Chapter Thirty-Eight: Resisting the Sheep
"All state-run enterprises are like this, which one doesn't take over a decade from start to completion and production?! Private factories that collect shares don't have such problems, after all, delaying for a day is the shareholders' own loss. The earlier they go into production, the sooner they see results. Under the drive of financial interests, their eyes will be wide open, who wants to make money here can hardly deceive them." Kou Qing said disdainfully.
"The child also thinks so, with the help of shareholders, not only can we recruit good people to run the factory, but also speed up the construction and production of the factory. After all, the capital invested in the textile mill mainly comes from wealthy merchants or even officials in Guangdong Province. With their help, they will pay attention to the difficulties encountered in building the factory and must make every effort to help the child build the factory for the sake of money and benefits. Although it is better to raise more capital, the child still wants to control the textile mill, so the way to recruit is a very important issue." Tan Yanqing said with a smile.
"In my humble opinion, either way of raising capital is not bad. If I had to say which one gets things done the fastest, it would be the first method. After all, it's a matter of credit. My reputation as Governor-General of the two Guangs is still worth something. If local merchants don't agree, I have some savings set aside that might as well be put to use and let you accomplish more. Listening to your discussions over this period of time, I've gained some understanding of Western-style industries. It's possible that from Zeng Guofan to Li Hongzhang and Zhang Zhidong, the path they took was quite wrong. Perhaps commercial management is not a bad approach after all!" Tan Zhonglin said with a smile.
These days, Tan Yankai and his staff have been analyzing the pros and cons of the Westernization Group's practices over the decades. Tan Zhonglin is naturally very concerned about this matter. At least because of Tan Yankai's "Exhortation to Study", Tan Zhonglin has gradually transformed from slightly rejecting Westernization to a stance of "supporting but not participating" in the Qing court's political position. It wasn't until recently, due to Tan Yankai considering his family's standpoint, that he must "accumulate wealth and leave room for the future", which led to further changes in Tan Zhonglin's political leanings.
The most important reason is that what Tan Yanqing is doing now is within the control range of Tan Zhonglin. If there are any mistakes, it's not a big deal to lose some money, and it won't hurt his reputation or affect his foundation in officialdom. Moreover, he is old, but his son is very young, and in politics, he will eventually have to establish his own foundation. Looking at the current officialdom, those who hold real power, such as Li Hongzhang and Zhang Zhidong, are all leaders of the Westernization Movement. Tan Zhonglin may be old, but his mind is clear - from Zeng Guofan's time to now, those who have become powerful in officialdom either have military achievements or control a large number of Western-style industries. He also sees through that in this era of unprecedented change, Western products will eventually replace traditional Chinese goods, and for the sake of his family and son's future, developing Western-style industries is not only about accumulating wealth but also about building up his son's political capital.
The news of the recruitment of shares by the Governor's son to set up a textile mill in Guangzhou spread like wildfire within two or three days. Tan Yanqing would invest 500,000 taels of silver as initial start-up capital and hold 51% of the shares. People from all walks of life in Guangdong could participate in investing and buying shares to co-found the factory. The wealthy merchants of Guangzhou responded enthusiastically to this news. As one of China's earliest open cities, Guangzhou had a much longer history than Shanghai. Its businessmen were no strangers to foreign industries, and they had long wanted to invest in the textile industry. However, due to the "ten-year patent" privilege enjoyed by the Shanghai Machine Weaving Bureau, anyone who wanted to enter this industry would become an affiliate of the Shanghai Machine Weaving Bureau. The Guangdong merchants had been extremely dissatisfied with this for a long time.
Now, Tan Yankai's organization of a weaving factory has given them an excellent opportunity. Tan Yankai has already stated that the Beiyang Minister Li Hongzhang has sent a letter confirming their qualifications for running the factory and enjoying the privileges of the Shanghai Machine Weaving Bureau. The cloth and yarn produced will enjoy the same tax rate as imported goods when entering the interior, with half of the customs duty and exemption from likin. Guangzhou merchants naturally understand China's demand for cloth, now they have formal guarantees, and it is their most familiar business, so they actively subscribed to shares. Due to the high enthusiasm for subscribing to the weaving factory's shares, Tan Yankai and his staff had to suspend subscriptions, verify the subscriber's financial strength, register them, and finally select the best partners to co-organize the weaving factory.
Of course, the wealthy businessmen in Guangzhou who can be included in Tan's name list must subscribe to a capital of more than 10,000 taels. Otherwise, if there are too many subscribers, it will inevitably lead to an oversized board of directors, which is not conducive to decision-making. After the textile mill has been built and put into production for some time, regular small-denomination shares will be issued to further expand the capital and raise more development funds, which has also been understood and responded by the wealthy businessmen in Guangdong.
After ten days of operation, Tan Yankai and his staff finally determined the cooperative candidates. There were twenty-eight Guangdong merchants who eventually became members of the textile factory's board of directors. The total amount of their subscribed capital plus Tan Yankai's was as much as 1.7 million taels. They all unanimously agreed that after the textile factory had been in operation for one year, Tan Yankai would inject an additional 200,000 taels into the capital and ultimately obtain a controlling stake of 51%.
In addition to Tan Yanqing, the 29-member board of directors determined the various chapters for building the factory after several days of discussion, including the proportionate dilution of shares held by the directors when the textile mill operates well and needs to expand its capital and raise additional share capital. Of course, the directors have the right to give priority to purchasing their own proportion of shares. With this simple board of directors, the "Resisting Sheep" textile factory officially began operations, and the weaving and spinning machinery was entrusted to Tan Yanqing by the board of directors, with the board only having supervisory power.
The name of the textile mill, without a doubt, came from Tan Yanqing's "plagiarism", and even the trademark was not spared, directly quoting the image of two sheep resisting each other. At the board meeting, Tan Yanqing only discovered that this trademark and factory name were so well received, the image was so apt - they set up the textile mill to compete with foreigners, to snatch profits from foreigners' hands, and even the old man highly praised this "creativity".
"Later generations may forget this symbol, but in this era, it's not just about making money, but also establishing a national symbol while making money, which can also serve to awaken national consciousness from another angle!" Tan Yanxing thought excitedly after his proposal was passed by the board of directors.
It's not a short time since he came to this era, but Tan Yanqing has never been so excited - "Diyang" is a legendary name, anyone who knows something about modern national industry will know this name, and he never thought that the symbol of this legend would change because of him.
"Perhaps I can do more and better, today is a witness, from now on I will work harder to create conditions for change, let change be more, towards the direction I hope for..." Tan Yanqin thought to herself, clenching her fists tightly.
It was perhaps a joke played by history that when the first batch of 580 looms and 50,000 spindles ordered from Britain and the US were being installed and tested in Guangzhou, news suddenly arrived in Guangzhou - on September 10 (October 19), the Shanghai Machine Weaving Bureau, which was preparing for a major expansion, was destroyed by a sudden fire, with extremely heavy losses, conservatively estimated at over one million taels!
Tang Baowen in Tianjin learned of the news by telegram and immediately wired Tan Yankai in Guangzhou to report the news. Tan did not delay, as the news from Shanghai had not yet reached Guangdong, he had to convene a board meeting before the news arrived to boost the morale of the directors of the Rongsheng Weaving Factory, so although it was already late at night, he sent someone to summon the board members to meet in the Mu You Hall of the Governor's Office of Guangdong and Guangxi.
"Governor Li Hongzhang of Tianjin has expressed his views on this matter as follows: 'Cotton yarn is a daily necessity for the people, and the machine-spun yarn is light, soft, and even in texture, and its value is especially cheap. Therefore, people from far and near are competing to buy it... If we can sell Chinese cotton, give life to Chinese laborers, and allow Chinese merchants to share the profits, this matter cannot be stopped, nor can it be delayed!' " Tan Yankai read out the telegram, and after finishing reading it, he also distributed the telegram among the directors for them to pass around and take a look.
At this time, Li Hongzhang, as the Qing court's most prominent northern official, had a crucial attitude. Tang Bingwen sent a telegram about Li Hongzhang's attitude to firm up Tan Yankai's determination to set up a factory, because Li Hongzhang urgently needed someone to come forward and develop the textile industry. Every year, importing 50 million taels of silver worth of textiles from Britain had become a heart disease for Li Hongzhang. Zhang Zhidong, who was also a leader in the Westernization Movement, shared the same feeling, but his understanding was not as profound. His main purpose in setting up a textile factory was still to profit from it and use this profit to fill the gap left by the steel factory.
"Now the cotton yarn has soared to seventy taels, no matter what Shanghai's machine weaving factory is like, we here absolutely cannot stop, not only can't stop, but also need to speed up, and even expand the scale! If a Shanghai factory burns down, the already high price of cloth and cotton yarn will rise again in the short term. This is our best opportunity to show off!" A director stood up and said loudly.
"How many of the spinning and weaving machines we ordered from England and America have not arrived yet? How much silver money is left now? If possible, please order the spinning machine first, at least the price of this cotton yarn has risen to a heart-stopping level!"
"Will Shanghai be rebuilt on that side?"
"Nonsense! Of course it's going to be rebuilt. This telegram clearly states the intention of the Beiyang ministers in black and white, so rebuilding is a certainty!"
………
Tan Yanqing did not expect that what he originally wanted to do was to encourage these businessmen to stand firm, but unexpectedly, after the Shanghai Weaving Bureau was burned down, the directors not only didn't show any worry, but instead loudly advocated for expanding production and re-ordering looms and spinning machines from Britain and the United States. This way, they could fill the gap left by the Shanghai Weaving Bureau, as if the fire in Shanghai had become a holiday for them.
However, the Shanghai Machine Weaving Bureau was destroyed by a big fire, which woke up Tan Yankai - in his past life memories, the Westernization Movement's industrial enterprises almost all encountered big fires or explosions, which of course had a lot to do with the operators, but the fire prevention and explosion-proof measures were far from enough.
"Gentlemen of the board, I think that expanding the scale can be put on hold for now, but this fire-fighting equipment is absolutely indispensable. Even if we build a larger textile factory, it won't withstand a single fire. Fortunately, we chose a location by the river, making it very convenient to fetch water to extinguish fires. However, apart from establishing strict fire prevention and explosion-proof regulations, I suggest considering purchasing one or two fire trucks. This way, in case of an emergency, we can respond quickly and put out the fire. Of course, we must also provide rigorous training for our workers, ensuring safety from the very beginning!" Tan Yanjin banged on the table, waiting for the directors to quiet down before speaking loudly.
"Considering the thoroughness of the group's planning, this fire-fighting equipment is indispensable. Anyway, a million taels of silver have already been spent, so it doesn't matter if we spend a few thousand more to add some fire-fighting equipment. If heaven itself were to oppose us and a big fire were to break out, at least we wouldn't end up like the Shanghai Weaving Bureau!" All the directors nodded in agreement.
"This matter of equipping the fire equipment and training workers is settled first, then it's a question of equipping the devices and expanding production scale. Each director can vote by show of hands, we have twenty-nine people in total, minority follows majority, of course also depends on the amount of capital." Tan Yanqing said.
"Mr. Tan, I have another question to ask!" said a director.
"Please, this is the board of directors. As the one with the least seniority, you can just call me by my courtesy name. The decisions made here will also affect the profits you will gain from this textile factory in the future. I believe that as long as it's something everyone has proposed, it's all coming from a good intention, and we'll all take it seriously!" Tan Yanqin said with a smile, and all the directors nodded in approval after hearing him. Although the social atmosphere of this era is more open than before, the tradition of scholars not speaking of personal gain has been passed down for thousands of years and cannot be changed in just ten or twenty years. Someone like Chen Fei, who was originally a scholar and then learned foreign languages and entered a foreign firm, is truly a rare talent.
"Excuse me, Gong An, after the big fire at the Shanghai Machine Weaving Bureau, will Governor Li of Beiyang rebuild the weaving bureau? And are the preferential terms previously promised to us still valid? The most crucial point is whether the government will participate in our weaving factory?"
Tan Yanqing smiled slightly and stood up, saying: "After the Shanghai Machine Weaving Bureau caught fire, Tang Bowen in Tianjin was able to send a telegram to me at the first time after learning the news. Do you think this is possible for someone who has only met once? My only explanation is that this telegram can be said to have been sent by Mr. Li! Mr. Li was afraid that we would lose confidence and give up after learning the news, so he used Tang Bowen's hand to firm our determination to set up a factory. Therefore, I think the favorable policy that has been decided will not change, and this also involves the prestige of the Beiyang government... In my opinion, the Shanghai Weaving Factory will definitely be rebuilt. It took eleven years to prepare, and it was reduced to ashes in just four years. Who can swallow this?"
"Of course, everyone is most concerned about whether the government will intervene. As for this issue, you can all rest assured. If it were a government-supervised business, I would have suggested that my father do so long ago. But what are we doing now? To put it bluntly, we're making money, grabbing market share from foreigners in China's textile industry, competing with them in the marketplace for profit, not running a government office! You are all senior figures in the business world and naturally understand that if the imperial court were to get involved, it would be extremely unfavorable for merchants. In Europe and America, the government only controls industries related to national security, such as arms and munitions, while purely civilian industries like textiles are not only non-interventionist but also strongly supported with favorable policies. Therefore, I resolutely oppose government intervention in our textile mill... Of course, if the government were to forcibly intervene, I would not hold back any of you, and I would buy back your shares at a price 20% higher than your initial investment. Now we can sign an agreement, put it in black and white, and establish this charter, so that later on, juniors like myself won't be embarrassed to meet with seniors like yourselves in Guangzhou!" Tan Yanke said with a smile.
All the directors burst out laughing after hearing Tan Yanqian's words: "What Zhao An said is really true!"
Although at the critical moment of building a factory, such an unfavorable message suddenly came, Rongxian Woolen Mill continued to construct with ease. All equipment was intensively installed and debugged, and another 300,000 taels of funds were raised to purchase textile equipment. The previously ordered equipment also arrived in Guangzhou from overseas for installation.
In just half a month, 580 looms and 50,000 spindles were installed and debugged. After the grand opening ceremony at the end of September, the Risheng Spinning Mill officially started operation. Due to the Shanghai Weaving Bureau being destroyed by fire, the largest textile enterprise in China is now the Hubei Weaving Bureau established by Zhang Zhidong, which has nearly 1,000 looms and 30,000 spindles. The Risheng Spinning Mill will be second on the list, with a number of spindles far exceeding that of the Hubei Weaving Bureau.
