982 FINANCIAL REFORM AND THE ECONOMY
and then sell them to people outside their own kye at double the price. Thus the
profit ends up in the hands of one man, while the harm extends to tens of thou-
sands.^20Despite the complaints of the licensed merchants the government was unable
to enforce the ban against illegal competition, and it lost its resolve to maintain
the very system of licensed monopolies as well. For that reason Yu Suwon's pro-
gram for the expansion of licensed shops and the creation of oligopolies under
state control was becoming less feasible. In 1781 when the hat monopoly
demanded the arrest of capital guardsmen for selling woolen hats illegally, King
Chongjo decided to allow the agency in charge of capital markets to adjudicate
each complaint individually lest total enforcement of the law bankrupt the sol-
diers involved in unlicensed production of the hats and arouse their animosity.
As partial compensation to the licensed merchants the government tried to reduce
some of their tax burdens by collecting part of them from the weavers directly,
but the Ministry of Taxation refused to go along and demanded more taxes from
the licensed merchants and drove them to the edge of insolvency.
The ministry sought to achieve a reconciliation of conflicting interests by
granting the wool monopolists a ten-year 5,000-yang loan to buy silver from
China, putting them in charge of collecting commercial taxes from the soldier
hat-sellers, but the wool monopolists feared that eventually the unlicensed oper-
ators would drive them out of business. In 1782 the iron monopoly, and in 1784
the lacquer ware and wood products monopolies, demanded government action
to ban unlicensed sales by merchants and producers, but the government admit-
ted that it was powerless to block unlicensed sales in the countryside.
In 1787 the government again tried to bring competition from unlicensed man-
ufacturers and merchants under a modicum of control by attempting a com-
promise solution. It instructed the knife monopoly that it could not simply ban
all unlicensed sale of knives and would have to permit unlicensed vendors to
operate alongside the licensed merchants, a policy referred to as joint sales (t 'ong-
gong pari/we). It permitted independent iron makers to buy scrap iron from the
monopoly iron shops to make small tools and sell them on the market on their
own, but it also attempted to assuage the licensed merchants in Seoul by grant-
ing them. tribute middlemen (kong'in), and capital guardsmen 157,000 yang of
interest-free loans to help tide them over their financial difficulties. The ambiva-
lence of government policy continued in 1788 when the government enforced
the ban against unlicensed sale of candles but refused to ban unlicensed sales
of honey. In I79T licensed fish merchants complained that private owners of
ships were selling their catch directly to the public, while the private entrepre-
neurs claimed that selling small quantities of fish directly to consumers was
accepted convention.^2!