**Chapter 74
**The Central Bank and the Navy (1)**
Approximately 18,000 Comanche tribesmen were relocated to the town of Hanos in northern Chihuahua. Here, it was decided where each family would be placed.
Immigration officials explained in detail the benefits of pioneer immigration and urban immigration to the Comanche tribesmen.
“However, if you choose urban immigration, you may be placed in a city with families who have been sentenced to hard labor. Even during their hard labor sentence, they are allowed free time or outings, so they can meet their families.”
This was an order issued by the Crown Prince to alleviate the severe shortage of industrial labor in the Mexican Empire.
The Comanche tribe, from older boys to middle-aged people in good health, had all been sentenced to hard labor. Being able to be placed in the area where their fathers and sons were working was a great benefit.
“Then I will go to the city.”
“Yes, please tell me your name.”
Thus, approximately 18,000 Comanche tribesmen were scattered throughout the construction sites and various industrial sites of the Mexican Empire.
“As I told those who were sentenced to hard labor, it is best for you all to learn Spanish as quickly as possible. It is not only important for living in the Mexican Empire, but also your Spanish proficiency will be included in the criteria for selecting model prisoners.”
The Crown Prince explicitly included a reduction in hard labor sentence based on Spanish proficiency to accelerate the assimilation process, which applied to all prisoners sentenced to hard labor, not just the Comanche tribe.
As the northern part of the Mexican Empire was gradually being organized, Puhiwi Kwassu and a dozen messengers met their compatriots who had crossed the northern border.
“No! What brings you here? Have you decided to come north now?”
Potzna Kwahifu, the chief of the band who had decided to leave for the north, welcomed Puhiwi Kwassu. Surely, they had left thinking this was the last time. But how could they meet again so soon?
“Unfortunately, that's not the case.”
“Well, I expected it, since there were no tribesmen around you. So, what brings you here?”
Potzna Kwahifu asked curiously.
“I came on the orders of the Crown Prince of the Mexican Empire.”
“···The orders of the Crown Prince of the Mexican Empire? Do you have a message for us?”
Potzna Kwahifu asked in a calm voice, as if his interest had faded.
“He told me to warn you. He said not to cross into the Mexican Empire again.”
“Ha! It's our land where we originally lived, so it's up to us.”
He actually intended to return if his forces grew stronger.
“He threatened you with the lives of the Comanche tribesmen who remain in Mexico. If you come over, we might get hurt.”
“···Ha.”
“Instead, if you don't cross the border, the Mexican Empire will allow you to trade.”
“Trade. Are they saying they will sell us food?”
“Yes. They said they will sell you food, as well as various iron weapons.”
“···That's right.”
Those who had crossed to the north had not yet resorted to looting. They had only been there for a week, scouting and gathering information. Their food situation was not good.
As Potzna Kwahifu was pondering for a moment, one of the chiefs who had been listening to the story stepped forward and said.
“What are you worried about? Didn't you come here because you thought you couldn't defeat the Mexican Empire anyway? It's right to swear not to go back and solve the food problem.”
It sounded reasonable, but weren't these the people who had come north, risking their lives because of their strong resentment towards the Mexican Empire?
Would it be right to give in to a single word promising trade? Potzna Kwahifu, after pondering for a moment, made his decision.
“Well, we have hostages, and there's almost no chance of winning, so we have no choice. Okay, I swear that we will not cross the border of the Mexican Empire. But I would like to be able to trade as quickly as possible.”
They had brought a lot of loot and buffalo hides they had collected over time, although they had little food.
“Thank you for deciding. I will suggest the trade matter to the Mexican Empire.”
“Okay.”
Puhiwi Kwassu greeted his fellow tribesmen and left for the Mexican Empire.
***
October 1835.
Robert, the leader of the Imperialists, brought up a controversial proposal.
Standing directly on the podium of the Parliament, he took a deep breath and emphasized the necessity of the bill ordered by the Crown Prince.
“Honored fellow parliamentarians, I stand here today to emphasize the necessity and importance of the ‘Establishment of the Mexican Central Bank Bill.’”
The institution of a central bank had already been introduced by various countries in the 18th century, but it was still a controversial institution.
In fact, the United States had gone through ups and downs, establishing and abolishing the central bank twice.
The expressions of the Landowner and Republican parliamentarians, who had been looking at Robert with a dull gaze, wondering what he was about to say, became serious.
“This bill is not simply about creating a financial institution. It is a historic step that strengthens the economic foundation of our Empire and opens the path to prosperity.
First, the establishment of a central bank is the most reliable way to stabilize the value of our Empire's currency. The central bank will have the exclusive right to issue currency, and through this, it can maintain the value of the currency at a certain level. Including anti-counterfeiting features, we can showcase the reliability of our economy to the world.”
The current monetary system of the Mexican Empire is chaotic. The ‘Peso,’ a silver coin with the face of Agustin I, is the most widely circulated, but colonial currencies and various foreign gold and silver coins are also in circulation.
This chaotic monetary system only increases the complexity of administrative and economic activities, and is also vulnerable to counterfeiting crimes.
Robert's speech continued. It emphasized the various functions of the central bank, including promoting economic growth through monetary policy, controlling inflation, supervising and regulating banks, and acting as the government's fiscal agent.
All of these were necessary. The Mexican Empire was experiencing rapid economic growth, as everyone could feel, but at the same time, inflation was occurring as money was being injected into the market. There was a clear need to manage this.
Supervision and regulation of various private banks are also necessary. Including Alfonso Express, which is practically a nationwide bank, many banks are sprouting up, but there is no institution to supervise them, leading to side effects.
As the government's fiscal agent, the central bank also plays important roles, such as issuing bonds and providing liquidity.
“···Honored parliamentarians, the passage of this bill is not just an institutional change, but an investment in the future of our Empire. The establishment of a central bank will lead the Mexican Empire to a stronger and more stable economic system.
I urge you all to stand together at this important moment for the bright future of the Mexican Empire. Thank you.”
Despite Robert's passionate speech, the Landowners and Republican parliamentarians remained indifferent.
This is because the issue regarding this bill is not about the various functions of the central bank. The establishment of a central bank essentially means centralization.
The increasing power of the Imperial family, which was becoming stronger over time, was making even the Landowner parliamentarians, who had opposed federalism, feel a sense of crisis.
The Republicans, of course, were no exception. The Republicans, many of whom had always been friendly to federalism and decentralization, became even stronger in that tendency.
One of the Landowner parliamentarians asked a question.
“Robert, the central bank has many advantages, but it also has side effects, and I wonder if you know that the United States recently decided to abolish the central bank. Even in our Mexican Empire, where the government already has too much economic power, if a central bank is established, there is a risk of excessive concentration of economic power.”
It is true that the Mexican Empire has a vast amount of farmland, unprecedented anywhere in the world.
The area of the farms confiscated from the Spaniards accounts for 20% of the land in Mexico proper, excluding the northern territories, and Cuba has 90% of its farms owned by the government.
The selection of heads of various government ministries is a structure where the Prime Minister and Parliament recommend to the Emperor, but if the Emperor doesn't like it, he can reject it, so it is best to choose someone who is politically neutral.
The Emperor even has the constitutional right to dismiss all civil servants, so the executive branch is essentially operating according to the Emperor's will.
Therefore, the Emperor is essentially wielding the enormous economic power held by the government, and in this situation, the parliamentarians would not welcome the creation of an institution with even greater economic power.
Robert tried to persuade them, but it was a futile effort, as their positions were clearly different from the beginning.
Rafael, the Speaker, pretended to listen for a while and then called for a vote.
“We will now vote on the ‘Law on the Establishment of a Central Bank.’”
The result, of course, was a rejection.
***
‘This law won't be legislated in one go, will it?’
I had entrusted it to Robert, but I didn't have any expectations. It was just one of the tasks to build legitimacy.
A central bank is something that exists so naturally in modern times, but not at this time. European powers like Britain had introduced central banks, but it wasn't considered essential.
Right now, one of the biggest political issues in the United States is the ‘Bank War’ that started when President Andrew Jackson refused to renew the charter of the ‘Second Bank of the United States,’ which had served as the central bank of the United States.
This is a sensitive issue that is bound to cause conflict, so we have no choice but to use other methods to pass it.
“You mean you want me to publish articles about the central bank and bonds.”
Niceto de Zamacois replied after listening to my explanation.
“That's right. Emphasize the benefits of bonds.”
‘La Espada de D. Simplicio,’ a leading conservative newspaper in Mexico, was owned by the Imperialist family, and Zamacois, the editor-in-chief, was also an Imperialist figure.
“4% interest rate with a face value of 100 pesos. Is this condition okay with you?”
In modern times, government bonds, which are considered safe assets, also have to compete with other investment products, so interest rates often rise, but in this era, there are no such competing products.
In fact, the interest rate on British bonds, which had risen due to the war, was gradually decreasing from 3% to 2.75%, 2.5%, and 2%.
Our government's finances are considered quite sound, so we can raise some funds at an interest rate similar to Britain's, but we need a larger amount now.
‘The face value is only 100 pesos, so even self-employed farmers and urban workers can afford it. It will be a pretty lucrative investment tool for them.’
“It's affordable, so don't worry. You just have to make sure as many people as possible know about these bonds that will be issued when the central bank is established.”
“Yes, I understand. Leave it to me, Your Highness.”
It is normal for a stable government to raise funds at such a low interest rate, but the Mexican independence army during the independence movement made an unbearable promise to an unbearable target.
If that was all, it would have been enough to pay it off somehow, but if they tried to extort more than that wicked promise, we have to show them that we are not just suckers.
These are large-scale bonds for that purpose.
This was a good chapter, thanks
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