Stocks

Lu Bu briefly discussed matters concerning the aristocratic families and continued to supplement: "The avenues for the bank to make money are not limited to lending; it can also earn significant profits through currency exchange, pawnbroking, auctions, and other businesses."

Yan Mu and the generals eagerly asked, "What are currency exchange, pawnbroking, and auctions?"

Lu Bu took a sip of water and first explained the currency exchange business: "The bank can exchange gold, silver, and copper coins for depositors free of charge. Because copper coins are depreciating, the exchange rate fluctuates. We can take advantage of the time difference and regional differences to earn some margin through different exchange rates." Lu Bu then explained concepts such as exchange rates.

Speaking of pawnbroking, Lu Bu glanced at the warriors: "Pawn shops are probably your favorite places to go. If you temporarily lack money, you can pawn real estate, carriages, silk, clothes, jewelry, and even expired weapons or aging horses there. It's like storing them temporarily. The pawnshop assesses a value, gives you the money you need urgently, and sets a time for you to retrieve the items. Once you have money, you can redeem your belongings. The pawnshop charges a certain percentage of pawn fees. If you exceed the agreed-upon time and still haven't redeemed the items, they become dead pawns. The pawnshop won't ask for the money back; instead, they sell the items at market value. The pawnshop earns money through pawn fees and the difference between the market price after selling dead pawns and the original assessed pawn value."

Cheng Lian, somewhat clear-headed, raised his hand and asked, "Why does it sound the same as loans?"

Lu Bu shook his head: "For loans, the collateral required is usually immovable property or large quantities of goods, such as real estate, goods in shops, carriages, ships, etc. Moreover, loan amounts are generally larger and require guarantors. It takes a relatively long time to obtain a loan. However, pawnshops provide on-the-spot assessments, immediate cash, simple and quick procedures, and they can pawn any valuable item, even wives, children, or servants."

At this point, Lu Bu couldn't help but sigh: "In this chaotic era of war, pawnbroking is a charitable business that can rescue people in danger. In times of great disaster, those who watch their children starve to death might as well pawn their children. This way, the entire family won't starve."

During the Eastern Han period, the prototype of pawnshops, known as "zhiku" (质库), had already emerged. Wealthy merchants, officials, military forces, temples, and large landlords actively engaged in lending operations with items as collateral. Items brought into the pawnshop for collateral, besides ordinary gold, silver, pearls, and currency, sometimes included slaves, horses, and more. Ordinary working people often used daily necessities as collateral. The period for pawnshop loans was very short, and the interest was very high. The assessed value of pawned items was often arbitrarily lowered during the loan period. If the borrower couldn't repay the loan when it was due, the pawned items would be confiscated. This frequently led to many households going bankrupt. In response to this, Lu Bu established the Dedication Pawnshop, jointly operated by the government and the people, with the aim of providing emergency relief and reducing tragedies of family ruin and loss of life.

Upon hearing Lu Bu's explanation, Cheng Lian raised his hand again: "Can wine, fine wine, be pawned?"

The crowd burst into laughter, and Lu Bu smiled at this wine enthusiast: "Of course, but for now, with so many people starving outside, let's not make wine. Wait until the farmland is successful and the harvest is plentiful, then I'll let you drink to your heart's content."

Territorial cultivation was not pioneered by Cao Cao. In fact, during the Western Han period, Emperor Han Wen and Emperor Han Wu had recruited large numbers of farmers to cultivate land on the borders. The generals under Lu Bu were not unfamiliar with territorial cultivation, and Lu Bu explained the benefits of civilian and military cultivation, as well as the importance of food in the following years. All the generals agreed with Lu Bu's territorial cultivation policy. However, since they had not yet left Luoyang to return to Bingzhou, the territorial cultivation policy had not been implemented, but everyone was already inspired by the future vision that Lu Bu had painted of the Bingzhou Army being well-equipped and well-fed, sweeping across the world like a rolled-up carpet.

Lu Bu then explained the auction business: "Regularly holding auctions in major cities, inviting those wealthy and naive officials, aristocratic youths, to bid. They hype up various rare and exotic treasures to extremely high levels before selling them. Items for auction include calligraphy, paintings, cultural relics, fine blades, fine horses, and even beautiful women and handsome men."

Song Xian asked, "So, what is bidding?"

Lu Bu drew his Seven-Star Sword and laid it on the table, saying, "Let's assume we all want this precious sword. Who should own it? Of course, it goes to the one with the highest bid. For example, if you bid 10,000 coins, Wei Xu bids 20,000 coins, and Cheng Lian bids 30,000 coins, then Cheng Lian would own this precious sword. Those aristocratic youths care a lot about face; they won't lose in the battlefield, and I'm afraid even a piece of junk could be auctioned off to them for tens of thousands of coins through the bidding system."

During the discussion with everyone, Lu Bu gained a deeper understanding of how to conduct business activities in this era. He then suggested to Yan Mu, "I propose that we establish a Dedication Group. It will oversee three businesses: Dedication Bank, dedicated to deposits, loans, and exchanges; Dedication Pawnshop, focused on pawnbroking; and Dedication Auction House, specialized in auctions."

Yan Mu agreed.

Gao Shun, being straightforward, said, "The five million coins rewarded to me by the Lord, I will deposit into Dedication Bank. If the Lord and Sir Yan discuss matters related to merchants, I have little interest. If there's nothing else, I'll take my leave."

Lu Bu was amused by Gao Shun's frankness. "Zilong, you stay seated. What we are about to discuss involves your lifelong interests. You can't afford not to participate."

Gao Shun frowned but patiently sat down. The other generals looked at Lu Bu with puzzled expressions.

Lu Bu then introduced the concept of stock ownership to everyone: "Establishing this Dedication Group requires a significant amount of startup capital. My father-in-law's funds alone are not enough. I plan to use the gold and silver obtained from Luoyang this time as the initial capital. You can also put your reward money into it as the capital. Following a system where one share is equivalent to ten thousand coins, if all of us contribute one billion coins, it would be considered as one hundred thousand shares. After a year, when that one billion coins has turned into twelve billion, each share would have increased by twenty percent. At the year-end, the additional money would be distributed as dividends to everyone. Of course, if you don't take it away, it will be kept there, and at the beginning of the next year, the shares will be redistributed, allowing you to own more shares."

While the other generals were still contemplating this, Wei Xu, the finance enthusiast, quickly grasped the concept. "In other words, if I invest three million, it counts as three hundred shares. At the end of the year, I can get six hundred thousand, and that three million remains as stock capital. If I don't take it away, this three hundred and sixty thousand becomes new capital. If others take their dividends, my shares will increase by sixty shares."

Lu Bu nodded. "You catch on quickly in financial matters."

Lu Bu handed the list of money and items seized from Luoyang to Yan Mu. "When stabilizing military morale, I used twenty thousand catties of gold and ten thousand catties of silver. I have left behind twenty thousand catties of gold and ninety thousand catties of silver. I'm giving you ten thousand catties of gold and forty thousand catties of silver, plus these sixty-five carts of fine silk and rare treasures worth four billion coins as the starting stock. You can sell these rare treasures through auctions, earning eight billion or even forty billion coins. Regardless of the amount earned, we will split it into three parts—one part as your capital, one part as my capital, and the remaining part for military use, temporarily stored in the bank."

After a brief calculation, Yan Mu said, "Let's use the bottom price for these rare treasures to calculate the initial shares. After I finish the auction, we can recalculate the shares. For now, they will all be considered yours. The sixty-five carts of fine silk are mostly plain silk, totaling fifty thousand pieces. The average price is two thousand coins per piece, making it one hundred million coins. The ten thousand catties of gold and forty thousand catties of silver, converted into copper coins, make it two hundred million coins. Adding the four billion coins from the rare treasures, your total stock capital is seven hundred million coins, or seventy thousand shares. I will convert all my personal assets, estimated to be one hundred million coins, into ten thousand shares. Wei Xu's three million investment will be three hundred shares, and Gao Shun's two million will be two hundred shares."

In this way, Yan Mu recorded everyone's shareholdings.

Lu Bu went to great lengths to implement this stock ownership system to win the hearts of the generals, tying them to his chariot and making them prosperous together, facing risks together.