Joseon Military Officer, Establishing Balhae - Chapter 319



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Episode 319

Secret Negotiation (2)

Hoipa Castle (Volatilization), the capital of Hoipa Kingdom, one of the four kingdoms of Haeseo Yeojin, was originally a Goguryeo castle. As such, it was quite sturdy, built on a hill surrounded on three sides by the Hoipaha (Volatilization) stream, a unique Goguryeo style mountain fortress.

Nurhachi, who had led his troops and retreated to this volatile place, felt somewhat relieved when he saw his eldest son, Chuying, and his 20,000 troops. His stiff expression also relaxed somewhat.

Nurhachi climbed up the castle tower and felt a sense of pride as he looked at the flowing water of the Vaibha River that surrounded the castle. Compared to the land of Jianzhou, which was his base, the Hoi Pa region was a much better place to build up national power. There was an abundance of land that could be cultivated and the soil was fertile. The Vaibha River basin was particularly so. It was no match for the Liaodong Plain occupied by the Ming or the Songnun Plain incorporated into the territory of the Later Jin, but it was not easy for such a wide plain to exist in the middle of a mountainous region, so it felt all the more precious.

But when I thought of the Balhae army coming from the east, south, and northeast, my mood fell again.

After a short rest, Nurhachi went down to the castle. As expected, scouts continued to come in and report on the movements of the Balhae army.

“Our troops who were guarding Purala retreated to Golminala. Then, the second naval force occupied that place, and the entire Donggo and Jeocheon fell to the enemy.”

The two regions of Donggo (Dongak) and Jeocheon (Cheoljin), located north of the Amnok River, were the lands of the five Aimen who made up the early Jianzhou Jurchen.

“Wanggiyan in the east and the western part of Ula in the north also fell into enemy hands.”

It was said that Wanggiyan (Wanyan) and the western part of Ulla, which had been divided between Balhae and the past, had already fallen to Balhae. With Wanyanbu gone, the land of Jianzhoubu, which could be said to be the birthplace of the Later Jin, was now reduced to only two regions, Sushuhou and Hunehe. However, these too were soon to be occupied by Balhae.

Nurhachi could not come to his senses due to the continuous bad news coming in. Balhae’s offensive was too terrifying. Five divisions in the north, three divisions in the east, and two divisions in the south. A total of ten divisions, including the 1st Operations Command troops, totaled 125,000 troops, were advancing on three sides.

In addition, the situation in the eastern part of Ming was also reported, which was even more spectacular. The entire Ming army was defeated on all fronts and retreated to Liaoyang. Since Hoi Pa Cheng was not far from the capital, this was relatively recent news.

“Well, Golminala is dangerous. If they attack from the south, there’s no countermeasure.”

Nurhachi felt a cold sweat forming on his back.

Nurhachi felt the same sense of crisis that all the generals and his sons felt. No one could come up with an alternative and remained silent. Those who had already fought the Balhae army felt in their bones how dangerous the situation was with 120,000 troops approaching.

In the end, the eighth son, Hong Taiji, spoke first.

“You must make a decision now.”

“Huh! Right. I have to make a decision.”

“The Liaoyang War is almost over. A wise commander would preserve his troops and retreat to Gwangnyeong. If not, not only Liaoyang but even Gwangnyeong will be handed over to Later Balhae. If Liaoyang falls like that, we will have to deal with the Balhae army advancing from Liaoyang in the direction of Liaodong. In such a situation, will we be able to defend Golminala?”

Hong Taiji was assessing the situation very coolly.

“Then what do you think? Are you saying that we should abandon Golmin-Ala and move to the land of Western Mongolia? Without even putting up a fight?”

The eldest son, Chuying, came forward and became angry at Hong Taiji.

“Brother, we are not much different from the Ming. And our land is too large to handle. Even if our territory were reduced to Eastern Mongolia and Southern Mongolia, it would still be large. The problem is people. If we don’t have enough people, if we don’t have enough warriors to fight, what good would it be to have land? If we fight bravely against the Later Balhae, we might inflict great damage on them. If that happens, we will have to be prepared for annihilation. With one cavalry of 7,500 men, we could not handle even 500 enemy troops, and suffered losses of nearly 3,000. This happened in both places where the battle took place this time. What can we do against an army of 120,000?”

Hong Taiji expressed his opinion strongly and in detail.

At the part where he was severely defeated by the 500-strong Balhae army, Chewing looked at Nurhachi in surprise. Then Nurhachi nodded with a stern expression.

“Hong Taiji’s words are absolutely right. In this war, our task is to preserve our forces. Forget about fighting against the Later Balhae and winning. They are an army that has faced our great army and the Ming army at the same time and won an overwhelming victory.”

“Then what are you going to do? If you decide, what decision will you make?”

Chewing looked at Hong Taiji and Nurhachi alternately as he spoke.

“Hong Taiji, tell me.”

Nurhachi asked Hong Taiji about his intentions.

“Send a messenger to King Taegeon of Later Hae-wang to request a peace conference, and we must make peace a success no matter what. As I said last time, we must endure even if they force us to suffer the humiliation of a loser.”

“That, that is so unfair and cruel.”

Chewing shuddered and complained.

“Understood. Then let’s send the lion before it’s too late. There’s no time to hesitate. The northern rearguard is still advancing towards Golminala with unstoppable momentum.”

The army that Nurhachi feared the most was the right army of the Balhae First Division. They could intercept the troops approaching from the east and south and buy time, but the only force that could deal with the Balhae Northern Army consisting of five divisions was the army stationed in Golminala. Daishan’s left army had already retreated to Golminala, so there was no other way.

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Seoul Metropolitan Government Complex, Ministry of Finance Office.

Minister of State Lee Ha-ryun looked closely at the faces of each of the top representatives gathered in the conference room and smiled.

“Wow! Have all the top representatives in the country ever gathered in one place like this? Back in the old days of Donghaebu or in the early days of the foundation, it only took a few minutes, but now there are so many that it fills up the conference room.”

“Come to think of it, that’s true. In the past, when we gathered together, there were only about ten people.”

Empress Hong Eun’s older brother, Hong Jin, the Minister of Finance, agreed with Lee Ha Ryun’s words.

“Isn’t this a truly precious opportunity? So I just hope that today’s meeting will lead to a great conclusion.”

Kim Myeong-sin, who had served as the Minister of Finance for a long time and returned to the position of chairman of Songhwa Sangdan, answered with a smile. Not only that, but his younger brothers and cousins, including Kim Ye-sin, the president of Goryeo Shipping, Kim Deok-sin, the chairman of Goryeo Sangdan, and Kim Seon-sin, the president of Songhwa Textile, were all present. In addition, other chairmans of other companies and presidents of major affiliates also attended, and the conference room was filled with people.

“How is the situation going?”

The other party’s chief, Chaek In-ho, asked. He was the son of the chairman of the Privy Council, Chaek Deok-hyeon (Cheomteo-heo).

“We are making great progress. The northern, central, and southern fronts are all progressing as planned.”

Lee Ha-ryun gave a brief explanation of the situation.

“Your Excellency, are you sure you don’t have enough funds?”

Hamgang Sangdan Daebang Yoo Sam-soon asked.

“It’s okay. As you know, we’ve been preparing for war for a long time. And our finances are also quite ample.”

Hong Jin answered on behalf of Lee Ha Ryun.

The reason Balhae’s finances were abundant was naturally because taxes were collected well. The society as a whole was prosperous due to the commerce and industry that grew day by day. In addition, tax revenues were abundant. In addition, a huge amount of gold was mined in the mines of Unsan and Daeyudong in Pyeonganbu and Sado Island in Hongjebu, so Balhae’s finances were strong enough to easily wage such a large-scale war.

“Okay, then shall we get to the main point?”

When Lee Ha-ryun declared the meeting open, Hong Jin came forward first and announced government policy.

“Regarding the establishment of a private commercial bank, there is no reason not to permit it, as long as it adheres to the few principles set forth by the government. The first of these principles is that no particular capital should control the bank. Shall we hear the opinion of the upper council on this matter?”

The group that requested this meeting today was the Upper Council. They formed this council to request permission to establish a private bank, and have been in constant contact with the Ministry of Finance and Economy to exchange opinions.

The reason the merchants were so enthusiastic about establishing commercial banks was to make it easier to raise business funds. Balhae’s territory was expanding day by day, and the market was expanding accordingly. In addition, most merchants had a taste for foreign trade, and they set their sights on overseas markets. In addition, as new products were continuously being developed, new industries were also emerging. During this boom period, the state-run Bank of Korea was limited in supporting the merchants’ economic activities alone.

In addition, with the announcement that a second state-run bank, the Agricultural Bank, a bank targeting farmers, would be launched soon, the movement to establish its own bank for merchants became more active.

At Hong Jin’s request, Lee Deok-eun, the secretary of the council and a member of the Bukcheong Sangdan, stepped forward and responded.

“20 groups agreed to participate in the equity, and a rule was made that the combined stake of affiliates in the same group cannot exceed 10%. In addition, the government was allowed to take a 1.5% stake, giving the government the authority to audit and intervene in the bank’s management.”

The capital of the first private bank was set at around 1 million won, and several companies as well as the government decided to partially secure publicness by investing some of it.

“The second condition is that banks should be free to decide their lending and deposit interest rates, but subject to central bank controls such as reserve requirement ratios and regular audits. Do you agree with this?”

“Yes, Your Majesty.”

“Are you also aware that a second private bank will soon be established with the participation of several small and medium-sized merchants in order to prevent the monopoly of private banks? This bank will also be supported by the government.”

“Yes, I know very well.”

“Okay, then let’s get the investors going and sign the agreement.”

The name of the first bank, which was to be established through investment by the top 20s, was decided to be ‘Commercial Bank.’ And small and medium-sized top 20s outside of the top 20s also decided to establish a ‘Industrial Bank’ with a capital of about 500,000 won, and were in the process of establishing it.

Once all of these banks are established, Korea Bank and Agricultural Bank will be state-run banks, while Commercial Bank and Industrial Bank of Korea will be private banks, competing to operate.

The representatives of the participating companies came forward one by one and signed the agreement. The agreement contained the amount of capital to be contributed by each company and the conditions for establishing the bank.

Once all the procedures were completed, Lee Ha-ryun came forward and announced the new policy.

“We plan to establish a stock exchange in the next three years. The Ministry of Finance is currently preparing diligently. So, please listen to the Ministry of Finance’s explanation and decide whether or not to participate.”

The top representatives had some knowledge of the stock exchange, as the Ministry of Finance had been providing them with information.

The history of the stock market in the West is very deep-rooted. Even today, the Amsterdam Stock Exchange in the Netherlands (founded in 1610) is actively operating.

Balhae was also in the process of reorganizing its financial system in order to open a stock exchange, and the establishment of a private bank was part of this effort.

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