**Chapter 77**
**Central Bank and Navy (4)**
Roberto, member of Congress, knew what Rafael, the chairman, who had come without any notice, would bring up. It was because things were progressing as His Highness the Crown Prince had said.
-Roberto, if they can't find another way to divert the citizens' attention from the bonds, the public opinion war will eventually be our victory. Then, they'll only have one option left. They won't be able to change the public opinion that wants a central bank, specifically naval bonds, so they'll try to adjust the conditions in exchange for agreeing to its establishment.
-Yes, that's likely. But they won't be able to do anything if we don't accept it.
-But accept the deal.
Roberto didn't immediately understand his master's instructions to accept the deal.
-If we hold the elections as they are, the Imperial Party could win more than half the seats, Your Highness. They'll never accept that risk, so this law has to be passed before the election, doesn't it?
-Think long-term. If we push it through like that, this incident will lead to the Landowner Party and the Republicans uniting to oppose us. Then, the conflict between the church and the republicans we've worked so hard to create will be extinguished.
Roberto finally understood. The conflict between the church and the republicans surrounding the establishment of a secular university was so intense that it was on the verge of full-blown armed conflict.
In the end, the Imperial family mediated, and they both compromised, but as a result, the church's power in Congress increased.
They felt a sense of crisis.
Somehow, members of Congress from both the Imperial Party and the Republicans, those who had strong faith or were from families closely connected to the church, began switching sides to the Landowner Party.
The number of such members was only a few, but the impact was significant. It was a signal that the Catholic Church, which had immense influence but was spread across various political factions, had openly sided with the Landowner Party.
The conflict between the republicans and the Catholic Church ultimately accelerated the Catholic Church's political movement, turning into a conflict between the republicans and the Landowner Party.
-So, you're saying that if we want to pass the law, we only need one of the Landowner Party or the Republicans, and if we choose one and pass the law unilaterally, the other side won't be able to trust the side that betrayed them first.
-That's right. They're not getting along now, but to keep that structure going in the future, we can't keep siding with one side. If we do, the ignored side is more likely to become radicalized. We sided with the republicans last time, so it's better to make a deal with the Landowner Party this time. But if they don't ask for a deal, there's no need to go looking for them first. Make a deal with whoever comes to you first.
-Yes, I understand, Your Highness.
I thought they would come about a month before the election, but they came much sooner than expected.
"So, they still have their political instincts."
Roberto welcomed Rafael, the chairman.
"It's an honor that you've come all the way to my house, Chairman."
Surprised by the unexpected hospitality, Rafael smiled lightly and replied.
"Haha, as expected of the famous Mendoza mansion, it's very impressive."
General Fernando Mendoza, the Emperor's right-hand man, and Roberto Mendoza, member of Congress, lived together in this mansion.
As the servants began to bring in tea and snacks, Roberto asked.
"You've come to talk about the law on the establishment of a central bank, haven't you?"
He said it as if he had expected it, and Rafael readily replied.
"Yes, that's right. Our Landowner Party would like to support that law."
"There will be conditions, right?"
"Yes. First of all, we would like that institution, the central bank, to be an independent body, not under the executive branch. The head should also be appointed not by the executive branch, but by the Prime Minister and Congress, like the ministers, and then submitted to His Majesty the Emperor. ...It would be good if you could make sure that our Landowner Party can buy enough naval bonds."
The conditions of the deal were exactly as His Highness the Crown Prince had predicted. They wanted to ensure they could nominate as neutral candidates as possible, since it was going to be established anyway.
Openly, the governors and Supreme Court justices appointed by the Emperor are classified as completely Imperial Party members, but the ministers of each branch of the executive branch, although they can't refuse the Emperor's orders, are considered to be relatively neutral in terms of their personalities.
Since it's going to be established anyway, it's a bonus to secure naval bonds, which could be a lucrative source of income for the landowners.
"Alright."
"What? ...Can you decide that quickly?"
Rafael was surprised when Roberto readily agreed.
"Yes, we can accept those conditions."
"Hmm... Alright. Thank you for the good deal."
"Thank you as well."
Rafael had easily achieved his goal, but he left the mansion with a nagging feeling.
The next day, Roberto, member of Congress, reintroduced the bill on the establishment of a central bank.
The republican members of Congress, as before, opposed it, but they couldn't help but feel something strange.
"Why aren't those Landowner Party guys opposing?"
"And that's not all, shouldn't they have held a vote by now and finished it?"
Something had changed. Pedro Gonzalez, member of Congress, who was feeling it, had a thought.
"They've made a deal with the Imperial Party."
He knows from experience. Didn't they make a deal with the Crown Prince regarding the implementation of the metric system and the establishment of a secular university?
Hearing that, his fellow members of Congress were furious.
"We knew they weren't trustworthy, but..."
"Damn it. Don't they realize that passing this bill through a deal will eventually choke them?"
The Landowner Party thought the same way about the republicans, but people are hypocrites by nature.
The republican members of Congress were looking at the Landowner Party more hostilely, not at the Imperial Party, who had proposed the bill, but at the Landowner Party, who had suddenly reversed their position on an issue they should have united to oppose.
Meanwhile, Pedro, the leader, was organizing his thoughts.
"If the Imperial Party and the Landowner Party have made a deal, this law will pass. If we continue to oppose it, it will hurt us in the election."
Pedro had some expectations for the election. It's true that the Crown Prince has gained public support by accumulating achievements, but the number of immigrants has been increasing rapidly recently, and self-employed farmers and urban workers, who are not part of the landed gentry, have been dividing into the Imperial Party and the Republicans.
It's not that the republicans have done anything great, but their resentment towards the landed gentry has led to support for the other side, and the republicans are closer to the opposite side of the Landowner Party than the Imperial Party.
In other words, the Imperial Party will likely gain more seats from the Landowner Party in this election, but the republicans are hoping to not only maintain their seats but also increase them slightly.
"If the Landowner Party guys have any sense, they'll have agreed to make the central bank independent from the executive branch as a condition of the deal."
"We have no choice but to agree."
"It's because of the election."
"Yes, if it's going to pass anyway, there's no need to do something that could be a weakness in the election."
Pedro's fellow members understood his words.
Thus, the law on the establishment of a central bank was passed.
***
As agreed, they nominated someone from Congress to be the governor of the central bank, and a relatively neutral expert was chosen.
The central bank's staff was filled by scouting people who had studied finance in Europe, employees of commercial banks, and employees of the Treasury Department.
The staff moved into the central bank building that had been prepared in Mexico City, and their first task was to issue naval bonds.
"Wow, did you prepare this beforehand?"
The governor of the central bank asked in admiration when I showed him what I had prepared.
I'm not a financial expert, but I know what bonds are and how they work. Bonds at that time were issued as physical documents, like stock certificates, and I had prepared the design beforehand.
"What do you think? Doesn't it make you want to buy it?"
"I was going to buy it anyway, but now I want to buy it even more."
It's a naval bond issued by the state, after all. People will want to buy it based on the interest rate, but since it's our Empire's first bond, I paid attention to the design.
On the front, I put the Mexican Empire's unique pattern around the edge and wrote various information in a neat font. On the back, I drew a picture of a ship of the line, which people of that era associated with "warships," in a beautiful way.
This will be valuable as a collectible in the future.
"I've completed the detailed information and design for the bond, so please do the rest of the work as quickly as possible."
"Yes, I understand."
***
January 1836.
The cold winter weather covered the world, but most of Mexico wasn't that cold.
Citizens headed to the Rios Express branches, which were now a natural part of most villages.
"Is it today? We came yesterday and got nothing."
"I told you, I got the date wrong yesterday. Can't you see all the people gathered here?"
Today is the day the naval bonds, which have been advertised relentlessly in various newspapers, will be sold. "Simplecio's Sword," in particular, published the bond's design and used a strategy to appeal to patriotism, saying that the bond was for financing the training of the navy.
The Rios Express branch, where two friends arrived, already had many people lined up.
"They say His Highness the Crown Prince bought 1 million Pesos worth of bonds!"
"Wow, 1 million Pesos! But it's being sold today, how do you know?"
"It's written in today's newspaper."
"Ah, I see. He already made a purchase decision."
Hearing what others were saying, they became more convinced about buying bonds. They waited for hours, and finally, they paid 200 Pesos and bought two bonds, which looked exactly like the ones they had seen in the newspaper.
"So, if you have this, you'll get 4 Pesos in interest for 10 years, a total of 40 Pesos, right? And you'll get your principal back at maturity?"
"Yes. It's a 100 Peso bond with a 10-year maturity and a 4% annual interest rate."
His friend, who had picked up some knowledge from somewhere, answered using seemingly sophisticated terms, but his friend wasn't listening, already admiring the picture on the back of the bond.
"Wow, are they building this with the money we paid? It's kind of satisfying."
"···It's impressive."
People bought bonds to receive interest, but when they saw the picture of the ship of the line drawn on the bond, they felt a sense of satisfaction that they had helped the country.
***
Just two weeks after the bonds were issued, 5 million Pesos were collected. It was the result of not only ordinary citizens but also landowners buying bonds with their spare money.
They'll reach their final goal of 10 million Pesos within two months, in this era.
A tremendous amount of Pesos was pouring in through the railroads that stretched across the Mexican Plateau, California, Texas, the Yucatán Peninsula, and Central America.
"It's truly amazing."
The sight of the cargo hold of the train filled with glittering Pesos was a spectacle even for Agustin I, the Emperor.
Workers hired by the central bank were carrying sacks full of Pesos, grunting as they moved them to carts.
Given the amount, the central bank had hastily prepared warehouses that were being filled up, with the army deployed to guard them strictly.
"To collect 10 million Pesos! With this amount, we can allocate a sufficient budget for building warships and even build a third harbor and shipyard."
Agustin I said to the Crown Prince.
"Father, not yet. I have a plan to multiply this money."
"···You have another plan?"
Agustin asked with a slightly surprised but expectant expression.
"Yes, we've created a central bank, so we need to use it."
If we were just going to issue bonds, there was no need to create a central bank.
As the Emperor marveled at the mountain of silver coins, the Crown Prince thought once again about the inefficiency of metal currency.
Thanks for this chapter
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