Chapter 109: The Talent of a Trusted Advisor

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Upon hearing Xun Yu’s interruption, Cao Cao asked curiously, “What is it, Wenruo?”

Xun Yu cupped his hands and inquired, “May I ask, my lord, upon entering Dongwu County, did you initiate opening the granaries to distribute grain in order to stabilize the people’s hearts?”

Cao Cao nodded and replied, “Indeed. When I first arrived, the population here was sparse, so I decided to open the granaries to attract the people back and help them settle.”

Nearby, Cao Hong was puzzled and asked, “Along the way, Wenruo and I carried a large amount of wuzhu coins to buy rice. If my lord opened the granaries to distribute grain, why would they go to such lengths?”

Cao Cao was astonished and said, “Such a thing still happens? Every day, I have Boda count the county population three times—morning, noon, and night. The changes in population are well known, and the grain distribution is allocated according to the county’s population. In principle, everyone should get their share. How is it that people still buy grain?”

Xun Yu smiled without speaking, but Liu Ye spoke up: “My lord, the population figures fluctuate because some people receive grain and then sell it to rice merchants, taking the money and leaving the county. The people left behind do not know how long your lordship will continue distributing grain, nor whether Eastern Commandery will stabilize. They are also unaware of the harvest from the good fields outside the city this year. Since the major landowners in Eastern Commandery have been thoroughly defeated, the good fields are poorly managed, and the farming populace outside the city finds it difficult to have surplus grain to sell. Naturally, the county’s common people end up buying more grain.”

In those days, the main suppliers of grain were the great landowners. Their vast arable lands, tended by tenant farmers, produced harvests far beyond what ordinary self-cultivating farmers could manage. This was still a primitive agricultural society; a family growing vegetables could barely feed itself, provided there were no natural disasters. There was no surplus grain to sell.

Now, Cao Cao had caused the Black Mountain bandits to be drawn in and provoked the Mount Tai outlaws, and with his own actions, the powerful clans in Yanzhou had been nearly wiped out. Who now had grain to send to the county for sale?

Liu Ye recognized this problem but had no good solution. Supporting small landowners would take time, and to address the urgent crisis, opening granaries to distribute grain was the only option. Although this risked some people profiting from grain speculation, there was no better alternative.

Liu Ye was a master of reading people, strategy, and discerning his lord’s intentions, but he was not an expert in governance. Faced with the challenge of rebuilding production, he was not necessarily wiser than Cao Cao.

Hearing Liu Ye’s words, Cao Cao sighed, “To reap the benefits is to endure the consequences. It cannot be helped.”

His words were sharp. Now that the powerful clans of Yanzhou were nearly wiped out, he could establish himself here, but he had to bear the fallout of the people having no grain to cook.

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Xun Yu laughed and said, “My lord need not worry. Extraordinary times call for extraordinary measures. Simply distributing grain will not solve the urgent problem and will only give speculators the chance to profit.”

Cao Cao brightened immediately. “Wenruo, do you have a solution?”

Xun Yu replied, “My lord need only issue two prohibitions and implement a barter system to resolve this urgent matter.”

Cao Hong, listening nearby, became interested. Was this scholar about to offer a policy proposal? How much understanding did he have of what later generations would call economics?

Rebuilding production and recovery—was that not economics? In this matter, Cao Hong’s homeland had done very well, experiencing decades of economic growth. Born in such an era, he naturally had some insight and was curious about Xun Yu’s capability.

Xun Yu explained, “First, my lord must issue a prohibition forbidding rice merchants from appearing in Dongwu County. Next, ban the use of wuzhu coins for transactions within the county. Finally, issue a barter decree, establishing a market for exchanging goods, so the people may take what they need.”

Upon hearing this, Cao Cao and Liu Ye both fell into deep thought. Only Dian Wei remained expressionless, unaffected. Cao Hong, after some reflection, understood Xun Yu’s intent. This was the time when the worthless wuzhu coins minted by Dong Zhuo were rampant, and grain was scarce. In short, there was an excess of currency but a shortage of food—an inflationary situation.

When the money supply exceeds the real value of goods, it is inflation. This is a principle well known even in high school civics. A rough solution is to increase effective supply and control the money supply. Xun Yu’s two prohibitions covered these two aspects.

Banning rice merchants from Dongwu County naturally prevented grain from being resold and lost to the outside, ensuring it went directly into the people’s hands, increasing effective supply.

Prohibiting transactions in wuzhu coins controlled the money supply by simply forbidding their use.

The barter system then balanced total social demand with total supply. These three proposals are the basic methods to combat inflation. Xun Yu delivered them without hesitation, proving his reputation as a kingmaker was well earned.

Liu Ye and Cao Cao, both intelligent men, quickly grasped the key points and praised Xun Yu’s clever strategy. Cao Cao laughed heartily, “This way, the wuzhu coins won’t be carried out of the county by those speculating on grain. Though Eastern Commandery is now impoverished, it will one day regain vitality. But when the people no longer have wuzhu coins, collecting taxes will again be a complex matter.”

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Xun Yu cupped his hands and smiled, “My lord is wise. The rice merchants reselling grain only seek to quickly turn the worthless wuzhu coins into personal gain amid the chaos. Those selling grain want to take their money somewhere peaceful. It is ultimately a problem of currency. Though the current wuzhu coins are mixed with many inferior coins minted by Dong Zhuo, once melted down and reminted, they still represent a considerable asset. The wuzhu coins remain in circulation everywhere. If the grain in Dongwu County constantly circulates only among merchants and locals, but the wuzhu coins flow outward, restoring Dongwu County and even Eastern Commandery will require great effort.”

Cao Cao asked, “Wenruo means... I should collect the wuzhu coins, melt them down, and remint them for reissue?”

Xun Yu smiled, “Exactly. And not only collect the coins in Dongwu County but also as many as possible throughout the entire Eastern Commandery.”

Cao Cao hesitated, “But collecting wuzhu coins from the people without cause is somewhat...”

Although Cao Cao had brought the Black Mountain bandits into Yanzhou, causing great suffering and ruthlessly eliminating the powerful clans, he understood the importance of public support. He was unwilling to directly seize money from the common people.

If he could not seize it openly, then deception was the only way. Naturally, Liu Ye took the lead, saying, “My lord can issue a proclamation announcing that General Yuan Gonglu of Runan commands that anyone hoarding the inferior wuzhu coins minted by Dong Zhuo is guilty of treason and will be punished by waist-chopping. Now that Yuan Shu has sent Sun Wentai to attack Luoyang, forcing Dong Zhuo westward—this is common knowledge. Such a proclamation is fully justified. Besides, the original wuzhu coins and those minted by Dong Zhuo are easily distinguished, making deception impossible.”

Cao Cao immediately rejoiced, “Ziyang’s wisdom surpasses the ordinary! With Wenruo Ziyang devising plans for me, there is nothing to worry about!”

Yuan Shu, of course, was unaware that Liu Ye had outwitted him once again.

After a brief discussion, Cao Cao promptly returned to the county government to issue orders, temporarily suspending the grain distribution. Liu Ye and Xun Yu sought lodging, Dian Wei returned with Cao Cao to the county office, and Cao Hong, having clarified where his wives and concubines were staying, set out to join them.