**Chapter 78**
**Central Bank and Navy (5)**
February 1836.
The fourth official general election of the Mexican Empire was held.
More people participated than before, but it was still an election where the majority of the population couldn't participate.
The congressmen, whose terms were limited to a total of 12 years according to the constitution, stepped down, and new faces filled the parliament.
"You're on your third term now, aren't you?"
"Yes, Your Highness."
Congressman Robert answered.
"I limited the terms to three to prevent congressmen from staying too long, but it's too short, after all."
I'm going to keep the term limit itself, but I think I need to change the conditions a bit.
"I apologize for the results being worse than the number of seats I mentioned before, Your Highness."
"You got 77 seats, didn't you? You've created a significant gap with the landowners' party and the Republicans, so I think this is a success."
The number of seats he told me he could secure was 80 out of a total of 201.
"Considering what Your Highness has achieved, I'm truly ashamed that I couldn't get better results than this."
If he's telling me this, it means he was really confident about getting around 80 seats. He probably expected more, so it's not unreasonable for him to be disappointed.
"Don't be too hasty. It's better to take it slow. Think about the extreme political turmoil in Mexico right after independence. It's better to change things slowly, as you've been doing for the past 14 years, it has many advantages."
I don't prefer radical reforms. Radical methods always come with side effects.
"That's something you do when there's no other way."
If I hadn't made a deal with them until the end of this central bank issue, I could have forced them to accept my original proposal without any changes, or if they hadn't yielded, they would have faced more extreme results in the election.
"It might seem like a gain in the short term, but it's a huge loss in the long run."
The landowners' party and the Republicans would have become dissatisfied and hardened, and they would have joined forces to oppose the royal family. They would have spent time squabbling instead of building up the country's strength.
Congressman Robert is not someone who wouldn't know this.
"Yes, Your Highness is right. I'll take a more long-term perspective. Thank you, Your Highness."
"Alright."
I patted Congressman Robert on the shoulder.
"But the balance is starting to break slowly."
The landowners' party has 61 seats, and the Republicans have 63 seats, so the control of the parliament, which was split into thirds in the previous parliament, has shifted to the Emperor's party.
***
Of all my companies, the one that makes the biggest claim to size is Rios Express, from its establishment to now.
On the other hand, the smallest company is "Solis," run by Isidro Solis. It played the role of a cash cow during the California gold rush, operating restaurants and accommodations in various cities, but looking at the reports, its profitability is declining.
"The restaurant business is doing okay, but the accommodation business is rapidly declining because most of the miners have received land in the California area and settled there."
"Yes, Your Highness. It's not at a loss because it has good locations, but the future outlook isn't good."
Diego answered me.
"Well, it was a business that was aiming for the gold rush boom, but it's a shame to leave it as it is."
I do have a business idea that came to me recently.
"I should entrust Solis with the canned goods business."
"Ah, the army will also have demand for canned goods, so we don't have to worry about profitability."
Restaurants and food businesses are different industries, but they're not completely unrelated, and it's something that needs to be done anyway.
"Yes, and I have a drink in mind, but I'll have to do some research to find the exact recipe."
The drink I have in mind is cola. I know that early cola used carbonated water, sugar, coca leaves, and kola nuts, but the exact proportions are unknown, so it will have to be made through experimentation.
Diego wrote what I explained in a letter and said.
"Your Highness, should we just write that they should maintain the status quo for the accommodation business?"
"No, it's a shame to use that land like that. Wait a moment."
The locations of the accommodation businesses that Solis owns are all in the heart of the city. And it's not just one or two, but they have them in most of the settlements that benefited from the California gold rush, including Sacramento, San Francisco, Los Angeles, and more.
"Ortega Construcción's capabilities have improved a lot, so we can start the hotel business."
"The hotel business?"
Modern hotels, which provide sophisticated services and various amenities, first began in England at the end of the 18th century.
In 1829, "Tremont House," which introduced many "firsts" in the hotel industry, such as indoor plumbing, indoor toilets and bathrooms, achieved great success in Boston, USA.
"We can make one too. But California, you see."
It's true that California has grown incredibly fast due to the gold rush and immigration, but I wonder if it's ready for the hotel business. Of course, we'll do it eventually. We can't leave that good land idle, just building motels like now.
"We should open the first branch in Mexico City. We'll build up experience by operating stably here and then go back to California."
"Yes, there probably aren't many hotel guests in California. I'll write that down, Your Highness."
As I was reviewing the reports from the managers and giving them business advice, as usual, the guest I had invited came to my office.
"Your Highness, Mr. Alfonso Rios is here."
"Tell him to come in."
"Yes."
Alfonso entered.
"Your Highness, you called for me?"
It was a calm greeting, typical of Alfonso.
"I have something to talk to you about."
It's about Rios Express.
Among my companies, there are several that are incredibly large, including Ortega Construcción, Mexico's Imperial Railroad Company, and Estrada Steel, but the biggest of them all is Rios Express.
Even now that there's a railroad, they're transporting an incredible amount of letters and packages across the country, and the demand for passenger transportation services through stagecoaches is still there.
People have become so accustomed to using Rios Express's services that even when they make money, they don't bother buying horses or carriages.
Rios Express branches across the country have started providing financial services, and they have become the leading consumer finance company in the Mexican Empire, similar to how Wells Fargo became the leading consumer finance company in the American West in the original history.
"I want you to split the financial part of Rios Express. It's a good thing that both the logistics and finance have grown, but they're not really related fields. There are inefficiencies when one company does two unrelated businesses."
Alfonso, not a person who likes small talk, went straight to the point.
"···Is it because of expertise and focus?"
"That's right. In fact, Rios Express is currently focusing its efforts on finance."
"Yes, the return on investment is higher in finance, so we're focusing on finance."
Wells Fargo and American Express in the original history also went down a similar path. The two companies, which originally started as logistics and transportation service companies, shifted their main business to financial services over time. In the process, the logistics and transportation service divisions were sold off or gradually shrunk and disappeared.
It's not comparable to the profitability of the financial industry, but it's a shame to think that both logistics and transportation are industries that will continue to grow until the present day.
It's a bit different, but it's a good business to get into retail, like supermarkets, as the economy becomes more sophisticated.
"There's still plenty of room for growth in logistics and transportation, but you have limitations on your time. There are employees in the company who are responsible for logistics and transportation, but I believe you know how big the difference is between a manager who personally cares and one who doesn't."
Alfonso nodded slightly.
"Yes, I agree. I hadn't thought of splitting it, but it would be good for me to focus more on finance."
"Good, then recommend a suitable person to take over the logistics and transportation side. He'll lead Rios Express. The financial side, which is split off, will become a different company called "Rios Bank."
"Yes, I'll find a suitable person as soon as possible."
Alfonso answered and asked some questions.
"Will the split-off "Rios Bank" be unable to use the existing infrastructure?"
"For now, let them share the existing infrastructure, and in the long term, let them expand and separate their branches."
We discussed various other things and created a concrete split plan together. As we were nearing the end, Alfonso said.
"Your Highness, I would like to transfer the 3% of my Rios Express shares to my successor. It's a different mindset, having shares and not having shares."
The current share structure of Rios Express is simple, 90% for me and 10% for Alfonso, and the split company will have the same share structure.
In other words, Alfonso will have 10% of Rios Express and 10% of Rios Bank. He asked me to allow him to transfer 3% of his Rios Express shares to his successor for free.
"It's your shares, so you don't need to ask me for permission, but I can't allow that. I'll give you my shares, you keep yours."
"No, even before I received the shares, I thought I had received great kindness from Your Highness, but after receiving the shares and the company growing, it's become too much kindness. Please let me repay you."
"It's because you did well that the company has grown this much. Then, let's give 1.5% each. What do you think?"
It's true that Alfonso has become one of the wealthiest people in Mexico in a short period of time. But that's because he achieved overwhelming results among his classmates who became managers at the same time, growing it into the largest company in Mexico.
"Alright."
Alfonso accepted when I took a step back. The new manager will have 3%, combined with my shares and Alfonso's.
***
After the election and the bond sales were nearing completion, the bill to issue paper money was passed.
It was the first bill of the newly elected parliament.
"As you said, it passed without much opposition."
Congressman Robert reported to me after the bill was passed.
"It's not a law that affects power, like the establishment of the central bank. In fact, it's a better solution for them than the current situation, so they have no reason to oppose it."
The Mexican Empire didn't have an official currency issuing institution from the time of the confiscation operation right after independence.
The pesos currently in circulation are not issued with the official consent of parliament, but rather by Agustín I, arbitrarily moving the executive branch to issue them.
"Yes, this time, we've been able to officially issue currency authorized by parliament, and there was little opposition to introducing the gold standard, which we were worried about, since the United States also uses both gold and silver."
"I see. You've worked hard on this one too."
We can't go to a full gold standard yet.
The peso, currently a silver coin, is circulating nationwide, and we need to issue paper money based on gold. There will inevitably be a period of time when silver and gold are used together.
This is the same situation in the neighboring United States. A bimetallic monetary system, where both gold and silver are used, has several disadvantages compared to a system where only gold-backed currency exists, but it's unavoidable for now.
"Eventually, we'll have to fully convert it after collecting as many silver pesos as possible."
There will be side effects, but they're negligible compared to the many advantages of paper money.
I immediately ordered the Ministry of Finance to issue currency.
The second task of the central bank has begun.
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