Chapter 188: Currency War. (4)
At Yuan Taisuo's argument, Emperor Xuande examined the design of the paper currency again.
"Certainly…."
The image of two dragons facing each other with a single cintamani between them seemed to be growling at one another.
From that moment, the war of words among the ministers began.
The main participants in the debate were the instructors from the Directorate of Education.
"If the problem is one cintamani, why not add another one?"
"The very fact that there are two dragons is the problem! Two complete dragons in one place? That means the nation will be split!"
"Even numbers are easily divided in two! Absolutely no even numbers!"
"Then how about three?"
"Wouldn't that be unbalanced!"
"Look at the ding (tripod). Doesn't it have three legs? Yet it maintains perfect balance and is treated with reverence!"
"How many corners does the paper currency have? Four! And you want to put only three dragons? Do you think that makes sense? To do that properly, you'd need to put in four dragons!"
"You want to put four dragons on that small paper currency? You don't even know the character 'jeol' (meaning talkative)! Bah! For a minister of this Empire to be so ignorant!"
"Ignorant! How dare you spout such nonsense!"
The heated debate escalated toward dangerous levels. However, having witnessed many eunuchs, ministers, and military commanders imprisoned and ultimately beheaded from the previous incident, the tension stayed precariously below the danger line.
"A single dragon is all that's needed!"
"Have you not considered the harmony of yin and yang? How can you achieve balance with just one?"
"In all my life, this is the first I've heard that dragons have male and female sexes! A dragon, by its very nature, is a being that has cultivated the Dao through absorbing the qi of heaven and earth and ascended! Are you suggesting that sacred dragons mate like common village beasts and bear offspring?"
Watching the debate between Ming officials and eunuchs, the Vice Minister of Taxation grumbled internally.
'Just print a landscape painting!'
The Vice Minister wasn't the only one thinking this. Sejong, who had been watching the debate with a face full of fatigue and irritation, suddenly shouted.
"Enough! Stop this at once!"
At Sejong's roar, the ministers immediately ceased their debate and prostrated themselves on the floor. Sejong looked at the Vice Minister of Taxation with an irritated expression.
"I ask the envoy from Joseon! How did Joseon resolve this matter?"
"As you know, we put in landscape paintings."
"Indeed."
Upon hearing the Vice Minister's answer, Sejong turned to look at the Ming subjects.
"If a picture must be placed on the paper currency, put in a landscape painting instead of dragons."
"That cannot be allowed!"
At Sejong's command, the Grand Secretary immediately stepped forward to object.
"Why is that?"
"The dragon is the symbol of the Son of Heaven and the symbol of the Empire! The dragon absolutely cannot be removed!"
"Correct!"
"The dragon must be included!"
At the Grand Secretary's words, those who had been debating simultaneously voiced their support for him. Seeing this, Sejong placed his hand on his forehead and let out a long sigh.
"Haa~. What am I to do about this…."
Ultimately, after a long and lengthy debate, Sejong reached a conclusion.
"If a dragon must be placed on the new paper currency, then only one shall be put in. Just as there is one Son of Heaven, there is one Empire. Therefore, only one dragon shall be placed. Just as the Empire's prestige encompasses the four seas, the dragon's body shall wrap around the four corners of the paper currency."
"We receive your command!"
"Long live, long live, long live the Emperor!"
At Sejong's conclusion, the officials and eunuchs all prostrated themselves and answered in unison.
Watching this from the side, the Vice Minister of Taxation chanted "long live" along with the Ming people while grumbling internally.
'No, if he was going to make the decision himself anyway! Why make people suffer like this!'
* * *
Half a month later, the Vice Minister of Taxation was finally able to return to his country.
"Jemulpo is in sight!"
Upon hearing his subordinate official's shout, the Vice Minister burst out of his cabin and ran to the bow of the ship.
"Finally, Joseon! I've returned to Joseon!"
The Vice Minister's voice was filled with emotion.
* * *
After arriving at Jemulpo, the Vice Minister of Taxation and his party changed boats and headed straight for Hanseong via the Han River.
The Vice Minister and his party, who entered Geunjeongjeon, paid their respects to Sejong and reported their return.
"Having shouldered unexpected matters, your hardships must have been great."
"Not at all. It is a subject's duty to follow royal commands."
Though he said this, the faces of the Vice Minister and the diplomatic mission were in a terrible state.
Looking at the mission with a sympathetic expression, Sejong gave his command.
"There is much I need to hear from you, but seeing your condition now, rest is urgent. Take two days of rest, then report to duty."
At Sejong's words, the Vice Minister and his party immediately prostrated themselves and cried out.
"Your grace is boundless! Long live, long live, long live the King!"
The historian who recorded all of this added a note at the end.
-The historian says:
I am envious.
* * *
Two days later, as soon as the Vice Minister of Taxation reported to duty, he headed to Geunjeongjeon. With Sejong and Hyang in attendance, as well as all ministers of the rank of Director and above, the Vice Minister reported everything that had occurred in Ming.
"…and so, Ming is preparing to circulate the new paper currency. The new paper currency is expected to be circulated in two years."
"I see. What is the state of Ming's population and commercial scale?"
At Sejong's question, the Vice Minister searched his memory for a moment before answering.
"Detailed information was inaccessible so I cannot give exact figures, but the population is approximately 12 times, and the commercial scale approximately 20 times."
"20 times!"
At the words 'commercial scale 20 times,' the ministers gathered in Geunjeongjeon all began to murmur.
"What is the basis for saying so?"
Sejong asked in a trembling voice. He knew that Ming was a great nation. But he couldn't easily believe that the commercial scale was 20 times.
In response to Sejong's question, the Vice Minister explained the basis.
"I could not access exact information, but in the process of planning the new currency, I was briefly able to see the household registry and tax collection lists compiled by Ming's Ministry of Revenue. Based on the population recorded in the household registry and the tax amounts listed in the tax collection records, the result came out to 20 times."
"Even so, 20 times…."
As Sejong shook his head, Hyang interjected.
"Would it not be possible?"
"Possible?"
"Yes. Ming's founding preceded our Joseon. And we Joseon suppressed the growth of commerce and industry. Combining those two factors, it is entirely possible."
"I see…."
At Hyang's explanation, Sejong nodded.
* * *
Hyang's argument had some merit.
Ming was founded in 1368. And Joseon was founded in 1392. There was a gap of about 24 years in time. Furthermore, Joseon valued agriculture according to Neo-Confucian ideology.
Of course, those 24 years of gap were during the late Goryeo period, and Goryeo had a tradition of favoring commerce. However, during that gap period, starting with the invasion of Japanese pirates, the entire land was devastated, and fierce struggles were taking place among political forces on the Korean Peninsula.
Therefore, it was a situation where the safety necessary for commerce and industry to flourish could not be guaranteed.
The temporal gap and agriculture-centered political ideology had brought about this enormous difference.
* * *
Upon hearing Hyang's explanation, Sejong and the ministers nodded.
"I thought we had caught up to some degree, but in reality, we still fall far short…. Hoo~."
Sejong, who let out a long sigh, commanded the ministers.
"We still have a long way to go. Let us put in a bit more effort."
"We receive your command!"
Once again, Sejong and the ministers renewed their determination.
* * *
The Vice Minister of Taxation began to speak about what he considered the truly important part.
"I will report what I considered most important while I was in Beijing. You may have already received a report, but the value of silver in Ming continues to rise."
At the Vice Minister's words, Sejong turned to look at Hyang.
"I have already received a report. Is it that serious?"
"Just before I returned, one nyang of gold could be exchanged for eight nyang of silver. Please consider that when our Joseon conquered Tsushima, the exchange rate when purchasing sulfur from Ming to manufacture gunpowder was one nyang of gold to ten nyang of silver."
"Hmm…."
Sejong calculated for a moment. The Tsushima expedition had occurred 11 years ago. At that time, in the process of preparing for the expedition, they had to purchase sulfur from Ming to increase their gunpowder reserves.
"I see. The value of silver has risen significantly. What is the reason?"
"It is because silver consumption has increased. Ming began collecting taxes in silver much earlier than our Joseon. They also settled payments in commerce with silver. Therefore, as silver consumption outpaced production, its value rose."
"I see. And so…."
After stopping briefly, Sejong turned to look at Hyang. This was because he recalled the memory of Hyang running here and there as soon as he received information that large amounts of silver were coming in from Ming.
Reflecting on those events, Sejong asked the Vice Minister of Taxation.
"If we had not mentioned currency circulation to Ming this time, what do you think would have happened?"
"I casually broached the subject with the Ming officials I had built friendships with, and there was a considerable possibility that silver would have been recovered in the form of tribute."
"Is that so? Hoo~. That was close."
At the Vice Minister's answer, Sejong sighed and wiped his chest. If Ming's commercial scale was as enormous as the Vice Minister said, there was a risk that Joseon's silver would be sucked out as tribute.
And without proper compensation.
Sejong turned to look at the ministers.
"As you have heard from the Vice Minister of Taxation, the demand for silver in Ming is increasing. We must find a way to protect Joseon's silver. And without provoking Ming, the suzerain state."
"We receive your command!"
As soon as the ministers' answer ended, Hyang interjected in the conversation.
"Father. May this son speak?"
"I permit it."
As soon as Sejong's permission was given, Hyang got straight to the point.
"We must devise various methods to prevent Joseon's silver from being sucked into Ming. However, the first thing we must do is prevent Joseon's merchants from bringing gold in from Ming."
"Why? It's gold, not silver?"
At Sejong's question, Hyang gave a brief answer for the reason.
"Because while merchants may profit, it is a loss for Joseon as a whole."
"Hm?"
At Hyang's answer, Sejong and the ministers stroked their beards and began to think about the true meaning.
After a while, Sejong, the Minister of Taxation Kim Jeom, and Meng Sa-seong simultaneously uttered exclamations of realization.
"That's it! For every one nyang of gold that comes in from Ming, we lose two nyang of silver!"
"Exactly!"
What Hyang spoke of was the exchange rate arbitrage and exchange loss using the gold-silver exchange ratio between Ming and Joseon.
* * *
When they first created paper currency, Hyang and the Ministry of Taxation had set the gold-silver exchange ratio at 1:10. This was partly due to production volume and circulation scale, but it was also a ratio set for ease of administration in various economic areas including tax collection.
However, if there was a difference in the gold-silver exchange ratio between Ming and Joseon as now, it was obvious that merchants would emerge to take advantage of this.
Right now, even if they bought gold in Ming, brought it in, and exchanged it at the mint or paid it as payment for goods, an additional profit of two nyang of silver would be generated for each nyang of gold.
However, while this was profit for merchants, it was a loss for the nation as a whole.
This was not merely a concern. In the late Ming period and during the Qing Empire, this exchange rate arbitrage was exactly how European merchants trading with China maximized their profits.
Until the 17th century, Europe's exchange rate maintained the traditional 1:12 level. However, China's exchange rate was 1:6. Simply put, European merchants could make a 100% profit just by buying gold in China and returning to Europe to sell it.
Therefore, merchants of the East India Company traveled busily between Europe, China, and Japan, making enormous profits through exchange rate arbitrage.
It was a method of multiplying profits several times over by bringing European and Japanese silver to China, exchanging it for gold, bringing that gold to Japan to exchange for silver, bringing that silver back to China to exchange for gold, and then selling it in Europe. (Note 1)
* * *
Having understood the problem Hyang pointed out, Sejong and the ministers immediately decided to create relevant laws.
Following this, Hyang asserted one more thing.
"We must subjugate the Japanese state."
"Subjugate the Japanese state? Isn't that too hasty?"
Thinking that 'subjugation equals war,' Sejong spoke with a voice full of worry, and Hyang explained in more detail.
"I do not mean to subjugate them by military force. We must make the Japanese market exclusively ours, Joseon's alone."
* * *
Note 1) The Story of Jews - How They Made the History of Wealth. Written by Hong Ik-hui. Published by: Haengseong;Bipsae.