Duke Huan asked,“How do we gather statistics then?’’Guanzi replied，“Make clear how much land each xiang has, how much grain people living there consume，and how much the total grain output might cost．Make sure how many people each county has，how much land it has，how much money it needs for its expenditures，to what extent should the price of grain be adjusted to meet the need for the circulation of the currency，and how much surplus grain can be left yearly．And also make sure how much fabric can be produced during the whole year by women able to work．Calculate the total value of their work, according to the current price of fabric and figure out how much can be left after all needs for clothes and other utilities are met．In addition，make other statistics separately to record the conditions of various lands．”

    Duke Huan asked, “What did you mean by saying‘to make other statistics separately to record the conditions of various lands’?”Guanzi replied，“Some lands can grow cattails，and some can grow bamboos，sandalwood trees and silkworm thorns．Some are lower-lying and damp，and there are also some ponds and lakes with fish and turtles living there．If you can take firm control and make good use of these four kinds of lands，you can levy taxes on the products produced there，so it is no longer necessary to collect poll tax．As for fields with an output of ten gu each mu，if the sovereign does not take control of their produce according to the records of the statistics，they will be controlled by some powerful and rich people．When the common people have money，they will not pay attention to farm work．This should be considered as a misstep of the sovereign.”

    Duke Huan asked，“What kind of measures should be taken to popularize the statistical system?”Guanzi replied，“If the measures on statistics are not kept secretly，authority over the throne will be controlled in the hands of the sovereign’s inferiors．”Duke Huan asked,“What do you mean?”Guanzi replied．“Make clear how much cultivated land each xiang has，how many people consume foodstuffs there，how many women are engaged in spinning and weaving，and how much surplus clothing can be left yearly．Make inspection tours through each zhou to collect information such as how much land it has，how many people live there and how many people have fields but cannot produce enough grain to support themselves．  Collect information such as how much land it has，and how much surplus grain can be left after the total consumption of each year．This kind of information must be recorded clearly．That is called general statistics．Then make investigation into the whole situation of the state．issue some money and lend it to people who might have a grain surplus．Large families can getmore money and small ones get less．Some people only have some mountainous and secondary fields，thus the total amount of grain produced each year is not enough to support themselves．The government can also lend some money to help them，so they can survive．When the harvest of the following year is good，make an agreement with the people as follows：‘Previously，I have lent some money to you．Please check the bills and make sure how much the grain in your region costs，then you can return about seven tenths of the amount you have borrowed in grain．’Then the price of grain wilt go up and the value of the currency will depreciate． Thus，the government will control the surplus grain of thebest fields．However，the grain surplus of the secondary fields is inadequate to complement the deficiency of the mountainous fields．Therefore，the price of grain will be driven up ten times higher．Farmers who grow crops on mountainous fields  can  obtain  some  loans  from the government to sustain their lives，so that they will not suffer severe losses．The price of grain can go up ten times higher and the sovereign can sit back and obtain huge profits because the surplus grain produced by the best fields is under his firm control．Regarding fabrics produced by female workers，if they can meet the needs of the state，make agreements with the producers to purchase their products under contract．Check the prices of fabrics of the local region and then make an agreement with people as follows：‘The sovereign does not have cash and the only thing he has is grain．Therefore，you will be paid in grain instead of in cash．’Thus，grain can be traded for fabric．As a result，fabric needed by the state can be obtained and the price of grain will fall to the original level．After that，make a thorough investigation into the situation to issue some money，lend it to the people and then take action to hoard grain to drive its price up ten times higher．Then notify the wealthy people and the usurers as follows：‘The sovereign is going to make a journey，and you people should all lend a certain amount of money to sponsor this trip．’Also，issue an order to the neighboring counties as follows：‘You will not trade your surplus grain yourselves．If the sovereign’s stocks run out before the end of the trip，he will borrow some grain and fodder from you to support his followers and feed his horses．’The price of grain of the counties near the capital will be influenced by this order and will go up ten times higher again．Then the sovereign can issue another order：‘All money borrowed from the wealthy people can be repaid in grain．’Thus，the price of grain will depreciate and the value of our currency will go up．Cities and counties a11 over the state can gather statistics of all the local regions this way．Thus，the price of grain can go up ten times higher．Then order the people to return the amount they borrowed in grain．Thus，nine tenths of the money will be controlled by the state and only one tenth is in the hands of the people．So，the value of money will go up and the price of tens of thousands of goods will come down．Therefore，it is time to purchase other goods with cash．After that，most of the money will be controlled by the people，tens of thousands of goods will be collected by the government，and prices of these goods will go up ten times．The government can dump them at the market prices till their prices return back to the previously normal level．Hence，the financial statistics of a state should be well planned before commodities are produced and these commodities can be controlled after they are finished．The state should issue orders to purchase or dump goods at the right time．Thus it is no longer necessary to collect money from the common people．That is called gathering statistics and maintaining the financial balance of the nation．"

    Duke Huan asked Guanzi，“Are there any methods we can take to sponsor various state expenditures without collecting money or levying taxes directly upon the people?” Guanzi replied，“If you have the statistical work well done，can take control and make good use of natural resources，why do you need to collect money from the people?” Duke Huan asked，“What does taking control and making good use of natural resources mean?” Guanzi replied，“During the spring，the common people should focus on farm work and they can also be employed for forced labor．During the summer， orders should be issued to make certain when mountains and wetlands should be off limits and when they should be reopened for public use．During the autumn season，orders should be issued to make certain when mountains and wetlands should be off limits and when they should be reopened for public use．And during the winter，orders should be issued to make certain when mountains and wetlands should be off limits and when they should be reopened for public use．Because wealthy people try to monopolize the supply and demand of goods，prices of commodities fluctuate，and at the same time annexations of land and appropriations of assets among the common people also take place．Also，you should take firm control of the‘Four Important Factors’．”Duke Huan asked，“What are the‘Four Important Factors’?”Guanzi replied，“In mid-spring，make sure that everything needed by the common people has already been stored in your depot．In mid-summer make sure that everything needed by the common people has already been stored in your depot．In mid-autumn，make sure that everything needed by the common people has already been stored in your depot．And in mid-winter，make sure that everything needed by the common people has already been stored in your depot．In the middle of the spring，make plans about items needed such as，how many two-layer clothes worn in spring are needed；how many one-1aver clothes worn in summer should be prepared；how many things for instance，rods，baskets，ropes，dustpans，sacks，hutches，bamboo boxes and strings will be needed；how many days will these things be used；and how many people will use them．The poor people who cannot afford these utensils can borrow them from the local government．After all the undertakings are finished，these things should be returned to the government and then the indentures can be torn up．Thus，the common people can devote their strength to the state and the sovereign can provide utensils for the people．Do not disturb the spring ploughing during the ten days in the middle of spring．Do not disturb the weeding during the ten days in the middle of summer．Do not disturb harvesting during the ten days in the middle of autumn．And do not disturb maintaining fields during the twenty days in the middle of winter．That is called doing farm work at the right time．"

    Duke Huan said，“Very good．I am going to set up a department and let it supervise statistical affairs．What shall I do to establish it ?．”Guanzi replied，“The income from salt and iron is enough to support this department．’’Duke Huan asked“How can I operate it after it is established?”Guanzi replied，“Grant a sum of nine thousand jin of gold to people of Long Xia and use money as subsidiary currency．Grant gold to the wealthy big families and lend money to the small and less wealthy ones．As for the area between Mount Qi and Sai Qiu to the west of Zheng Qiu，it is a mountainous area．Lend money to people of this area according to the amount of their possessions．Betweem the eastern side of Shou Ling of the Zhou Dynasty and Shao Sha，the fields there are second-rate．In general，grant loans with money．Lend gold to the wealthy big families．Lend money to the small and less wealthy ones．If the state takes firm control of grain produced in these three areas，the price of grain will go up twenty times．Everywhere in the state of Qi，there are cows and horses raised by Liang Wei and Yang Suo．Please send people there to check the age, size and condition of their livestock and tell them as follows：‘The government is about to strengthen the military forces，so cows and horses will be purchased from you to equip the chariots．However，the sovereign does not have cash，so he is going to pay you in terms of grain according to the current market price．’Thus，the cows and horses will be in the hands of the sovereign，and grain will be shared between these two families．When they dump grain，the price of grain will return to normal level．But you will still control their livestock．”Guanzi continued，“Please make an agreement with the common people and arrange to loan twice the amount to people with fields．This measure might not be taken up-country (referring to all the areas located near the capital of the state)．However，it must be taken in border areas，because these areas can provide enough horses to equip thousands of chariots．Thus all the horses needed by the army of the state of Qi can be supplied，so it is no longer necessary to ask for these animals from the people．”Guanzi continued，“Make sure that the state grain price is controlled by the sovereign，the prices of products produced by mountainous areas，forests and utensils kept in the national depots are all controlled by the sovereign，also the price of everything is controlled by the sovereign during all four seasons．Travel through the state to inspect the fields．Trees growing on fields are addressed as‘bandits robbing crops’，and they should be removed．Except for mulberry trees planted around all four sides of houses，other trees would be regarded as damaging the raising of silkworms and the textile industry．No buildings，utensils can be made without the timber produced in mountain forests．So the sovereign can set up three tax rates to levy taxes on trees produced in mountainous areas as follows：Trees with extremely slight trunks that can be grasped with one hand are regarded as firewood．Trees with trunks that cannot be grasped within one hand can be used for building houses．Extremely big trees are used for making inner and outer coffins．Clarify the tax rates for trees used for firewood，ordinary buildings and coffins respectively．”

    Guanzi said，“If you use the income collected from selling salt and iron to sponsor the statistical work of the state and also store or dump grain at the right time，the price of grain can go up ten times．Normally，a sovereign can keep nine tenths of the profits，but the common people will still have enough to support themselves．Moreover，they can live in peace and are not hostile towards the sovereign．Remove land tax．Levy tax on the products of mountains．Levy heavy tax on wealthy families able to afford extremely lavish funeral ceremonies for their deceased family members．Levy light tax on small and poor families who only can afford simple funeral ceremonies．Levy heavy tax on wealthy families living in luxurious buildings．Levy light tax on small and poor families living in ordinary houses．If the sovereign sets up the statistics system in the state，he can control the wealth of his people like guiding a horse by simply pulling the rein．That is called gathering statistics to maintain the financial balance of a state．”