In the face of Colin's sharp question, Bachelor Sang Ni immediately calmed down.
He realized that although the guardian of the Northern Frontier in front of him was young, he was not someone who could be easily fooled.
Therefore, he slowly sat down at the opposite side of the table and nodded solemnly.
"Yes, this new farming and animal husbandry system that I have high hopes for does indeed have several fatal flaws."
Vera was shocked and she immediately put down the knife and fork in her hand. She wiped her mouth with a napkin and was ready to listen carefully.
Bachelor Sang Ni seemed to be worried that the two important people in front of him would lose confidence in his agricultural reform plan, so he quickly comforted them.
"But please rest assured that I have already thought about these flaws for a long time and I have already come up with some solutions."
Colin nodded noncommittally and said, "Why don't you talk about the flaws first?"
"Okay." Bachelor Sang Ni cleared his throat and said frankly, "First of all, sweet potatoes have a fatal flaw. It is difficult to store them for a long time.
Barley, wheat, and rice can be stored for three to five years as long as the method is correct. But sweet potatoes, even if they are dried, they can only be stored for half a year at most. "
Vera tilted her head and said in a puzzled manner, "This is not a big problem. After we finish eating sweet potatoes, we can just eat bread. It is not like we are not planting wheat anymore."
Bachelor Sang Ni shook his head and said, "Duke, the problem is not this, but the tax!"
"Tax?" Vera did not understand.
Colin's eyes narrowed and he immediately realized what kind of problem this would bring.
The tax collection method in this world was very backward and it was generally used to offset taxes.
For example, if the Lord of Winterspring Town implemented "tithing" in his territory, that was to say, all the output of the people here would have to be paid to the Lord.
Those who planted wheat would have to hand over one-tenth of their barley, and those who raised cattle and sheep would have to hand over one-tenth of their cattle and sheep, as well as their leather, wool, and other items of recognized value. Therefore, if Scholar Sonny's new farming and animal husbandry system was promoted, the farmers in this system would have to hand over one-tenth of their sweet potatoes and pork.
However, this involved a serious problem – sweet potatoes could not be stored for a long time.
Of course, the Lord didn't collect these taxes for himself. No matter how many people there were in his family, they wouldn't be able to eat that much.
These taxes were either used as strategic reserves, as military rations, or to exchange for goods they wanted in the market … In short, the taxes collected had to be able to be preserved for a long time.
Sweet potatoes, on the other hand, had a fatal flaw in this regard.
It was no wonder that Scholar Sonny's seemingly perfect agricultural reform plan was met with so much resistance in Imperial Dragon City. The nobles did not want their sweet potatoes to go bad so quickly.
After listening to Bachelor Sang Ni's explanation, Vera finally understood what was going on. However, she immediately asked, "Then, is it possible for the citizens to exchange the sweet potatoes for copper coins and then use the copper coins to pay the tax?"
"I'm afraid that's not possible." Scholar Sonny shook his head.
"Why?"
"Because we don't have enough copper coins."
"You don't have enough copper coins?" Vera was even more puzzled. She had no choice but to look at Colin for help.
Colin also nodded with a dignified expression on his face as he said, "Indeed, if we ask the citizens to use copper coins to pay the tax, it may seem more convenient for the Lord, but in fact, this will greatly reduce the amount of copper coins circulating in the market.
On the other hand, the farmers who have adopted the new agricultural and pastoral system will not be able to store sweet potatoes for a long time. Therefore, they will inevitably sell some of the sweet potatoes that they can't finish and buy wheat that is easier to store. As a result, the demand for copper coins in the market will increase.
The demand for copper coins will increase, but the supply will decrease. The more successful the new agricultural and pastoral system is, the greater the impact it will have on the existing monetary system, and it may even cause deflation. "
Colin was almost certain that deflation would happen.
This was because the world was originally dominated by a natural economy. Therefore, the farmers almost didn't use copper coins on a daily basis. This was because they were all farming their own land. Therefore, they didn't have to pay taxes on their harvests.
However, the new agricultural and pastoral system was different. The farmers had to trade their sweet potatoes. Otherwise, they wouldn't be able to finish eating their sweet potatoes. This would greatly stimulate the market's activity. If the money supply couldn't keep up, the consequences would be extremely bad.
However, Vera didn't understand these things at all. She blinked her cute big eyes and was even more puzzled.
Scholar Sonny was also curious about Colin's new term: "Deflation? Sir Viscounts, what do you mean by that? "
Colin coughed a few times before he said lightly, "It means that the currency circulating in the market is not enough. Instead, copper coins have become a rare commodity. Its value has risen sharply, and the prices have fallen. The people who have copper coins are not willing to exchange them, and finally, the entire trading market can't operate normally."
Scholar Sonny looked at Colin in amazement. It seemed that he didn't expect that the young Viscounts would have such a deep understanding of the economy.
"Then, can't we mint more copper coins?" Vera asked again.
Scholar Sonny nodded and said, "Yes, this is indeed a way. However, the Empire of Light's minting power is in the hands of the royal family. Therefore, you must first obtain the consent of the royal family.
Moreover, I must remind you that minting copper coins is actually a thankless task. This is because the cost of minting copper coins is higher than their value. "
The people of this world might not understand the economic operation as well as Colin, but they also understood the importance of the right to mint coins.
Therefore, it was not a simple matter to obtain the right to mint coins from the royal family.
When Scholar Sonny's new agricultural and pastoral system was rejected, it showed that the royal family didn't want to change the current currency system.
In fact, even if Colin obtained the right to mint copper coins, he didn't want to do it. This was because, as Scholar Sonny had said, minting copper coins was a thankless task. It would only increase the burden of the House of Saint Hilde.
However, Colin had other ways to solve the problem of the shortage of money.
This was thanks to his experience in his previous life, where he was used to the various operations of businessmen in the developed market economy.
Therefore, he smiled and said, "We don't have to mint copper coins."
Scholar Sonny's eyes narrowed and he quickly asked, "Sir Viscounts, do you have a better way?"
Colin smiled and nodded. "Yes, we can borrow money from the merchants!"
"Borrow money?" Scholar Sonny was suddenly confused. He didn't understand what borrowing money had to do with increasing the money supply.
Colin smiled confidently and explained leisurely, "We can use the name of the House of Saint Hilde to borrow money from the merchants in the Northern Frontier. And the thing we need to borrow is food!
Previously, when the Northern Frontier was in famine, I know that many merchants had secretly stockpiled a large amount of food. They were waiting for the food prices to rise to make a big profit. Originally, I wanted to wait until I returned to the Northern Region to teach these fellows a lesson for trying to profit from the country's disaster.
But now, it seems that we can use a gentler method and borrow a large amount of food from these merchants. "
Vera couldn't help but wonder, "Colin, does this have anything to do with what we are talking about now?"
"Of course, listen to me slowly." Colin smiled and comforted her. "When these merchants lend us their food, the House of Saint Hilde will issue a batch of bills with the family emblem. Well, let's call them bonds.
Moreover, you will also announce in public as the Dukes Of The North that anyone who holds these bonds can come to the Lion's Roar Fort to exchange for food of equivalent value after the debt matures. "
Vera was still confused. Her cute big eyes blinked as she looked at Colin. It seemed that she didn't know how to ask questions.
However, Scholar Sonny seemed to have realized something, and his eyes became brighter and brighter.
Colin smiled and continued to explain, "In this way, these bonds will be equivalent to food. Moreover, they will be guaranteed by the credit of the House of Saint Hilde. Therefore, they will have the characteristics of the general equivalent. In simple terms, they can be used as currency.
After that, we will announce that from now on, the taxes of the Northern Frontier must be paid in currency or bonds of equivalent value. Once there is a shortage of copper coins, believe me, people will definitely use these bonds as a medium of exchange.
In this way, although we will not be minting new coins, we will actually increase the supply of currency circulating in the market. "
Scholar Sonny stood up excitedly. His face was flushed red as he said loudly, "Lord Viscounts, you are really a genius!"
After that, he paced back and forth in the dining hall. It seemed that he was carefully thinking about the feasibility of this method.
Vera twined her hair around her fingers. She seemed to understand what Colin meant.
However, after pacing back and forth for a long time, Scholar Sonny suddenly stopped and asked, "Lord Viscounts, I think that there may be a problem with your method."
"Tell me."
"The loans that the House of Saint Hilde borrowed from the merchants will have to be paid off. Once they are paid off, won't these bonds be withdrawn from the market?"
"Who said that the loans must be paid off?" Colin said in a faint tone, "We can borrow new debts to pay off the old debts and maintain this debt forever."
Scholar Sonny was stunned.
Vera was also a little hesitant. This was because in this world, borrowing money was not a glorious thing, especially for the nobles. It could be said that it was a shame for them to owe money to those lowly merchants.
Now that the situation in the Northern Frontier was special, it was reasonable to ask the House of Saint Hilde to borrow some money to solve the emergency. However, if the debt continued, it would be a great blow to the prestige of the House of Saint Hilde.
Colin looked at the changes in the expressions of the two men and laughed in his heart.
He knew that a certain number one rogue country on earth had also borrowed a lot of money, but would anyone dare to look down on it?
"Believe me, a reasonable debt is not a burden, but a blessing!"
Colin said the famous words of Hamilton, the first Secretary of the Treasury of the United States.
In fact, Colin's way of issuing bonds bypassed the royal family's right to mint money. In fact, it was equivalent to privately issuing circulating currency.
And if he could hold the right to issue currency in his hands, how much profit and influence would it generate? Of course, Colin was well aware of this.
Why did the Federal Reserve like to buy US bonds every time there was a financial crisis?
Wasn't it to inject a large amount of liquid US dollars into the market in this way to increase the money supply and thus cause inflation?
It was also called quantitative easing.
In fact, it was just printing money like crazy.
But there was no other way. After all, the Federal Reserve was indeed paying off the debt in this way …
Colin's inspiration actually came from this. He borrowed food from the merchants and issued bonds of equivalent value. Then, he endorsed these bonds with the credit of the House of Saint Hilde. Coupled with the fact that these bonds could be used as tax credits, these bonds had the function of currency.
In this way, the House of Saint Hilde could dilute and harvest the wealth of the merchants on the Northern Frontier and even the nobles of the entire empire through this method.
However, with the nobles of this world's superficial understanding of finance, they should not be able to understand the true power of this method.
Of course, this world was still dominated by the natural economy and not a market economy. Therefore, there was no way to fully exert the power of currency issuance.
However, as long as this method could be implemented smoothly, Colin was confident that the Northern Frontier could quickly recover from famine and war. He was even confident that the gap between them and the other three territories could quickly be widened.
Vera looked at Colin's confident face. Although she did not fully understand the true meaning of this plan, it did not prevent her from fully supporting her husband as always.
As for Bachelor Sang Ni, this guy could not wait to implement his new farming and animal husbandry system in the Northern Frontier. Even if he had some doubts about Colin's solution, he would not voice them out at this time.
When Colin saw that the two of them no longer had any objections, he suddenly sent a formal invitation to Bachelor Sang Ni.
"Bachelor Sang Ni, I wonder if you would like to go to the Northern Frontier and serve as an agricultural consultant for the House of Saint Hilde?"
Scholar Sang Ni's expression turned solemn. His gaze towards Colin finally carried a trace of respect and reverence from the bottom of his heart. He said in a deep voice,
"I would like to!"
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