hsntnovel Chapter 2690 Selling Bonds
Chapter 2690 Selling Bonds
“Father, I had no choice. Who could have known this business would grow so big and expensive? Everything costs money, especially road construction. It cost me tens of millions of dollars for thousands of miles of roads. That's enough to build a whole city.”
"Once this road is completed, the Prince Ji's residence will need a period of rest and recuperation before developing further."
Li Shen explained that he had also built a large city in Japan, which cost several million kan.
These past few years, we haven't made any money; in fact, we've invested a lot more.
"Tenth Prince, I know why you did this, and I know that you did it for the benefit of the country and the people, but you should also act within your means."
"Now that your Prince Ji's mansion is so heavily indebted, I'm afraid you won't be able to repay it anytime soon. You're not thinking of not paying this money, are you?"
Li Shimin asked with concern.
"Don't worry, Father, we'll pay this money back as soon as possible," Li Shen replied.
“Father, since this money came from the Ji Prince’s bank, there’s no need for Tenth Brother to be in such a hurry to return it, is there? After all, it’s his own property.”
Li Chengqian suddenly suggested that since the property belonged to the Prince Ji's mansion, repaying the money would simply be a matter of transferring money from one hand to the other.
"Quickly!"
Li Shimin then angrily rebuked:
“Brilliant! This bank is the imperial bank's front office; the people who deposit money here are all citizens of our Great Tang. If these millions of strings of cash aren't returned…”
What if someone tries to take advantage of you?
What banks fear most is a ruined reputation; if something like this happens, the bank will soon be unable to continue operating.
Although I don't understand the specifics of this matter, I know that banks cannot fail, otherwise wouldn't the people who deposit money suffer losses?
Gao Ming, you must remember this: after you ascend the throne, do not let my tenth son's Ji Prince's Mansion fall, or countless people will be ruined.
One must be extremely cautious when dealing with money exchange shops.
After hearing Li Shimin's words, Li Shen couldn't help but look at Li Shimin with new respect, never expecting his father to have such profound insight.
They actually know that money in the bank cannot be touched at will, nor can it be left unpaid; this money is the hard-earned money of ordinary people.
Dad's finally realized something.
Li Chengqian realized his mistake and quickly bowed.
"Thank you for your teachings, Father."
"Tenth Brother, judging from last year's situation, you still have quite a few shortfalls this year, right?" Li Shimin calmly looked at Li Shen.
Li Shen thought for a moment, then stretched out his fingers and counted again. He had made a lot of money in Xizhou, 150 strings of cash in Yanqi, and extorted over a million strings of cash.
There were also some spoils of war and more than 10,000 prisoners of war.
In total, the shortfall next year is estimated to be only one or two million strings of cash.
If I handle a few more big cases this year, I shouldn't be short of money.
Thinking of this, Li Shen looked up and said:
"Father, we shouldn't be short of money this year. If we live frugally, we should have enough."
"How will they repay those four million strings of cash? It will probably take several years."
Li Shimin was worried that someone would expose Li Shen's borrowing of money, which would cause him to lose the support of the people and cause them to withdraw their money. In that case, Li Shen would be finished if he had no money.
"Father, don't worry about that. If it really comes to that, I have many ways to resolve the crisis."
Li Shen was full of confidence.
"Oh? Then tell me, do you have any other good ideas on how to earn more than four million strings of cash in a short period of time?"
Li Shimin immediately inquired, noting that Li Shen's ideas could often be applied to court affairs.
Now that Li Chengqian is right there, this can be considered a lesson for Li Chengqian.
Li Shen hesitated. He was planning to use this move at a crucial moment, so there was no point in saying it now.
"What? Is it some kind of conspiracy or scheme this time? Can't you tell me?"
Li Shimin's face darkened, knowing that his rebellious son Li Shen must have some insidious scheme.
"No, no, Father, you've misunderstood. I was just thinking about how to tell you," Li Shen quickly waved his hand.
"Speak quickly," Li Shimin said impatiently.
Li Shenyi gritted his teeth and said:
"Actually, the solution my son came up with was very simple: first, borrow money to pay off the debt."
"That's it? You want to borrow money from me to pay off your debts?" Li Shimin curled his lip, thinking it was some brilliant idea.
"No, no, no, how could I borrow money from Father? Father wouldn't lend me any."
"I borrowed from merchants, from nobles, from aristocratic families, from all the wealthy people in the Tang Dynasty."
Li Shen shook his head. His own father was so stingy; he wouldn't lend him anything.
"Hehe, Lao Shi, do you think too highly of yourself? You think you can just lend money to anyone like that?"
You may have some prestige among merchants, but you have been infamous among officials and nobles for generations, not to mention the powerful families who regard you as a demon.
"Do you think they'll lend it?" Li Shimin smiled contemptuously. This rebellious son really had no idea about his own character.
Given his credit history, who would lend them money?
“Father, of course I can’t borrow it directly. Father, do you still remember the batch of national bonds we issued a few years ago to repair the road to Liaodong?”
"National debt?" Li Shimin's eyes suddenly lit up upon hearing this:
"Of course I remember that in the third year the court paid off all the money and even paid some interest."
Do you also intend to use this method?
Li Shen nodded:
“That’s right, I also want to use this method to issue bonds for the Prince Ji’s Mansion and give it a 50% interest rate for one year.”
"Fifty percent profit!! Are you crazy? Do you know how much fifty percent profit is?" Li Chengqian exclaimed in shock.
“Brother, this isn’t high. I’ve heard that the highest interest rate for loans issued by the imperial court is 70% per year. My 50% interest rate isn’t high at all,” Li Shen said dismissively.
"When will the imperial court have a 70% profit? The highest interest rate for the imperial court is 36%, and the monthly interest rate cannot exceed 6%. Private businesses can only earn 3% per month."
Li Shimin could no longer sit still.
"Father, the Tang Code stipulates that the monthly interest rate for defaulting on debts shall not exceed 6%, and the annual interest rate shall not exceed 72%."
My 50% profit this year is reasonable; it's not a lot.
Li Shen retorted, saying that when he opened the bank, he had Wang Xuance look up the laws, precisely because he was afraid that asking for too high an interest rate would violate the law and draw criticism.
But Li Shen was shocked when he checked; the interest rates in the Tang Dynasty were damn high.
The law stipulates a monthly compound interest rate of 6%, which translates to an annualized rate of 72%.
The highest annualized interest rate for commercial loans from the imperial court was 36 percent.
This almost scared Li Shen to death. One hundred yuan, and a maximum of one hundred and seventy-two yuan a year. Isn't this pushing ordinary people to their deaths?
That's why Li Shen has so many bank loans; the main reason is the low interest rates, so he doesn't have to repay exorbitant interest payments.
The laws of the Tang Dynasty did not have any strict requirements on loans, meaning that interest could be compounded indefinitely.
If you can't repay your debts, unless you make a fortune, you'll never be able to get out of debt in this lifetime.
The interest rate offered by Li Shen was 50%, which is not considered the highest.
"Father, with this 50% interest, I believe many people will buy bonds issued by the Prince Ji's Mansion, right?"
Li Shen said confidently.
(I checked some information and found that the lowest loan rate among feudal dynasties was the Qing Dynasty, with an annualized rate of 36%. Although the monthly and annual rates were high, it was still a principal-to-interest loan.)
In other words, the maximum monthly interest rate is 3%, and no matter how high it is or how much interest is compounded, it cannot exceed the principal. Once the principal is reached, no more interest will be charged.
Just like Wang Xifeng in *Dream of the Red Chamber*, who charged a monthly interest rate of 10%, this constitutes usury and is not protected by law.