Chapter 520: Bank! <<< >>>
Seeing Li Chen's resolute determination, Xu Changqing felt a weight lift from his chest.
It's a good thing I didn't voice my opposition directly just now, otherwise it would have been quite awkward for me.
"But even so, Xu Changqing still said: 'Your Highness, why insist on opening a money house? Although the money house has a lot of silver, they all belong to depositors. According to my understanding, most of those who open money houses don't earn much profit, and they also have to bear the risk of keeping the silver. If there is a loss or theft, these are all the responsibilities of the money house.'"
Xu Changqing didn't understand, but Li Chen was crystal clear about it.
A moneychanger is a bank!
Can banks make money?

Although it may seem like a losing proposition to encourage the public to deposit their money and pay interest, this is actually quite lucrative.
But the money changers could obtain a huge cash flow, even though they were only responsible for safekeeping. Once the people's silver was deposited, it was unlikely to be withdrawn in full unless there was a major event.
Then the bank can use this influx of cash to make more money.
For example, lending.
Interest rates on loans, contain huge business opportunities.
This line of work is extremely difficult for outsiders to get into.
In feudal times, there weren't many ways to find someone.
But the imperial court was different.
The imperial court manages the household registers of all people under its rule. No matter where you go, there will be local government officials overseeing you.
Therefore, the state-run pawnshops were not afraid of debtors running away at all.
You can run from debts owed to individuals, but you can't escape debts owed to the government.
Moreover, once money houses are established, there is another huge function: bonds.

Issuing bonds in the name of the imperial court, allowing the common people to taste some sweetness first. As long as the court fulfills its obligations of principal and interest several times, then regardless of what the court does subsequently, there will be a steady stream of funds from the people.

Having thought this through, Li Chen had made up his mind completely.
"Do you know which industries are the most profitable among the people?"
Upon hearing Li Chen's question, Xu Changqing was taken aback for a moment before replying: "Brothels and gambling dens are incredibly profitable."
“That's right, both businesses exploit human weaknesses. Brothels need no explanation; as long as men haven't gone extinct, the business of brothels will never cease.”
"Even if the imperial court were short of money, it wouldn't resort to this kind of flesh trade. Otherwise, this palace wouldn't be criticized by those scholars for millennia."
As for this casino, the biggest source of income is undoubtedly the rake. Every gambling table has a winner, and as long as there's a winner, they have to pay a rake. As for the tables where the casino itself acts as the banker, they can even use techniques like cheating to swindle gamblers' money. But this is only one aspect; the other major source of income is lending.
“The casino lends money to regulars on a nine-to-thirteen basis. The casino employs thugs, and the borrowers are all familiar local customers. They are not afraid of not getting their money back, and they can always make a fortune. Moreover, this is relatively hidden, and only the casino owner knows the true taste of it— making money silently.”
Although the imperial court cannot engage in the business of flesh and blood, lending money is permissible.
Li Chen's last words fell, and Xu Changqing was completely stunned.
He couldn't understand why the Crown Prince would know so much about brothels and gambling dens.
But this does not prevent him from being opened a new world door by Li Chen.
Xu Changqing could reach the position of left minister of the Ministry of Revenue, just one step away from becoming Minister of Revenue. Xu Changqing was definitely not a fool.
On the contrary, his mind is very agile.
After Li Chen's reminder, he immediately realized that with the court's unique advantages, this business could truly bring a steady stream of wealth to the court!

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