"The deed is based on it, and then you can use this to ask us to return the principal and interest."

"Oh, that's right." Li Xiao's explanation was very simple and clear, but Lao Wang understood.

"Borrow money, you want to borrow money from me?" Lao Wang looked at Li Xiao.

"That's right, who wants you to be a rich man, who doesn't ask you to borrow money, it just so happens that you happen to be here today, one side is in trouble, and all sides support, so you will be generous and supportive. Don't worry, we won't lend you this money for nothing, the contract will be written in black and white, and the interest will not be less, how about it? ”

Li Zhi pinched his chin, "Then why don't you call it an IOU, why do you call it a bond?" ”

"Of course, there is a difference." Li Xiao explained.

An IOU is usually a voucher for borrowing money from someone, and it will indicate the borrower and the lender. But the difference in the bond is that Li Xiaoke did not intend to specify who he borrowed money from, but only the amount of the loan, the interest and the maturity time.

"Why do you want to do that?"

"Circulation, let the bonds circulate."

"Circulation? Why? Li Zhi was even more puzzled.

"Let me tell you this, if you lend me a hundred dollars, I will give you a hundred bonds, and this bond will be the same as each denomination, then I will give you a hundred bonds, with an agreed interest and repayment time. If you hold these bonds, you can keep them in your hands and come to us to repay the principal and interest when they are due, or you can transfer them to others, and then whoever holds these bonds, we will recognize him as our creditor, and you can come to us for debts. ”

"It's a little complicated, but I get it, but why do you have to do that?"

"Circulation, let this bond circulate."

Circulation, which is a very important attribute in later generations, such as cash flow.

If it is an ordinary IOU, it generally cannot be transferred to others, but if it is a bond, there is liquidity, and what does circulation represent? It is an asset that is revitalized.

A bond with a standard denomination, a promised interest rate and a time of repayment, can be used as cash in some ways.

After all, as long as Lanxi Township can afford to repay, then it is no different from cash.

Of course, the question is, since Lanxi Township wants to borrow money, how can they guarantee that they will be able to repay the principal and interest at that time.

This, of course, is a credit problem.

Li Zhi was the emperor, and although he was a little confused at first, his mind quickly flashed, and he felt that he had discovered a great event.

Lanxi Township doesn't necessarily have this credit now, but what if the imperial court comes to issue this kind of bond?

"What's the matter, Lao Wang, your Wang family has a big business, and you don't want to help at all?" Li Xiao glared at Li Zhi, who was stunned.

"How much?"

"Ten is not too little, a hundred is not too much, you can donate as much as you want."

Li Zhi smiled slightly, "How many bonds are you going to issue?" ”

"We have more than 1,300 households in Lanxi Township, with a population of nearly 10,000. This year's summer grain harvest will definitely fail, and it is estimated that it will be about forty percent of the harvest, even if the imperial court reduces the field rent, but this rent adjustment still has to be paid, and if it has to be discounted, it will be a lot more. Even if our township makes a concerted effort to take out all the grain, it will still be insufficient, and I estimate that there will be at least one to two months of grain. ”

An adult male needs about six stone a year, and even if the number of women and girls is halved, they will need three or four stone a year.

The rations for one to two months for nearly 10,000 people, even if they are a little less, will require at least five or six thousand stone of grain. Today's grain prices are rising, and the bucket of rice is nearly 50 wen, even if it is corn, it has to be 30 wen per bucket.

To buy 5,000 stone millet, at the current price, you will get 1,500 yuan.

"It's going to have to be about fifteen hundred."

"What about interest rates? How long does it take to repay? Li Zhi asked with great interest.

Interest ah, Li Xiao pinched his chin and hesitated.

In these years, the interest rate is very high, there are no serious financial institutions, there are many private loans, and the interest rate is also high. Even the imperial court has lent usury, since the Sui and Tang dynasties, perennial wars, sometimes only the Beijing officials have Yulu, and the local officials do not even have Yulu.

So what do the officials feed themselves on?

Relying on the field, the vocational field, the Yongye field, and the public field, everyone depends on the income from the land rent. Even the office expenses of the yamen depend on the public estate. Later, the situation was slightly better, and the imperial court specially allocated a sum of capital to the yamen in various places, and this money was let the yamen lend money themselves, and the interest was used for the office expenses of the yamen.

This money is also called public money, and the yamen gives the public money to special people to lend and collect interest, and they are generally the children of local rich and powerful families, and these people are also known as money-catching officials.

What is the interest on this money?

The government ordered the officials to lend 50,000 yuan each, and collected 4,000 yuan in interest every month. 50,000 principal, 48,000 yuan a year, the annual interest is about 100% of the principal.

This is still a loan issued by the government, and the annual interest rate has reached nearly 100 percent, while the interest rate of private loans is only high, not low, which shows that the interest rate of lending has been high in recent years.

What are the people's nine out of thirteen, what sheep anointing, donkey rolling and so on, in short, the shorter the loan, the higher the interest.

If Li Xiao wants to issue bonds, it must not be lower than the interest rate of the government's public money.

"I plan to use the bonds for half a year, with 100 cents as a denomination, with a monthly interest rate of 5 cents, and an annual interest of 60 percent, excluding compound interest, and the interest due for half a year is 30 cents."

"That's a little lower than the public money!" Li Zhidao.

"We borrowed money to buy life-saving food to survive the famine, how can we have any money, this money is borrowed, and we have to pay it back quickly, or the interest rate is so high, the more it rolls, the more it rolls."

If a bond of 1,500 yuan is issued, Lanxi Township will have to repay the interest of 450 yuan after half a year.

"Your monthly interest rate of five cents is too low, and the monthly interest rate of the government and public office is eight cents. It's not easy to borrow. That's it, fifteen hundred, I'll do it alone. I'll send someone to bring me the money, and you give me bonds. ”

"You've got it all?" Li Xiao was surprised.

Fifteen hundred, this is not fifteen hundred yuan, this is a lot of money, one and a half million yuan, Datang's purchasing power is very high.

A landlord with 100 acres of land does not have so much money, and even an ordinary landlord with 1,000 acres of land may not have so much cash in his hands.

1,500 yuan, you can buy hundreds of acres of land. In later generations, an acre of land was worth tens of thousands, and according to the value of the land, this was equivalent to tens of millions of yuan.

"Really?"

"What do I lie to you, do what I say." Li Zhi said with a smile, 1,500 yuan is just a small meaning for him. He was in a good mood at the moment, and he felt that Li Xiao's bond was an interesting good thing.