Chapter 33
Railroad (6)
'I can't just build this for free.'
Of course, I need to be paid.
No, why would you ask for money from individuals instead of using the national budget when you're building national infrastructure?
Common sense changes with time and circumstances.
The members of the legislature and the landowners here own a significant portion of the land in the Mexican Empire.
If railroads are built in this country, 99.9% of the people will not benefit, only the 0.1% of the landowners.
Of course, the people will also use the railroads, so they will benefit to some extent, but the scale of that benefit is incomparable to that of the landowners who own real estate.
The day after the railroad opening ceremony, a 'Railroad Construction Briefing' was held at the National Palace (Palacio Nacional).
"Members of the legislature, and landowners. I believe you have seen the power of the railroad and locomotive I have created."
Many landowners nodded.
"In the future, all the territory of the Mexican Empire will be divided into two: areas where railroads are laid and areas where they are not. Goods from areas with railroads will always be transported throughout Mexico cheaply and quickly. People will also be able to travel throughout Mexico cheaply and quickly. What will happen to areas without railroads?"
I deliberately explained the benefits of the railroad in detail for emphasis. The landowners were paying attention to my words.
"They'll have to transport goods and people by stagecoach, as before. Even then, using stagecoaches to reach the destination is inefficient, so they'll have to take them to the nearest railroad station. That means that goods and people from areas without railroads will eventually move to areas with railroads. You are all very well aware of the meaning of these words."
Places where goods and people gather will inevitably develop. That means that land prices will inevitably rise.
"I know that some of you are questioning whether the government is spending too much money building railroads. Let me make it clear here. The government will hardly spend any money in the future. The first railroad section is just a pilot case. I can't build such a great thing for free with government money. The amount is too large, and it would create fairness issues. So, we plan to build the railroads by collecting construction costs from each region."
You all know that your real estate prices will skyrocket if railroads are built, but I can't just give it to you for free. If you want a railroad, pay up. That's what I said, in a roundabout way.
"By the way, our 'Royal Mexican Railroads' (Ferrocarriles Reales de México) will consider the amount of the construction cost when deciding the railroad route, the location of the stations, and the construction order."
I can give preference to those who pay the most, but I can't guarantee it.
"We'll continue to collect construction costs in the future, but we'll give special consideration to those who make a commitment today."
If you commit to the construction cost right now, we'll give you more consideration.
"Thank you for listening to my long explanation. Do you have any questions?"
Many people raised their hands.
A long question-and-answer session followed, but they were all trivial questions about the minimum construction cost, the construction period, the construction order, and the location of the stations.
The important question came a little later.
"Your Highness, it's clear that railroads will bring great benefits, but I think it's a problem that a single company monopolizes railroads throughout this vast Mexican Empire. What do you think about that?"
It was a republican member of the legislature.
Since they were blocked from attacking the use of a huge government budget, they used their last remaining card, attacking the monopoly.
"If there is a company other than mine that can build railroads and develop locomotives, I won't object to that company operating railroads."
"···"
"But it will take at least a few years to develop domestically. I don't think you're suggesting that we import from foreign countries, are you?"
"···No. Thank you for your answer."
"Okay, if there are no more questions, I'll end my presentation. Those of you who want to commit to the construction cost can fill out this application form."
Looking around.
At first, they were a little hesitant, but someone was the first to start filling out the application form.
It was Robert, a member of the legislature who supported the emperor.
"Oh! Thank you for your first investment commitment. Since it's the first, I'll give it special consideration!"
"Thank you, Your Highness!"
Seeing that, the members of the legislature who supported the emperor and the landowners from each region began to flock in.
"That's the application form I was holding!"
"Landowner over there! Please line up properly!"
"Here! We're running out of application forms!"
The railroad company employee hastily brought more application forms.
***
While the members of the legislature who supported the emperor, the landowners, and the landowners were excitedly filling out application forms, the republican members of the legislature and the landowners were watching from the corner.
"We should fill one out too."
"Ahem… It's a little… to give money to the crown prince."
"You've already bought a bunch of mechanical harvesters, so what."
"Oh, really! Stop talking about that! Everyone bought one, so what! And it's different, you see. If we fill out an application form here, we'll be agreeing to the crown prince's railroad company!"
"So we should just accept that our land will be the only one without a railroad?"
"Or, they said they're going to keep collecting construction costs, so how about we just put it in later, not today?"
"···Ahem. Isn't that too cowardly?"
Their attack on the use of a huge government budget was blocked before it could even be implemented, and their decisive attack on the monopoly was blocked too easily.
"Huh? That man, isn't he your assistant? What are you doing?"
One person was having his assistant fill out an application form while he just stood there.
"What are you talking about? I don't know anything."
Everyone wants to sign the application form, but they're all watching each other.
In the end, Rafael, the speaker, stepped in to resolve the situation.
"···It's not like we can check the crown prince just by not applying here, and we'll only be reducing our influence. Let's all get something out of this."
I was secretly grateful that the speaker had resolved the situation, but it was awkward to thank him, and it was also awkward to get angry.
"···"
They silently picked up the application forms.
***
The railroad construction briefing was a great success. The landowners competed with each other to invest.
'I can't say that I've tricked them.'
It's true that I've benefited greatly, but they will also benefit greatly. Real estate is important, both in the future and now. No, it's even more important now.
It was my goal to lay down a spiderweb of railroads throughout Mexico, so it doesn't make sense to collect construction costs and not build railroads.
'It's more like a kind of deal.'
The railroads themselves are built for the landowners, who pay for the construction. This is a win-win deal. Now I'm going one step further.
I prepared the opening day of the stock exchange to coincide with this time.
I told the landowners who had filled out the construction cost application forms at the National Palace.
There's one more event left, so don't leave, be patient.
There's a huge new building in the center, the heart of Mexico City. It's the 'Mexican Stock Exchange' (Bolsa Mexicana de Valores), which was recently completed.
"Those of you here all know what stocks and stock exchanges are. You're the ones who are driving the Mexican Empire."
Most of you know what stocks are, even if I explain them in detail. If you didn't know, I've already announced that today's event is the opening ceremony of the stock exchange, so you should have studied it, for appearances' sake.
A sense of expectation, 'Is this really happening?', appeared on the faces of the landowners at my words.
I satisfied that expectation.
"I don't need to say much. Right here, right now, at this stock exchange, I'm going to list 'Royal Mexican Railroads'!"
"Whoa!"
Unconcealed gasps came from here and there.
'The CEO of 'Royal Mexican Railroads' (Ferrocarriles Reales de México) is me.'
I'll leave the actual management to an agent, but there's a reason why I have to be the nominal CEO of this company.
"I'm here as the CEO of Royal Mexican Railroads. Before the official listing, let me tell you about the vision of our company."
It's about using my image and fame.
Even in modern times, when the stock system is established and a lot of information is released, companies with no revenue at all sometimes record huge market capitalizations based solely on the image of the CEO or expectations for new technology.
I have both.
European countries, at least, would have gained some experience by this time, having experienced the Tulip Mania, the Mississippi Bubble, and the South Sea Bubble, but what about the Mexican Empire, where the stock exchange opened today?
'They're like children who don't know anything about the stock market.'
Hundreds of the richest people in the Mexican Empire were waiting for my words, their eyes shining with anticipation at the unexpected situation of the listing.
"Royal Mexican Railroads is a railroad company established with my personal assets. It's not a monopoly, but like Ortega Construction, which is the only company in the Mexican Empire that can build railroads, Locke Precision Machinery, which is the only company that can produce locomotives, is also mine."
Mumbling.
"···Isn't that just saying it's a monopoly?"
"Shh. You can't hear anything."
I continued.
"I'm confident that our company will operate most of the huge length of railroads that will be built in the empire in the future. You all know that, since you committed to investing in railroads yesterday. The economic, military, and political impact that this new thing, the railroad, will bring."
I gave them time to think.
"Railroads mean a transportation revolution. Those who don't use railroads will never be able to beat those who do. In other words, every businessman who wants to transport goods will use railroads. Everyone who wants to travel long distances will use railroads. Imagine, how much profit can you make if you can control all of this railroad network?"
Everyone was holding their breath.
"I will sell 30% of this railroad company's ownership, that is, 30% of the stock, starting today for only three days. I appreciate your interest."
***
It was a radical decision.
In fact, the members of the legislature and the landowners, except for those who supported the emperor, felt a little uncomfortable.
They felt like they would be left behind if there were no railroads, so they invested, but it was like they were all helping to increase the size of the crown prince's company.
In the end, wasn't the crown prince going to eat all the profits from operating the railroads?
"His Highness the Crown Prince knows what he's doing. He's a smart man."
"Yes, it's like a sign that we should get along."
Selling stocks means that he's not going to eat all the profits.
In other words, he's going to share the profits.
"30% is a bit disappointing, but it's a pretty big concession, isn't it?"
The landowners, who had felt uncomfortable with the imperial family, mistakenly thought that the imperial family cared about them.
The republicans' position became ambiguous again.
They want it.
Ownership of a company run by that smart crown prince. He's never failed, has he? It looks like success is guaranteed.
If you just look at the simple profit and loss, you want to buy it. But it's not that simple.
"If we become shareholders too, who will check the crown prince? That's not going to happen."
Rafael, the speaker, made a firm threat in front of the republican members of the legislature and the landowners.
It's a little different from investing in railroad construction costs. That can be seen as a kind of deal, and you can still check them. But what if you become a shareholder? Your interests will conflict.
"That's right. We republicans must never fall for this temptation."
They made a firm decision.
The crown prince stepped down from the podium, and a stock exchange employee came up.
"Okay, we're going to sell 30,000 shares of 'Royal Mexican Railroads' at 10 shares each, starting now. Normally, stock trading is done in a way where the buyer and seller agree and tell me the details of the trade. But since there's only one seller today, we're going to sell it to the person who bids the highest price, in a special auction format. Let's begin."
As soon as the host finished speaking, someone shouted.
"Me! I'll buy it! 500 pesos!"
"Oh, my! How can you shout out the price without raising your hand, so rudely!"
"If you don't like it, get out!"
"···510 pesos!"
The Mexican Stock Exchange was filled with excitement from the first day.
The crown prince smiled as he felt that excitement.
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