After viewing the village stats, Ouyang Shuo told Gu Xiuwen to convene the main officials to the meeting room to discuss something. The officials who were to attend the meeting, in addition to the secretaries and their deputies, were also to include all five cavalry sergeants and all the advanced technical talent of the territory.
After he left, Ouyang Shuo went to the administrative office. Many of his ideas would need to be processed through Administration Department. Therefore, before the commencement of the meeting, he and Fan Zhongyan needed to talk about some things.
The two of them spoke about military reform, privatization, and other important matters, and they had a sincere and effective conversation. Ouyang Shuo had to admire Mr. Xi Wen’s experienced ability in handling governmental matters. Many of the decision-making details of his instructions had problems, which were pointed out and immediately amended and improved upon.
Half an hour later, in the new meeting chamber, Ouyang Shuo sat himself down in the middle of the gathered people and began to host the first meeting since the upgrade to third grade village.
“After upgrading the territory, more challenges await us ahead. To ensure the safe and orderly development of the territory, our primary task will be to expand the army. In yesterday’s defensive battles, the cavalry team played the greatest role. Therefore, I have decided to expand the cavalry to a full one hundred men. Shi Wanshui will act as the the captain of the cavalry squadron, with the 1st cavalry platoon under his command. In addition, 3rd squad Sergeant Lin Yi performed outstandingly in yesterday’s battles, and will be promoted to the rank of lieutenant, leading the 2nd cavalry platoon!”
Lin Yi bowed from his seat, “My lord’s trust will not be broken!”
Shuo nodded in reply. “The cavalry 1st platoon is to be mainly composed of soldiers from the current cavalry team. The 2nd platoon will need to start new admissions. Admitting new recruits will be done by General Shi and Lin Yi. My suggestion is to choose from the current militia that performed well during the defense warfare.
“Accordingly, the new military system will be rearranged. Former 4th squad Sergeant Zhao Si Hu will be transferred to the 2nd platoon 1st squad. Former 2nd squad Sergeant San Gouzi will have his duties lifted, I have other plans for him. 5th squad Sergeant Li Mingliang will be transferred to the 1st platoon 2nd squad.”
Ouyang Shuo said to General Shi, “The cavalry will need seven more sergeants. After General Shi and Captain Lin Yi have inspected and appointed them, report them to me. Lin Yi should also have the right to recommend the people for his 2nd platoon.”
General Shi nodded his head, indicating that he understood Shuo’s meaning.
“In view of the further expansion of the size of our territory, the external environment is becoming more complex. In order not to be caught by surprise, I think it is necessary to set up a Military Intelligence Division, with the former 2nd squad Sergeant San Gouzi as the secretary.”
San Gouzi, who had been apprehensive since he had lost his previous duties, sighed in relief as he heard about his new duties. “I will not disappoint the Lord’s faith in me!” he called out.
“The new division will have twenty people allocated to it, formed by the former 2nd cavalry squad members with additional new recruits coming in. The new division will be operating independently. It will operate autonomously and will be led by both the cavalry team and myself. These will be the adjustments to the military. Are there any questions?”
General Shi stood up and straightforwardly said, “My Lord, I have something to say. Expanding the army, I am naturally in favor of. The problem is, as the Lord has just said, the number of troops will reach more than 120 soldiers. Now, the barracks cannot hold so many, and there are only 53 slots left for the change of jobs of basic soldiers, we cannot meet the demand for all the new soldiers.”
“In order to alleviate these problems, I am going to upgrade the barracks to an intermediate barracks,” Shuo replied quickly.
“Excellent, then I have no more worries!” Shi Wanshui said, clearly pleased.
About military matters, other than General Shi, nobody had anything else to say.
“The issue of military reform is closed. The next thing to discuss is the core topic of this meeting. Taking advantage of the upgrading territory, I am ready to implement privatization in the territory. On this issue, I would like to invite Mr. Xi Wen to give you all an introduction.”
About privatization, Ouyang Shuo had had an excellent talk with Fan Zhongyan. This time he had deliberately arranged for Zhongyan to introduce the situation, pushing him to the center role so that the core people of the territory could slowly accept his leadership.
Zhongyan clearly read Shuo’s intentions and took the hint to act. Neatly rising, he bowed to salute Ouyang Shuo, saying slowly, “My fellow attendees, I will be presenting to you the main content of privatizing the territory. After yesterday’s great defense, both adequate materials and abundant capital have become available, satisfying the initial needs we have to begin privatizing.
“Therefore, in order to improve production efficiency and improve the economy in response to the expectation of the villagers, our Lord has decided to officially start the process of privatizing the territory. Basically, we want to end the days where everything was distributed uniformly, the core principle is ‘You reap what you sow’.”
“Specifically, the territory will no longer be responsible for the food supply of the villagers, and accordingly, for the work done by the villagers, we will now pay a reasonable wage. At the same time, shops, farms, residences, and fishing boats will be available for purchase. However, strategic resources such as the logging fields, quarries, mines, and salt pans will still be directly controlled by the Lord.
“In order to protect the basic livelihoods of the villagers and to help make the transference from a feudal government to self-sufficiency, and also rewarding the villagers for their hard work so far, the Lord has arranged a basic welfare package for the citizens. There will be a coupon for a 100 units of grain, 20 units for meat, one animal hide, one set of ordinary linen clothes, and a coupon for 20 silver coins.
“The whole process of privatization will be achieved through the establishment of an official bank, which will provide low-interest loans and will be open to all villagers who meet the requirements. The specific rules of the bank will be set up by the bank’s manager after it has been formally established.”
When Fan Zhongyan had finished, his words had created quite a stir. There was a lot of whispering, warmly discussing the generosity of the Lord.
The newly appointed cavalry captain Lin Yi smiled at his big brother, Master Lin Yue, saying, “Big brother, this time you can buy your own dojo and own your own business, ah?”
Lin Yue frowned, saying, ”Don't talk nonsense, I do not have that much money.”
“Big brother, you are worrying too much. The Lord has thought it through, thinking of everyone’s situation. Didn’t you heard what Mr. Xi Wen said? The Lord said he was setting up a bank to provide low interest loans.”
Lin Yue was very wary, answering hesitantly, “But we don’t know about the conditions to access the loans, I am afraid I will not meet the requirements…”
“Big brother, you are really skeptical. Think about it. You are an advanced martial arts instructor. If you cannot get the loan, then pretty much nobody in the whole territory will be able to meet the loan requirements. Everyone will become angry, and privatizing will be useless.” Lin Yi glanced at Shuo several times, apparently more understanding of Ouyang Shuo’s intentions than his brother.
Lin Yue slowly nodded in silent agreement.
After everyone had calmed down, Ouyang Shuo said, “Just now, Mr. Xi Wen has introduced the content of the privatization,” said Shuo, waiting a moment before continuing. “To achieve the goal of privatizing the economy, we must accomplish at least six things.”
“First of all, we have to establish a bank.
Secondly, we need to determine to residents the price and rent of the small homes, shops, and other assets.
Third, we will need to build a series of bakers, butchers, clothing shops, and other shops, to ensure that the villagers can easily purchase the necessities of life.
Fourth, to develop wage levels and price levels in order to pay them their wages.
Fifth, someone will need to be responsible for distribution of the basic welfare package.
Lastly, we need to establish the taxation system.”
“For these six things, we need to discuss them one by one. First, let's have a discussion about the name of the bank, does anyone have any ideas?”
“Simply call it the Shanhai Bank?” Zhao Dexian said tentatively.
“Too casual, not a good name!”
“Hey, I think Wan Tong Bank is a better name, it has momentum!” This was the opinion of Zheng Shanpao.
“Stealing someone else’s name, even worse!”
“We are in the Lianzhou Basin, call it the Lianzhou Bank?” Giu Xiuwen asked confidently.
“It’s narrow and bad!”
Ouyang Shuo shook his head, the names were not satisfactory.
At this time, Cui Yingyu opened her little mouth and said: “I think it can be called the Four Seas Bank, of the same line as 1Shanhai Village, and also brings the meaning of gathering golds from the four seas.”
Shuo’s eyes lit up. Four seas, four treasures, that is simple and low-key, with hidden ambitions. He was very satisfied, he smiled and said, “That is very good, anyone else?”
“Very good, very good!” This time, everyone’s opinion was quite consistent.
So, Shuo directly said, “Okay, it is named so, it will be called the Four Seas Bank. For the first phase of funds for the bank, I am prepared to inject 200 gold coins. As for the manager of the bank, Cui Yingyu will serve there.”
Discerning eyes could clearly see the importance of the Four Seas Bank. It was not only the core of the privatization; in the future it would play the role of the territorial treasury. So the key position in it could only be someone in whom Ouyang Shuo placed extreme trust to. Therefore, everyone was silent. Just looking at Cui Yingyu conveyed deep understanding of what the appointment meant. They could only hope to earn that same level of trust.
Yingyu naturally understood people, and for Ouyang Shuo’s trust, she was very grateful. She was also very happy for the job as manager of the Four Seas Bank. However, she was now serving as Secretary of the Material Reserves Division, and was aware of some jealousy of her. If she also took over the Four Seas Bank manager position, it would no doubt create more hard feelings.
“Big brother, I am afraid my energy is limited, there is much work to do,” she replied gracefully, giving him the room to refuse.
Ouyang Shuo was prepared for this backhand refusal. “You do not have to worry about that. I have arrangements made. You are relieved of your position as Secretary of the Material Reserves Division, and Deputy Secretary Zhao Youfang will temporarily take your place. At the same time, Du Xiaolan is promoted to the Assistant to the Secretary of the Material Reserves Division to help Zhao Youfang in dealing with affairs there.”
Zhao Youfang was still lacking somewhat in qualifications or ability for the position, so Ouyang Shuo did not directly appoint him to the post of Secretary. As for Du Xiaolan, she was one of Yingyu’s apprentices, and had been officially appointed. Shuo had marked her as a reserve talent, and now had the opportunity to boldly promote her to an important job with her experience.
Such a personnel arrangement was something that nobody could understand. After all, no matter how you looked at it, the Material Reserves Division was still more important than the Four Seas Bank.
_1_ _Shanhai Village_ __ 山海村 _and Four Seas Bank_ 四海钱庄 : _Shanhai’s_ _hai_ _carries the meaning of_ _sea_ _in mandarin._
*[Long Taos]: side characters in Chinese operas who perform acrobatics and fight scenes
*[12.47 to 13.07]: don't ask me about the tree sap
As for everyone’s doubts, Ouyang Shuo didn’t care to explain.
“I have decided to set up a Financial Division to be responsible for the financial affairs and taxation of the territory after privatization. The Financial Division will operate independently, and the Four Seas Bank will also be incorporated into the Financial Division’s jurisdiction. The Financial Division Secretary will also be Cui Yingyu.”
Everyone suddenly realized what was going on. The Financial Secretary and the manager of the Four Seas Bank, that was the real God of Wealth. The status of that position was comparable to that of the Director of Administration.
Yingyu was also incomparably excited, recalling her talk with Ouyang Shuo yesterday vividly. She did not expect that with this one move, he would not only unload her of the burden of the Material Reserves Division, he would then promptly make her responsible for the even more important Financial Division. She slowly rose and said crisply, “I will not fail to live up to big brother’s trust!”
Ouyang Shuo nodded at her. “With the Financial Division established, your first task is to establish an effective tax system. Here, I will set the general tone for everyone to discuss the specific details of implementation, and for the loans from the Four Seas Bank. The Financial Divison will be responsible for making the report.”
Yingyu nodded, showing that she understood.
“In simple terms, the tax will be divided into two types, agricultural taxes, and business taxes. The agricultural tax will be relatively simple, it should be set at 3.3%.
The business taxes will be divided into customs duty and business tax. For tariffs, we have to expand the territory and have business contacts with the outside world, only then can we set up checkpoints for tariffs. Hence, at this stage, we will be focusing more on business tax. In order to encourage handicrafts and commerce, we will also set the business tax at 3.3%.
“Tax will be an important financial source of the territory in the future, we must maintain the stability of the tax rate to foster growth. If you have any comments, you can speak freely.”
Fan Zhongyan stood up and said quietly, “The lord is generous and loves his people, this tax rate is already the lowest in history. My only fear is that such a low tax rate cannot maintain our daily expenses and military spending.”
“The two low-level tax rates are more conducive to the rapid development of the territory’s economy. As long as we make the cake bigger, even if we only have a small share, that share can still be very impressive. On the other hand, if the cake is small, even if we take half the cake, it is still not much.
“Most importantly, in the territory, there are industries that were not privatized, a source of income whose profits will all be turned over to the Financial Secretary, so that the government will not have to worry about the financial affairs of the territory,” Ouyang Shuo replied to him.
Hearing Ouyang Shuo says that the salt and other industries’ profits would be turned in to the Financial Secretary, Fan Zhongyan calmed down. As someone that worries about the country, his wish for the low-level tax had been met just as he wanted. He was actually worried that Ouyang Shuo would claim ownership over the industries, but Ouyang Shuo said he would not hold onto certain industries. Otherwise, if the territory was short on money, then, in the end, they could only grab it from the hands of the common people.
This was one of the limitations of historical figures. Even with the wisdom of Fan Zhongyan, he did not understand that the strength of a territory was the strength of a player. Ouyang Shuo, as a player lord, simply didn’t care if he didn’t have his own massive treasury.
After Fan Zhongyan was done, Zhao Dexian rose. “Lord, I have a question. For farmers, do we need to pay the agricultural tax at the same time as paying rent on the farmland?”
“The Secretary of Agriculture will be dividing the farmland among the farmers, and providing free property to be worked by them in the form of farmland rights that they own themselves to ensure their own interests. They are not, however, allowed to annex new lands. We will not allow new farmlands to be cultivated privately, only the Land Reclamation Division may do this,” Ouyang Shuo explained briefly. “As for the number of mu of farmland that each farmer can get, it is necessary for the department to discuss among themselves.”
Zhao Dexian nodded his head, understanding clearly.
Hearing Ouyang Shuo finish with the arrangements for the farmers, the temporary Secretary Zhao Youfang stood up. “Lord, we also want to know, how will we collect the taxes from hunters and fishermen?”
“First of all, the fishermen. There are two ways to tax the fishermen. One is to tax the sale of the fish directly on the market. In order to ensure that the tax is smooth and there is no evasion, the fish must be sold at a fixed stall, not privately. The other method is that they can sell it directly to the Material Reserves Division, they will be charged based on the business tax. However, sporadic tradings will not be taxed.”
“The taxation of herdsmen works similarly to that of fishermen. The buffalo will be a restricted animal and cannot be slaughtered for sale. It can only be sold to the Material Reserves Division, and the ranch controlled directly by the territory is not taxable.”
Ouyang Shuo knew that with such provisions there were still loopholes, and some tax evasion tricks were not blocked. For example, a cunning shepherd might think of keeping his livestock in the territorial ranch, thus avoiding the taxes. But right now, the Financial Secretary was new and the staff was undertrained. It was not advisable to carry out too complex of an operation, otherwise, it would be self-defeating.
Waiting until Zhao Youfang was done, Mu Qingsi stood up and said happily, “Little Sister has a question to ask. If I had acquired the tailor workshop, then will the terms of one set of clothes per person in the territory basic welfare package continue on? If it will continue, who do I go to for compensation?”
“There are two options for compensation this way. One- the territory will provide you raw materials for the cloth, the tailor shop will only be responsible for processing them. For producing clothing, the territory will pay you for your work.
“You can also, of course, buy your own cloth, make your own clothing, and the territory will buy the clothes from you at market price.”
“This kind of market-oriented cooperation applies to all types of privatization after the shops open. Of course, after the privatization, certain military goods like arrows and leather armor cannot be arbitrarily made, only the government weapons workshop can produce such military goods..”
The discussion about taxation lasted nearly an hour and a half. During this period, representatives of the various industries all spoke up about problems in their own areas. Ouyang Shuo answered all of their questions.
Yingyu was sitting there feeling the mountain-like pressure. Writing all these questions and answers down, she did not have time to think about them, nor know how to answer them. She could only diligently write down Ouyang Shuo’s answers one by one. After she had some time, she could sort out the answers and write them down into the guidelines for the Financial Division, she didn’t know what else to do.
With the taxation and bank problem done, the remaining items would be much easier. Ouyang Shuo said a bit lazily, “On the development of wage levels and price levels, I leave the Administration Department with full responsibility of a detailed program, present to me for approval. As for all kinds of shops and basic welfare distribution and implementation, naturally, the Material Reserves and Construction Divisions will take full responsibility.”
To these orders, Fan Zhongyan, Zhao Youfang, and Zhao Dewang nodded, showing they understood the orders.
“We will also discuss the pricing of shops and real estate,” Ouyang Shuo went on. “According to how things develop, there will be a number of large-scale adjustments to our plans in the foreseeable future, which will involve a large amount of land, including the demolition of existing shops. Therefore, before we do pricing, we need to have rigid requirements for the real estate property rights. That is, villagers will be buying real estate rights and income rights. The land itself still belongs to the government.”
“If the land is needed, the owner of the property rights must unconditionally obey the territory’s decision and accept the removal of the territory or shop. As compensation, the territory will unconditionally replace the same real estate with the same sized building in the new location.
“Therefore, at this stage, we will need to assess the real estate and shop prices, you must not consider the cost of land use. For a basic tailor shop, for example, it takes 40 units of wood, 20 units of stone, coupled with the labor needed to make it. The cost is the sum of ALL the construction costs. On the market, a unit of wood is 20 copper coins, a unit of stone 30 copper. Therefore, the cost of a basic tailor shop’s materials is 1400 copper pieces, with labor costs being set by the Construction Division.
“My opinion is that real estate prices are generally about 1.5 times the construction costs of the property and 2 times for business shops. As for renting a building, use the 1:200 ratio rent to price, that is, the monthly rent should be 0.5% of the price of the building.
Once Ouyang Shuo finished, Little Sister Mu on the side whispered, “Big Brother, bloodsucker! You are doubling the price for the people?”
Shuo looked at her as he explained, “All of you may be wondering, why not act in accordance with the cost of construction? One, we have to respect the laws of the market. If you do not grab a certain profit, it is easy to disrupt the market. Two- supply has to remain balanced with construction costs, otherwise the price could be too low and the number of buyers too high.
“For example, up to twenty people can live in a small residential courtyard. If the price is too low, a family of three might have the ability to buy one. Suddenly, there will be housing tension in the territory. With privatization, the living conditions of the villagers will improve greatly. Therefore, the construction division will have to adapt to the laws of the market, with the flexibility to adjust the size and number of small courtyard residences, with other buildings more suitable for people to live in.”
Zhao Dewang rose and said, “Understood!”
“Residential and retail pricing and the follow-up sales and proceeds are the responsibility of the Administration Department, to be marked as financial revenue and deposited into Four Seas Bank.”
At this point, the discussion on the privatization of the territory came to an end. There are a lot of specific works waiting for the divisions to handle and most of them could not be done overnight.
*[Long Taos]: side characters in Chinese operas who perform acrobatics and fight scenes
*[12.47 to 13.07]: don't ask me about the tree sap
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