Chapter Ninety-Two: Funds of the Official Office

Zhen Qian had just opened his mouth to speak when the voice of the page, Wang You, echoed from outside the door: “Eldest Young Master, the distillery caught two more just now—should we hand them over to the authorities tomorrow?”

Wang You’s parents were indentured servants; born into this station, he was considered property from birth. Later, his mother, noticing his cleverness during a visit to her family, kept him by her side as a page, making him Zhen Qian’s personal servant. Thus, he followed Zhen Qian everywhere, though even so, when Zhen Qian dined with his two daughters behind closed doors, Wang You could only report from outside.

“Still those foreigners? How were they caught?”

Outside, Wang You’s tone was disdainful: “Of course, those foreigners again! Relying on their close ties to the military governor, they run rampant across Hebei… The two entered the village and were spotted by the second steward. While sneaking into the distillery, one was trapped by a leg-hold, the other ensnared in a fishing net. Both are now locked in the dungeon.”

“Break one of their legs. Have the second steward deliver them to the authorities first thing tomorrow. Each person involved in tonight’s capture is to be rewarded with a hundred coins. And arrange a carriage for me—I’ll visit the county magistrate in Luquan tomorrow afternoon.”

Wang You agreed and quickly vanished.

Zhen Qian truly wondered why these foreigners lingered like restless spirits. In two months, six gangs had eyed the distillery, their thieving hearts undeterred. The saying goes, ‘A man without guilt, but with treasure is in danger.’ He merely produced baijiu and brandy to amass wealth; if he revealed the glassware, the sky would surely fall.

In the Tang Dynasty, distilled spirits as we know them did not exist. Most wines were low-proof—murky or sweet. Varieties like Fushui of Yingzhou, Ruoxia of Wucheng, Sangluo of Hedong, Yichun of Yuanzhou, Tukuchun of Xingyang, Shidongchun of Fuping, Shaochun of Jiannan, Qianhe grape wine of Hedong, Yunxi Boluo of Lingnan, Jiuyun of Yicheng, Pen Shui of Xunyang, Lu Wine of Qi… Even the stronger wines served at imperial banquets, such as Sanlejiang, were special court recipes akin to medicinal brews, with health benefits like fatigue resistance, immune modulation, and hypoxia endurance—their alcohol content hovered around twenty degrees.

Early Tang saw industry decline and grain prices soar—first eighteen rebel kings, then the Turks and Goguryeo. The court issued prohibition edicts, banning private brewing.

By mid-Tang, grain was plentiful, and taverns flourished from bustling cities to remote villages. Large and small establishments dotted the land, a prosperity unseen in previous eras. This proved not only the Tang Dynasty’s economic zenith, but also the richness of its wine culture—the private brewing industry thrived.

Wei Yingwu, in his “Tavern Ballad,” extolled the splendor of new wine houses in Chang’an: “Noble families buy wine along Chang’an’s streets, a hundred-foot tower rises overnight. Jade-green glass catches the spring breeze, silver-plated banners welcome guests…” Taverns were often marked by fluttering wine flags, as Pi Rixiu wrote in “Wine Flag”: “Azure banners, several feet wide, suspended along the thoroughfare. Often stirred by wind, displaying the wine’s name.” Liu Yuxi, Lu Guimeng, and others penned famous lines describing these flags: “Wine flags face each other at the head of the grand embankment, below are moored boats, above are towers”; “Only at dusk by the stream does nostalgia arise, wine flags’ shadows fall on the spring flow.”

Many taverns were managed by women. Li Bai’s poem “Farewell at the Jinling Tavern” describes this: “The wind blows willow blossoms, filling the shop with fragrance; a Wu maiden presses wine, inviting guests to taste.” In “Seeing Off Pei Eighteen Returning South to Song Mountain”: “A foreign maiden beckons with fair hands, urging guests to drink golden cups.” Li Shangyin wrote: “Fine wine can bid farewell to age; the hostess behind the counter is still Zhuo Wenjun.” These lines all celebrate female tavernkeepers.

Tang wine businesses were taxed and had local official sales systems. Wine taxes were considerable, especially after the An Shi Rebellion, as military expenditures soared and taxes increased. According to the “Comprehensive Examination of Literature—Taxation Section,” in Tang Daizong’s Guangde second year, monthly taxation was instituted; in Tang Dezong’s Zhenyuan second year, wine sellers were taxed at 150 coins per dou. In Tang Wenzong’s Taihe eighth year alone, national wine taxes amounted to over 1.56 million strings of coins—a staggering sum.

Since Zhen Qian produced and sold wine, he naturally could not avoid the Luquan county authorities. Besides gifting ten jars of fine wine to the county office each month, he also offered a thirty percent stake in his tavern business.

Any problem solvable with money is no problem at all!

In any feudal dynasty, salt, iron, wine, and tea were immensely profitable industries, inevitably subjected to heavy taxes. The court managed wine taxes with utmost rigor.

Zhen Qian’s enterprises were few—not for lack of ability, but for lack of opportunity. Not a single grain from his land was sold; instead, he purchased and stockpiled grain from elsewhere for contingency.

Taverns, grain stores, money exchanges, and wine houses formed the four pillars of Zhen Qian’s wealth. His tavern initially bought and sold homemade wines, but profits were meager. He had to open a grain store to buy miscellaneous grains—sorghum, soybeans, millet, and broomcorn, all excellent for brewing and discreetly acquired. With grain stores and wine houses as cover, his grain purchases escaped the county office’s notice.

The money exchange belonged to the Zhen family in Luquan, inherited by Zhen Qian after the family split. At first, he thought it dispensable, but further knowledge startled him.

Tang’s main currencies were copper coins and silk; gold and silver were not standard tender. Before use, gold and silver had to be exchanged at money shops, with frightfully high fees: five percent for gold and silver into copper coins, two percent for silk. Every transaction profited both ways—a classic case of “profiting from both the plaintiff and the defendant.” Zhen Qian wouldn’t be himself if he didn’t seize such a lucrative opportunity.

Currency exchange was only the tip of the iceberg; true profits lay in lending. Tang’s interest rates differed vastly from later eras—so high that “usury” hardly describes it. In later times, outrageous monthly interest was one or two percent: borrow ten thousand, pay a hundred or two monthly. In the Tang, rates soared to eight percent monthly, not counting compound interest.

Why did Tang’s monthly rates reach seven or eight percent? First, one must understand the concept of “gongxie funds,” which is hard for later generations to grasp.

During the Sui-Tang period, for official expenses and salaries, the government operated commercial and usurious ventures with capital known as “gongxie funds.” At the start of the Sui, the capital was established in the capital and provincial offices, lent for commerce, and profits used for public expenditure. The Tang inherited this system: in the first year of Wude, gongxie funds were set up, managed by clerks—nine per bureau, called “money clerks,” usually sons of officials below the sixth rank, called “money clerk sons.” Each managed fifty strings or more; required to remit four thousand coins monthly, fifty thousand yearly, as officials’ salaries. Timely payment allowed the clerks to participate in civil service selection and receive posts. Though abolished during Emperor Taizong’s reign, it was restored in the twenty-first year of Zhenguan. At that time, the capital had over seventy bureaus, with more than six hundred money clerks. Total gongxie funds ranged between twenty-four thousand and thirty thousand strings.

Local prefectures and military commands also had gongxie funds, managed by clerks, for staff salaries and expenses. According to fragments from the Dunhuang County Museum and the “New Tang Book—Finance Section,” nationwide prefectural gongxie funds during the Kaiyuan era totaled between 800,000 and 1 million strings.

In early Tang, interest from gongxie funds was a major source of officials’ pay.

Later Tang continued the system, and interest funded official meals, sacrifices, banquets for foreign envoys, and miscellaneous expenses for guesthouses, hospitals, and music schools. Gongxie funds grew markedly, also called “profit funds.”

Interest rates were eight percent monthly during Wude and Zhenguan, seven percent in early Kaiyuan.

Initially, gongxie funds were managed by bureau clerks; after Yonghui, wealthy households (high households) took over. Early Tang called them “money people,” “money households,” or “profit money households.” They were exempt from labor obligations; if charged with crimes, punishment required official approval—local authorities could not mete out penalties. These managers often mixed personal funds with official capital for private gain, and when defaults occurred, they used the authority of official funds to intimidate debtors.

Gongxie funds had strict management: each bureau reported quarterly, prefectures annually, to the Ministry of Justice. In the Yuanhe period, thirty-two bureaus’ profit funds were overseen by the Censorate, which reviewed and disposed of accounts at year’s end.

The court’s loan rate was seven percent monthly; private lending never lower. Such high rates made the money exchange’s profits enormous.

In the sixth year of Kaiyuan, Deputy Secretary Cui Mian petitioned: “Excessive interest ruins many… For commoners, it is a heavy burden,” and in mid-late Tang, it became a malignant tumor. In years of disaster, ruined households were countless.