In the imperial study, Chu Chen was explaining the matter of the bank to the Empress.
"That's how it is."
"..."
Upon hearing Chu Chen's words, the Empress was dumbfounded.
"How can this be so insane? You're saying that the financial resources I can access have suddenly increased by an equivalent of twenty-one million taels of Yun Chao?"
"Yes, Your Majesty," Chu Chen replied, suppressing a smile.
The Empress was bewildered. In the past, only the imperial farms could provide over a million taels of silver to the imperial treasury. The annual revenue of the court was only two million taels, which was not enough for itself, let alone to be allocated to the Empress's personal treasury.
She had to haggle over every penny. Even in the last two years, the imperial treasury had never held more than twelve million taels of silver. Although the court had become much wealthier recently, with income from a few prefectures and counties that had adopted the new three laws, it only amounted to tens of thousands of taels.
Both the court and the Empress were in such a state. Who would have thought that they could suddenly gain an additional twenty-one million taels of immense wealth out of thin air? Was money really growing on trees?
"Chu Chen, are you absolutely sure that the seven million farmers and laborers will not exchange their Yun Chao for gold and silver? And what about the merchants... will there be no bank runs?"
The Empress asked softly after a long silence.
"Please rest assured on this matter, Your Majesty. I have only allowed the bank to over-issue by a factor of one, with a deposit reserve ratio of fifty percent, which is more than sufficient. Unless all holders of Yun Chao nationwide attempt to withdraw their funds simultaneously, a collapse is impossible."
Chu Chen said with great confidence, "The situation has already opened up. Yun Chao has firmly established itself in Shuangyue Prefecture. As merchants, factory owners, and farmers spend Yun Chao in various places, and Yun Chao circulates throughout the country, a nationwide bank run will simply not occur."
"In fact, if it weren't for the sake of caution, I would have even planned to print another twenty-one million taels."
"..."
Hearing this, the Empress didn't know what to say. They had printed Yun Chao worth twenty-one million taels out of thin air, and he still felt it wasn't enough?
"Even if you're not afraid of bank runs, but with so much purchasing power entering the country, are there enough goods in the country for them to buy?"
"This is even simpler. Too much money and too few goods will lead to inflation, causing prices to rise and indirectly increasing the cost of living for the people. Conversely, too little money and too many goods will lead to deflation, causing many workshops, factories, and other places of employment to close down."
"Both are crises, but within a certain range, they are controllable. In other words, the problem can be solved by simply increasing production capacity and the quantity of goods."
Chu Chen was even less worried about this.
"Inflation, deflation, production capacity."
The Empress murmured to herself, as if a new world had opened up to her. "So this is how money can be handled, and this is how a country can be governed!"
At this moment, the Empress felt that her previous struggles with money were utterly foolish.
However, is production capacity really that easy to solve? The Empress frowned and asked, "How will you easily solve the problem of production capacity? And if you cannot rapidly increase production capacity, how will you deal with it?"
"Does Your Majesty know about the water-powered forging machines and the human- and animal-powered forging machines that the Ministry of Works, under my guidance, has established outside the city?"
Chu Chen did not answer directly but instead asked a question.
"I know a little. The Ministry of Works reported to me about those two types of machines, stating that they are masterpieces that even Lu Ban would envy!"
The Empress seemed to understand something and smiled. "You're not planning to invent more machines that require no or less human labor, are you?"
"Naturally, why wouldn't I?" Chu Chen smiled.
"But if that's the case, won't it eventually take away many people's jobs?" the Empress asked pointedly.
"That might not necessarily be a bad thing, is it? Everyone is well-fed and can lie at home, only needing to go out occasionally to maintain the machines. The rest of the time, they can be supported by the automatic production of the machines, living a carefree life."
"...That kind of era, I don't believe it," the Empress said after a moment of silence.
"Perhaps, but that's not the point. The point is that by using machines that require few or no people to replace human labor in many tasks, more manpower is freed up to join production, greatly increasing efficiency and output."
"And a water-powered forging machine, with one person on duty, only requires three to four people to operate it for twelve hours! Non-stop! Do you still think it will be difficult to increase output?"
Chu Chen's words plunged the Empress into silence once again. She had lost count of how many times she had fallen silent since Chu Chen's arrival.
"I also have several other inventions that can increase transportation speed and capacity, thereby improving mining efficiency. As for food, as long as some land is planted with early-maturing corn in the spring of next year, it can be harvested in just over two months.
"At that time, relying on that corn will be enough until the sweet potatoes and potatoes are harvested. With these two supplemented by rice and wheat, it will be sufficient to ensure that the entire Yunyue Kingdom does not lack grain for the next three years!"
"...You actually have more inventions! I truly don't know how your brain is wired. Marvelous inventions seem to be as numerous as scattered grains of rice in your mind!"
The Empress was very curious about what Chu Chen's mind was filled with.
"What are these 'several new inventions' you speak of?"
"Steam engine, wooden tracks, iron rails, and coaxial linkage wheels."
Chu Chen replied without hesitation.
"Steam engine? Wooden tracks, iron rails??"
The Empress pondered and found that she had never heard of these three terms.
Seemingly sensing the Empress's confusion, Chu Chen smiled and explained, "The steam engine allows us to place machines on land, so we no longer need to be near rivers to utilize natural power. Therefore, it requires no human labor or only very little."
"And its output is incomparable to that of cast iron, steel, or human and animal power today. It will be a tenfold or hundredfold increase in production capacity!"
Chu Chen said with a slight smile.
The Empress did not know how a steam engine operated, nor did she know how the water-powered forging machine operated. However, as long as it could achieve what Chu Chen said and produce a large quantity of goods, that would be sufficient.
The Empress was still unaccustomed to this approach of over-issuance and instinctively felt it was somewhat serious, but since Chu Chen said it was fine, she chose to believe him.
"Your Majesty, in short, with the bank, the Ministry of Revenue will not lack money for the next few years. And from now on, Your Majesty will no longer need to subsidize the court. Instead, you can keep the subsidy notes and ledgers and request loans from the Ministry of Revenue later."
A sense of helplessness washed over the Empress. She said, "The entire Yunyue Kingdom belongs to me, and the money in the Ministry of Revenue is also mine. If we are one, how can there be talk of borrowing and repayment?"
"Your Majesty, your thinking is incorrect. Public accounts are public accounts, and private accounts are private accounts. They must never be casually mixed."
Chu Chen earnestly advised her.
"Alas, I understand. I am tired, you may withdraw."
"Yes!"
After leaving the imperial city, Chu Chen revealed a sly smile.