PROVINCIAL AND LOCAL ADMINISTRATION 691ever-normal price stabilization system, and those who preferred refurbishing the
system of state loans to the peasants through district righteous granaries or vil-
lage granaries.
Lending Institutions: Chou through Tang
Yu began his essay on the Chinese experience with the views ofLi K'uei, prime
minister under Marquis Wen of the state of Wei in the late fifth century B.c., not
only because he represented the wisdom of antiquity, but because he was an
early spokesman for price stabilization. Li K'uei had pointed out that when the
price of grain was too high, the "people," that is the nonagricultural, urban con-
sumers, were hurt and were forced to take flight to regions where prices were
lower. But if prices were too low, then the farmers were hurt and the country as
a whole ended up in poverty. In other words, extremes of grain prices were equally
damaging even though the victims may have been different, and the virtuous
ruler was bound to maintain fair prices for farm products. He prescribed that
the state always had the responsibility of buying up a certain portion of the crop,
but the percentage varied according to the size of the crop itself. In a bumper
crop year, the government should buy three-fourths of the crop at a price suffi-
ciently high to guarantee a livable income for the farmers. If the crop were mod-
erate, it would only have to buy half the crop; or if it were poor and the price of
grain was high, it would only buy one-fourth of the crop. In famine conditions,
the state would then distribute the grain reserves it had built up by buying grain
during bumper crop years and selling off a sufficient amount to bring the high
price of grain down to normal levels. The object of this ever-normal operation
was to ensure that farmers were guaranteed moderate incomes and the nonfarming
population was able to buy food at reasonable prices.
The History of the Han Dynasty also worked out the microeconomic statis-
tics for an average peasant family on the basis of production, tax payments, per
capita consumption, and the conversion of the surplus to cash for the purchase
of clothing and rituals. It also pointed out that because most peasant families
did not save in anticipation of the costs of sickness, death, and funerals, they
usually were left short at the end of the year, or failed to apply themselves dili-
gently so that the grain supply never matched demand, and the price of grain
rose. It was therefore left to the government to estimate the potential food sup-
ply and either buy up a portion of the crop or payout part of its reserves to ensure
a stable price for grain. Under Li K'uei's leadership the state of Wei did this and
became rich and powerfup6
Yu Hyongwon then traced the subsequent history of ever-normal and local
relief granaries in China. He showed how in the reign of Emperor Hsiian of the
Han dynasty (B.C. 73-48) Keng Shou-ch'ang obtained the emperor's approval
for establishing Ever-Normal Granaries (Ch'ang-p'ing ts'ang) in districts along
the frontier to buy up part of the crop and bid up the price of grain that had slumped
during a series of bumper crops. Later in the Sui dynasty in 585 the minister of