Chapter 1135: The Origins of Trust

Liu Ba was confident before he started working, but once he got involved, he realized that his bank had to be linked to the Taishan Bank, and the aristocratic families had already agreed to Chen Xi's terms—seventy percent of the money had already been moved to the main bank.

Without this constraint, Chen Xi wouldn't have dared to expand the bank into Cao Cao’s territory, as it involves bearing the risk of credit. But with seventy percent of the actual cash transferred, the credit risk was significantly reduced.

Considering the distance between the Yongliang Bank and the Taishan Bank, the time required for a round trip was enough for Chen Xi to shift funds between different places, ensuring that unless there was a large-scale run on the bank, there wouldn't be a credit crisis.

Moreover, with copper being imported from Lusong to Donglai and then to Fenggao—the commercial center that Chen Xi established—under the supervision of Wang Xiu, this flow of funds into the hands of aristocrats and commoners would gradually eliminate any potential credit issues.

To be honest, if it weren’t for the fact that counterfeiting a marquis’s seal resulted in the extermination of one’s family, Chen Xi wouldn’t have dared to use his own seal as the basis for the credit currency. Additionally, Chen Xi ensured that everything was documented in triplicate, with the exchange vouchers checked one by one in front of all parties involved, providing a level of formality that reassured the aristocratic families.

This wasn’t simply about clever tricks to rob Peter to pay Paul; the establishment of this system came from building up a merchant network, unified commercial management, the formulation of regulations, and overseeing the entire business system before gradually making it independent.

Because Chen Xi had previously sent people to oversee the transactions of large merchants, ensuring internal stability within the merchant guild, the overseers acted as intermediaries to guarantee the fairness of major transactions. These countless large-scale transactions throughout the year not only promoted commercial prosperity but also made large merchants aware of the importance of having a trusted intermediary for major deals.

No one wanted to carry tons of copper coins for a transaction, so they deposited the money with the intermediary and then picked up the goods, with Chen Xi’s intermediaries transferring the funds directly to the recipient.

Even transporting hundreds of millions of coins along Liu Bei’s government-supervised roads couldn’t guarantee absolute safety, let alone in regions controlled by Cao Cao. If the money was stolen, one could only cry. But when money was deposited with Chen Xi, he would simply transfer the funds, and the recipient would collect the money directly from their local treasury.

This was only possible because the government had just been established and there were no factions to complicate things. Thus, the central government could collect the money, and the prefectural authorities would handle the transfers, making the system acceptable. Moreover, this method of transaction was extremely fast and safe, so all merchants hoped to participate.

Chen Xi’s original intent was to let the aristocrats and powerful merchants taste the benefits and encourage them to join the system. So, when other merchants requested to join, Chen Xi collected a hefty membership fee before agreeing to their participation, further expanding his control over commercial information.

While no one could get a complete picture of the entire commercial landscape—even the three managers of the merchant guild couldn’t fully grasp the information related to nationwide commerce—Chen Xi, with the entry of large merchants, had access to information from all over the empire.

Chen Xi, unlike those merchants looking for quick deals, had been manipulating everything from behind the scenes since the previous year. This was why Chen Xi could guarantee he wouldn’t lose money.

Whenever someone needed something, Chen Xi would order his people to check the lowest price and buy it. Then, he’d immediately sell it off. Even with a five percent profit margin, handling transactions worth hundreds of millions could generate millions in profit.

Because of these tactics, Fenggao became known as the place where you could buy anything in the world and sell anything you had, all at the fastest speed, because Chen Xi had access to nationwide commercial information and needed everything.

Chen Xi also used over a hundred aliases to buy and sell various items, and Fenggao’s official outlets even sold information.

For example, information on who needed a certain item and at what price, or who had something someone wanted. The prices for such information weren’t too high, ranging from one to ten gold coins.

Of course, many of these were aliases set up by Chen Xi, but it didn’t stop people from constantly buying the information. Chen Xi’s various aliases were busy buying and selling all the time.

Unfortunately, the good times ended in the latter half of last year. A group of time-pressed merchants began doing the same thing, and their numbers kept growing.

Because of the official involvement, merchants in Fenggao grew accustomed to having the government’s presence. After all, the government ensured no one would be swindled, and Chen Xi despised those who didn’t play by the rules, even crushing a few to set an example.

As a result, both merchants and the aristocratic families backing them came to trust the government’s arbitration. Then, one day, Chen Xi found the role of intermediary too tedious, requiring too many staff to maintain. So, he decided to switch to a different system.

This system was the so-called banking certificate. The aristocrats never questioned it because they thought of it as the same type of certificate they used with intermediaries. Furthermore, this new certificate had the added bonus of being personally verified by Chen Xi—each voucher bore his seal and came in triplicate.

Unlike intermediaries, however, the voucher was paper and could be easily carried around. After all, no matter how good your relationship with the intermediary, you couldn’t carry them around in your pocket.

People tend to be lazy, and it was largely due to Chen Xi’s indulgence that someone first used the voucher as a form of currency. Once that happened, aristocrats and large merchants quickly followed suit. It was much more convenient than hauling money around, so large transactions became more and more frequent.

When this new method of transaction first appeared, Chen Xi had pretended to warn the aristocrats and large merchants not to do it, claiming it would cause confusion when the government tried to distribute money.

But the man known for his debating prowess, Chen Xi, was eventually persuaded by these money-hungry individuals. Indeed, when you stand in the way of someone’s profits, their tenacity can be astonishing.

The aristocrats and merchants had already experienced the convenience of this new method of transaction. Expecting them to return to the days of hauling tons of coins by cart, traveling for over a month to another province while risking their lives? They’d have to be out of their minds!

So, Chen Xi was convinced but added many restrictions—one being collateral, and another requiring personal collection for large amounts. The latter, in essence, served as insurance against dirty money.

Back in the day, Britain’s national bank operated similarly. Only the account holder could withdraw money; if they didn’t come in person, even close relatives like siblings or parents had no access. It was an airtight system.

Chen Xi wasn’t quite that strict, but he maintained some face. However, in cases where entire families disappeared, there was no choice but to seize their assets. It was wartime, after all—who knew if someone might just vanish one day?

In this way, if Sun Ce or Cao Cao eliminated a wealthy merchant who had deposited collateral, Liu Bei’s side could also claim a share. Occasionally, when Chen Xi was short on funds, he’d secretly sell blackmail material on corrupt merchants to Cao Cao.

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