Chapter 284: Sweet Port Turbulence – A New Fundraising Channel

At the same time, Ma Qianzhu looked at the newly received telegram. Just reading the first line, he drew a sharp breath. The words "Great Leap Forward" sprang to mind. Deposits—were they planning to open a bank in Guangzhou? Before the Leizhou situation was even resolved, now they wanted to cause a financial storm in Guangzhou?

Reading further, however, it had nothing to do with banking—it wasn't even a money shop. This idea hadn't come from the Guangzhou Station itself, but from Shen Fan, the senior manager of Purple Treasure Pavilion. He'd made this suggestion not because of advanced financial awareness, but because it was a traditional form of business capitalization in that era.

Depositing idle funds with a well-regarded shop, then drawing annual interest. The shop gained operating capital; the depositor earned a return. This practice continued long after money shops and even banks appeared in China—right up until the 20th century. Not just large trading houses, but even small cloth shops and oil-and-salt stores accepted deposits to varying degrees. Well-established shops with good reputations could attract deposits many times—even tens of times—their own capital.

For the jewelry trade—an industry that was capital-intensive and required substantial funds—accepting customer deposits was long-standing practice. Seeing that the masters' business was thriving and their standing was growing, Shen Fan had proposed this approach.

The interest on such deposits was far lower than short-term loans—only 1.5% monthly, or 18% annually. By modern standards, this wasn't particularly high. Guo Yi remembered that back when he was a child, the one-year bank deposit rate had once reached 12%. For shops that frequently needed to borrow for turnover, this was practically an interest-free loan.

"Who would want to make deposits with us?" They ran a jewelry store. For them to suddenly announce they were accepting deposits—who would become a customer?

"That's precisely the advantage of being in the jewelry and curio trade," Shen Fan explained. "We get access to the ladies of the inner quarters. Getting them to make deposits is easier. The wives, daughters, and concubines of great households—even favored personal maids—have private savings they want to put to use. Some have just 50 or 100 taels; others have thousands or tens of thousands." He smiled. "The bolder ones lend money. But lending requires reliable agents, and middlemen inevitably skim a cut. Word also leaks easily. So most prefer to deposit with reputable establishments."

Hearing this, Guo Yi was uncertain. Having more silver on hand was good, but the Guangzhou Station wasn't short of cash flow at the moment. Taking deposits now would mean additional interest expense.

"Master, the benefit of taking deposits isn't just for our own use," Shen Fan continued. "The Guangzhou market sometimes has tight cash flow, sometimes loose. When it's tight, short-term lending can bring several times the interest in return!"

"With lending like this, for a business with no roots like ours, I imagine it's easy to lend out but hard to collect."

"There's a second benefit. The deposits come from the inner quarters of official and gentry households." Shen Fan hinted. "The women's private funds may be limited, but once word gets out, people will see Purple Treasure Pavilion's connections and influence in a completely different light."

By now, Guo Yi understood. These deposits wouldn't just help with turnover—they'd elevate Violet Sincerity Trading's status in Guangzhou! Even without using the deposited silver for lending, it would give them a protective umbrella. From that perspective, 1.8% annual interest was quite cheap.

Shen Fan pulled out a small booklet. Inside was a list of names and business names: "Su Ji," "Jin Yan Zhai," "Run Ji," and so on. About twenty in all.

"These are passbooks from ladies who've recently expressed interest in opening deposit accounts with Purple Treasure Pavilion. Since I hadn't received your approval, I haven't accepted their deposits yet. But the account books have been prepared."

"Who are all these people?"

Shen Fan pulled out another notebook filled with symbols only he could read—commercial code, similar to Suzhou numerals. Used for recording things that couldn't be made public. "Most are honored ladies of official and gentry families. I'll copy out a name list later, but this list must be kept confidential—"

"I understand." Guo Yi thought—since these were private funds, confidentiality was paramount. Who knew that anonymous deposits already existed in the Great Ming? Truly ahead of the world.

"These twenty-odd passbooks come to about 10,000 taels of silver," Shen Fan said. "This is excellent business. Barring major upheaval, they typically only draw interest and don't touch the principal."

But this was too significant a matter. The Guangzhou Station's three officers considered for a long time and decided to wait until the quarterly report to explain this plan in person. But turning away money that came to the door would be hard to justify. So they agreed to let Shen Fan accept this first batch of deposits, with 1.5% monthly interest, paid without touching the principal.

The matter would have remained shelved like that. But the recent "rush to sell" crisis in Leizhou had suddenly strained what had been comfortable cash reserves. This project, originally just icing on the cake, suddenly took on life-saving significance. Guo Yi felt there was no time to waste and immediately brought it to the Executive Committee's table.

Having finished reading the entire report, Wu De finally relaxed. He'd originally thought the Guangzhou Station was planning some kind of financial operation—Wu De had an instinctive fear of such things. Now it turned out they were merely proposing "illegal fundraising." The interest looked high, but as a way to ease the cash crunch—an actual good approach. Though he couldn't help thinking of "bank run" risks he'd often seen in business novels. Weighing it all, he decided to support the Guangzhou Station on this issue.

After sending a telegram from the Ascending Peace Island stating his position, the rest of the voyage was uneventful. The ship arrived safely at Hai'an Port early on the fifth day. As soon as the ship entered port, Wu De sent someone immediately to the South China Sugar Factory to assess the situation—without real-time communication, what if things had already gone up in flames?

The messenger returned shortly and reported that the crowd outside South China was still thick as ever, but sugar-selling appeared to be continuing with no visible anomalies. Wu De knew the South China cash flow hadn't yet broken and relaxed somewhat. He ordered the crew to maintain outward calm while staying alert. Meanwhile, he prepared to personally visit South China to discuss arrangements for delivering the silver.

Wu De's estimate was correct. South China's funds indeed hadn't run out—but the moment of exhaustion was fast approaching. The night before the Ascending Peace Island arrived, silver reserves had fallen to less than 1,000 taels. At that rate, getting through the next day was questionable. Everyone at South China was like ants on a hot wok.

Wen Tong desperately hoped Chang Shide could hurry back from Champa with rice—selling it would bring tens of thousands of taels to tide them over. But the Great Whale had vanished like a kite with its string cut, with no word at all. After waiting several days, someone from the Executive Committee finally arrived—but without silver, only a radio set. Wen Tong nearly despaired. What use was a radio? Fortunately, word came soon after: a ship had been sent to Guangzhou to pick up silver.

50,000 taels was still far below the safety threshold, but every day they could hang on was a victory.

But when the silver would arrive remained unknown. They watched reserves dwindle day by day. As a precaution, the Liao brothers both went out to see if they could raise funds from the market. But the crushing season in Leizhou was always a time of tight cash—no shop could spare large sums. The only ones with substantial ready silver were the trading houses under the Haiyi Guild, which had stockpiled hundreds of thousands specifically for sugar purchasing. Borrowing from them would be asking the tiger for its skin.

But their attempts to raise funds couldn't be hidden. Soon, rumors spread everywhere that South China was running out of cash and would probably default any day. The news spread from one to ten, from ten to a hundred. The farmers, who had just begun to calm down, grew restless again. Some were hurrying through the night to sell their sugar. The outflow of silver only accelerated.

Wen Tong was filled with regret. Had he known, he wouldn't have let the Liao brothers go looking for funds. No meat gained, just brought trouble on themselves. He'd basically shown everyone his hand. If the Ascending Peace Island didn't arrive soon, the situation at South China might become unmanageable!

As for Xiao Gui, Mei Lin, and the other transmigrators—they were all helpless. Watching the situation on the verge of collapse, Chen Tianxiong said: "The way things stand—it's 'no breaking, no standing.' Without drastic measures, I'm afraid we'll be squeezed right out!"

(End of Chapter)