Chapter 1766 - The Grain Merchants
Most of what arrived was rice and cloth. Salt, with its low value, was in less demand than either. Lin Baiguang knew that most of this rice came from Siam and the East Indies. Vietnam's position as a rice supplier had been overtaken by the latter—the civil war between North and South had drained too many peasants from the fields, and Vietnamese grain output had diminished considerably. The Dutch had seized the opportunity to fill the gap, shipping boatload after boatload of East Indies rice in exchange for white sugar and silk. Because the Australians were willing to import rice in almost unlimited quantities, the Dutch East India Company had for the first time escaped the chronic drain of silver in its China trade, achieving a rare trade balance. The cost was merely a great many empty return voyages: rice was of such low value that several shiploads were needed to exchange for a single cargo of sugar and silk. But achieving trade equilibrium was a resounding success in the eyes of the Batavia Council. The Dutch were now using every means to squeeze rice out of the entire East Indies to supply the Australians—whose appetite for rice seemed infinite.
Thank heavens we control East Asian international trade, Lin Baiguang thought. Otherwise we couldn't pull off this currency-reform spectacle.
The sight of brown rice streaming endlessly onto the Dachang wharf seemed to have a calming effect on public sentiment. Although Dachang had not yet begun wholesale grain operations, rice prices in Guangzhou had stopped rising. Lin Baiguang had a good sense of the situation: the warehouses of the various rice shops and ya brokerages would be well-stocked—every year when the lean season arrived, it was their golden opportunity to make a killing.
"Chief, the grain merchants have all arrived..." his secretary murmured from behind.
"I'll be right there," Lin Baiguang said.
In one of Da Shijie's reception rooms, over a dozen men had gathered—their appearances and dress ranging from shabby to lavish. All had been invited by Zhu Fuyuan, the manager of Dachang's Guangzhou branch. They were grain merchants who regularly traded between the outer provinces and Guangzhou.
Seeing him enter, the group swarmed forward in a disorderly chorus of greetings.
"No need for such ceremony. Please, sit." Lin Baiguang waved a hand. Because of the crowd, several long benches had been set out in the office. Lin Baiguang took the central seat and motioned for everyone to sit.
For these grain merchants, this was the first time any of them had been summoned by an Australian—quite unexpected. Since the change of regime, everyone in Guangzhou's commercial circles had been scheming for ways to gain access to the Australians, yet so far not one had succeeded. Even a well-connected tycoon like Gao Ju had been granted only a brief tea's worth of audience with Governor Liu—already considered a tremendous honor.
To think that they—long-haul rice traders stuck at their guild-halls—should be the ones summoned by an Australian! And according to Manager Zhu, this one was an authentic "Second Prefect of Guangzhou"! What an honor indeed.
Even more surprising: the man didn't put on airs but invited them to sit together and had tea served. That was treatment reserved for distinguished guests. Astonishment and delight mingled among the merchants.
Zhu Fuyuan introduced them one by one. All were so-called "itinerant traders"—engaged in long-distance grain transport. Lin Baiguang said:
"I've asked you here today for one purpose: to discuss Guangzhou's grain trade." He lit a cigar. "You're all grain merchants, so I needn't explain how vital grain is. This concerns the people's livelihood. I hope everyone will speak frankly—tell me everything you know."
The merchants murmured assent. The eldest among them stood and said, "If Your Excellency has questions, we will of course answer truthfully. Only, we are itinerant merchants who deal in long-distance transport; our knowledge of conditions inside Guangzhou itself is limited. Should there be any omissions, we beg Your Excellency's pardon."
Lin Baiguang nodded with a smile. "Of course. Rest easy. Since you are long-haul grain merchants, let's start with your business. Where does Guangzhou's grain come from, and how much is shipped in every year?"
The old man made to rise again, but Lin Baiguang waved him down. "Sit, sit. No need for formality."
"Reporting to Your Excellency: most of Guangzhou's grain comes from Guangxi..."
Guangxi had been an important grain supplier to Guangdong since Ming times. Guangdong's grain consumption was concentrated mainly in the prosperous Pearl River Delta. Not only did the Delta hold most of Guangdong's population, but widespread cultivation of cash crops and the digging of fish-ponds meant that grain production fell far short of demand; the shortage was especially severe there. So in a sense, the "Guangxi–Guangdong grain trade" was really the "Guangxi–Pearl River Delta grain trade."
"Grain is shipped from Wuzhou," the old man said. "We have granaries in Wuzhou. After we purchase rice, we transport it down the West River to here."
Part of the cargo was unloaded at Foshan and distributed across the Delta; part went to Humen, then out to sea to be resold in eastern Guangdong and Fujian. The rest was sold in Guangzhou.
"How much grain do you bring into Guangdong each year, and how much to Guangzhou specifically?"
"The grain shipped out of Wuzhou is almost beyond counting—on the order of a million shi," the old man said. "Those of us here transport roughly two hundred thousand shi a year from Wuzhou to Guangzhou."
Lin Baiguang did a quick mental calculation: two hundred thousand shi was about 19,000 metric tons. By this timeline's standards, that was a very respectable volume.
"That's no small business."
"It's big, all right—otherwise who'd endure such hardship!" The old man sighed. "From Wuzhou downstream, the West River is teeming with pirates, and the boatmen are crafty. You have to pay for safe passage. Even so, if a storm hits and you lose a boat—that's your whole capital gone!"
A merchant in his thirties chimed in: "And even if you arrive safely in Guangzhou, it's still no sure thing you'll make money! We're outsiders, itinerant traders. From the officials down to the street rats, every 'god' has to be fed incense! And after you've burned incense for all the gods, the ordeal isn't over—you still have to suffer the ya brokerages..."
The old man coughed, and the younger man fell silent. Lin Baiguang had summoned them precisely to gather information on the ya firms; evidently, the brokerages were something of a colossus here.
He spoke gently: "Why stop? The ya brokers must be hard to provoke. But rest assured: our Great Song, having liberated Guangzhou, intends to reform the old ways. Whatever grievances you have, speak them freely. The Guangzhou Municipal Government will see that justice is done!"
At these words, the merchants remained hesitant. Lin Baiguang added: "Surely you know the Senatorial Council's way of doing things: first, credibility; second, we don't forget old friends; third, we use people to their full potential. The ya brokers' misdeeds are well known to me. Speak freely. The Senatorial Council is waging a revolution of King Tang and King Wu here in Guangzhou—even a Ming emperor's kin would be worth nothing here, let alone a bunch of ya men holding Ming-issued permits!"
The young merchant had been itching to talk. Now he spoke up loudly: "Manager Ding is right! However high and mighty those ya men act, their permits come from the Ming. Guangzhou is Song territory now! What's there to fear?"
At that, the merchants who had been silent seemed suddenly enlightened. They grew eager to speak. Lin Baiguang smiled. "Don't rush. One at a time." He looked at the young merchant. "What is your honored name?"
The young man rose hastily and bowed. "Reporting to Your Excellency: this humble one is He Gao."
"You first."
"Yes—pardon my presumption." He Gao said, "Your Excellency, the ya-permit and ya-broker system has brought nothing but harm to the nation and the people! As the saying goes, 'Carters, boatmen, innkeepers, porters, and brokers—even if innocent, they deserve the blade!' Truer words were never spoken!"
At this, the merchants' faces went pale. The ya system had been used by government offices since the Tang dynasty. Though riddled with abuses, it carried many "benefits," which was why every successive dynasty retained it. No one knew what the "Great Song" intended to do; to come out swinging with "nothing but harm" was extraordinarily bold.
Lin Baiguang said, "I've heard of the ya men's evil reputation. But set that aside for now. Tell me your grievances."
He Gao shook his head and sighed. "It's not just us grain merchants—any trader dealing in bulk long-haul goods has been preyed on by the ya brokerages. We put up capital and toil through innumerable hardships to transport goods here. The ya system was originally meant to help us outsiders—they'd act as matchmakers; we'd sell our goods and profit; we'd pay them a commission; all fair. But now buying and selling is controlled by the ya. Without going through a ya firm, you can neither buy nor sell. And those ya bosses, flaunting their government permits, not only collect fat margins—they torment us outsiders at will. Take us grain merchants: the moment our cargo arrives in Guangzhou, it has to go into the ya's warehouse. Private wholesale is forbidden. Grain always sells—everybody knows that. The ya batches it out to local rice dealers, collects the payment—and then won't pay us. Often they hold our money for months on end..."
"If the goods have been sold, why withhold payment? Don't they just collect a commission?"
"Your Excellency doesn't know. As long as they haven't settled accounts, the grain is still counted as theirs in the warehouse—and they continue charging us storage and brokerage fees. On top of that, with money in hand, they can turn it around for interest. Meanwhile, the cost of being stuck in Guangzhou falls entirely on our shoulders..."
"Wait," Lin Baiguang said. "How does the ya collect the payment at all? A broker is supposed to introduce buyers and sellers and collect a commission; the transaction should be between you and the local rice dealer."
"Your Excellency is unaware—old-timers say that's how it used to be. Somewhere along the line, this outrageous rule took over. They're called brokers, but they don't introduce us to customers. What they actually do is take our grain and resell it wholesale to buyers. We endure countless hardships, brave storms and pirates to ship our rice here—and they sell it for us, pocketing profits from both sides! They grab the lion's share, yet we still owe them a commission! And getting our own payment back is next to impossible."
(End of Chapter)