I Became The Crown Prince Of The Mexican Empire - Chapter 78



Only Noblemtl

Central Bank and Navy (5)

February 1836.

The fourth official general elections were held in the Mexican Empire.

Although more people participated than before, it was still an election in which the majority of the population did not participate.

Lawmakers who had served out their 12-year terms, which were limited by the Constitution, stepped down, and new faces filled the National Assembly.

“Are you in your third term now?”

“Yes, Your Majesty.”

Rep. Robert answered.

‘We limited it to three terms to prevent the members from becoming too enthusiastic, but it’s shorter than I thought.’

I plan to keep the term limit itself, but I think the conditions need to be changed a little.

“I apologize for the result being lower than the number of seats I had previously mentioned, Your Majesty.”

“Didn’t they win 77 seats? They opened up a pretty big gap with the landlords and the Republicans, so I think that’s a success.”

The number of seats he told me he would be able to secure was 80 out of a total of 201.

“Considering all that Your Majesty has accomplished so far, I am truly ashamed that I have only been able to achieve these results.”

If you’re telling me, you were really confident about getting 80 seats. In reality, you probably expected more than that, so it’s not surprising that you’re disappointed.

“There’s no need to rush things. It’s better to take things slowly. Think about the extreme political turmoil in Mexico right after independence. There are many advantages to taking things slowly, as we have done over the past 14 years.”

I am not in favor of radical reforms. Radical methods inevitably have side effects.

‘You only do that when there’s no other way.’

If I had not made a deal with the central bank issue until the end, I could have had them accept the original plan I had pushed for without any changes to the conditions, or if I had not given in until the end, I could have had them suffer a more extreme result in the election.

‘It may seem like a short-term gain, but in the long run it will be a huge loss.’

The landowners and the republicans would have become increasingly dissatisfied and hardened, and would have banded together to oppose the imperial family. They would have wasted time fighting politically, rather than building up national power.

Congressman Robert is not unaware of this fact.

“Yes, Your Majesty, you are right. I will approach this with a longer-term perspective. Thank you, Your Majesty.”

“okay.”

I patted Congressman Robert on the shoulder.

‘But the balance is starting to break down.’

The landowners have 61 seats and the republicans have 63 seats, so the leadership of the National Assembly, which was divided 1/3 each in the previous National Assembly, has shifted to the imperialists.

***

The largest company I have owned, from the very beginning until now, is Rios Express.

The smallest company, on the other hand, is Solis, run by Isidro Solis. It was a cash cow during the California Gold Rush, operating restaurants and lodgings in several cities, but reports show that its profitability is declining.

“The food service industry is making some sales, but the accommodation industry has seen a sharp decline in occupancy because most of the miners have settled in the California area after receiving land there.”

“Yes, Your Majesty. We have already secured lands with excellent locations, so we are not in the red, but the future outlook is not good.”

Diego answered me.

‘Well. It was a business that was aimed at the gold rush from the beginning, but it would be a shame to leave it like this.’

There is a business idea that just occurred to me a while ago.

“I should leave the canning business to Solis.”

“Oh, if it’s canned food, there will be demand for it in the military, so I don’t have to worry about profitability.”

Although the restaurant and food business are somewhat different industries, they are not completely unrelated, and since it is necessary anyway, someone has to do it.

“Yeah, and I have a drink in mind, but I’ll have to research the detailed recipe.”

The drink I was thinking of was cola. I know that the early colas were made with carbonated water, sugar, coca leaves, and cola beans, but the exact mixing ratio is unknown, so it would have to be created through experimentation.

Diego wrote down in a letter what I had explained to him.

“Your Majesty, would it be better to just write that the accommodation industry should be maintained as it is?”

“No, it’s a shame to use those lands like that. Just wait a moment.”

The lodging facilities owned by Solis are all located in the heart of the city. And not just one or two, but in most of the settlements that benefited from the California Gold Rush, including Sacramento, San Francisco, and even Los Angeles.

“Ortega Construction’s capacity has also improved significantly, so it may be time to start a hotel business.”

“Are you talking about the hotel business?”

The modern concept of a hotel, offering sophisticated service and various amenities, first originated in England in the late 18th century.

In 1829, the Tremont House opened in Boston, USA, a huge success, introducing many ‘firsts’ in the hotel industry, such as indoor plumbing, indoor toilets and baths.

‘We can do it too. But it’s California.’

It is true that California grew incredibly fast due to the gold rush and immigration, but I wondered if it could even build a hotel business. Of course, it will someday. I can’t just leave that good land to waste by building motels like it is now.

“I think I’ll start by opening my first store in Mexico City. I’ll run it relatively steadily here, build up some know-how, and then return to California.”

“Yes, I suppose there won’t be many hotel guests in California. Then I will write it as such, Your Majesty.”

As I was reviewing the managers’ reports and advising them on business directions as usual, a guest I had invited came to my office.

“Your Majesty, Alfonso Rios has arrived.”

“Let me in.”

“yes.”

Alfonso came in.

“Your Majesty, have you called?”

It was a calm greeting typical of Alfonso.

“I called you because I have something to talk about.”

This is a story about the Rio Express.

Among my companies, there are several huge ones, such as Ortega Construction, Imperial Mexican Railway, and Estrada Steel, but the best of them is Rios Express.

Even after the railroads were built, huge amounts of letters and parcels were transported across the country, and there was still a demand for passenger transport services via stagecoaches.

It has become common for people to simply use the services of Rios Express rather than going through the hassle of purchasing a horse or carriage even when they have money.

Rios Express branches across the country also began offering financial services, and became the powerhouse of consumer finance in the Mexican Empire, much as Wells Fargo had been in consumer finance in the western United States.

“I wish Rios Express would split off its financial division. It’s good that logistics and finance are both growing, but they’re not very related. There are some inefficiencies in having two unrelated businesses in one company.”

Alfonso is not the type to enjoy small talk, so he got straight to the point.

“···Is it because of the problem of expertise and concentration?”

“That’s right. In fact, isn’t Rios Express currently focusing its capabilities on the financial sector?”

“Yes, we are focusing on finance because it has a higher rate of return on invested capital.”

Wells Fargo and American Express, both of which have a history of 100 years, have followed a similar path. Originally started as logistics and transportation service companies, over time they have shifted their main business to financial services. In the process, their logistics and transportation service divisions have been sold or gradually reduced to nothing.

It is a pity that both logistics and transportation are industries that will continue to grow until the present, although it is nothing compared to the profitability of the financial industry.

Although it is a slightly different field, it is a good business to enter into the distribution industry such as marts as the economy becomes more advanced.

“There is still plenty of room for growth in logistics and transportation, but your time is limited. There may be employees in the company who are in charge of logistics and transportation, but I believe you will understand the difference between the management directly taking care of it and the management not.”

Alfonso nodded slightly.

“Yes, I agree. I hadn’t thought about splitting it, but I think it would be better if I could focus more on finance.”

“Okay, then recommend me the right person to take charge of logistics and transportation. He will lead Rios Express. The financial side that is being split off will be a different company called ‘Rios Bank.’”

“Yes, we will do our best to find the right person as quickly as possible.”

Alfonso answered like that and asked some questions he was curious about.

“Will the split ‘Rios Bank’ lose its ability to use existing infrastructure?”

“For the time being, we will share the existing infrastructure, and in the medium to long term, we will expand and separate the branches.”

We had many other conversations and came up with a concrete division plan together. At the end, Alfonso said:

“Your Majesty, I would like to transfer my 3% stake in Rios Express to my successor. There is a difference in the mindset between having a stake and not having one.”

The current shareholding structure of Rios Express is simple, with me owning 90% and Alfonso owning 10%, and the company to be split will also have the same shareholding structure.

That is, Alfonso will have a 10% stake in Rios Express and a 10% stake in Rios Bank. He asked that he be allowed to transfer 3% of the shares in Rios Express to his successor without compensation.

“You own the shares, so you don’t need to ask my permission, but I guess I won’t. I’ll pay you what’s mine, and you can keep what’s yours.”

“No, even before I received the stocks, I thought I had been greatly indebted to Your Majesty, but as I received the stocks and the company grew, the favor became too much. Please let me repay you.”

“The company has grown to this size because of your hard work. Then let’s give each of you 1.5%. What do you think?”

It is true that Alfonso became one of the richest men in Mexico in a short period of time. However, it was because he achieved overwhelming results among his peers who became managers at the same time and grew the company into the largest in Mexico.

“All right.”

When I took a step back, Alfonso also accepted. My and Alfonso’s shares will be combined to give the new manager a 3% stake.

***

By the time the election was over and bond sales were finished, a bill was passed to issue paper currency.

It was the first bill of the newly elected Congress.

“It passed without much opposition, as you said.”

Congressman Robert reported to me shortly after the bill passed, saying:

“It’s not a law that would influence power like the establishment of a central bank, and it would be a better solution for them than the current situation, so there’s no reason to oppose it.”

The Mexican Empire has never had an official currency issuing agency since the confiscations carried out immediately after independence.

The pesos currently in circulation were not issued with the formal consent of the Congress, but were issued arbitrarily by the executive branch of King Agustín I.

“Yes, this was an opportunity to issue currency officially authorized by Congress, and there was no significant opposition to the introduction of the gold standard, which we were concerned might be opposed by anyone, as we were persuaded that the United States was also using a mixture of gold and silver.”

“I see. You had a hard time with this one too.”

We cannot yet move to a complete gold standard system.

In a situation where the silver peso is currently circulating nationwide, it is necessary to issue paper currency based on gold. There will inevitably be a period where silver and gold are used together.

The situation is the same in the neighboring country, the United States. The monetary system that mixes gold and silver has many disadvantages compared to a system that only has a gold standard currency, but for now, it is an unavoidable situation.

‘Ultimately, we will have to recover as much silver pesos as possible and then convert them completely.’

There may be side effects, but they are negligible compared to the many advantages that paper money provides.

I immediately ordered the issuance of currency through the Treasury.

The central bank’s second task has begun.