Chapter 1360 - Charitable Enterprise

No one in the entire Executive Committee specialized in sericulture, and Wu Nanhai had little confidence in Li Yao'er, this "self-taught" agricultural technician. So back in Lingao they had conducted experimental autumn silkworm rearing, having Li Yao'er follow the textbooks exactly. The results proved that agricultural manuals and educational films were indeed highly accurate instructional materials. Whenever problems arose, looking up solutions in the reference materials had worked without fail.

With the silkworm houses completed, Li Yao'er established a Sericulture Production Team at the estate. Since most current servants already had jobs, the team members came primarily from refugees at the charity hall—with priority given to those with sericulture backgrounds. These several dozen households were settled in a dedicated residential area. The men cleared land and planted mulberry; the women raised silkworms. Over a dozen students were also selected from the estate's charity school as trainees for a sericulture training class.

One of the Production Team's main tasks was developing mulberry orchards—planting trees and expanding cultivation area. Though the trees planted last year and this year couldn't yet be harvested for leaves, they would be tremendously useful in the future. In the Agricultural Committee's Jiangnan plan, Phoenix Mountain Estate was designated as the site for a future agricultural vocational school. Building a strong foundation now was absolutely worth the investment.

Mulberry trees had strong adaptability, thriving in poor or fertile, dry or moist conditions. They were easy to plant and manage, had few pests, yet offered high economic returns. Particularly mulberry leaves—in the Jiangsu-Zhejiang silk-producing region, a dan of leaves could fetch about three qian of silver. Average yields were about twelve dan per mu, meaning that even without raising silkworms or reeling silk, just selling leaves could earn three liang and six qian. That equaled the income from top-grade paddy fields yielding three shi of rice per mu.

But top-grade paddy yielding three shi was rare, and whether each year's harvest reached that level involved considerable luck. Mulberry, however, could be planted on slopes, in odd corners, anywhere—and leaf production was relatively stable. Plus there was additional income from firewood and mulberries.

At the Agricultural Committee's orchards in Lingao, using modern dense-planting techniques and strictly managed fruit-and-leaf dual-use mulberry varieties, yields could reach 1,000-2,000 kilograms of mulberries and 1,500 kilograms of leaves per mu.

Here in Hangzhou, with neither Lingao's agricultural technology and resources nor its superior heat and water conditions, projected yields were considerably lower. Plantings would focus on leaf-mulberry varieties, with only about ten mu of dual-use fruit-and-leaf mulberry planned.

Through interviewing Production Team members, Li Yao'er learned that local orchards were typically planted at about 240 trees per mu as "tall-trunk mulberry." Leaf yields varied with management intensity and fertilizer, but average monthly yields of 800-1,200 jin per mu were achievable.

With the high-yield varieties imported by the estate plus scientific management, Li Yao'er was fully confident of achieving 1,000 kilograms per mu.

That said, this was several years away. For now, Phoenix Mountain Estate's budding sericulture industry would have to depend on purchasing mulberry leaves. Leaves couldn't be harvested in advance—they had to be bought at market. Once silkworms entered their third molt, leaf prices would skyrocket, and situations where money couldn't buy any weren't unheard of. Ensuring leaf supply for the Sericulture Production Team was Zhao Yingong's most pressing task.

The simplest method was naturally to purchase orchards or buy leaves directly. Purchasing orchards was most reliable, but quickly acquiring suitably located ones wasn't easy—the facility was at Phoenix Mountain Estate, and orchards too far away meant excessive transport costs. Moreover, mulberry orchards were heavily taxed. The orchards currently being developed at Phoenix Mountain were all newly reclaimed land; with some palms greased at the yamen, they could be concealed from the tax rolls indefinitely. But already-registered orchards couldn't so easily avoid tribute. Playing it safe, Zhao Yingong decided not to purchase orchards for now—this year, Li Yao'er's work would focus mainly on breeding and experimental silk-reeling, with limited leaf requirements. They could buy at market prices.

Originally, he hadn't worried much about leaf supply. Things that burdened ordinary commoners were mere drops in the bucket for him.

But since he had begun planning a sericulture cooperative—using the cooperative to control farmers, and thereby control cocoons—he had developed new ideas. Intelligence from various sources showed that Jiangnan's sericulture industry, like Leizhou's sugar industry, was heavily dependent on loans.

In such industries, whoever controlled the lending controlled the biggest share of market profits.

Controlling farmers through loans was a technique the Tiandi Society had long employed, and it was how they had gradually built the Leizhou Sugar Industry Consortium. So he had long been preparing his own micro-lending plan, even having Delong's Hangzhou branch draft several proposals.

Moreover, last autumn, northern Zhejiang—especially Hangzhou, Jiaxing, and Huzhou—had suffered severe drought, with no rain for seventy consecutive days from August through October. The countryside was devastated. Though Jiangnan's abundant resources prevented the large-scale refugee uprisings seen in the north, restoring production now would make sericulture households even more desperate for loans.

But he soon discovered his plan was too idealistic. This wasn't Hainan, where the Executive Committee held political power, nor Leizhou under the umbrella of the violence-backed Leizhou Sugar Company trust. Here he had neither the political foundation of coercion nor economic monopoly power. Promoting new things like cooperatives meant facing an environment of zero trust.

Originally, Zhao Yingong had planned to have Delong set up sub-branches in several towns where the silk-and-cocoon trade was active, offering loans to sericulture households. But he quickly discovered that rural micro-credit in this time-space was almost entirely controlled by local landlords, middle-rich peasants, and wealthy farmers. The silk-and-cocoon dealers and leaf-traders also had a foot in. The common feature was that many participated in lending, but each lender's range was very small—basically limited to their own village and its immediate surroundings.

In an era when most farmers never ventured beyond fifty li of home and might not visit the county seat more than a few times in their entire lives, expecting farmers to voluntarily approach a bank for loans was a pipe dream—and farmers were deeply suspicious. They would rather trust local moneylenders than a bank that appeared out of nowhere, let alone some "cooperative."

Sericulture households had operated this way for centuries; they would never lightly join a cooperative that suddenly sprang up. To get them to participate, to accept guidance in modern sericulture techniques, there had to be a demonstration model showcasing the benefits of joining.

When the Suzhou Sericulture Technical School promoted sericulture reform in the Republic era, they had specifically established an extension station in Kaixiangong Village. Through constant promotion and outreach, they gradually advanced their reforms. Had the Anti-Japanese War not intervened, they might well have established China's first sericulture agricultural cooperative—in fact, by then Kaixiangong Village and nearby areas were already showing early signs of such organization.

Simply staying at Phoenix Mountain Estate running a closed, small-scale operation would never produce a cooperative. "Going down to the grassroots" wasn't empty rhetoric. Even Japan's highly successful agricultural cooperatives had expended enormous effort persuading and mobilizing farmers to join when they first started.

These years, Zhejiang's floods and droughts had been quite frequent. Though the consequences weren't as severe as in the north and central plains, the rural economy had still suffered significant damage, leaving many refugees without food or clothing. Since he had already partnered with local gentry to establish a charity hall for receiving and relocating refugees, this cooperative organization could fly the banner of "post-disaster rehabilitation."

Under the guise of organizing refugees for "productive self-help," he would establish a demonstration society under the Cixin Hall name—a vertically integrated operation from sericulture through silk-reeling—using refugee women as workers. With the moral authority of running a charitable operation, plus the backing of Catholic gentry and connections with the Revival Society, his sericulture consortium plans should proceed without major issues.

He called Li Yao'er in and explained his thinking. Li Yao'er didn't disagree. She just felt she had only just started training students; if scale expanded too quickly, she might not be able to manage everything.

"Don't worry," Zhao Yingong reassured her. "Many of the refugees we've taken in have sericulture experience. You just need to maintain strict technical standards. With the improved varieties we provide, good harvests are guaranteed."

"If that's the case, we'll also need to set up a silkworm-rearing facility down the mountain," Li Yao'er said. "There are too many people at the charity hall—probably not suitable for sericulture there."

"The rearing facility and reeling factory can be set up by the river. It's just operating under the charity hall's name—a charitable factory concept. Naturally, it should be close to the hall so workers don't spend too much time commuting."

"What about the mulberry leaf problem?" Li Yao'er was somewhat worried. "Silkworm eggs are easy—Lingao shipped us plenty, and I'll breed some more myself. But the estate's mulberry trees are all newly planted; they won't even be enough for the breeding station."

"I plan to 'buy forward leaves.'"

"Buy forward leaves?" Li Yao'er didn't understand the term and looked at him in confusion.

"It's jargon." Zhao Yingong smiled. "You're going to be the sericulture cooperative's head honcho. You'll need to understand all the local dialects and trade terms of this time-space..."

"Wait—I'm an agricultural technician. When did I become your head honcho?"

"I think you're perfect for it." Zhao Yingong adopted a "who else but you?" expression. "You understand the technology, and you're a transmigrator who knows how to organize people. Communication between us has no barriers. Plus you've been running the Sericulture Production Team well these past few days, haven't you? Just think of this cooperative as the production team scaled up tenfold."

"But—"

"Don't worry." Zhao Yingong continued to encourage her. "You don't need to fear this or that. These past few days you should have seen clearly what our era is like. This is an era without any concept of human rights. The women on the Sericulture Production Team are outright slaves. You could beat one to death and no one would make you pay with your life..."

"Stop—that's exactly what frightens me," Li Yao'er said, frowning. "I always feel like I don't belong in this society. This is too different from Lingao. This is practically hell on earth..." She glared at Zhao Yingong. "I understand what you mean. Here there are no personnel arrangements, labor protections, or such issues to consider. We're factory owners with slaves. Dealing with slave workers is just carrot and stick. As long as we teach them the techniques properly and make them work hard, that's all."

Zhao Yingong silently cursed: Literary pretentiousness flaring up again! But outwardly he remained pleasant. He had plenty of experience dealing with women; when their emotions erupted, anything you said would be wrong. Better to let them vent, then talk.

Unexpectedly, Li Yao'er said only a few words and then fell silent. She was actually a quite rational woman and quickly realized the absurdity of her own outburst—after all, hadn't she promised to buy female servants for her husband? And hadn't she quite seriously considered how to "train" and "discipline" them once they arrived, how to project the "authority of the mistress," what punishments servants should receive for transgressions... essentially a mashup of all the palace intrigue novels and dramas she had consumed.

When it came down to it, she too thoroughly enjoyed the feeling of being a slave-owner, an "upper-class person." Her earlier righteous speech felt like slapping her own face—she blushed.

"I understand. I accept this assignment—serving the Executive Committee!"

"Serving the Executive Committee and the people!" Zhao Yingong corrected.

"Give it a rest." Li Yao'er said. "Let's not talk about that. What does 'buy forward leaves' mean? Can leaf supply be guaranteed? If it can't keep up, we'll have to abandon the silkworms—that's too big a loss."

"No problem," Zhao Yingong explained. "Buying 'forward leaves'" was actually a primitive form of futures trading. Buyers paid orchard owners in advance at a set price, purchasing leaves before harvest and taking delivery after picking. This "forward leaf" trading was quite similar to the "buying green seedlings" practice of the time—both exploited farmers' urgent cash needs during the post-New Year lean season to purchase futures at lower prices. Of course, if there was a bumper harvest of leaves or a large drop in sericulture activity caused prices to crash, the buyer would lose.

But in most years, with raw silk prices high, "buying forward leaves" was profitable for both leaf-market merchants and sericulturists. Many sericulturists without their own orchards or with insufficient leaf production would even borrow at usurious rates to buy forward leaves. This had spawned a specialized brokerage—the "leaf-dealers"—trading in leaf futures. Trading methods were quite flexible, including buying and selling on margin, cash sales, and credit—the full range.

"...If we're not speculating, then since we have abundant capital, buying these futures leaves is quite economical. Though prices now are certainly higher than around New Year, this is still the lean season, and last year there was drought. Grain prices in the market are high. With spring upon us, farmers need cash to resume production. Buying now should get us a considerable discount."