King of Commerce, Yeonsan-gun Ch.35
The Earners and the Spenders
Kyung-sik pondered deeply, trying to unravel the mystery behind the unexpected reluctance to cash in the Napjeoncheop (national bonds).
‘With an annual interest rate of 10%, one might expect people to wait for more interest, but... no, since the interest rates offered by the Minhoe (local councils) are higher, that doesn’t make sense.’
In fact, with the new national bonds offering higher interest, it would be logical for people to rush and exchange their old ones.
‘Could it be the exemption from labor taxes? No, the Napjeoncheop costs 1,000 Jeon each. Those who can afford to buy them wouldn’t be subjected to labor taxes. Besides, labor taxes are currently monetized and primarily target the poor. Wealthy individuals likely avoided them by paying proxies.’
Despite considering several rational reasons, Kyung-sik couldn’t find a satisfactory answer.
He decided to use the wealth of experience he had accumulated during his time in Joseon to think again.
From his experiences, Kyung-sik knew that peculiar and distinctly “Joseon-like” problems often arose.
“Could it be...?” A sudden realization struck him.
The Legacy of Public Debt
As mentioned earlier, the Napjeoncheop was essentially a modified version of the Gongmyeongcheop (a document selling honorary titles) .
The Napjeoncheop system was inspired by No Sa-shin’s proposal to introduce the Napsok Bogwanchak (a method to raise funds by selling honorary positions) .
Because officials couldn’t grasp the concept of the state owing money to its people, Kyung-sik had restructured the system into something familiar to Joseon’s people: the Gongmyeongcheop with a twist. Instead of bestowing actual positions, it offered honorary titles and future redemption.
Unlike the original Gongmyeongcheop, the Napjeoncheop had several improvements.
No Sa-shin’s initial suggestion had included selling real positions, which had garnered criticism for being tantamount to corruption. Kyung-sik’s version only offered honorary titles, removing the element of actual positions from the scheme.
The new titles, such as various degrees of honorary noble ranks, were clearly marked with a “Napjeon” prefix to distinguish them as honorary and inferior to true titles.
This was done to appease the aristocrats who would have otherwise opposed the scheme.
The benefits were also significantly reduced. While it theoretically exempted the holder from labor taxes, in Kyung-sik’s Joseon, the labor tax system was nearly defunct, rendering this benefit moot.
Similarly, the title allowed the holder to wear expensive clothing appropriate to their rank, a privilege largely ignored except when aristocrats sought to assert their status.
In the late Joseon period, the Gongmyeongcheop had indeed evolved into such a system.
As the benefits dwindled, the public became increasingly reluctant to purchase them, leading to forced sales and criticism of the system as fraudulent.
In contrast, Kyung-sik’s Napjeoncheop provided a modest 10% interest—insignificant by modern standards but still a tangible benefit.
The documents omitted the name field found in traditional Gongmyeongcheop, as the primary purpose was to create a bond rather than confer a title.
Thus, the Napjeoncheop read something like this:
“This document appoints the bearer as a Napjeon Gasan Daebu (honorary rank) and exempts them from labor taxes. Issued in the eighth year of Hongzhi, X month, X day. Redeemable after the ninth year of Hongzhi, X month, X day, at the Ministry of Finance.”
To the untrained eye, it resembled a prestigious appointment letter, albeit for a decorative, non-functional rank.
The problem began here.
Misunderstandings and Misuses
Given that the Napjeoncheop was closely modeled after the Gongmyeongcheop, its administrative details were meticulously crafted based on the original Gongmyeongcheop procedures.
The names and addresses of purchasers were recorded in detailed ledgers.
Most bonds were sold in Seoul, making it easy for officials to track down the buyers.
“Are you Lim Bok, the one who bought the Napjeoncheop last year?”
“Yes, that’s me.”
“It’s time for the government to reclaim the bond. As stipulated, we will add 10% interest and redeem it for 1,100 Jeon. Hand over the bond.”
Lim Bok let out a bitter laugh.
“Ah! I contributed my wealth to help the nation during a famine, yet the country doesn’t recognize my loyalty and sees this as just a mere 100 Jeon transaction. If I surrender this bond, my family will revert to being commoners. But if the nation rejects us, what’s the point of living?”
“Wait! Why are you drawing a sword? Stop!”
These were relatively straightforward cases, where people had purchased bonds hoping for a rise in social status.
Those who had bought bonds to speculate in the currency market, like Choi Mal-dong, were more cunning in their financial maneuvers.
“Come here!”
“What’s going on?”
“Is this the house of the commoner Choi Mal-dong? It looks grander than many aristocratic homes.”
“Ah... you’re from the authorities? What brings you here?”
“You bought a Napjeoncheop last year. It’s been a year, and it’s time to redeem it for the principal plus interest. Since you haven’t come forward, we’re here to check.”
Choi Mal-dong, who had been nervous, relaxed upon hearing this.
“Ah, the Napjeoncheop. There’s no law that says I must redeem it after a year, right?”
He was technically correct. However, Joseon was still a feudal monarchy where laws served more as guidelines.
The officials decided to conduct a search without a warrant, a practice far from the rule of law seen in modern societies.
“Your refusal is suspicious. Where is the Napjeoncheop?”
“Hey! What are you doing? Stop rummaging through my house!”
Despite finding a substantial amount of money, the officials couldn’t locate the Napjeoncheop.
Choi Mal-dong was taken to the Royal Investigation Bureau for interrogation.
Under the brutal methods of Joseon’s interrogation, Choi quickly revealed what had happened to the bond.
“I resold the Napjeoncheop to people in the countryside at a higher price...”
The buyers varied widely, from wealthy merchants and local landlords to even some servants.
In a way, the Napjeoncheop functioned as intended, circulating in a secondary market as a financial instrument.
However, most Joseon citizens didn’t understand the Napjeoncheop as a bond but rather as a prestigious appointment letter.
People familiar with financial concepts, primarily in Seoul, treated it as a bond.
Astute individuals quickly realized that people in rural areas didn’t grasp the concept of the Napjeoncheop as a bond.
Since notices about the Napjeoncheop were only posted in Seoul, Pyongyang, and Jeonju, rural people were unfamiliar with them.
Seoul residents capitalized on this by selling the Napjeoncheop at inflated prices to people in the countryside.
“Ha! Our family is now noble. With this document, who can say otherwise?”
“Hah! No more looking down on us merchants! Bow before Gasan Daebu Choi!”
“But what does ‘Napjeon Gasan Daebu’ mean? Does it mean ‘Paid Gasan Daebu’?”
“Who cares?”
Realization and Resolution
Upon learning about these misunderstandings, Kyung-sik held his head in his hands.
“Damn it, running a government in Joseon is impossible.”
Just when things seemed to be going smoothly, a hidden issue surfaced unexpectedly.
In hindsight, it seemed odd that people were so eager to buy low-interest Napjeoncheop bonds.
The people of Joseon had a different plan all along.
‘Trying to adapt existing systems to modern ideas was a mistake, wasn’t it?’
Interestingly, shares in the Wimusa (military company) sold more slowly.
For most people in Joseon, the idea of “You are now a noble” had more appeal than “We’ll give you money.”
To avoid such misunderstandings in the future, Kyung-sik decided that next year, he would issue straightforward bonds labeled plainly as “Ministry of Finance Bond, 1,000 Jeon.”
However, it was too late to change things now. The second-year issuance of the Napjeoncheop had already been distributed to the national grain markets, and many had already been sold in Seoul.
Forcing people to return the bonds now would only increase resistance, and some Napjeoncheop in the countryside might never be redeemed.
“For now, send a dispatch to the grain markets to burn any unsold Napjeoncheop. Continue calculating the interest on the already sold bonds from last year’s rate.”
Though the situation had taken an odd turn, there was no urgent need for cash if no one wanted to redeem the bonds.
Joseon had enough accounting practices to handle transactions without actual cash exchanges, similar to the direct tax deductions implemented during last year’s New Deal.
With financial institutions in place, it was possible to issue promissory notes or operate an overdraft system.
The simple interest on the Napjeoncheop was also manageable, amounting to less than 1 million Jeon annually for all issued bonds.
Kyung-sik decided to discontinue the Napjeoncheop system and planned to introduce genuine bonds the following year.
Spending the Surplus
After deducting the expenses for the military drills, Kyung-sik allocated the remaining small budget to modest projects.
One such project was expanding the Hwarinseo (relief agency) outside Gwanghuimun Gate.
They installed Ondol (heated floors) and tiled roofs, creating a decent facility, but it was still a place for the destitute to await death, leading to a shortage of willing doctors.
When Kyung-sik consulted his ministers for solutions, one suggested enlisting monks, which seemed like a reasonable idea.
Kyung-sik realized that there was a large temple in Seoul, Wongeoksa, whose monks seemed to do little but argue with Confucian scholars.
Considering they had ample land, Kyung-sik decided they could contribute to public service. He conscripted monks knowledgeable in medicine to serve at the Hwarinseo.
Kyung-sik’s approach to religion was pragmatic. Coming from a society where religious figures often engaged in volunteer work, he saw no issue in leveraging monks for public health initiatives.
In this rare instance, Kyung-sik’s views aligned with the Confucian elite, who generally sought to exploit religious institutions for state purposes.
Historically, Yeonsan-gun (Prince Yeonsan) had demolished Wongeoksa and turned it into a pleasure house, so Kyung-sik’s plan to use it for community service was relatively benevolent.
Curious about the medical traditions within Joseon Buddhism, Kyung-sik summoned No Sa-shin, the court official most knowledgeable about Buddhism.
Upon learning more, Kyung-sik was somewhat disappointed. Much of the Buddhist medicine involved reciting scriptures or following ritualistic practices from Indian or Taoist traditions, rather than practical treatments.
However, he did find some useful practices, such as the emphasis on cleanliness in monastic regulations.
‘Maybe I should produce soap after all... Though, the traditional soap-making methods using lye and oil might be too harsh for people here.’
While Kyung-sik was absorbed in these thoughts, the scholars at Seonggyungwan started making noise about No Sa-shin’s Buddhist activities, prompting Kyung-sik to assign some of them to the Hwarinseo.
Ultimately, Kyung-sik had to personally oversee the Hwarinseo to ensure it operated effectively.
Improving Public Health
Kyung-sik, lacking formal medical training, relied on his modern knowledge and common sense to make improvements.
While he possessed more knowledge than the average person, his understanding of applicable medical techniques in Joseon was limited.
Regarding traditional Korean medicine, his main contribution was avoiding treatments involving dangerous substances like mercury or scorpion venom.
Thus, his reforms focused on introducing modern hygiene practices and systemic changes.
He ordered that patients in the Hwarinseo should not be placed too closely together, maintaining a distance of about 2 meters (approximately 10 Chok in Joseon’s short measurement system).
He also mandated that patients’ bedding be changed frequently and aired out twice a day, even as the weather grew colder.
Caregivers were required to change their clothes frequently and wash them after each use.
This led to the inevitable production of soap, as traditional washing methods using urine, lye, or bean powder were inadequate.
Although Joseon was poor, they decided to use soybean oil from surplus beans due to the recent bumper harvest.
The soap was well-received, especially by the palace maids.
‘If soap production increases, it could boost the demand for oil and stabilize bean prices during bountiful years.’
In addition to soap, Kyung-sik considered using distilled soju as a disinfectant.
When he suggested to the court physicians that distilled soju could be used to clean wounds, they were skeptical.
“What ancient text supports using soju externally for wound treatment? We know it balances bodily fluids and wards off cold when consumed in moderation. How does applying it to the skin help?”
Of course, they hadn’t heard of such practices before, as it was knowledge from the future.
“I’ve tested it myself for treating acne.”
The physicians were puzzled by Kyung-sik’s claim that he had discovered this through treating his own acne.
Did the king really use soju for facial treatment? They had suspected he was just using soju as an excuse to drink while mourning, but now it seemed he applied it to his face.
Kyung-sik clarified that he had used soju to clean his skin before and after treating acne, but the doctors remained confused.
“In any case, distilled soju has cleansing properties that help prevent infection in wounds.”
Despite Kyung-sik’s attempts to simplify his explanation, he struggled to make it relatable to the Joseon physicians.
While most physicians still looked perplexed, one stepped forward.
“I believe there is merit in what the king has said. I will personally test the effects of soju on wounds.”
This was Kim Gong-jeo, a physician known for experimenting on himself whenever a new medicine arrived from China.
Recognizing the need for empirical evidence to validate his reforms, Kyung-sik assigned Kim Gong-jeo to the Hwarinseo to monitor and document the efficacy of these practices.
“Excellent. I would like you to serve as the chief physician at the Hwarinseo. Observe the patients and document the outcomes of these measures.”
Additionally, Kyung-sik inquired if there were any medicines suitable for treating patients at the Hwarinseo.
“For those suffering from Daepungchang (Hansen’s disease), Tangyak (Chinese medicines) like Hojama can be effective.”
‘What? How could they treat leprosy with ancient methods? Isn’t it a bacterial disease that requires antibiotics?’
“What is Hojama?”
“It’s a herb brought from China, known for its seeds, which are brewed and consumed as medicine. It’s particularly effective for treating skin conditions caused by wind and dampness.”
This marked the first time Kyung-sik had truly experienced a moment of “I totally understand (not really).”
Nevertheless, it seemed the medicine might be ineffective for treating leprosy.
Regardless of the specifics, if the treatment didn’t cure leprosy, it wasn’t very useful.
Upon further explanation, it became apparent that the herb was used broadly for various skin conditions.
Medical practices in this era were simplistic: treating all skin ailments with the same medicine.
“Alright, let me see this Hojama.”
The physicians brought out something that Kyung-sik recognized from his past.
His mother had once bought a health food labeled as such, and he had eaten it as a snack.
“This is flaxseed!”
In the West, flaxseed was known for producing linen. (*1)
“Do we cultivate this herb locally, or is it only imported from China?”
“We cultivate a small amount in the medical fields, as it’s challenging to import it regularly.”
“And do we use the flax stalks for making cloth, like hemp fabric?”
The physicians exchanged puzzled glances, questioning the king’s logic.
Kyung-sik also found it strange.
Why didn’t they use flax for making fabric when it was similar to hemp and known to be cultivated locally?
It seemed this was an oversight, as even China didn’t appear to use flax for cloth production.
This was a missed opportunity. Flax was a versatile crop that could thrive almost anywhere and produced better quality fabric than hemp. It could be used for making armor, paper, and even soap.
In the process of setting up relief centers for the poor, Kyung-sik realized he had uncovered a wealth of untapped potential.
Notes:
In historical contexts, Gongmyeongcheop was a document granting honorary titles in exchange for money. These documents were used to raise funds during emergencies but gradually evolved into mere ceremonial titles with little to no real benefit. Kyung-sik’s Napjeoncheop represents a modern twist on this system, offering bonds instead of titles.
Buddhist monks in Korea traditionally played significant roles in public health and medicine, especially during times of crisis. Their contributions were often driven by religious duty and communal service, aligning with Kyung-sik’s practical use of their skills for public welfare.
In the Annals of the Joseon Dynasty, there are records of rulers and nobles using soju (a traditional Korean distilled spirit) for medicinal purposes, reflecting its perceived health benefits.
Flax, known as Hojama in this context, is cultivated for its seeds and fibers. It has been used historically for its nutritional and medicinal properties, as well as for producing linen fabric.
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