The waiter brought another round of drinks. Lin Yuchan was already slightly tipsy, her cheeks flushed. She could only imitate Miss Louise, pretending to be breathless with laughter at a joke, propping her elbow on the billiard table, silently spilling more than half the wine from her glass.
Su Minguan frowned slightly. Though this girl had decent alcohol tolerance, she normally didn’t dare get thoroughly drunk like a man. Today, she dared to drink freely only because he was by her side.
These foreign devils were inconsiderate, actually treating her like a man when pouring drinks!
He beckoned the bartender over, gave him some money, and whispered a few instructions.
“Don’t be discouraged, there’ll be opportunities for cooperation sooner or later!” The dent manager laughed heartily, having the bartender bring Lin Yuchan another glass of expensive amber-colored foreign liquor. “When cotton prices rise to fifteen pence next year, I’ll still have little Zheng buy your cotton! We’ll make money together!”
The sound of billiards cracked around them, with similar bold proclamations flying everywhere in the hall. Lin Yuchan accepted the wine glass, secretly amused.
So even weather-beaten foreigners could daydream. Raw cotton rising to fifteen pence? Then Europeans wouldn’t be able to afford clothes.
However, the firework-like price surge of raw cotton in recent years, and the enormous pounds sterling foreign merchants had earned from it, were like brilliant evening clouds that dazzled people’s eyes, making them forget the approaching night.
And Su Minguan was digging traps with her, bit by bit, on the inevitable path to darkness.
She suddenly blurted out: “If prices rise to fifteen pence next year, I won’t be greedy for that profit! Mr. Dent, when the time comes, I’ll supply you raw cotton at this year’s market price—seven pence per pound! All the extra money goes to you!”
Then she held her breath, tilted her neck back, and drained the foreign liquor in one gulp.
“Cough cough…”
Who had poured her a full glass of tea!
Dent manager was stunned, laughing incredulously: “Miss, you’re drunk.”
“The condition is that now, immediately, you pay me eighty percent deposit.” Lin Yuchan’s smile remained unchanged, still speaking with wine-induced boldness. “So I can buy more quality cotton fields. Now you can ask your comprador how much you plan to buy?”
“…”
The foreign merchants who heard this collectively fell silent for several seconds.
Before today, no one had imagined that a small Chinese female businessperson could be so outrageous.
Supplying next year’s cotton at this year’s market price.
She was willing to give up next year’s certain profits because she urgently needed cash to expand her cotton fields.
It sounded reasonable.
And for the trading houses, it was equivalent to prepaying for half-price discounted products.
Win-win.
So beautiful, it seemed almost unbelievable.
Of course, some would secretly wonder—what if cotton didn’t reach fifteen pence next year…
Even if prices didn’t meet expectations, rising to twelve or ten pence, foreign merchants would still profit. Even if prices remained unchanged at seven pence, foreign merchants would only lose a year’s interest.
Compared to their real estate losses last year, this was a drop in the ocean, not even counting as a loss.
Unless prices fell below seven pence…
Cotton prices had been skyrocketing for years. Every year, there were pessimists. But every year, prices surged upward triumphantly, slapping all the pessimists’ faces.
Like a teenager growing taller each year. Who would think he’d suddenly shrink back?
Though the logic was clear, the battle-hardened Dent manager also knew that Lin Yuchan’s proposal carried considerable risk for them.
He whispered with several friends, exchanging opinions.
Su Minguan’s face reddened slightly as he instantly understood Lin Yuchan’s meaning, his heart pounding.
This little troublemaker… was even more daring than he’d thought.
Su Minguan stepped forward without explanation, appropriately putting his arm around Lin Yuchan’s.
“You’re drunk, Miss Lin.” His eyes showed warning as he half-forcibly took the empty glass from her hand, whispering in her ear, “Don’t be so generous with the foreign devils, you can borrow money to buy land…”
Lin Yuchan rolled her eyes at him, half-genuinely complaining coquettishly: “Which bank will let a girl open an account?”
Su Minguan apologized to everyone: “She’s tired, I’ll take her back to rest.”
Half-pulling, half-dragging, he escorted this little actress out of the billiard hall and sat her on a sofa.
The foreigners behind found it amusing. Only the Dent manager’s ears perked up.
This little couple was whispering in Guangdong dialect—if he missed a word, his twenty years in Hong Kong would be wasted!
“Hey, wait.”
Just as Lin Yuchan was about to leave the billiard club, the Dent manager finally couldn’t resist, his whiskers flying as he chased after them.
“Miss Lin… is your seven-pence agreement still valid?”
Lin Yuchan turned back with a smile: “Until tomorrow evening.”
“Good! Tomorrow, please wait at your company. I’ll send someone to negotiate.”
———————————
The next evening, Su Minguan worked by lamplight in the accounting office, seriously implementing several contracts signed with foreign merchants.
The warehouse rental contract with Sassoon Trading House: one-year term, storing four thousand dan of cotton, deposit of five hundred taels of silver, cash already in hand.
The warehouse rental contract with Jardine Matheson: also a one-year term, storing six thousand dan of cotton, deposit also five hundred taels. Tang Tingshu was too eloquent, much more capable than Sassoon’s comprador, so Su Minguan had to make concessions. A check for the sterling equivalent of five hundred taels lay in his drawer.
Additionally, Tang Tingshu insisted that if Jardine Matheson needed to withdraw cotton early, Boya Company must accommodate them. The condition was paying a penalty equivalent to three pence per pound.
The cotton supply contract with Baoshun Trading House: agreed to supply at least five thousand dan of cotton at seven pence per pound, delivered after one year. Eighty percent deposit, at current exchange rates, forty-four thousand taels of silver, paid in three installments. If sterling appreciated against silver beyond a certain margin after one year, the remaining twenty percent balance would be canceled.
Every clause and word of the contracts had been discussed and verified by senior compradors, with no loopholes or gaps. Baoshun Trading House’s cash deposit, due to its enormous amount, had Dent manager’s special approval signature.
Su Minguan finished organizing the last document, looked up, and saw Lin Yuchan leaning against the doorframe, smiling at him.
“Does your conscience hurt?”
“You should ask those foreign merchant managers that question.” Su Minguan’s mouth corner curved imperceptibly. “They relied on strength in numbers and smooth talking to bully a lonely girl in the billiard room, force alcohol on you, bargain down cotton prices, and exploit your warehouse land. Those with conscience might reflect on God before bed, but I think most are celebrating and scheming how to squeeze another drop of oil from this ignorant young woman.”
Lin Yuchan couldn’t help laughing, reaching out to flick his forehead.
“Couldn’t you use fruit juice? That tea was so bitter!”
He caught her wrist and ruffled his hair instead.
Indeed, the essence of “betting against” was that as long as both sides maintained specific expectations, both felt they’d get the better deal.
No deception, no fraud, both parties are voluntary—all open schemes.
The more optimistic about cotton markets, the more money they’d made in the past, the more likely they were to take risks now.
Five days later, Baoshun’s first deposit payment arrived. Sassoon Trading House’s homeless cotton was also hired by laborers and wheeled cart by cart to Boya’s empty warehouses.
Su Minguan skillfully inspected the cotton bales, casually asking: “Can I borrow Manager Chang’s people?”
“No.” Lin Yuchan answered clearly. “Baoluo is leading people in Ningbo settling Meng Cotton Shop accounts, then I promised him a month’s paid vacation. Besides…”
She paused, smiling: “Besides, this doesn’t belong to Boya Company’s cotton business. This is your independent business as ‘General Sales Agent.'”
This was an adventure for just her and Su Minguan. Better not to involve other Boya people.
Su Minguan nodded, no longer pressing for anything.
He worked alone, running around outside until dark every day. Three days later, the four thousand dan of cotton stored by Sassoon had been rebranded under Boya and various small merchants’ names and rapidly sold to European textile factory agents, demanding cash payment as much as possible, at an average price of six pence and three farthings—eleven taels of silver per dan. After deducting commissions and taxes, pending receipts totaled thirty-five thousand taels of silver.
Soon, Jardine Matheson’s stored cotton also arrived. Su Minguan used the same trick, reselling these six thousand dan of cotton for fifty thousand taels of silver.
Then he immediately canceled these warehouse rentals and recovered the original deposits.
The warehouse landlords were delighted, immediately raising rents by twenty percent and renting the space to others.
After news of Boya’s contracts with major trading houses spread, within days, several more speculative small trading houses sent people to visit, asking if they could buy seven pence per pound of cotton in advance like Baoshun. As for cash deposits, with banks currently lending freely, there was no shortage.
Lin Yuchan completely let go, allowing Su Minguan free rein. So he brought back even more contracts.
Until Lin Yuchan reminded him, the risk was too great, and he decisively called a halt.
“So far, if our expectations are wrong, the value of your and my shares, plus my cash savings, can barely fill the hole.”
She was staking her entire fortune, still insufficient to repay his sacrifice of Yixing.
Su Minguan didn’t oppose his boss, reluctantly withdrawing.
———————————
Due to Boya Company’s massive cotton dumping, raw cotton market prices fell slightly to six pence per pound. But this small price drop was just a “fake fall”—prices were quickly propped up and even climbed at a steeper angle.
News about the American Civil War trickled to the Far East, including many contradictory reports. Some believed the civil war could end within a month, then everything would return to normal. But scholars also argued convincingly that Southern cotton plantations had mostly been destroyed by war, the American economy had collapsed, division was inevitable, becoming another Europe.
Market reaction to these vague intelligence reports was always consistent—meet all changes with constancy; hoarding more goods was never wrong.
The 1865 cotton market was crazier than all previous years combined.
On the most stifling summer day, Nanshi Flower Market threw out over a hundred thousand dan of cotton at an average price of eight pence per pound, equivalent to thirteen taels of silver per dan. Within ten days, prices rose to seventeen taels per dan. Prices at flower markets around Chongming Peninsula also rose with the tide, from fifteen to eighteen taels in just over half a day.
Trading houses completely abandoned “daily opening price” strategies, newly hiring over a hundred assistants responsible for on-the-spot pricing at docks. All fixed-price contracts were voided because missing one dan of cotton meant forfeiting dozens of times the profit.
Raw cotton prices nearly doubled within a month, attracting unprecedented numbers of speculators. With cotton having prices but no market availability, quick-witted foreign merchants turned to currency markets. Foreign exchange speculation became fashionable, exchange rates fluctuated multiple times daily, silver dollar and draft trading reached millions daily, and market interest rates soared to a maximum annual rate of forty percent.
Foreign bank stock premiums continuously set new records. The newly established HSBC provided large-scale financing to trading houses—original shares with a face value of 10 pounds immediately reached market prices of 30 pounds upon issue. Other new and old banks also massively increased capital and expanded shares, lending extensively to trading houses and other merchants.
Everything seemed familiar. Only the protagonist had changed from land to raw cotton. Shanghai Port began new dreams again.
Of course, many worried this might again be another mirage. But cotton was different from real estate. Compared to flimsy, abstract land deeds that could be arbitrarily speculated, raw cotton was a tangible bulk commodity. People could avoid living in settlements, building mansions, or enclosing land… but they had to wear clothes, right?
Foreign cloth woven in Europe still had to be shipped back to China for sale! And it sold well.
Moreover, unlike real estate’s domestic production and consumption nature, Chinese raw cotton buyers were Europeans. They were wealthy and advanced, with endless streams of wealth. They surely wouldn’t be the first to flip the table, right?
Besides, during the last time’s real estate turmoil, even if some foreign merchants lost money and jumped into rivers, others made fortunes! How would you know without gambling?
Some people learned from experience, cautiously withdrawing from markets, even publishing newspaper articles warning the public to learn from history and not repeat real estate mistakes.
More people stepped on these “lessons from the past,” feeling fully prepared as they aggressively entered new arenas.
These pioneers indeed made fortunes. All cotton in Shanghai’s nearby suburbs was pre-ordered, with prices tripling or quadrupling. They took boats and mule carts to the remote countryside, buying acre by acre, working hard for ten or eight days, then returning dozens of times upon resale.
Overnight wealth myths circulated everywhere. Even previously cautious observers couldn’t resist silver’s temptation, entering one after another, regretting why they hadn’t awakened earlier.
Boya Company belonged to the extremely few “timid faction.” Lin Yuchan had early canceled all cotton procurement business. Large amounts of cotton delivered from trading houses had been sold off during the bubble’s early stage. Now, company personnel were idle, sighing daily at soaring raw cotton prices.
Aunt Hong recently had no business at all, bored stiff, so she went to Yude Women’s School for classes and at least learned some numbers. Now she sprawled over a newspaper, struggling to read the rows of prices, saying with frustration: “Girl, if you’d waited another half month, cotton could sell for eighteen taels per dan! What was your selling price, twelve taels?—You lost half the profit! Too early!”
Of course, Lin Yuchan also felt pain. But she was flesh and blood, not a prophet. Her only fortune-telling advantage was limited to predicting “American unification” and “the Qing Dynasty’s end.” As for tomorrow’s cotton price movements, she wasn’t better than dice-throwing.
She decisively passed the buck: “Minguan handled all this. He must have his reasons.”
Su Minguan was new to raw cotton markets—his knowledge was sufficient, but experience-wise, he was still an outsider. From his observer’s perspective, twelve taels of silver per dan was already a rare high price. Immediately disposing of raw cotton goods after obtaining them matched his judgment.
Besides, regret was too late now. Aunt Hong sighed: “Young Master Minguan is, after all, a newcomer to cotton. Should’ve let Baoluo return from vacation to guide him—definitely could’ve waited for better selling opportunities.”
Lin Yuchan couldn’t help smiling. That former simple elder sister who wove cloth and sold fish now spoke in sophisticated terms, even saying “selling opportunities”—who knew who she’d learned from?
She replied: “This matter is Minguan’s sole responsibility. He bears his own risks—if he loses, his shares will cover it, nothing to do with our business.”
The trading houses contracted with Boya were jubilant, probably laughing in their dreams at catching such a sucker.
Lin Yuchan encountered Zheng Guanying, who looked at her sympathetically and shook his head.
At current raw cotton prices, Boya Company supplying Baoshun Trading House at the extremely cheap “seven pence per pound” meant Lin Yuchan lost at least thirty thousand taels of silver.
Zheng Guanying, mindful of compatriots, suddenly stopped and bowed politely, softly saying: “Thirty percent breach of contract penalty.”
This reminded her that even if she breached contract now, returning those forty-thousand-plus taels and paying a thirty percent penalty, then selling this cotton at higher prices later, she could still earn more.
Lin Yuchan thanked him politely: “Willing to gamble, willing to accept loss. Won’t regret signed contracts. Besides, what if cotton prices fall next year—wouldn’t I profit then?”
Zheng Guanying smiled coldly. With almost all Shanghai trading houses getting a share, how could raw cotton prices fall?
Even if demand wasn’t that high, everyone would work together, raising each other; prices couldn’t possibly drop.
In routine merchant association discussions, Lin Yuchan repeatedly reminded fellow merchants to watch cotton market risks.
“I hear European textile factories are already somewhat overproducing…”
But immediately more people refuted: “But textile factory contracts with trading houses are already signed. Textile factory losses are their business—Westerners value contracts, they’ll still buy cotton as agreed!—Alright, alright, Mrs. Lin being cautious is right, everyone appreciates it. These prices are indeed somewhat inflated, let’s be careful, sell slowly, don’t be greedy.”
Merchants would naturally privately remind themselves that bubbles always burst someday—they must escape the peak early to preserve profits.
However, where this “peak” was, no one could say.
Lin Yuchan couldn’t force everyone’s heads into cold water. If even one or two people heeded her advice, that was virtuous.
After another half month, raw cotton trading volume slowed. Everyone expected tomorrow’s prices to be higher than today’s, so they hoarded goods waiting for “opportunities.”
Only Lin Yuchan was empty-handed, without a pound of goods. She chose an auspicious day, dragging Su Minguan as bodyguard, carrying final payments from trading houses, wanting to find somewhere to store them.
A total of one hundred thirty-eight thousand taels in silver notes, all payment she’d received by selling cotton that didn’t belong to her.
But this money was just “temporarily stored” with her by the trading houses. Not a single tael could be touched.
Standard Chartered Bank’s doors were wide open, with Manager Macalley waiting at the entrance, leaning on his walking stick, hurriedly coming out to greet her.
“Miss Lin!” He greeted warmly, showing eight white teeth. “Dear Miss Lin, please wait! You look especially radiant today! Let me guess—are you here to open an account?”
News of “Boya Company dumping large amounts of cotton” had also spread in small circles. Foreign banks have been lending frequently lately, making such information very well-informed. Manager Macalley knew that Lin Yuchan must currently have large cargo payments needing storage.
Lin Yuchan slightly slowed her pace, reciting like a sutra:
“I have no husband, no father or brothers, no designated male guardian, and I don’t want to appoint the Qing government as my guardian, so I can’t open an account at your bank…”
“Wait!”
Manager Macalley condescended to run down the granite steps, face full of smiles as he detained her: “Those outdated customs you mention are all in the past! Our bank now embraces modern trends and revised rules this year. Noble ladies like you, with assets reaching certain thresholds and titles, can have partial autonomous guarantor rights. As long as the bank manager signs and takes responsibility, confirming your financial capabilities… I, I would sign for you, I one hundred percent believe in your financial management abilities…”
Lin Yuchan was slightly surprised, turning back for a look.
Standard Chartered Bank was willing to lower itself this much to attract deposits?
Recalling three years ago at this time, Manager Macalley had looked at her through two nostrils, arrogantly and protectively saying: “Ladies are beautiful, fragile, noble beings dominated by emotion. They cannot independently be responsible for their financial affairs unless under male supervision—this is full protection for ladies…”
She rolled her eyes and also showed eight teeth in a fake smile: “I do currently have large deposit needs, thank you for modifying rules for me. However…”
She patted her handbag, saying regretfully, “Though we’ve always cooperated pleasantly, I’ve already agreed with another bank. Sorry, women are just this fickle.”
She turned and entered the HSBC office in the Bund’s “Central Hotel.”
“Where’s the manager?” She asked the clerk directly. “Ask if they’ll let Chinese women open accounts. One hundred thirty-eight thousand taels of silver. If not, I’ll go to Standard Chartered Bank across the street.”
———————————
All crows under heaven are black. Learning she had over a hundred thousand taels of cash, HSBC’s first comprador Wang Huaishan took small steps, personally coming out to greet her.
“Women?… Yes, yes, this humble person will report to the boss later…”
Rules were dead, but people were alive. Years ago when a sixteen-year-old girl wanted to open an account with just a few hundred taels, anyone would think her ignorant and not worth wasting time on.
Now, the cash she wanted to deposit exceeded a hundred thousand taels, reaching the asset threshold of a small trading house. Even the Shanghai County treasury might not be able to produce so much treasury silver at once.
Though she remained a fragile, irrational lady equivalent to an underage child in terms of legal standing, who would have trouble with money?
Wang Huaishan beamed with joy: “So much silver isn’t safe in money shops—they’d immediately lend it to fraudsters. Must be entrusted to proper banks for safekeeping… Xiao Xi!”
He called over a street runner, loudly instructing: “Brew tea, buy pastries! Seat this lady!”