The air in the small Western-style building was thick with tension. Lin Yuchan struggled to play tai chi with the big shots.
Xu Run and Zheng Guanying—one playing the good cop, one the bad cop, one a smiling tiger, the other openly displeased—sang their duet of praise and criticism with a single theme: Mrs. Lin, dear sister, about that advance supply contract Baoshun signed with you initially, could we possibly back out of it?
“Chunfu went to Suzhou to take up his post? What a pity, we missed the chance to see him off. Back when we both worked as runners at Baoshun, and being fellow townsmen too, we got along so well. Later, when he founded Boya, I even attended the opening ceremony.” Xu Run smiled broadly, first recounting eight hundred words of revolutionary history, then attentively poured tea for Rong Hong’s successor’s little sister. “If he were still here, he’d probably write off this contract with a stroke of the pen. After all, given the current market price of cotton cloth… hehe… nobody expected this back then… Now the inventory is piling up too much, you see, I haven’t slept for three days already…”
Zheng Guanying sat to one side without speaking, only picking preserved plums with a toothpick, then suddenly interjected coldly: “Making money like this, how shameless.”
Xu Run’s expression changed: “Little Zheng, what kind of talk is that?—Sister, don’t mind him, he’s been scolded by the foreign boss for several days now, so he’s in a bad mood. Of course, we won’t make you return all forty-four thousand taels intact, that would make us scoundrels, wouldn’t it? We’ll pay penalty fees, twenty percent, thirty percent, we can negotiate. But asking Baoshun to buy cotton cloth at seven pence per pound—if word of this gets out, it’ll be the laughingstock of all Shanghai. Have you thought about what others will think of your Boya Company? Will anyone dare cooperate with you in the future? Ah, if I had been there initially, I definitely would have advised against it…”
Last time, when Lin Yuchan and Su Minguan returned from Tianjin to Shanghai aboard the Luna, Xu Run had secured them a private cabin, sparing Lin Yuchan the embarrassment of being surrounded and harassed in third class, spending the night among the masses like a wolf among sheep. Xu Run felt he had done her a favor, so he spoke quite familiarly. Lin Yuchan was truly finding it hard to fend him off.
By the end of his speech, he made her feel like she was a scheming merchant deliberately harvesting people’s wealth, that Baoshun Trading House’s employees had all been denied their year-end bonuses because of her, and might not even receive their full salaries. Everyone had elderly parents above and young children below—how could they survive?
Lin Yuchan made up her mind to respond to change with consistency. If all else failed, she’d just play deaf. Anyway, the money was at HSBC. As long as these two didn’t drug her, she’d root herself to this sofa today and not leave!
She didn’t care what others thought of her. She had strictly abided by the contract without playing any tricks. If she broke the contract with Baoshun, whose reputation would be more damaged was still uncertain.
“When the contract was signed initially, it was between Manager Dent and Minguan. Now, if we want to change the contract, at least the two of them should renegotiate, right?” She blinked and leaned forward, feigning innocence. “Although this deal was Minguan’s idea and I didn’t manage it much, I’m now Minguan’s boss, so it’s not wrong to approach me. But Manager Dent either can’t spare the time or what…”
A flash of displeasure crossed Xu Run’s face. How could a foreigner possibly condescend to visit a Chinese merchant?
Lin Yuchan’s mind flickered slightly, catching a glimpse of his weakness from Xu Run’s eyes.
No matter how shrewd, affable, well-connected, or skilled at making money he was… in the foreigners’ eyes, he was nothing more than an errand boy.
Lin Yuchan thought for a moment, then added: “He sent you two to negotiate. If it works out, he loses less money; if it doesn’t, it’s all your fault. You both know clearly how much money Baoshun has made from Chinese hands these past years. He can’t win everything when he’s ahead and renege when he loses, can he? You’re both employees—losing this sum isn’t shameful.”
Xu Run: “…What kind of talk is that, sister? Have mercy, you have keen eyes, you plan strategically, you knew cotton cloth would be slow to sell, you must give your compatriots a way to live! As the saying goes, always leave room for future meetings…”
Knowing that her “prediction of cotton cloth’s poor sales” was most likely a lucky guess, he couldn’t mention luck now, and patiently praised her as a female Zhuge Liang; knowing she was trying to sow discord between him and his boss, he couldn’t expose it either, only repeatedly signaling Zheng Guanying to play the bad cop.
But Zheng Guanying ignored him, instead standing up and walking over to examine the tea leaves on the shelves, hands behind his back.
Xu Run: “Little Zheng!”
Zheng Guanying suddenly said out of nowhere: “Tea prices aren’t falling.”
Lin Yuchan immediately picked up the thread: “Exactly, Baoshun Trading House has so many businesses, they can’t all be profitable, right? This year’s tea can at least turn a profit, so what’s losing a bit on cotton? We Cantonese also say, sugarcane isn’t sweet at both ends, if you eat salted fish, you must endure thirst. If Manager Dent puts you two over the fire because of this small loss, that’s too unreasonable.”
More sowing discord!
Xu Run smiled awkwardly, about to say something, when Zheng Guanying suddenly swept back with his sleeves, his pale, exhausted face showing a trace of anger.
“Working for foreigners, being ordered around, what’s the point of making a few coins? If they dock our bonuses again this time, I’m quitting. Brother Xu, what about you?”
Both Xu Run and Lin Yuchan stared in shock.
Lin Yuchan recalled that since she’d known Zheng Guanying, this was the longest sentence he’d ever spoken…
Zheng Guanying looked at her, still with that cold, aloof, punchable expression, asking her word by word: “Next year, what will make money? Any insights?”
Compared to the adaptable Jardine Matheson, the internally feuding Baoshun, Sassoon & Co.’s strategy was to tough it out—weather the bottom of cotton prices, and perhaps in a few months, they’d see light at the end of the tunnel!
The Sassoon manager was probably busy cleaning up the mess and never invited Lin Yuchan to play billiards again.
However, Lin Yuchan also kept her guard up. During this period, she rarely went out alone, and even less frequently visited the cotton cloth market, to avoid awkward encounters with acquaintances.
Only once, when she went to the tea house workshop to check the steam engine efficiency, on the return trip she called for a carriage. As soon as she got on, she felt the route was wrong—the driver was taking her toward a remote area.
In broad daylight, normally, Lin Yuchan wouldn’t have been so alert. After all, the concession was under construction everywhere, with “Private Road, No Trespassing” signs all over. Some drivers had expired licenses and had to avoid the patrol, so taking alternate routes was normal.
But she knew that recently she’d been blocking people’s financial paths, so she’d rather be cautious and not let her guard down.
“Where are we going?” she immediately asked.
The driver seemed not to hear.
“This isn’t the way to Saigon Road!” Lin Yuchan raised her voice. “Turn left!”
The driver still didn’t explain.
“If you don’t stop, I’ll jump out!”
The driver turned back, smiled maliciously, sped up, and turned into a deserted alley.
Lin Yuchan immediately drew her gun, leaning half her body out of the carriage, threatening fiercely: “Stop! One more step and I’ll shoot you! I have connections at the police station!”
Seeing this woman carry a gun, the driver wilted, muttering curses—”crazy woman,” “lunatic,” “dragging me into eight generations of bad luck”…
Reluctantly following her directions, he turned around and got back on the main road. Lin Yuchan had him stop directly at Shiliupu Wharf.
The Yixing Society had disbanded, but Lin Yuchan carefully remembered where each of the key brothers was making their living. Seeing Shi Peng sweating as he unloaded cargo at the wharf, she immediately waved him over.
Shi Peng dragged the driver to the back. Ten minutes later, the driver was crying and confessing, saying a gang of ruffians had promised to pay him two silver dollars to take this young lady to a remote place. He truly didn’t know what they planned to do. The driver didn’t dare offend the hoodlums and could only comply. Please spare his life… He poured out a pitiful litany of excuses.
With Yixing’s headquarters gone, the Hongmen brothers had lost their backbone and were each scraping by on their own, while various small-time thugs took advantage of the vacuum. Shi Peng’s face turned green with anger.
“Miss Lin, do you have any enemies recently? What should we do with this driver?”
Lin Yuchan had a vague suspicion in her heart. But the driver was purely motivated by money, hadn’t received those two dollars in payment, and didn’t know the background of those ruffians. Even if sent to the authorities, nothing would come of it.
In these extraordinary times, she didn’t dare cause more trouble. She had Shi Peng make a fierce face and thoroughly intimidate the driver, guaranteeing he wouldn’t dare pick up women for the next month.
That evening, when Su Minguan returned and learned of this incident, he firmly ordered her:
“Don’t go out for the next few days. I’ll handle all related business.”
He rarely restricted her movements. Lin Yuchan looked at his serious expression and was certain he wasn’t joking.
“I have a gun…” she protested somewhat.
“A’Mei, you have principles, but some people don’t.” Su Minguan stroked her hair. “Sassoon & Co. has always been prudent in their dealings, but they’ve expanded too rapidly in recent years and hired quite a few unreliable people.”
Lin Yuchan was being coaxed like an ignorant little girl. To show her protest, she stood on tiptoe and thoroughly tousled his head from all angles twenty-one times.
But she still took his advice to heart. Who told her that physical strength was her weakness—she had to accept it. Doing business in this era wasn’t just about brains, but also survival wisdom.
Today’s Shanghai wasn’t the Shanghai of the twenty-first century. Economic turmoil led to frequent crimes. Even when Su Minguan went out alone to handle business in remote areas, she felt somewhat worried.
Fortunately, a couple of days later, Su Minguan mentioned casually that he’d found out—the local ruffians were hired by a comprador under Sassoon, wanting to “share the master’s worries” by scaring Lin Yuchan into refunding the cotton payments.
As for the foreigners, they claimed ignorance, though who knew if they’d tacitly approved.
Su Minguan went directly to the trading house and gave them a thorough tongue-lashing. Sassoon & Co., suffering heavy losses and desperate for reasons to lay people off, immediately reprimanded the comprador and threw him out, not even returning his employment security deposit.
Greed breeds madness. Friends who were usually well-dressed and called each other brothers could turn around and strip you to the bone if driven by selfish motives.
Lin Yuchan was also a woman who’d seen the world. She didn’t feel particularly frightened, just sneered mockingly: “Sore losers.”
More and more people couldn’t handle losing. The price of raw cotton cloth, which had remained around two taels per dan for several months, suddenly and quietly dropped to one and a half taels on an unremarkable day.
Then came one tael, nine qian, eight qian…
Even the common people were stunned. This price couldn’t even cover the cost of growing cotton—the more they sold, the more they lost!
Local government officials finally belatedly intervened. Bold officials took out their limited treasury silver, organized merchant assemblies, and called on locals to buy cotton cloth to stabilize prices, lest bankrupt merchants cause civil unrest.
But when the raging flames of capital came burning, these few counties’ and townships’ silver reserves were like trying to put out a cart fire with a cup of water.
Moreover, the cotton speculation fever of recent years had swept the Yangtze River valley. Trading houses had bribed local officials through compradors to encourage farmers to plant cotton on a large scale. Farmers around Shanghai had almost all cut down their rice crops and switched to cotton. China’s cotton production had rapidly soared from self-sufficiency a few years ago to a level of “supplying all of Europe and marching toward the world.”
Now, no one wanted to buy this cotton—orders had completely dried up. Clusters of white cotton bloomed and smiled in the fields, unharvested, until they drooped and withered, rotting away.
Wooden cotton gins rotted at village entrances, dismantled by helpless villagers for firewood.
The supply-demand relationship was extremely distorted. Unless another Europe could be created, no one could solve the problem.
In distant Europe, the most severe financial crisis in history was brewing. War-generated demand rapidly shrank, the global textile industry’s carnival had ended, and countless banks and trading houses were battered and bloody by bad debts. When the Bank of England refused to provide bailout funds to the financially troubled Gurney Company, causing the latter’s bankruptcy, an even greater avalanche began.
The entire British financial market experienced large-scale panic—bank runs, stock market crashes. A circulating storm that began on the other side of the ocean swept around the globe, leaving countless ruins in its wake, finally returning to the center of the Industrial Revolution.
In the fourth month of the fifth year of Emperor Tongzhi’s reign, the earliest foreign bank to enter China’s interior—the Commercial Bank of India—closed its doors. Its London headquarters had filed for bankruptcy a month earlier.
Subsequently, the Mumbai-based Bank of India collapsed, the Central Bank of Western India collapsed, the Asiatic Banking Corporation—pioneer in issuing silver notes—saw its stock plummet from 25 pounds to 2 pounds before collapsing…
The British-Indian joint Agra and Masterman’s Bank, which had been massively increasing capital and expanding shares at the beginning of the year, suddenly had its capital chain break and declared bankruptcy because it couldn’t repay a mere 1,800 pounds in debt…
Concession residents watched with confused excitement as dejected British and Indian people—who just the day before had been drinking, dancing, and making fun of Chinese people—now carried boxes of documents and letters, walking heavily out of empty Western buildings with expressions like homeless dogs.
Then more Chinese people emerged from the buildings—compradors, interpreters, translators, runners, apprentices… Some compradors jumped into the Huangpu River right after leaving, only to be rescued by a crowd of helping hands.
Because the relationship between compradors and trading houses wasn’t purely employment but partnership with shared risks and profits, when trading houses collapsed, many compradors went bankrupt too, with all assets mortgaged to the trading houses completely vaporized—not a penny could be taken out.
As for small and medium-sized trading houses and Chinese foreign trade companies, countless suffered losses and bankruptcies. The more entangled they were with foreign capital, the more severely they bled when dragged down.
The ancient Chinese nation, forcibly drawn into the international trade whirlpool, watched helplessly as it bled continuously but could never find the knife that was cutting its flesh.
Only then did people suddenly realize that the earlier real estate bubble had been merely a prelude.
Fortunately, the newly established Hong Kong-based HSBC Bank, having not participated in large-scale speculation, weathered the crisis safely. Not only did business continue as usual, but it also provided the cash-strapped Hong Kong British government with an emergency loan of 100,000 Hong Kong dollars, securing the right to issue Hong Kong currency. That year’s dividend rate reached 10%, making it a winner standing tall in the storm.
The raw cotton custody contract between Boya Company and Sassoon & Co. finally expired. Lin Yuchan spent 3,200 taels of silver to buy back 4,000 dan of quality raw cotton at eight qian per dan, sending it to Sassoon & Co.—no one received it, so it was just piled in the courtyard. The Sassoon manager had already boarded a ship to Mumbai, reportedly to avoid debts.
A year earlier, Lin Yuchan had immediately sold these 4,000 dan of raw cotton for 35,000 taels. Adding the storage lease deposit of 500 taels, Lin Yuchan magnanimously waived the remaining 500 taels. There was no point trying to collect it anyway.
Net profit from this transaction: 32,300 taels of silver.
Then came repaying Jardine Matheson’s 6,000 dan of raw cotton. Payment of 50,000 taels, plus warehouse lease deposit of 500 taels, minus the total raw cotton price of 4,800 taels, net profit: 45,700 taels.
“I won’t play like this again,” Lin Yuchan pressed her chest, feeling her heart pounding as she watched Su Minguan enter these amounts into the books. She set firm principles for herself: “Scared me to death.”
This was fortunate that her predictions were accurate. Otherwise, if raw cotton prices hadn’t crashed through the floor, she’d probably be carrying heavy loads at the wharf by now.
Or one careless move, and because she’d blocked people’s financial paths, she could have been schemed against without a trace.
Or if she’d chosen the wrong bank, all her efforts would have been in vain, everything lost…
Doing business in the nineteenth century carried completely incomparable risks compared to modern times. Who could have imagined that capital would flee at will, banks would collapse overnight, and of the fourteen foreign banks operating in Shanghai’s concession, only five would remain?
She just wanted to do business, not risk her life. This money wasn’t earned comfortably.
However, it was still a rare life experience. Once was enough.
Su Minguan licked his brush on the inkstone, looking at her with slight amusement.
“Told you not to play billiards.”
She was the one who insisted on getting involved initially. She was also the one trembling with lingering fear today. This girl was naturally unsuited for speculative wealth—she excelled at steady, methodical progress.
Finally came Baoshun Trading House’s futures contract came. Five thousand dan of cotton, which had initially brought in 44,000 taels in payment, could now be bought for just 4,000 taels. If she were unscrupulous enough, she could still demand the remaining 11,000 taels from Baoshun.
“I doubt they could pay it anyway.” Lin Yuchan beamed with joy, generously waiving the foreigners’ debt. “Even if they had money, they wouldn’t willingly give it to me.”
“Net profit from this transaction: 40,000 taels.”
Su Minguan calculated with apparent calm, but the pen tip recording the accounts couldn’t stop trembling slightly on the paper.
“Wait.”
Lin Yuchan recalled the scene of the two major compradors singing their duet in her Western building, keeping a careful eye out before letting him record it.
“Eli Trading House, Brunswick Trading House—those small trading houses that signed small futures contracts with you initially, why haven’t we heard from them lately?”
Su Minguan answered without hesitation, laughing: “They went bankrupt long ago. Everyone fled back to Europe. Can’t collect the final payments—infuriating.”
Lin Yuchan’s heart stirred. “Let’s go take a look at Baoshun first.”
Outside the Baoshun Trading House building was chaos. Some people were queuing to register for something, while more gathered to watch the excitement.
Lin Yuchan was shocked to discover countless laborers carrying things out—Western furniture, carpets, oil paintings, bicycles, violins…
The golden sign reading “Dent & Co.” was taken down and casually thrown into a cart, mixed with a pile of scrap metal.
“This whole cart, ten taels of silver, one price! Whoever wants it takes it!”
A servant shouted hoarsely.
Su Minguan suddenly grabbed Lin Yuchan’s arm and ran.
“Hey…”
He ran frantically without regard for appearances, with two patrol officers panting behind, unable to catch up.
“Hey, stop! Have you no shame? Men and women in the street… huff huff…”
They ran to Baoshun Trading House’s commercial wharf in Hongkou. The wharf entrance was chained shut, with a sign reading “Liquidation in Progress.”
This trading house that had started with smuggling, struck gold with opium trade, was once the premier British firm in the Far East, owned the largest speedboats in all of Asia, and had been a pioneer of old-school capitalism, was now forced to close due to “extremely poor business.”
The wharf was crowded, mostly with Westerners in suits who whispered among themselves with the air of spectators.
“In times like these, who has money to buy ships… Most will probably fail to sell…”
“The Hong Kong branch closed, too? Tsk, that building was nice, but now there’s no money…”
“No legal disputes? That’s good…”
Boxed loads of inferior opium, tea, and cotton were piled in the open space, all numbered. Most was cotton—bundle after bundle of huge bales being pushed around.
There were also more than ten steamships, lighters, and barges of various sizes, quietly moored at numbered berths. These sea beasts that had once dominated China’s waters now looked submissive, bound by thick ropes, swaying with the waves like sleeping beauties.
Wooden signs showed each ship’s specifications and starting bid prices.
Water Sprite, Queen, Valkyrie…
The Westerner presiding over the bankruptcy auction loudly announced that Baoshun Trading House’s creditors—those who had bought company bonds, those owed payments, and employees owed wages—enjoyed priority preferential bidding rights.
Boya Company, holding Baoshun’s IOU for 11,000 taels of silver, suddenly became one of the largest creditors.
Su Minguan suddenly turned, his eyes bright.
“Miss Lin—withdrawal. Resignation. Settlement.”
Lin Yuchan was caught off guard. Without the account books on her, she could only rely on her brain to recall forcefully. After closing her eyes for a few seconds, she pulled out her HSBC checkbook from her chest, then looked around and found the day’s exchange rate table on a cardboard sign.
Su Minguan quietly reminded: “Don’t forget the 9-1 split.”
She nodded. She’d long decided all this money belonged to Su Minguan. She wouldn’t begrudge him a cent.
But fairly speaking, she should indeed earn some “hardship pay.” It wasn’t her style to accept favors for nothing.
She found a stone pier to use as a desk, picked up a stone to calculate by hand, then drew out her fountain pen, carefully writing a string of numbers on the checkbook.
39,500 pounds.
According to today’s exchange rate, equivalent to 116,900 taels of silver. All from memory and hand calculation, erring on the generous side.
She smiled as she handed out the check.
“The interest is a bit modest—my apologies.”