong slapped his knee.
"That's right! They would know well what does well in that city, and the competitive situation of the industry the person wishing to start a business has chosen! They would be able to give advice to those newly starting businesses! What does the Minister of Taxation think?"
At Sejong's question, Kim Jeom answered with a sour face.
"W-well, of course it would be so."
"Then...."
When Sejong showed signs of adding work to the Taxation Ministry, Kim Jeom hurriedly continued speaking.
"The place that handles tax work for merchants and artisans is indeed the Taxation Ministry, but the place that handles work related to starting and closing businesses is the Ministry of Personnel! For a business to succeed, avoiding excessive competition is basic, so the Ministry of Personnel is the appropriate place to give advice about this!"
'I refuse to both take on more work and have usable people taken away like peeling dried persimmons!'
Thanks to desperately turning his head, Kim Jeom successfully passed the 'burning hot potato' he had been thrown to the Ministry of Personnel.
At Kim Jeom's statement, Sejong, who had been thinking deeply, nodded.
"Is that so? I see. What does the Minister of Personnel think?"
Heo Jo, who had suddenly taken on the burning hot potato, answered stumblingly.
"D-definitely, work related to starting and closing businesses is indeed the Ministry of Personnel's work."
"Then, let's have the officials in charge of the Business Review Department be primarily selected from the Ministry of Personnel. However, since the people's desire to start businesses is to obtain wealth, deploy officials from the Taxation Ministry appropriately as well."
When Sejong reached a conclusion, Heo Jo and Kim Jeom simultaneously bowed their heads.
"We receive your command!"
* * *
Thus, the agenda regarding the 'establishment of the bank' that Hyang had proposed was passed.
"Then let us end here for today. Go and attend to your duties."
When Sejong declared the meeting adjourned, the ministers paid their respects and exited Geunjeongjeon one by one.
"Khehm!"
"Khem!"
While exiting Geunjeongjeon, Kim Jeom and Heo Jo glared at each other and kept clearing their throats. It was a situation where Kim Jeom had passed the burning hot potato Hyang had thrown to Heo Jo, and Heo Jo had been hit directly. Kim Jeom hadn't completely escaped either, but he hadn't taken a direct hit like Heo Jo.
"No, Minister. When there are already not enough people as it is...."
When Heo Jo grumbled, Kim Jeom retorted sullenly.
"Who are you saying lacks people in front of whom right now? Thanks to taking them away like peeling dried persimmons whenever there's someone worth using, the Taxation Ministry's officials are in a situation of being divorced."
At Kim Jeom's words, Heo Jo made a groaning sound and said.
"Hnnng... some good wild ginseng came into my house recently, so I'll send it to you soon. You're overworking yourself like that, so you should at least take some tonic medicine, shouldn't you?"
At Heo Jo's words, Kim Jeom immediately answered.
"Come to think of it, about ten soft-shelled turtles came in recently. I'll send the soft-shelled turtles to your house, Minister. It's a food ingredient good for stamina, so boil them thoroughly and eat."
"Khem! Khehm!"
"Khehem! Hem!"
The two ministers loudly cleared their throats and walked toward the Six Ministries district, turning away from each other.
To those who didn't know, it might have sounded like the two ministers were speaking out of concern for each other, but those who had lived in the Six Ministries offices to some extent could tell that this was a tremendous declaration of war.
Wild ginseng was a famous medicine, to the extent that there was a saying, 'It makes even a dying person spring up.'
Therefore, the words 'Eat wild ginseng' meant 'Work yourself to death from overwork.'
Soft-shelled turtle was a food ingredient and medicinal material famous for nourishment and stamina. However, soft-shelled turtles were famous for something else as well. That was their vicious nature of 'once it bites, it holds on even if its head is cut off.'
In other words, Kim Jeom saying 'I'll send soft-shelled turtles' was a roundabout way of saying 'Even if I die, I won't die alone!'