There were three routes from inside the pass to outside the pass. One went out through Datong in Shanxi, crossed the Great Wall, and entered the Northeast through Inner Mongolia. Another followed the railway through Shanhaiguan into the region beyond the pass. The third took the sea route to the Japanese-leased Kwantung territory at the southern tip of the Liaodong Peninsula, then boarded a South Manchuria Railway train into the Northeast.

Ishiwara Kanji naturally departed from the Kwantung territory, heading for Fengtian. Boarding the train with a group of Japanese officers, they found the carriage nearly empty, which surprised Ishiwara. An officer immediately explained: "The Chinese all board outside the Kwantung territory. Ishiwara will see them shortly."

Indeed, as the officer said, after the train left the Kwantung territory and stopped at a small station, the platform of this modest station was packed with people. Seeing the train arrive, the crowd looked at it and stood up, one after another.

From the looks of it, the crowd was about to surge toward the train, when uniformed personnel on the platform immediately began maintaining order. As these people had the ordinary Chinese civilians—loaded with bags and bundles, traveling with families in tow—form orderly boarding queues, Ishiwara Kanji was first surprised, then couldn't help but laugh.

Under the puzzled gazes of the Japanese officers, Ishiwara Kanji pointed at the uniformed people and asked: "Are they police?"

Colonel Satō was surprised. "How did Ishiwara know they were police?"

Ishiwara Kanji smiled. "Their uniforms resemble British police uniforms, and their rank insignia aren't military style."

Seeing Ishiwara's keen observational skills, Colonel Satō nodded. "They're the armed police force Senior He established. They carry pistols when on duty. They're mainly responsible for maintaining order among Chinese migrants and accompany the trains."

While they were speaking, the train had stopped. As Colonel Satō said, the police directed the migrants to board in an orderly manner and take their seats. The Chinese migrants from inside the pass looked at the Japanese officers with curiosity, but paid more attention to settling themselves and their families. The platform quickly emptied, and just as the train began to move, a new group of Chinese migrants was directed onto the platform by the armed police.

Ishiwara Kanji turned to look at them and asked, somewhat puzzled: "How many trains depart from the Kwantung territory each day now?"

Colonel Satō sighed softly. "Only one or two from the Kwantung territory. Senior He has organized his own trains specifically to transport these migrants. Most of those are freight cars—they can carry more people."

Ishiwara Kanji looked at the handful of Chinese who had boarded in the Kwantung territory and asked, confused: "Why don't they board in the Kwantung territory?"

A nearby officer answered sarcastically: "Because Senior He says these people aren't passengers—they're cargo. So the fee he pays is very low."

At this, several officers couldn't help laughing. Ishiwara Kanji smiled wryly, but when he looked at Colonel Satō across from him, he saw the colonel's expression was quite serious, so he asked: "Senior Satō, how many migrants have arrived in Manchuria now?"

Colonel Satō couldn't help but sigh softly. "From what we know, more than one million migrants have arrived in Manchuria in the past year. Senior He has provided them with excellent resettlement. If this continues, within five years at most, the population of Manchuria and Mongolia will exceed thirty million."

Several of the Japanese officers who had observed the war in Europe were shocked by this number. Ishiwara Kanji's expression also became grave. After annexing Korea, Japan's total population was about fifty million at most. If the Manchuria-Mongolia region had thirty million people, that would be sixty percent of Japan's population. And those thirty million would be under He Rui's rule. Just thinking about this comparison made clear what a powerful force this would be.

Just as Ishiwara Kanji had expected, the Northeast government wasn't just absorbing migrants—it was doing everything possible to incorporate them into its administrative system.

Director of the Statistics Bureau, Xu Jia, was reading the quarterly statistical summary. Heilongjiang had 411 townships, 5,174 administrative villages. Jilin had 369 townships, 5,228 administrative villages. Fengtian had 428 townships, 6,931 administrative villages.

All townships and administrative villages had established government organizations. Each administrative village had three rotating village chiefs, three rotating militia captains, five militia members, and one elementary school. Townships contained a complete administrative system including government, tax collection, education, public security, militia, and mobile court stations.

The figures below showed that the Northeast government system had over 300,000 personnel and employees. Combined with 120,000 military troops, the total was approximately 500,000.

Calculating at an average of 20 yuan and 300 jin of grain per person per year, that came to 10 million yuan and 150 million jin of grain.

Setting down the quarterly summary, Xu Jia picked up another report—this one about issuing paper currency in the Northeast. A Fengtian Bank headquarters and a Finance Department had been established, with the Fengtian Bank headquarters responsible for issuing Northeast currency. Shortly after the currency was issued, it had already become known as "Fengtian Notes."

The collateral for Fengtian Notes was grain and coal. The more Xu Jia read, the more he frowned. Finally, he set down the report and picked up the telephone. The operator connected him to He Rui's office. Secretary Song Danshan's voice came through: "Director Xu—oh, Bureau Chief Xu—is there something?"

"I'd like to give a report to the Chairman today," Xu Jia said. His head was already aching, so he picked up a string of wooden beads and began working them between his fingers. As the beads rotated through his fingertips, the pressure in his heart noticeably lessened.

"Is Bureau Chief Xu certain the report can be given today?" Through the slight static of the electrical current, Song Danshan's concern was still audible.

"Does the Chairman have other matters?" Xu Jia pretended not to understand Song Danshan's worry. Consolidating statistical data was extremely troublesome work, prone to errors. Several previous clerical errors had occurred when staff copied figures, leading to mathematical results that became big jokes—jokes that He Rui himself had spotted.

"The Chairman has visitors to receive tomorrow," Song Danshan replied.

"Then schedule it for today," Xu Jia immediately confirmed the appointment. Set for 2 PM today. Seeing it was now 11 AM with three hours remaining, Xu Jia made two more calls, inviting Price Supervision Bureau Director Han Haitao and Finance Department Measurement Division Chief Tang Gui to a working lunch.

The lunch was a working meal. All three ate in silence. Back in Xu Jia's office, Xu Jia pulled out the currency issuance report, pointed to a series of calculations at the bottom, and asked Tang Gui: "Chief Tang, how were these calculated?"

Tang Gui picked up the report, confirmed it was his department's work, then answered: "This was based on the labor productivity report your Statistics Bureau sent us. We calculated from that."

Xu Jia was momentarily blank. He had to read so many reports each day that he had almost no recollection of any labor productivity report.

But Xu Jia wasn't worried Tang Gui was deflecting. He simply said: "Explain specifically."

Tang Gui knew mere words wouldn't suffice. He took the documents to the blackboard in the office and began writing as he explained. Based on data from the Statistics Bureau, Industry Bureau, Agriculture Bureau, and other production departments, commodities that could serve as "currency collateral" were selected, including grain, coal, and some cloth—the so-called "one black, two white." Since the government controlled the pricing of these commodities, using them as currency collateral determined the currency issuance volume. More plainly, this determined the quota of "Fengtian Notes" issued by the Fengtian Bank headquarters.

Because some commodities were produced by government-owned enterprises, the government set sales prices based on labor inputs.

These commodities also functioned somewhat as currency collateral, but couldn't be priced at the rate of necessities like grain, cloth, and coal. Therefore, their price was multiplied by a "weight" and included in the currency issuance calculation.

Even with Tang Gui giving the simplest possible description, Xu Jia felt his head spinning. Seeing that Xu Jia seemed to understand, Tang Gui stopped explaining and sat back down across from him.

Xu Jia picked up his bead string again and began rotating it while reviewing the documents. As the pressure lessened, Xu Jia could finally follow Tang Gui's explanation and think it through. After finishing the report summary, he began to understand.

"Chief Tang, so you're saying this currency is completely equivalent to commodities? Meaning for every yuan issued, there's one yuan's worth of goods out there to buy?"

Tang Gui, who had transferred from the Land Reform department to the Finance Department's Measurement Division, thought about it and answered: "Yes and no."

Xu Jia was stunned, not understanding what Tang Gui meant by this seemingly ambiguous yet clearly not ambiguous answer.

"How so?" Xu Jia pressed.

Tang Gui sighed deeply. "It's not that one yuan corresponds to one yuan of goods. If only it could be that precise—that's why I said no. When the Chairman established this policy, he said currency issuance is divided into three parts. First is wage expenditure—like for mine workers producing coal and iron, who must be paid for their work. Second is operating capital to keep current industries running—our factories need to buy coal, iron ore, and equipment; we need the funds for that. Third is industry development—enterprises need to increase output, whether by adding workers, improving equipment, increasing equipment quantity, or adding both workers and new equipment. In short, there's a lot involved. Think of it as a big pot. The way I see it, the size of your pot determines how much rice you cook. But I've just heard about and executed these things—as for how it all actually works, I don't know either."

Having said this, Tang Gui sighed again, looking at Xu Jia with an expression of helplessness.

Xu Jia had heard about all this too, but if even Tang Gui, the implementer, didn't understand how it operated, Xu Jia certainly didn't. Just as they were staring blankly at each other, Han Haitao—the former teahouse owner temporarily transferred to the Price Supervision Bureau—spoke up: "Bureau Chief Xu, I think the operating principles of this plan are basically: work gets paid, borrowed money gets repaid."

At this, Han Haitao looked at Xu Jia and Tang Gui, both of far higher standing and seniority than himself. Seeing neither looked displeased, he continued: "That's what we were taught in Price Administration Bureau training."

The Price Administration Bureau was responsible for inspecting market prices and preventing hoarding and speculation—a simple enforcement department. The basic operational level was too low for Xu Jia and Tang Gui. But when Xu Jia found himself unable to grasp the core of monetary policy, he could only approach it through concrete operations.

Though the currency issuance was large, it wasn't used arbitrarily. "Work gets paid" was easy to understand—the Northeast strictly investigated wage withholding, and those who oppressed the common people had all been eliminated.

"Borrowed money gets repaid" was equally easy to understand. Enterprises running production didn't use their own money to buy raw materials; they borrowed from banks. After selling their goods, they repaid the loans according to the lending terms.

This brought up the question of production efficiency. Enterprises with higher production efficiency earned more from selling the same goods. Such factories' staff also enjoyed better compensation.

But things weren't so simple—there were countless complications and twists. Xu Jia felt he had achieved the minimum expectation from inviting his two colleagues: he had confirmed that he couldn't understand these matters. Since he couldn't understand, he wouldn't bring them up when reporting to He Rui. If He Rui asked, Xu Jia could simply say he didn't understand.

At 2 PM, Xu Jia met with He Rui in a relatively relaxed mood. Indeed, He Rui didn't ask about banking or currency matters. The focus was on the construction of the administrative management system.

After Xu Jia finished his report, he couldn't help but ask: "Chairman, the Northeast and Inner and Outer Mongolia currently produce about 3 billion jin of grain. We collect grain taxes of 900 million jin, of which 150 million jin goes to government personnel expenditure. Right now, much of our revenue comes from exporting grain. What will happen in the future?"

He Rui chuckled softly. "Stopping grain exports in the future will solve this problem."

Xu Jia was stunned. Currently, most of the Northeast's imported equipment was purchased with money from grain sales. A large portion of the dividends paid to foreign merchants also came from grain sales revenue. If grain exports stopped, this income would vanish. He Rui's words were spoken lightly, but the implications were enormous. Xu Jia wanted to understand He Rui's plan and asked: "If we don't export grain, what do we do next?"

He Rui smiled. "If we don't export grain, we can export industrial goods. We can also do some other business—make some money as middlemen. Grain actually isn't profitable; we're only exporting it now because we have no choice."

Even as a military academy graduate, Xu Jia knew that exporting industrial goods was the hallmark of an industrial nation. Though he wholeheartedly supported He Rui's plan, after nearly three years of statistical work, Xu Jia no longer harbored blind optimism. He asked: "Chairman, what does the Statistics department need to do?"

He Rui answered decisively: "The inspection teams you've been sending out must strengthen their enforcement of compulsory education. Xu Jia, how many years to graduate from elementary school?"

"Five years," Xu Jia immediately answered. At the same time, he gently rotated his bead string, easing his inner pressure.

"How's the bead string working?" He Rui asked.

"Chairman, I rotate it when thinking about problems—it really helps," Xu Jia replied. This was He Rui's suggestion to everyone: those who could relieve stress on their own naturally should; for those who couldn't, find an object to help. Xu Jia had tried several things and found the bead string suited him best.

He Rui nodded. "If compulsory education is strictly implemented, within four years at most, everyone under 18 in the entire Northeast will have graduated from elementary school. Another three years after that, and we'll have large numbers of our own junior high school graduates. I spent several years in Japan, and I can tell you definitively—by then, the number of junior high school graduates will be about the same as Japan's. Junior high school graduates have the opportunity to become technicians, engineers. Xu Jia, do you think we Chinese are inferior to the Japanese in intelligence?"

Xu Jia's eyes grew bright. Unconsciously, he stopped rotating his bead string and answered loudly: "Of course not!"

"Indeed not. And we also have adult literacy programs and post-graduation vocational training systems. We can catch up to Japan in compulsory education levels in a very short time. This requires large numbers of government personnel who can execute the work. Many people now think there are too many people eating from the public treasury—they're not wrong. Of 3 billion jin of grain, we take thirty percent in tax, which is 900 million jin. The 150 million jin accounts for one-sixth. What we need to do is use the remaining five-sixths well, not hoard them like misers. For a modern industrial nation, such thinking is utterly foolish."

Xu Jia felt he understood some of it, but much more remained unclear. However, there was no point in asking further now. Regarding this currency issuance question, Xu Jia knew that even if he asked, he wouldn't understand.