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 LIBRARY 
 
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 Library 
 
 The original of this book is in 
 the Cornell University Library. 
 
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 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924021108570 
 
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 EEPOET 
 
 OF THE 
 
 OF THE 15TH OF JANUARY, 1^79, 
 
 ON THE ACTUAL CONDITION OF MEXICO, AND THE INCREASE OF COMMERCE 
 
 WITH THE UNITED- STATES, 
 
 Rectifying the Report of the Hon, John W. Foster, 
 
 ENVOY EXTRAORDINARY AND MINISTER PLENIPOTENTIARY X>F THE UNITED STATES IN MEXICO, 
 
 THE 9TH OF OCTOBER, 1878. ,^ 
 
 TO MR. CARLISLE MASON, 
 
 PRESIDENT OF THE MANUFACTURERS' ASSOCIATION OF THE 
 ITY OF CHICAGO, IN THE STATE OF ILLINOIS, OF THE UNITED STATES OF AMERICA. 
 
 •■'i^' 
 
 N. PONCE DE LEON, Publisher and Printer, 40 & 42 Broadway, New York. 
 
 1880. 
 
 J- 
 
A2J+ 
 
w 
 
 EEPOET 
 
 OF THE 
 
 OF THE isTH OF JANUARY, 1879, 
 
 ON THE ACTUAL CONDITION OF MEXICO, AND THE INCREASE OF COMMERCE 
 
 WITH THE UNITED STATES, 
 
 Rectifying the Report of the Hon, John W, Foster, 
 
 ENVOY EXTRAORDINARY AND MrNIStER PLENIPOTENTIARY OF THE UNITED STATES IN MEXICO, 
 
 THE 9TH OF OCTOBER, 1878. 
 
 TO MR. CARLISLE MASON, 
 
 PRESIDENT OF THE MANUFACTURERS' ASSOCIATION OF THE 
 CITY OF CHICAGO, IN THE STATE OF ILLINOIS, OF THE UNITED STATES OF AMERICA. 
 
 ^^\^^Ul(rtf/,„,^ 
 
 ^^..' "i y \ 
 
 . .1 
 
 N. PONCE DE LEON, Publisher and Printer, 40 & 42 Broadway, New York. 
 
 
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 1880. 
 
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 UNIVERSITY! 
 LIBRARY ''^ 
 
 / 
 
DEPARTMENT OF STATE 
 
 FOR THE 
 
 FINANCES AND PUBLIC CREDIT. 
 
 SECTION 3RD— FIRST BUREAU. No. 2,640. 
 
 1. With your communication of the 4th instant, there has been received at this office a translation of the 
 Report dated October 9th, 1878, which the Hon. John W. Foster, Envoy Extraordinary and Minister Plenipo- 
 tentiary of the United States to the Government of Mexico, directed to Mr. CarHle Mason, President of the 
 Manufacturers' Association of the Northwest, at Chicago, State of Illinois, which document you were pleased to 
 remit to me, in order that this office should make the rectifications it may judge proper and which the document 
 demands, containing as it does various points touching upon matters pertaining to this office. 
 
 The President has informed himself of the forementioned Report with all the attention its importance 
 requires, and at his direction, I proceed to make the observations which have been esteemed necessary. 
 
 2. The Manufacturers' Association of the Northwest, of the United States, gave a reception in Chicago to 
 the Representative of Mexico at Washington, with the object of obtaining information, and of discussing the 
 most suitable means of developing the commercial relations between the two republics. The Representative of 
 the United States in Mexico, was invited to that reception, and was asked to furnish the Association with such 
 information as he had been able to acquire during his residence in that country. This invitation was th» origin 
 of the said Report. 
 
 3. The Representative of the United States in Mexico commences his Report by stating that the increase 
 of commercial relations between the two republics is a subject in which |_he is profoundly interested, and to 
 which he has devoted much study and meditation ; that when he came to Mexico he was strongly impressed 
 with the idea of obtaining a great increase of commerce between the two countries ; that on proper occasions, 
 both in the United States and in Mexico, he has manifested his hopes on this point, and that he still cherishes 
 the same ardent desire that that object might be realized, as he considers it the most powerful and beneficent 
 means of preserving peace on the frontier ; of furthering and establishing political and social friendship between 
 Mexico and the United States, and of helping both nations to mutually maintain Republican institutions. 
 
 ■He then declares, that while the Representative of Mexico at Washington has become more and more 
 persuaded of the possibility of enlarging the commerce between the two countries, he, on the contrary, has 
 become constantly impressed with the obstacles which present themselves to its realization, and the embarrass- 
 ments which may supervene. He calls himself a colaborer in the great undertaking of promoting the develop- 
 ment of commercial relations between the two countries, but he avers, that, at the requisition of his fellow- 
 citizens, he considers it his duty to speak frankly and to conceal nothing of what is passing, although this may be 
 disagreeable to some. He declares that, although the Representative of Mexico at Washington may cherish 
 flattering hopes of a prosperous commerce, he, for his own part, must attend to representing the difficulties, 
 stumbling-blocks, and dangers which present themselves against it ; that he does not expect a flattering future, 
 and that it is as just, as it is important, to inform the manufacturers of Chicago of everything that may be 
 adverse as well as favorable to the desired end. He clearly decla"res, then, on commencing the Report, that his 
 principal object is to speak of the difficulties, stumbling-blocks and dangers which commerce in Mexico presents, 
 and following this proposal everything which is favorable to this enterprise has been almost totally omitted. 
 
 1. Receipt of the report of Mr. Foster to the Manufaotarers' Association of Chicago, of October 9th, 1878. 
 
 ' 3. Invitation of the Manufacturers of the Northwest ; the origin of the Report 
 
 3. The Report is framed, principally, to present the difficulties and dangers In the way of the development of com- 
 merce. 
 
4. This brief exhibit shows at once that unfortunately the ideas of the Representative of the United States 
 in Mexico, in respect to the increase of commerce between the two countries, have undergone an unfavorable 
 change within a short time past, as appears by comparing his opinion expressed on former occasions, and prin- 
 cipally in his speech delivered before the Chamber of Commerce of New Orleans, on November 19th, 1875, with 
 the conceptions contained in his Report of November 9th, 1878, to the Manufacturers' Association of the North- 
 west, of the United States. 
 
 5. This change is lamentable, indeed, as it occurs in a high public functionary, whose ideas and efficacious 
 co-operation would contribute in a great degree to the realization of so important an object. It is to be feared 
 that the difficulties which, through divers motives, have been presented to the realization of his desires, may have 
 worked a reaction in his mind which makes him exaggerate these difficulties to himself, and to imagine it to 
 be a more difficult enterprise to increase the commerce between the two countries than it really is. It is also to 
 be believed, that being profoundly impressed with these difficulties, he has determined to clearly manifest all the 
 stumbling-blocks and dangers which his fellow-citizens, needing information on a point so directly affecting them, 
 might encounter, and being influenced by the greatest good faith and honest intention, he has emphasized those 
 inconveniences in order to be forever free from the blame which might attach to him if he did not make them 
 patent in all their magnitude. * 
 
 6. While the Repoi t contains many exact data and estimates worthy of attention, it is unfortunately marred 
 by conceptions and deductions which are entirely without foundation, and which, emanating from no less a 
 source than an official Representative of the United States, a person of extensive information, great sagacity, 
 recognized tact, and large experience in the affairs of Mexico, from having resided in this country nearly six 
 years, it cannot but produce, and with good reason, a deep impression on the pepple of the United States. 
 
 7. If to these circumstances is added the fact that the Report of the Hon. Mr. Foster has been accepted by 
 the Government of the United States, upon its being made public, the impression which it must have caused in 
 that country against the increase of commerce with Mexico will be easily understood. 
 
 8. As a practical result of the said Report, however different may have been the intention of its author, it 
 annot but discourage any efforts that may be made to augment the commerce between Mexico and the 
 United States ; and as Mexico needs this commerce, the Government of this RepubHc believes it opportune to 
 make some rectifications in the mentioned Report ; presenting the situation of the country, such as it is, without 
 conceiving its drawbacks, nor exaggerating its advantages. 
 
 9. Taking into consideration that the mentioned Report is an official document of the Government of the 
 United States, which must be supposed to be greatly interested in the development of its own commerce with 
 the Mexican nation, and disposed, therefore, to favor everything which tends to produce that result, and that 
 the said Report is destined to circulate all over the civilized world, it is the duty of the Government of Mexico 
 to vindicate the country, clearing away the dark coloring under which the Report in question presents it. 
 According to the Report it would be inferred that Mexico, being a country which neither consumes nor produces 
 but very little ; which has no ways of communication, nor can have them ; which guarantees neither life nor 
 property, and which at heart resists all improvement and all progress, it ought to be abandoned by civilized 
 nations, as an unfruitful land, in which nothing can be reaped, but where everything that is invested in it is lost 
 producing naturally in the mind of the impartial reader the impression that Mexico is_ almost outside of the pale 
 of civilization. This consideration makes it not only a right, but the duty of the Government of Mexico, to 
 present the question such as it is per se, in order that the intelligent and impartial opinion of the civiUzed world 
 may not be led astray, but be able to pass judgment with a full knowledge of the truth. 
 
 10. The Hon. Mr. Foster divides his Report in three parts ; the first treats of the means of communication 
 which exist for commerce with Mexico, and the possibility of improving them ; the second, of the tariff and laws 
 in reference to commerce, and the third, of the security and protection which are granted in this country to life 
 and property. The same order will be followed in this rectification. 
 
 4. Contrast between the Report and the speech of Mr. Foster delivered in New Orleans, November 19th, 1878. 
 
 5. Appreciation of the causes which may have made this change. 
 
 6. The Report contains exact conceptions and well founded estimates, and at the same time inexact data and erroneous 
 deductions. 
 
 7. The Report has been accepted by the Government of the United States, upon its being made public. 
 
 8. The Mexican Government desiring to enlarge its North American comerce believes it opportune to rectify the Report. 
 
 9. The Mexican Government believes itself under the obligation to defend the nation against the estimates which aje 
 made of it in the Report. 
 
 10. This rectifioation will follow the order of the Report, treating separately of the three parts in which it ig divided. 
 
PART FIRST. 
 
 LINES OF COMMUHICATIOi ESTABLISHED III MEXICO FOR FOREIGN COMMERCE, 
 
 n. In the Report it is stated there are now established between Mexico and the United States four lines of 
 steamers, one running twice per month, between New York and Vera Criiz, and touching at other intermediate 
 ports ; another between New Orleans and Vera Cruz, making its trips every twenty days, and also touching at 
 intermediate ports ; and two lines on the Pacific, one sailing from San Francisco twice per month, touching at 
 Acapulco, and once per month at other ports of the Pacific, and the other, sailing every thirty-five days, for 
 Mazatlan and the ports in the Gulf of California. He states that these lines are subsidized by the Mexican 
 Government, and it is indicated that they are altogether insufficient to develop a great trade between the two 
 countries, stating that this can only be attained by the construction of a railroad that shall put Mexico in com- 
 munication with the railway system of the United States ; although in the same Report it is left to be understood 
 that the building of this railroad would be impossible, because it would offer no returns at all to the capital that 
 might be invested in its construction. 
 
 T 2. Some of these conceptions are correct, others are erroneous or exaggerated, and the consequences which 
 are deduced from them are the less admissible, inasmuch as in the Report no mention is made of facts and 
 incidents which are indispensably nectssary to appreciate and properly judge of the actual situation of Mexico. 
 In order to discuss with sufficient clearness the two points comprised in this part of the Report, that regarding 
 the lines of Steamers, and that which refers to Railroads, it is best to speak of each one separately. 
 
 I. LINES OF STEAMERS TOUCHING AT MEXICAN PORTS. 
 
 13. It is necessary to give a brief account of the manner in which 'the different lines of steamers which now 
 touch in Mexican ports were estabKshed, those subsidized as well as those that are not, in order to be able to 
 appreciate the actual situation of the exterior commerce of Mexico, especially in its relation to the United States, 
 both in the Gulf of Mexico, and in the Pacific Ocean. 
 
 14. With this object we will speak here of the following subjects : 
 
 1. EstabUshment of Knes of steamers not subsidized in Mexican ports of the Gulf of Mexico. 
 
 2. Lines of North American steamers plying in the Gulf of Mexico subsidized by the Mexican Govern- 
 ment. 
 
 3. Commerce of Mexico on the Pacific. 
 
 4. Lines of North American steamers on the Pacific subsidized by the Mexican Government. 
 
 5. Summary of subsidies paid by Mexico to lines of North American steamers on both seas. 
 
 6. The Government of the United States does not subsidize lines of North American steamers which 
 trade with Mexico. 
 
 7. Development of trade between Mexico and the United States by means of these steamers. 
 
 8. Contracts entered into by Mexico with line of steamers not American. 
 
 9. Summary of facts in reference to subsidized steamers touching at Mexican ports. 
 
 11. The Report declares that the lines of Steamers are insufficient, and that an international railroad is needed. 
 
 12 The communications by Steamer and by railway will be spoken of separately, in order to rectify some conceptions, 
 
 13. Propriety of showing how lines of Steamers have been established in Mexico. 
 
 14. IJine points will be spoken of in treating of the lines of Steamers. 
 
I. ESTABLISHMENT OF LINES OF STEAMERS NOT SUBSIDIZED IN MEXICAN PORTS OF THE GULF OF MEXICO. 
 
 15. During the Spanish rule there was no other port in New Spain, on the Gulf of Mexico, authorized to trade 
 with the MetropoUs but that of Vera Cruz ; for trade was not permitted with any other nation. The port of 
 Acapulco, on the Pacific Ocean, was also empowered to trade, in terms which will be spoken of hereafter. Upon 
 the consummation of Independence, various other ports on both seas were opened to the commerce of all nations. 
 
 A. The English Royal Mail Line., 
 
 16. The estabUshment of communication with Europe by packet vessels departing regularly from trans- 
 Atlantic ports and from ours, dates from the earliest years of our Independence. The West India Company, of 
 Elberfield, in Prussia, was the one which from the year 1822 began to dispatch periodically certain vessels which 
 sailed from English ports, bound for Vera Cruz. Those vessels were thoroughly well armed to defend themselves 
 from the Columbian Corsairs, which, lying in wait at the Island of Kankun, obstructed the entrance to the Gulf 
 of Mexico, under the pretext of making war on the trade of Cuba and Spanish vessels. One of these vessels, 
 the frigate " Rawhns," acquired celebrity for having conducted the Emperor Agustin de Iturbide, when he sailed 
 as an exile for Liorna. * 
 
 17. In 1824 the increase of trade with the countries emancipated from the Spanish dominion, and the 
 necessity for providing for the transportation of silver obtained from sales of merchandise, with the greatest pos- 
 sible security, causing the EngUsh Government to give orders that on the 15th of every month a vessel of the 
 Royal Marine should sail from Falmouth, bound for Honduras, Jamaica, and Vera Cruz. Those vessels 
 anchored in the Port of Vera Cruz, near the Island of Sacrificios or at the " Punta de Anton Lizardo," where 
 a small town had grown up called Morelia. They landed the passengers and correspondence they brought, and 
 weighed anchor for Tampico, where they generally received the silver coming from the interior of the Republic; 
 afterwards they returned to Vera Cruz, to take in the mail and passengers and set sail for England. 
 
 18. In the year 1841, the first steam vessels of the Royal English mail began to ply, although with some 
 irregularity. They sailed from Southampton, touched at Madeira, the Antilles, Jamaica and Habana, and then 
 at Vera Cruz and Tampico, and made the return voyage to England, touching again at Vera Cruz and Habana, 
 and then at Nassau and the Bermudas ; and thence to Southampton. 
 
 19. The first steam vessel crossed the Atlantic in 1838, and it is worthy of attention, that within three years 
 after, the English had already established steam communication with Mexico. In fact, in the Records of Foreign 
 Relations under date of Jan. i6th, 1841, there is found the following on this matter: "The English Government 
 has arranged, by means of considerable pecuniary sacrifices, the establishment of communication by steam 
 vessels, which will commence to take effect within the present year." 
 
 20. Although these vessels brought no merchandise, but were only dedicated to the transportation of 
 passengers and the mail, and to the expdrtation of some articles of great value and little weight, such as silver, 
 cochineal and indigo, this line, notwithstanding, afforded great advantages for trade, by the facility and regularity 
 of its communications, and this was one of the motives through the influence of which the trade of Mexico 
 remained for many years almost monopolized by Great Britain. This line continues touching in said ports, with 
 perfect regularity, and without any subsidy. 
 
 21. This diligence of the English to establish commercial relations with Mexico, by virtue of which a Une 
 of steamers has been established between the two countries since 1841, presents a marked contrast to the 
 conduct of our neighbors, for until the year 1850 no steam communication was estabhshed between the ports of 
 the United States and Mexico, and this did not become regular until 1868, through the subsidy of the Govern- 
 ment of Mexico. 
 
 B. First line of Steamers from New Orleans to Vera Cruz. 
 
 22. In the year 1850 the first line of steamers was established between New Orleans and Vera Cruz; 
 served first by the "Alabama," next by the "Orizaba," and then by the "Tennessee," the principal object of 
 
 15. Upon the consummation of independence, other ports were opened to foreign commerce beside Vera Cruz and 
 Acapulco. 
 
 16. Since the earliest years of independence there has been communication with Europe by means of packet vessels 
 
 17. In 1834 the English Government arranged for the departure of one of its naval vessels from Falmouth to Vera 
 Cruz on the 15th of every month. 
 
 18. In 1 841 steam vessels of the Royal English Mail first came to Mexico. 
 
 19. The first steam vessel crossed the Atlantic in 1838. Three years after they came to Mexico 
 
 30. The English vessels served for the transportation of passengers and the mails. 
 
 31. Contrast between the efforts of England and those of the United States, to establish communication 'th M ■ 
 22. The first line of Steamers between New Orleans and Vera Cruz was established in 1850, without a sub^'d ^^"'°' 
 
which was the transportation of cotton harvested in the Southern States, and destined for the factories of cotton 
 cloth established in Mexico. This Kne did not succeed in obtaining any subsidy from the Mexican Government, 
 neither did it, it is believed, obtain any from the United States. Its business must have been of some impor- 
 tance, being sustained without any subsidy, concession or exemption. By means of that hne the trade between 
 the two countries was aheady beginning to be developed when it was suspended, principally on account of the 
 civil war which broke out in the United States. 
 
 C. Line of Steamers from New Orleans to Minatitlan. 
 
 23. By virture of the concession which was made by the Government of Mexico, in favor of the Company 
 called " Louisiana of Tehuantepec," for the construction of a road through the Isthmus of Tehuantepec, this 
 Company opened a wagon-road from Suchil to Ventosa, and in 1858 established a line of passenger steamers 
 plying from New Orleans to Minatitlan; there the passengers were transferred to a steamer which ascended the 
 river Coatzacoalcos as far as Suchil, where they took the stage-coach to Ventosa, and from thence continued by 
 steamer to San Francisco. This line lasted hardly six months. 
 
 D. Line of Spanish Steamers. 
 
 24. Before the French Intervention, a line of Spanish steamers, of the house of Messrs. Lopez & Company, 
 doing service between Spain and the Island of Cuba, touched at Vera Cruz and Sisal. Its voyages were 
 suspended in 1869, on account of the importations of wax and tobacco having diminished, by reason of the 
 national production of both articles, and although it touched in Mexican Ports, it did not enjoy any subsidy 
 from the Government of the Republic. An endeavor is now being made to re-establish this line. 
 
 E. General Transatlantic Line of St. Nazaire. 
 
 25. In the year 1864 and during the French Intervention, with the view of enlarging French commerce 
 with Mexico, the general trans-Atlantic line of French steamers of St. Nazaire, subsidized by the French Govern- 
 ment, was extended to Vera Cruz. This line has contributed somewhat to the development of commerce with 
 France, and its results must have been of some importance, when it was not suspended after the retreat of the 
 French troops from Mexico, and notwithstanding that all official relations between France and Mexico were 
 then cut off, and still remain so; and that the conduct of the French Government during the Intervention had 
 greatly exasperated the public mind of this country against that Power. The French line, in spite of not being 
 subsidized on the part of Mexico, continues touching monthly at the port of Vera Cruz, and its vessels always 
 arrive with valuable cargoes. 
 
 F. Lines of Steamers from Liverpool. 
 
 26. The importance of the commerce that Mexico carries on with England is proved by the establish- 
 ment of two other lines of steamers which start from Liverpool, and touch at Vera Cruz, Progreso, and Tam- 
 pico ; one of them is called the West Indian and Mexico Line, and the other the West Indian and Pacific 
 Steamship Company — Limited. The first began to touch at Vera Cruz on the i6th Oct., 1863. Neither are 
 these Unes subsidized by the Government of Mexico, and notwithstanding, they still subsist, and the trade they 
 carry on is considerable, coming always loaded abundantly with merchandise. 
 
 27. From this cursory history, it appears that Mexico is in communication with Europe, by means of four 
 lines of European steamers, three EngUsh and one French, which touch in its ports of the Gulf, subsidized by 
 their own Governments, or sustained by the profits of their trade ; but without the Mexican Government giving 
 them any subsidy. This fact is in strong contrast with the conduct followed by the Government of Mexico in 
 regard to the American lines, for those which now exist have been asked for by this same Government, and are 
 touching in Mexican ports by means of the subsidy and other concessions which have been made to it by this 
 country, and which have been on the increase every day. 
 
 33. Line of Steamers from New Orleans to Minatitlan, and froni Ventosa to San Francisco. 
 
 34. A line of Spanish Steamers was established before the French Intervention, and while it touched in Mexican ports, 
 it had no subsidy 
 
 35. In 1864 the line of French Steamers was extended to Vera Cruz, and is now plying to this port without a subsidy. 
 
 36. Lines of Steamers from Liverpool, touching at Vera Cruz, without being subsidized by Mexico. 
 27. Summary of facts deduced from the preceding data. 
 
6 
 
 2. LINES OF NORTH AMERICAN STEAMERS TOUCHING IN THE GULF OF MEXICO, SUBSIDIZED BY THE MEXICAN 
 
 GOVERNMENT. 
 
 28. There are five lines of North American steamers subsidized by the Government of Mexico, now coming 
 to Mexican ports on both seas, two of which touch in ports of the Gulf, and three in those of the Pacific. We 
 will speak separately of those which touch in each sea, beginning with those of the Gulf. 
 
 A. Line of Steamers from New York to Vera Cruz. 
 
 29. Before steam communication was established between New York and Vera Cruz, there was a Une of 
 sailing packets, despached with great regularity by the house of Messrs. Hargous & Company. This line was 
 already running in the year 1 844. 
 
 30. The sailing vessels not being sufficient to develop the trade between the two ports, the Government of 
 Mexico granted, on the 24th of December, 1867, a subsidy of $2,200 for the term of two years, to the Une of 
 Messrs. Alexandre & Sons of New York, for every round voyage of twenty days, which should be made between 
 Vera Cruz and New York, touching on their outward and inward trips at the Ports of Sisal and Habana ; this 
 Company was exempted from all taxes upon the steamers and sailing vessels it should employ in the transporta- 
 tion of coal, having to pay only the dues of the pilot whenever they employed him. It was also granted them the 
 right to export free of duty the amount they should receive as subsidy. 
 
 31. By this contract the Government of Mexico gave to the Company of Messrs. Alexandre & Sons of New 
 York the following sums per year : 
 
 For subsidy on 18 voyages at $2,200 each $39,600 00 
 
 For exemption of export duties on $39,600 hard dollars at 8 per cent, which 
 
 silver was pa)dng at that time 3)i6o 00 
 
 For exemption from light-house dues, and inward and outward ports — dues for 
 
 18 voyages, at $200 3>6oo 00 6,768 00 
 
 $46,368 00 
 
 32. The term of the contract having expired in 1870, it was renewed on the 30th of May of the same year, 
 for two years more, with the same conditions, and was renewed the second time on the 20th of December, 1870, 
 without any modifications. At the expiration of the last term it was again renewed on the 19th of December, 
 1873, fixing four years as the duration of the new contract, augmenting the subsidy to $2,500 for each round 
 trip, and making it obligatory on the company that its steamers should touch at Campeche on their return. Upon 
 the expiration of this last term, a new contract was entered into with the same company on the i8th of January, 
 1878, increasing the subsidy to $2,700, and obliging its steamers to touch at Frontera. Instead of a voyage 
 every twenty days, it should be made every two weeks. 
 
 33. The annual sums which the company receives from the Government of Mexico, by virtue of this new 
 contract, are therefore as follows : 
 
 For subsidy on 26 voyages at $2,700 each $70,200 00 
 
 For exemption of export duty at 5 per cent, on $70,200 3)5 18 00 
 
 For the exemption of light-house,dues on 26 voyages, at $200 SjZoo 00 8,710 00 
 
 $78,910 00 
 B. Lines of Steamers from New Orleans to Vera Cruz. 
 
 34. The line from New York not being sufficient to meet the needs of the growing trade between Mexico 
 and the United States, the Government of Mexico entered into a contract with the same house of Messrs. 
 Alexandre & Sons of New York, on 26th of March, 1873, to estabUsh a Une of steamers between New Orleans 
 and Vera Cruz, which should make its trips every two weeks, touching, in going and coming, at the Mexican 
 
 28. The lines of American Steamers subsidized by Mexico, on tlie Oulf and on the Pacific, will be spoken of separately. 
 
 29. Line of sailing packets between New York and Vera Cruz of Messrs Hargous & Co. 
 
 30. First contract of December 34th, 1867, for the establishment of a line from New York to Vera Cruz. 
 
 31. The annual subsidy of this line amounts to $46,368. 
 
 32. The foregoing contract has been renewed four times, with increase of subsidy. 
 
 33. The subsidy which is paid to the New York line amounts to $78,910 per year. 
 
 34. First contract entered into on 26th of March, 1873, to establish a. line of Steamers between New Orleans and 
 Vera Cruz. 
 
7 
 
 ports of Tuxpam and Tampico. The contract was for two years, and the Government of Mexieo agree to pay a 
 subsidy of $i,8oo for every round voyage, conceding to this line the same exemptions granted to that from New 
 York. 
 
 35. By this contract the Government of Mexico gave to the Company of Messrs. Alexandre & Sons the 
 following annual subsidy : 
 
 For subsidy on 24 voyages at $1,800 $43,200 00 
 
 For exemption of export duty of 5 per cent, on $43,200 2,160 00 
 
 For exemption of light-house duty on 24 voyages, at $200 4,800 00 6,960 00 
 
 $50,160 00 
 
 36. At the expiration of this contract it was renewed on the i8th of January, 1878, for four years, increasing 
 the subsidy to $2,000 for each round voyage of three weeks, obliging the steamers, in addition to the ports named 
 in the anterior contract, to touch at Matamoras or Bagdad. 
 
 37. By virtue of this contract, the New Orleans hne receives annually from the Mexican Government the 
 following sums : 
 
 For subsidy on 17 voyages @ $2,000 for each round voyage $34,000 00 
 
 For exemption of 5 per cent, export duty on $34,000 1,700 00 
 
 For exemption of light-house duties. on 17 voyages @ $200, entry and exit. . . . 3,400 00 5,100 00 
 
 $39,1 
 
 00 00 
 
 C. Summary of Subsidies Contracted with North American Lines on the Gulf of Mexico. 
 
 38. The lines of American steamers estabHshed on the Gulf receive, therefore, at the present time, from the 
 Government of Mexico, the following subsidy : 
 
 The New York line, per year •. . $78,910 00 
 
 The New Orleans hne, per year 39, 100 00 
 
 Total $118,010 00 
 
 39. Notwithstanding that the Report has so pointedly represented a lack of funds in the Mexican treasury; 
 notwithstanding the fear and almost certainty which it expresses that Mexico cannot pay the subsidies it agrees 
 to, and notwithstanding that in various cases the said lines of steamers have neglected to fulfil the stipulations of 
 their respective contracts, the subsidies have been punctually paid them and nothing is owing them therefor. 
 
 3. Commerce of Mexico on the Pacific Ocean. 
 
 40. Hardly any mention is made in the Report of the lines of steamers established on the Pacific, subsidized 
 by the Mexican Government. Justice would not be done to the Mexican Nation, nor to the cause of develop- 
 ing the commerce between Mexico and the United States, if the efforts made by Mexico to establish and develop 
 its commerce on the Pacific Ocean were not to be taken into consideration. 
 
 41. During the Spanish rule the port of Acapulco was the only authorized port on the Pacific Ocean for trade 
 with Asia and the Spanish Colonies of South America. When merchandise came from Spain, destined for these 
 Colonies, it passed through Vera Cruz or else through Panama, directed to Peru and Chile. Before Acapulco 
 was a port of departure for the galleons to the Phillipine Islands, the port of Navidad was thus used. In 1602, 
 Acapulco began to be used for this purpose, and in the last years of the Spanish rule San Bias was their port. 
 
 42. The exterior commerce of Mexico by the Pacific has always been of less importance than that of the 
 Gulf, and this has prevented the estabUshing of lines of steamers in those ports' without subsidy. That trade has 
 been until recently almost monopolized by German and English sailing vessels. 
 
 35. Mexico pays annually to this line, according to said contract, $in,160. 
 
 36. Continuation of this contract on the 18th of January, 1878, for four years. 
 
 37. By virtue of this new contract, $:)9,100 is paid annually to the New Orleans line of Steamers. 
 
 38. The" subsidies paid to American lines on the Gulf of Mexico are upwards of $118,010 per annum. 
 
 39. The subsidies agreed upon have been paid, notwithstanding the represented paucity in the Mexican Treasury. 
 
 40. Efforts of Mexico to establish communication with the United States by the Pacific Ocean. 
 
 41. Authorized ports on the Pacific during Spanish rule. 
 
 43. The foreign commerce of Mexico on the Pacific has not permitted the establishment of lines of Steamers with 
 
 sudsidy. 
 
43- After the acquisition of California by the United States, and under the impossibility of communication 
 by land between it and the Atlantic States, Hnes of vessels doubling Cape Horn were estabhshed first, and after- 
 wards the Panama Railroad was built to shorten navigation, and make it possible by steamer, with transfer 
 over the Isthmus. The distance from Panama to San Francisco, which is about twenty days' voyage, was too 
 long for a freight and passenger steamer to carry sufficient coal for the voyage. It was therefore necessary 
 to stop at some intermediate point. Acapulco, which is midway between Panama and San Francisco, was chosen. 
 The Mexican Government granted the Pacific Mail Steamship Company all the exemptions necessary for them 
 to carry on their way trade in Acapulco, notwithstanding the provisions of the Mexican laws then extant against 
 it. In 1854 the steamers of this line began to touch at Manzanillo, a port about twenty hours' voyage from 
 Acapulco. 
 
 44. The Panama Raihoad Company, wishing to promote trade with the neighboring countries, so as to 
 increase the business of their road, they established a Hne of small steamers plying to some of the ports of Central 
 America. The trade with these ports grew extraordinarily in a few years, and Punta Arenas, Amapala, San Jose, 
 Champerico and other ports, which in 1850 exported almost nothing, have now a large exportation, which does 
 not compare unfavorably with that of more important mercantile nations, bearirig in mind the population of the 
 States to which these ports belong, and there are iron piers now in all of them. 
 
 45. As has already been stated, there was established, although only for about six months, a hne of steamers 
 from Ventosa to San Francisco, in connection with that from New Orleans to Minatitlan, for the transportation 
 of passengers and mails from New Orleans to San Francisco, thus opening a shorter route than by the way of 
 Panama. 
 
 4. Lines of North American Steamers on the Pacific, Subsidized by the Mexican Government. 
 
 46. There are three lines of North American steamers touching at Mexican ports on the Pacific, and subsi- 
 dized by the Government of this country : that of the Pacific Mail steamers, that of the Cahfornia and Mexico 
 steamers, and that of the Fast Navigation steamers on the GuLf of Cahfornia. Subsidy contracts have also been 
 entered into with other lines of steamers, which, although now discontinued, wiU be spoken of in their proper 
 place. 
 
 47. The Government ruhng the affairs of Mexico in 187 1, wishing to extend to the Mexican coasts of the 
 Pacific the advantages of the trade which had sprung up in Central America by means of the steamers of the 
 Panama Railroad Company, a formal application was made to this Company, as well as to the Pacific Mail 
 Steamship Company, to extend their lines to Mexican ports, offering them a hberal subsidy therefor, and such 
 other concessions as should be necessary. In virtue of this, the Panama Railroad Company entered into a 
 contract, on the 2 2d of February, 1872, agreeing that its steamers should touch at the Mexican ports of Soconusco, 
 Tonala, Sahna Cruz, Puerto Angel and Acapulco, belonging to the States of Chiapas, Oaxaca and Guerrero, aU 
 on the Pacific shore; the Mexican Government granted a subsidy of $2,500 for each round voyage; five years 
 was the term of the contract, and the Company was exempted besides from export duty, hght-house dues, &c., the 
 same as the New York and New Orleans Hnes. 
 
 48. The annual subsidy granted to the steamers of the Panama Railroad Company was as follows : 
 
 For subsidy on 1 2 voyages, at $2,500 each $30,000 00 
 
 For exemption from export duty on $30,000, at 5 per cent., according to the law of May 
 
 30th, 1872 1,500 00 
 
 $31,500 00 
 B. Line of Pacific Mail Steamers. 
 
 49. On the 31st of March, 1872, a contract was concluded with the Pacific Mail Steamship Line, for the 
 establishing of a hne of steamers which should make regular trips between Panama and San Francisco, touching, 
 in going and coming, at the ports of Acapulco, Mazatlan, Manzanillo, Cape San Lufcas, and at others that should 
 
 43. Grants made by Mexico to the first line of Steamers from Panama to San Francisco. 
 
 41. The Panama Railroad Company established a line of Steamers to Central American ports. 
 
 45. In the year 1858 a line of Steamers was established from Ventosa to San Francisco. 
 
 46. Lines of steamers subsidized, on the Pacific, that of Panama, of the Colorado River, and of the Gulf of California. 
 
 47. Mexico contracted, in 1872, for the Steamers of the Panama Company to touch at Mexican ports of the Pacific. 
 
 48. The annua] subsidy granted that Company was $31,500, according to the contract of January 23d, 1872. 
 
 49. Contract of March 31st, 1873, for Steamers of the Pacific line to touch at Mexican ports. 
 
be to the interest of the Company; the contract was for the term of two years, and $2,000 subsidy was given 
 the Company for each round voyage, granting them also the exemptions from duties comprised in the before- 
 mentioned contracts. 
 
 50. The subsidy granted by the Mexican Government to the Pacific Mail Steamship hne was as follows : 
 
 For subsidy on 12 voyages @ $2,000 $24,000 00 
 
 For exemption from export duty on $24,000, at 5 per cent., from July ist, 1872 1,200 00 
 
 $25,200 00 
 
 51. The steamship line of the Panama Railroad Company having become consolidated with the Pacific Mail 
 Steamship hne, and the contract with the latter having terminated, a new contract was signed with the said Pacific 
 Mail Steamship Company, July isth, 1875, by which it was bound to make two round voyages every month, 
 touching on both voyages at Acapulco, and on one of them at Mazatlan, Manzanillo, Puerto Angel, Sahna Cruz, 
 Tonala, and San Benito, and at San Bias, when there were passengers or freight for that port ; $2,500 per month 
 subsidy was granted to it, and the other exemptions of previous contracts, with the addition of the very important 
 privilege of carrying on a coasting trade, and five years was the term of the contract. Notwithstanding that this 
 contract has not been approved by the National Congress, it has been put in force. 
 
 52. The appropriations which the Mexican Government makes to the Pacific Mail Steamship Company, 
 according to this contract, are as follows : 
 
 For subsidy on 1 2 voyages, at $2,500 per month $30,000 00 
 
 For exemption from export duty on $30,000, at 5 per cent 1,500 00 
 
 $31,500 00 
 
 53. According to the 14th clause of the contract of July 15th, 1875, this contract was to be submitted to the 
 approval of Congress, without preventing its coming into operation at once. Perhaps on account of its not 
 having been approved by the Legislative Body, the late Administration did not pay the subsidy, and it was not 
 paid until the present Administration came into power. Mr. Julius A. Skilton, as representative of the Company, 
 applied to the Department of Finance, asking the payment of the subsidy from July, 1875, to December 31st, 
 1877, amounting to $66,130 74, plus five per cent, export duty and two per cent, for the exchange of small money 
 into hard dollars. Notwithstanding that the said contract was not approved by the Legislative Power, as already 
 stated, the present Government ordered the subsidy due to be paid, and again submitted the contract to Congress 
 for approval. The corresponding committee of the Chamber of Deputies presented their Report on the 4th of 
 December, 1878, advising that the contract should be discontinued, which Report was neither discussed nor 
 approved during the last session of Congress. The object was not to stop the voyages of the hne of Pacific Mail 
 Steamers to Mexican ports, but to terminate the contract of July 15th, 1875, so as to form another immediately 
 after, the clauses of which should coincide with those of the contracts which the present Administration has entered 
 into with other lines of steamers. 
 
 54. A great part of the trade with Germany and England formerly carried on with Mexico by saihng vessels, 
 through our Pacific ports, is now carried on by the said line of steamers, and as the invoices of the vessels which 
 bring these goods do not state whence they come, they are classed with the nationality of the vessels they are 
 brought in, which causes these goods, on arriving at these ports, to pass for North American, when they really 
 come from England or Germany. 
 
 C. The California and Mexico Line of Steamers. 
 
 55. The necessities of the trade between California and Arizona, and the difiRculties of direct communication 
 by land, decided the Colorado Steam Navigation Company to estabUsh a hne of steamers to ply between San 
 Francisco and Fort Yuma on the Colorado River. This hne touched at Cape San Lucas, Mazatlan, Guaymas, 
 and La Paz, on its own account without any subsidy from Mexico. The railroad from San Francisco to Fort 
 Yuma, upon its completion, diminished greatly the profits of the company, and the Mexican Government, fearing 
 
 50. The subsidy paid this Company by the Government was $25,200 per year. 
 
 51. The two lines becoming consolidated, a new contract was entered into with the Pacific Company in July, 1875. 
 53. Mexico pays an annual subsidy of $31,500 to the Pacific Mail Steamship line. 
 
 53. Upon this Administration coming into power, there were $66,130 74 owing to the Company, which were ordered 
 
 to be paid. 
 
 54. German and English goods passing for American, in the Pacific ports, by coming in American vessels. 
 
 55. The Colorado Steam Navigation Company. 
 
10 
 
 that these circumstances would oblige the company to suspend the line, offered, on tlae iithof June,. 187 7, to afford 
 them pecuniary assistance, to enable them to continue their voyages between San Francisco and the said Mexican 
 ports. 
 
 56. On the i8th of December, 1877, the Mexican Congress approved a contract made by the executive with 
 the said company, which took the name of the California & Mexico Steamship Line, by virtue of which contract 
 the company's steamers make a round voyage from San Francisco every thirty-fwe days, touching, going and com- 
 ing, at La Paz, Mazatlan, Guaymas, Magdalena Bay, and Cape San Lucas. The term of this contract is three 
 years, and the company receives the benefit of $2,000 subsidy for every round voyage, and enjoys all privileges 
 granted in other contracts. 
 
 57. The subsidy which, by virtue of this contract, the said company receives annually from the Mexican Gov- 
 ernment is as follows : 
 
 For subsidy on 10 voyages, at $2,000 each $20,000 00 
 
 For exemption from export duty on $20,000, at 5 per cent 1,000 00 
 
 $21,000 00 
 
 D. Fast Steam Line on the Gulf of California. 
 
 58. On the 19th of Nov., 1877, the Mexican Government entered into a contract with the representative of 
 an anonymous company of San Francisco to establish a Une of steamers making trips every eighteen days from 
 San Bias to Ciudad Lerdo, touching, going and coming, at Mazatlan, La Paz, Mulege, Guaymas, La Libertad, 
 San Fehpe, and Port Isabel, running from the latter point to Ciudad Lerdo in river steamers, and transporting the 
 mail and passengers from thence by stage to Fort Yuma. The subsidy per voyage is $1,500, and the term of the 
 contract three years. 
 
 59. Last November this company solicited permission for its vessels to carry the Mexican flag, and a new 
 contract was approved by Congress granting it this and other concessions. 
 
 60. The annual subsidy which the Mexican Government pays by virtue of this contract is as follows : 
 
 For subsidy on twenty voyages of 18 days each, at $1,500 $30,000 00 
 
 For exemption from export duty on $30,000, at 5 per cent 1,500 00 
 
 $31,500 00 
 
 61. This company was organized in San Francisco, where its headquarters are, and some of its members are 
 citizens of the United States. 
 
 E. Summary of Subsidies Contracted with North American Lines, Touching at Mexican Ports on the 
 
 Pacific. 
 
 62. The total of subsidies which the Mexican Government pays annually to North American steamers, 
 touching at our Mexican ports, is as follows : 
 
 To the Pacific Mail Steamship Company $3 1,500 00 
 
 To the CaUfornia and Mexican Steamship Company • 21,000 00 
 
 To the Fast Navigation Company of the Gulf of California 31,500 00 
 
 $84,000 00 
 
 63. In spite of the paucity in the Mexican treasury, and notwithstanding the doubt expressed in the Report, 
 of the possibiUty for Mexico to pay the subsidies it agrees to, the grants to the North American Unes on the 
 Pacific have been fulfilled. 
 
 56. Contract of December 18tli, 1877, with the California and Mexico Steamship line. 
 
 57. The annual payment to the California and Mexico line is $31,000. 
 
 58. Contract of November 19th, 1877, with the Past Line of the Uulf of California. 
 
 59. Enlargement of this contract November, 1878. 
 
 60. Annual subsidy paid this line, $81,500. 
 
 61. The Past Line of the Gulf of California has its headquarters at San Francisco, and is considered to be American. 
 63. MexiCO pays $84,000 annual subsidy to American steam lines on the Pacific. 
 
 63. The subsidies have been paid, notwithstanding the poverty of the Mexican Treasury. 
 
11 
 
 S- SUMMARY OF SUBSIDIES PAID BY MEXICO TO LINES OF NORTH AMERICAN STEAMERS ON BOTH SEAS. 
 
 64. The total sum which Mexico now pays in subsidy to American steam Unes on both seas is as follows : 
 
 To lines on the Gulf $118,010 00 
 
 To lines on the Pacific 84,000 00 
 
 Total $202,010 00 
 
 65. If the reduced condition of the Mexican revenue, and the multitude of serious and unavoidable claims 
 that press upon its treasury are taken into account, and these are compared with the amount of the revenue and 
 the good financial position of the United States, the efforts and sacrifices on the part of Mexico to establish and 
 extend its commercial relations with the adjoining nation can be better appreciated. 
 
 66. As will be easily understood, Mexico has not expended $202,010 in annual subsidies to North American 
 steamers, during the past years up to the present time ; for the Hnes have been established gradually, and the 
 subsidies have gone on increasing with the lapse of time. The following official statement, issued by the Depart- 
 ment of the Treasury, shows the sums that Mexico has expended in subsidies to North American steam lines 
 from May, 1868, to December, 1878: 
 
 DEPARTMENT OF THE TREASURY. — SECTION SECOND, SIXTH BUREAU. 
 
 Statement of Amounts paid from the General Treasury to North American Steam Lines from May, 1868, to 
 
 Dec, 1878, inclusive. 
 
 Year 1868 to 1869. 
 Paid Vera Cruz and New York Line $46,200 00 
 
 Year 1869 to 1870. 
 Paid Vera Cruz and New York Line 30,800 00 
 
 Year 1870 to 1871. 
 Paid the same Line from New York 48,400 00 
 
 Year 1871 to 1872. 
 Paid the same Line from New York 41,800 00 
 
 Year 1872 to 1873. 
 
 Paid New York Line $37,400 00 
 
 Paid Pacific Steam Line 4,5°° °o 4i,9°° °° 
 
 Year 1873 to 1874. 
 
 Paid New York Line 4°,Soo °° 
 
 Paid Pacific Line 64,250 00 104,750 00 
 
 Year 1874 to 1875. 
 
 Paid New York Line 40,000 00 
 
 Paid New Orleans Line 19,800 00 59,800 00 
 
 Year 1875 to 1876. 
 
 Paid New York Line 42,5°° °° 
 
 Paid New Orleans Line 30,600 00 
 
 Paid Pacific Line 35-45° 0° io8,55° °° 
 
 Year 1876 to 1877. 
 
 Paid New York and New Orleans Line 77,40° 00 
 
 Paid Pacific Line 34,619 26 112,019 26 
 
 Year 1877 to 1878. 
 
 Paid California Steamship Company 10,000 00 
 
 Paid New York Steamship Company 43,i°° °° 
 
 Paid New Orleans Steamship Company 25,600 00 
 
 Paid Gulf of California Steamship Company 1,000 00 
 
 Paid Pacific Steamship Company 35,587 18 115,287 18 
 
 Carriedover 115,287 18 
 
 64 The total annual subsidy now paid to Ameriean Steamers on both seas is $203,010. 
 
 65. The sacrifices of Mexico to establish and extend its commercial relations with the United States. 
 
 66. Amount of subsidy to American Steamers since May, 1868, is $806,750. 
 
12 
 
 Brought over $i 15,287 18 
 
 Year 1878 to 1879. 
 
 Paid Pacific Line for first six months 3°i543 S^ 
 
 Paid Gulf of California Line, from July to Nov. of 1878 2,500 00 
 
 Paid New Orleans Line, from July to December of 1878 18,000 00 
 
 Paid New York Line, from July to December of 1878 37)2oo 00 
 
 Paid California Line, from July to December of 1878 9,000 00 97,243 S^ 
 
 Total $806,750 00 
 
 6. THE UNITED STATES GOVERNMENT DOES NOT SUBSIDIZE NORTH AMERICAN STEAMERS TRADING WITH MEXICO. 
 
 67. The fact that the United States Government has not subsidized its own lines of steamers trading with 
 Mexico makes it plain, at least, that in efforts to establish and extend trade between the two countries, Mexico 
 is not the one that has been least solicitous. The Report recognizes this. 
 
 68. It is very satisfactory to see that the representative of the United States in Mexico estimates justly the 
 value of establishing new lines of maritime communication between the two countries ; that he does justice to the 
 efforts of Mexico to create and sustain those now existing, and that he bears in mind the recommendation we 
 formerly made to his government regarding the advisability of following the example of Mexico on this point, and 
 appropriating $100,000 to $150,000 to establish and maintain steam lines that should increase the trade between 
 the two nations, by which he believes steamship communication would be immediately doubled, and considers 
 that this would be sufficient for many years. On this point the Mexican Government takes much pleasure in 
 agreeing with him, only it is proper to call attention to the fact that Mexico is now annually devoting a larger sum 
 to this object than that set forth in the Report, notwithstanding the enormous disproportion in the resources of the 
 two governments, bearing in mind that the Mexican revenue amounts annually on an average to $17,141,508 29, 
 according to the data of the last five fiscal years, while that of the United States, in the year 1874 to 1875, 
 amounted to $288,051,000, and last year to $257,763,878, as appears from the President's Message of Dec. 2d, 
 1878. 
 
 A. Suggestions made to the United States Government to subsidize Lines of Steamers to Mexico. 
 
 69. Suggestions on this subject to the United States Government have not been wanting. Long before those 
 made by Mr. Foster, in his speech before the Chamber of Commerce of New Orleans, Nov. i8th, 1875, then al- 
 ready an authorized diplomatic representative of the United States in Mexico, and thus claiming attention from 
 the high character of the functionary from whom they emanated, Mr. Charles Butterfield wrote and published, at 
 his own expense, in 1858, a book entitled "The United States and Mexico. — Commerce, trade and postal facOi- 
 ties between the two countries. — Statistics of Mexico by Charles Butterfield," the second edition of which was 
 pubhshed in New York in 1861, by Messrs. J. A. H. Hasbrouck & Co. The principal object of this book was to 
 demonstrate to the United States Government the great advantages of enlarging its commerce with Mexico by 
 subsidizing a line of steamers making four voyages per month between Mobile or New Orleans and all the Mexi- 
 can ports then open to foreign commerce. 
 
 70. In this same book it appears that since 1853 Mr. Butterfield busied himself in promoting this important 
 matter, and that on various occasions the Mexican Government offered him a subsidy of $120,000 per year, 
 without his having been able to obtain a like sum from the government of the United States, for which reason the 
 line was never estabUshed. 
 
 B. The United States Government does not appear to be inclined now to subsidize lines of steamers to Mexico. 
 
 71. In spite of all this, it appears that the United States Government has not decided yet to subsidize lines of 
 steamers to increase its trade with Mexico, whereas in a message which the president of the United States sent to 
 the Senate Dec. 17, 1878, (Forty-fifth Congress, Third Term of Sessions, Executive Document No. 7,) proposing 
 that the United States Government should subsidize Unes of steamers to promote trade with Central and South 
 America, no mention is made of Mexico, beUeving, perhaps, that the means of communication subsidized by Mex- 
 ico which now exist are sufficient. 
 
 67. Mexico has not been less solicitous than the United States to establish relations between the two countries. 
 
 68. Recommendation of the United States Representative, to his Government, to subsidize lines of Steamers. 
 
 69. Proposal of Mr. Charles Butterfield to the United States Government, in 1853, to subsidize lines from New Orleans 
 to our ports on the Gulf. 
 
 70. Since 1853 Mexico has offered to pay a subsidy of $130,000 per year to the New Orleans line. 
 
 71. The United States Government, in proposing to subsidize lines of Steamers, does not mention Mexico. 
 
13 
 
 72. It is true that this message originated from a proposition approved by the Senate Dec. 5th, 1878, in 
 which the President was asked to transmit to that body all the information received by the departments of the Ex- 
 ecutive concerning postal and commercial relations between the United States and the South American countries, 
 with whatever recommendations he might think proper to submit to the Senate in regard to the measures it ought 
 to adopt to further and improve said'relations. Although it would appear that no information was asked in this 
 proposition in respect to Mexico, but only of South America, the President of the United States, in his message 
 of the 17 th of the same month of Deqember, refers not only to South America but to Central America also. 
 
 73. The President of the United States accompanied his message referred to with two reports, one from the 
 Secretary of State dated Dec. 17th, 1878, and the other from the Postmaster-General, of the 14th of the same 
 month, comprising official communications on this very subject. The report of the Secretary of State, important 
 in more than one respect, sets forth that the general predominance of Great Britain in the markets of Central and 
 South America, on the Pacific as well as on the Atlantic coasts, is to be attributed to the establishment of regular 
 postal communication with pecuniary help from their government. Their example has been followed by Germany, 
 France, and Italy, and this with the sagacity and enterprising spirit the European nations have thus shown, has 
 enabled them to reap for themselves advantages in favor of an extensive commerce in the American hemisphere 
 which naturally, from its geographical position, belong to the United States. 
 
 74. In another part of this communication the conclusions will be set forth which result from the report of 
 the Secretary of State, suffice it to say here only, that among the documents sent by the Department of State to the 
 President of the United States to be transmitted to the Senate, not one of them refers to Mexico, and only among 
 those sent by the Postmaster-General there is a communication from the United States Consul in Acapulco, dated 
 Feb. 8th, 1878, which makes some observations in regard to postal and commercial relations with the western 
 coast of Mexico in general, and with the port of Acapulco in particular. 
 
 75. It is probable that the United States Government proposes to specially recommend to Congress some 
 suitable legislation to promote commercial relations with Mexico, in response to the proposition recently presented 
 by Mr. Schleicher, and approved by the House of Representatives, in which information is asked of the Executive 
 respecting commercial relations between Mexico and the United States. 
 
 7. DEVELOPMENT OF TRADE BETWEEN MEXICO AND THE UNITED STATES BY LINES OF STEAMERS. 
 
 76. The Report continues by saying that the additional communication which it proposes, by lines of 
 steamers, would only be a partial and imperfect measure, to provide for the necessities of United States trade with 
 Mexico, if it is to be permanent and extensive, and that a railroad is indispensably needed, to put the City of 
 Mexico in communication with the railway system of the United States. 
 
 77. It cannot be denied that the development of interior commerce between the two Republics requires 
 indispensably the construction of not only one but of several lines of railways to put the diff"erent productive 
 regions of Mexico in communication with the centres of commerce and consumption of the United States ; but 
 it should not, at the same time, be ignored that lines of steamers and sailing vessels, employed in trade between 
 the two countries, can develop it in a great degree by increasing the facilities now offered and reducing their 
 charges on freight. This the Report recognizes, in saying that the increase of steamers through the subsidy the 
 United States Government might pay would be sufficient to meet the needs of commerce for some years. 
 
 78. The trade of the United States with the Island of Cuba is relatively considerable, and yet it is carried on 
 • entirely by steamers and sailing vessels. Solely by steamers and sailing vessels, this iinportant Island contributes 
 700,000 tons of sugar annually, for the consumption of the world; this amounted in 1875 to 2,140,000 tons, 
 almost two-fifths of all the sugar consumed. The same can be said of the extensive 'commerce the United States 
 carries on with Brazil. The United States has no other means of carrying on its commerce with England, France, 
 Belgium, Germany and other European and Asiatic countries, than by steamer sand saiUng vessels, and yet it sustains 
 a most active trade, and of surprising results. 
 
 72. The Senate asking for information from South America, the Prtsident also sends information from Central 
 America 
 
 73. Reports of the Secretary of State in respect to the increase of American commerce, by means of lines of Steamers. 
 
 74. The United States Department of State makes no mention of Mexico in its Report of December 17th, 1878. 
 
 75. Probability of the United States proposing some suitable means of increasing its commerce with Mexico. 
 
 76. The Report states that the establishment of steam lines is not sufBcient for the development of commerce. 
 
 77. Lines of Steamers can considerably increase the trade between Mexico and the United States. 
 
 78. The commerce carried on by the United States with Cuba, South America, Europe and Asia is done by lines of 
 Steamers. 
 
14 
 
 79- Although on a much smaller scale, Mexico has no other means of carrying on its commerce with France, 
 England, Germany and Spain than by steam and sailing vessels, and notwithstanding that trade is much more 
 important than that carried on with the United States. The market value of foreign goods imported to Mexico 
 in 1872-3 is estimated at $31,713,846 84, including 70 per cent, in duties and expenses on the invoice price, 
 while $11,118,057 94 represents the commerce with the United States, in ■W'hich sum, as has already been said, 
 European goods, coming to our Pacific ports in American vessels, figure largely. 
 
 80. It is evident, then, that it is not an absolute necessity, to build rf railroad from Mexico to the United 
 States, in order to obtain a great development of commerce between the two countries ; although the construction 
 of this line is very desirable and of great importance, and every effort should be made to realize it as soon as 
 possible, and for this end the Mexican Government is working. 
 
 8. CONTRACTS ENTERED INTO BY MEXICO WITH STEAMERS OTHER THAN NORTH AMERICAN. 
 
 81. The efforts of the Mexican Government to estabUsh and maintain steam communication betv/een its 
 ports and the United States, cannot be duly appreciated if mention is not made of the contracts it has entered 
 into with other hues of steamers, in order to improve its communication with some of the principal European 
 ports. We proceed, therefore, to an exact statement of the two contracts which Mexico has entered into, for 
 this purpose, and also of another contract with a river steamer to facilitate trade with the United States. 
 
 A. Contract entered into with Messrs. L. C. Garcia &= Company. 
 
 82. On the 17th of January, 1878, a contract was entered into with Messrs. L. C. Garcia & Co. to establish 
 a hne of steamers to put the ports of Vera, Cruz, Tampico and Progreso in communication with Habana, San- 
 tander, Havre and Liverpool, for the purpose of obtaining a considerable reduction in the freight tariff on 
 merchandise, which would permit the exportation of various Mexican productions to European markets. Although 
 this contract has not been approved by Congress, nor acted upon, not having passed beyond a simple project, it 
 is proper to note the object for which it was signed, as it serves to explain the one which was entered into after- 
 wards on the 8th of Oct., 1878, with the Belgio-Mexican Trans-Atlantic Company, which was approved by 
 Congress on the 27th of Oct. following; neither, however, has this hne yet been estabhshed. 
 
 83. The Mexican Government is convinced that the prosperity of the Republic depends principally on 
 encouraging the exportation of its productions, for it believes that as soon as circumstances may permit the 
 profitable export of everything the country can produce to advantage, honest and lucrative employment will be 
 afforded to all its inhabitants ; immigration will be possible ; there will be material welfare and abundance, and a 
 great opening up of the various sources of pubUc wealth. 
 
 84. One of the great obstacles to the exportation of our productions is the high price of freight, on land as 
 well as sea, in transporting them to foreign markets, where they are in demand. As in the interior of the country 
 there are no railways nor river communication, freight is very high, and even articles like sugar do not pay the 
 cost of exportation except they are produced on the coast or near it. Economy in interior freights not being 
 obtainable, it has been sought for in freight by sea. 
 
 85. Among the different hues of steamers communicating between Vera Cruz and various European ports, 
 that which affords the lowest freights is a Liverpool Hne, called the " West India and Mexico Steamship line," its 
 lowest rates between Vera Cruz and Liverpool being, according to the tariff published in Vera Cruz, January, 
 1878, forty shillings per English ton of 2,240 English pounds, equal to ten dollars of our money, calculating five 
 dollars to the pound sterUng. This freight is less than that charged by the Vera Cruz Railroad Comp9,ny up to 
 Nov. 24th, 1878, according to their contract of March 15th, 1873, approved by the Law of the 17th of December 
 following, on national products going from the Capital for exportation ; which freight was more than eleven dollars 
 per English ton before the iron pier was projected, and more than sixteen dollars per ton after the said pier was 
 made use of By virtue of the new tariff of the Vera Cruz Railroad Company, which began to take effect on 
 Nov. 25th, 1878, and which was adopted at the suggestion of the Mexican Government, to facilitate the export 
 of national products, freight is divided into three classes — first class pays $16 56 ; second class, $11 04, and third 
 
 79. The commerce of Mexico with Europe, greater than that with the United States, is carried on by lines of Steamer 
 
 80. The building of a railroad is not absolutely necessary to increase trade with the United States. 
 
 81. Contracts entered into by Mexico with lines of Steamers, other than North American. 
 
 83. Contract entered into with Messrs. L. C Garcia & Co. , to establish a line from Liverpool to Vera Cruz 
 
 83. The prosperity of Mexico depends principally on encouraging the exportation of its products. 
 
 84. One of the piincipal obstacles to exportation is the high price of freights. 
 
 85. Freight charged by lines of Steamers touching at Vera Cruz compared with that of the Mexican Railway 
 
15 
 
 dass, $6 90 per English ton ; first and third class freight still remaining higher than the tariff from Vera Cruz to 
 Liverpool. 
 
 86. According to the contract entered into with Messrs. L. C. Garcia & Company, Jan. 17th, 1878, the 
 minimmn maritime freight on national productions going to Liverpool should be two dollars and a half per 
 English ton, and on articles going to Habana, Santander and Havre, in proportion, and even less. The Mexican 
 Government believed that with a freight so low the exportation of many of our products which cannot stand the 
 present maritime freight would be profitable, and among them that of cereals, which must prove so favorable in 
 the future of our country, and it was judged, therefore, that this contract was one of the most efficacious means of 
 encouraging the export of Mexican productions. 
 
 87. It is true that exportable articles are not now produced in Mexico in sufficient quantity for operations 
 on a large scale, and that if the contract had been acted upon immediately, some months would have gone by 
 before the nation could have availed itself of that tariff; because in any effort to create such a commerce, 
 knowledge must first be acquired of the foreign markets and of the articles best adapted for such exportation, and 
 then time enough be allowed for sufficient to be sown to create an adequate supply over and above home consump- 
 tion. While recognizing this difficulty it was borne in mind, however, that there were already products, like 
 sugar, the exportation of which hardly pays the cost of present freights, and which, on the reduction of these to the 
 quarter part of the present tariff, would be profitable, and might increase greatly this article of sugar, so as to 
 become, in time, one of the principal staples of our export. 
 
 88. If the freights from Vera Cruz to Liverpool charged by the West India and Mexico Steamship Hne, 
 which come to half a cent per pound, are compared with those charged, until recently, by the steamers of Messrs. 
 Alexandre & Sons, it will be seen that notwithstanding the former enjoys no subsidy whatever, and American lines 
 are subsidized by the Mexican Government, and notwithstanding the great difference in the distance run by the 
 two Unes, the tariff of the English line makes it to the advantage of Mexico to export its products to European 
 markets. It is a cause of satisfaction to the Mexican Government that the New York and New Orleans Unes 
 have reduced somewhat the freights in their tariffs, which were approved on the first day of the present year. 
 
 89. Unfortunately, Messrs. L. C. Garcia & Co. could not establish the contracted Une, therefore Congress 
 did not concern themselves to approve the contract of Jan. 17th, 1878, but it served as a basis for that with the 
 Belgio-Mexican Une, which we wiU now speak of. 
 
 B. Contract entered into with the Belgio-Mexican Trans-Atlantic Company. 
 
 90. Although the freight tariff contracted with the Belgio-Mexican Trans-Atlantic Line is not as advan- 
 tageous as that agreed to with Messrs. L. C. Garcia & Co.'s Hne of steamers, it stiU offers a great inducement to 
 the export trade in national products, and this with the desire to open commercial relations with a country with 
 which we had no direct trade were the principal reasons which induced the Mexican Government to enter into a 
 contract with the Belgio-Mexican Trans-Atlantic Company, which contract notwithstanding, as has already been 
 said, has not yet begun to be acted upon. 
 
 E. Contract with Messrs. Bulnes Brothers of San Juan Bautista, Tabasco. 
 
 91. On the 30th of May, 1878, the Mexican Government entered into a contract, through the Secretary of 
 State for the Interior, with Messrs. Bulnes Brothers, of San Juan Bautista, State of Tabasco, by virtue of v/hich 
 those gentlemen obligated themselves to provide a steamer of a hundred tons, to make eight voyages per month 
 between Frontera and San Juan Bautista, connecting on four of these voyages with the New York steamers at 
 Frontera, to collect the mail, passengers and freight for those ports, paying said firm therefor $200 per month, 
 and placing the term at two years. 
 
 92. Although this is properly a river line, and is devoted only to facilitating the trade of the New York 
 steamship Une and putting the Capital of the State of Tabasco in communication with the port, it has been 
 thought proper to speak of it here, so as not to omit mention of any steamers subsidized by the Mexican Govern- 
 ment. 
 
 86 Freights from Mexico to Liverpool stipulated in the contraol; entered into with Messrs. L. C. Garcia & Co. 
 
 87 Cause of the little production of exportable products now in Mexico. 
 
 88. Freights charged by the Liverpool and the New York and New Orleans lines. 
 
 89 The contract with Messrs. L. C. Garcia & Co. served as a basis for that with the Belgio-Mexican Company. 
 
 90. Contract entered into with the Belgio-Mexican Trans- Atlantic Company. 
 
 91. Contract entered into with Messrs. Bulnes Brothers, of San Juan Bautista, May 30th, 1878. 
 93. This is a river line, established to facilitate the trade of the New York Steamers. 
 
16 
 
 g. SUMMARY OF FACTS IN REFERENCE TO SUBSIDIZED STEAMERS WHICH TOUCH AT MEXICAN PORTS. 
 
 93. From the preceding brief statement, the following facts appear to be demonstrated : 
 
 I St. That Mexico pays subsidy to only five lines of North American steamers, two on the Gulf and three 
 on the Paci fie. 
 
 2d. That Mexico has solicited the establishment of the North American lines to its ports, in order to de- 
 velop its commerce with the United States. 
 
 3d. That it has fulfilled its obligations contracted with the said lines, paying them the subsidies agreed to^ 
 in spite of the embarrassed condition of its treasury. 
 
 4th. That it has devoted no small portion of its limited revenue to subsidize North American lines of 
 steamers, the actual amount devoted to that object being larger than what the United States representative 
 in Mexico recommended his government to devote to that purpose, the relative proportion of the revenue of 
 the two nations notwithstanding. 
 
 5th. That the United States Government has not, up to this time, subsidized any North American Une of 
 steamers in order to develop trade with Mexico, notwithstanding the recommendation of its Representative 
 in this country, and the repeated suggestions made sincS 1853, by Mr. Charles Butterfield. 
 
 6th. That neither does it yet appear opportune to the said Government to subsidize lines of steamers to 
 Mexico, as is inferred from the President's Message, sent tp the Senate Dec. 17th, 1878, inasmuch as in it 
 subsidy is recommended for steamers to Central and South America, and a marked omission is made of 
 Mexico, altliough the presentation of documents on this matter is pending. 
 
 7th. That the four lines of European steamers now plying to Mexican ports on the Gulf have no subsidy 
 whatever from the Mexican Government. 
 
 8th. That although Mexico has entired into two contracts to subsidize two lines of steamers between 
 Mexican ports of the Gulf and European ports, one failed to establish itself, and the other has not been 
 established yet. 
 
 9th. That the Mexican Government also subsidizes a River Steamer, the principal object of which is 
 to facilitate the trade of the United States lines with the port of Frontera. 
 
 II. CONSTRUCTION OF A RAILROAD FROM THE CITY OF MEXICO TO THE UNITED 
 
 STATES FRONTIER. 
 
 94. After speaking of the lines of steamers, and representing them as partial and imperfect means to meet 
 the requirements of trade, if the United States is to enjoy an extensive and permanent commerce with Mexico, 
 the Report states that it is an indisputable fact, that what both countries most need, in a commercial point of 
 view, is an international railway. 
 
 95. At the same time that the Report presents the construction of a railroad in Mexican territory as very 
 difficult, if not impossible, for reasons which will be mentioned further on, it sets forth on this subject : " That as 
 far as the United States are concerned the problem can soon be solved ; that on the Pacific coast a United States 
 railway has reached the Mexican frontier at Fort Yuma; that the railway lines of Southern Texas have already 
 reached San Antonio, and that a month would suffice to extend them to the Rio Grande, in case their continua- 
 tion across the frontier should offer sufficient inducements; that there is another continuous line in process of 
 construction across New Mexico, in a southwestern direction, which will bring the Mexican frontier into commu- 
 nication with the lines of the Northern and Middle States ; that as concerns the work to be performed on 
 American territory, it can be considered as virtually finished ; but in regard to Mexican territory, all the labor has 
 yet to be done." 
 
 96. The Report states that in everything looking towards the construction of an international raikoad in 
 Mexican territory, all the labor is yet to be done, and in questioning when the work will be commenced, how fast 
 it will be carried forward, and when it will be finished, it sets forth that the answer to these inquiries demands 
 investigation into Jhe legislation and financial situation of Mexico, not to say anything about peace and the 
 stability of the Government. 
 
 93. Summary of facts in reference to subsidized steamers touching at Mexican ports. 
 !)4. Necessity of building an international railway from tlie City of Mexico to tlie United States frontier. 
 95. Railroads in the United States reaching, or approximating to, the Mexican frontier. 
 The construction of an international railway in Mexican territory is yet to be done. 
 
 06, 
 
17 
 
 97- The Report reduces these investigations to the three following points: 
 
 I St. What legislation or what kind of concession is necessary to the building of the railway? 
 2nd. What are the probabilities of obtaining such concession from the Mexican Congress? 
 3rd. What pecuniary aid can Mexico extend to this great work ? 
 
 98. The examination of these three points occupies that part of the Report referring to the construction of 
 railways in Mexico. The importance of this matter makes it necessary to treat specially of each one of them, 
 and for a more complete elucidation of the facts relating to this question the .following points will be examined, in 
 g^dition to the three set forth in the Report: 
 
 • 4th. Railway concessions made to North American companies. 
 
 5th. Railway concessions made to companies not American, 
 
 ^th. Railway concessions made to States of the Mexican. Confederation. 
 
 7th. The Mexico and Vera Cruz Railway Company, Umited. 
 
 8th. Summary of raikoads built in Mexico and of subsidies paid them. 
 
 10. WHAT LEGISLATION OR WHAT KIND OF CONCESSIONS ARE NEEDED FOR THE BUILDING OF RAILROADS IN MEXICO. 
 
 99. The Report states " that American capitalists and business men who have consulted with the Represent- 
 ative of the United States in Mexico upon the probabilities of obtaining a practicable concession from the 
 Mexican Government to build a railroad from the Mexican frontier to the City of Mexico, have almost invariably 
 considered it necessary that the concession should contain a clause by which the property and capital of the rail- 
 road should be guaranteed by the two Governments, and in some cases it has even been considered indispensable 
 that the credit granted by Mexico should also be guaranteed by the United States Government. The Report 
 considers that North American capitalists cannot ignore the half century of disorder and revolution in Mexico, 
 and there is a general conviction that their money cannot be safely invested in a great railway enterprise in this 
 country without the protection of the United States Government, by means of a treaty, or some other agreement." 
 The Report sets forth, lastly, that the Representative of the United States has unhesitatingly replied to these 
 inquiries, that in the present condition of pubUc feeling in Mexico its Government Nwould not consent to any of 
 these conditions. 
 
 100. If there were any foundation for the opinion expressed in the Report, " that without the protection of 
 the United States Government it would be impossible to build an international railroad in Mexico," the project 
 would have to be given up. Mexico could not enter into a treaty with the United States nor with any other 
 Power, consenting that a foreign Government should guarantee the fulfillment of a private contrat made by 
 Mexico for the construction of a work within its own territory. This would be equivalent to a formal and solemn 
 acknowledgment beforehand, of its own inability to fulfill its contracted obligations, and a nation that should 
 begin by confessing such impotency would justly forfeit the respect of the civiUzed world ; and for its own self- 
 respect ought to refrain from entering into a contract which it recognized itself unable to fulfill, unless stimulated 
 and obUged thereto by another nation, whose guarantee it accepted, for the carrying out of the compact. 
 
 loi. If the incidents which have taken place between Mexico and the United States, which will be referred 
 to further on, are taken into consideration, it wiU not appear strange, but on the contrary very natural, that it 
 should be more difficult for Mexico to enter into a treaty of this kind with the United States than with any other 
 Power. 
 
 102. But the opinion on this point in the Report appears to be without foundation, various North American 
 companies have solicited concessions from the Mexican Government to build railroads and have obtained them, 
 and far from requiring of this government the guarantee of the United States, they have accepted the conditions 
 that Mexico has imposed. 
 
 A. Conditions imposed by Mexico. Contract of the Texas International Railroad. 
 
 103. In support of the opinion expressed in the Report, that Mexico would not consent that the capital and 
 property of the railroad should be guaranteed by the United States Government, mention is made of two incidents ; 
 
 97. Questions which the Report examines, regarding the building of an international railway. 
 
 98. Examination of other points in relation to the same subject. 
 
 99. The Report considers the guarantee of the United States necessary to the building of an international railroad. 
 
 100. Were this so, the international railway project would have to be renounced. 
 
 101. Difficulties to the consent of Mexico, that a foreign Government should guarantee its contracts. 
 103, The opinion of the Report on this point appears to be without foundation. 
 
 103. The Report states that Mexico would not consent to the guarantee of the United States. 
 
 2 
 
18 
 
 one, the impression that was produced here by a proposition presented in the United States Senate May, 1878, on 
 this subject by Senator Morgan, of Alabama, and the other the conditions of the concession made to the Texas 
 International Railroad Company in May, 1878, to build a line from Leon to the United States frontier. The 
 first of these incidents will be spoken of, on treating of the state of public opinion in Mexico towards the United 
 States. 
 
 104. In regard to the second point, the Report states that the contract entered into with the Texas Interna- 
 tional Railroad Company " contained stipulations which would be totally null and void in case part of the cap- 
 ital should be transferred, or that any part of the property or interests of the company should be aUenated or mort- 
 gaged to any foreign State or government ; that all the capital and all the share-holders, employees and persol's 
 connected with the company should be considered as Mexicans in ever)fthing connected with the enterprise with.'^i 
 the Republic ; that these persons should have no right to make claims as foreign subjects " not even under alleged 
 denial of justice" 
 
 It adds, that "similar stipulations have been inserted in all the contracts or concessions to foreigners that 
 have been made or proposed since that date ; that none of these concessions have been found advantageous, and 
 that one of the reasons for this, which is very obvious, is that American capitalists decHne to invest their money in 
 Mexican enterprises, without some greater security than has been offered iii the past, and particularly do they de- 
 cline to renounce their nationality in exchange of the privilege of building a railroad in a foreign country, agreeing 
 beforehand to renounce the intervention of their government, in case justice is denied them, a right recognized in 
 the general principles of international law." 
 
 B. Reason of the Conditions which Mexico imposes for the Building of Railroads within its Territory. 
 
 105. As the Report considers it impossible to accept the conditions of the contracts on the construction of 
 railroads entered into by Mexico with North American Companies, it is proper to explain, although briefly, the 
 cause of those conditions, which are not special to the citizens of the United States, but are general to all 
 contracts of the kind that Mexico enters into, as the Report acknowledges. 
 
 106. A sad and painful experience has obliged Mexico to insist upon those conditions, and they have been 
 accepted, moreover, by companies who have built the roads they contracted for, and which are now finished, as 
 that of Vera Cruz. On one hand, the repeated concessions made by Mexico, without any practical result, from 
 the insolvency of the enterprises, and on the other, the exaggerated and unfounded claims proceeding from daring 
 speculators, by whom the country has been victimized, and who have even brought upon it unjust and severe 
 foreign wars, have caused Mexico carefully to shun contracting obligations that might lead it into difficuties, and, 
 above all, difficulties of an international character. These reasons determined the Mexican Government to require 
 in all railway contracts it has entered into the conditions which are said to be so onerous, and which prohibit one 
 of the parties from alienating their concession to a foreign Government or to another company or to individuals 
 without the consent of the Mexican Government, and to require that all questions rising out of the concession 
 shall be settled by Mexican authorities, according to the laws of this Country, to prevent their being invested with 
 the character of international claims. By restricting in the contract the right to sell the concession, it has sought 
 to prevent any speculator from transferring it to any foreign Government that might desire to provoke difficulties 
 with Mexico, and under cover of the rights granted in the concession, should try to exercise powers contrary to 
 the sovereignty and rights of the Republic. When the late French Emperor attempted to estabhsh his power in 
 Mexico, he would have had a better pretext to carry forward his plans — which owed their failure partly to the 
 attitude of the United States — ^if he had been the legitimate possessor of one of these conce-ssions. 
 
 107. Furthermore, the United States Government itself has repeatedly recognized, from the time of John 
 Quincy Adams and Henry Clay, that it had no right to take part in questions springing from the fulfillment of 
 contracts entered into between North American citizens and foreign Governments, and this proves that the 
 conditions referred to rest on a reasonable and just foundation. On the other hand, it does not seem probable 
 that the United States Government would consent to a foreign Government obtaining possession of any of the 
 lines of railway within its territory, notwithstanding that foreign capital is invested in many of them. 
 
 A. Diplomatic Claims against Mexico. 
 
 108. In order to see clearly the good reasons that exist for Mexico to dread foreign claims when they assume 
 
 104. The Report relates tlie conditions required by Mexico in its railway contracts. 
 
 105. Reason for these conditions, which are general to all contracts of the kind. 
 
 106. An endeavor is made to avoid the danger of their being transferred to foreign Governments, or giving pretext to 
 unfounded claims. 
 
 107. Claims proceeding from contracts not provided for in the Convention of 4th July, 1868. 
 
19 
 
 the character of diplomatic affairs, it must be remembered that they have generally been notoriously exaggerated 
 and have given rise to very serious consequences, Mexico having paid on their account relatively large sums. 
 
 109. Diplomatic claims occasioned a rupture between France and Mexico in I838 ; diplomatic claims, 
 served as a pretext, in 1 761, for France, England and Spain, to ally themselves against Mexico, in order to 
 bring upon her an armed intervention. * 
 
 no. In regard to the claims of citizens of the United States, suffice it to say, for the present, that they 
 have not been of the most moderate character. In speaking of those posterior to the treaty of Guadalupe 
 Hidalgo of Feb. 2nd, 1848, it is proper to bear in mind that those submitted to the Mixed Commission in session 
 at Washington, by virtue of the agreement of July 4th, 1868, amounted to $470,126,622 40, from which the 
 Commission threw out $466,000,991 20, only having recognized claims to the value of $4,125,622 20; less than 
 one per cent, of the sum claimed. Among the claims approved by the Mixed Commission were those of 
 Benjamin Weil, the principal and interest of which amounted to $487,810 68, and that of " La Abra Mining 
 Company," the principal and interest of which come to $683,041 32, making a total of $1,170,852 00, which, 
 ^th good reason, are considered to be unfounded, and therefore the United States Congress has authorized the 
 President to determine whether the respective decisions are revisable or not, following the precedent of the course 
 pursued in regard to claims of the United States citizens against the Government of Venezuela. 
 
 B. Clause in Reference to Denial of Justice. 
 
 111. The Report specially objects to the clause contained in some of the railway concessions made by 
 Mexico, by virtue of which the grantees cannot allege rights of foreign citizenship, nor present diplomatic claims, 
 in questions arising from the building of the road, " not even when denial of justice is alleged" setting forth that 
 this clause imports the ignoring of a right recognized in the general principles of international law. 
 
 112. Mexico has desired that in contracts entered into with foreigners, these should have no rights more nor 
 less than those enjoyed by A^exicans, and which are amply guaranteed by the laws of the country. It is not 
 logical to expect that any Government would consent to make better terms with foreigners than with its own 
 citizens. These considerations, and the fact that in some cases, in spite of the stipulations on the part of the 
 grantees, by which they could not allege the rights of foreign citizenship, nor interpose a diplomatic claim, 
 they have done so, alleging or pretending a denial of justice, have caused Mexico to deem it expedient to close the 
 door to every pretext for foreign claims, springing up from contracts on the construction of railroads within its 
 territory, even when denial of justice is alleged therefor. 
 
 113. Moreover, all who have Uved for any time in Mexico are aware that justice is dispensed in this country 
 alike to foreigners as well as to Mexicans. It is not probable, on the other hand, that justice would be denied 
 to a company provided with every means to substantiate its rights, according to the laws of the country, which 
 give ample recourse for the protection of all the inhabitants of the Republic. 
 
 114. The restriction conveyed in this clause was not inserted to enable Mexico with impunity to deny 
 justice to foreign companies, but to protect herself from the designs of unscrupulous speculators. Therefore the 
 fears that foreign companies will refuse to invest capital in building railways in Mexico because the clause 
 prohibits the allegation of the rights of foreigners and of diplomatic claims even in case of denial of justice, 
 appear to be entirely without foundation. 
 
 2. PROBABILITY OF OBTAINING A CONCESSION FROM THE MEXICAN CONGRESS. 
 
 115. In reference to this matter the Report states that "if it has rightly understood the opinions of American 
 capitalists, it does not seem worth the while to examine this second point, as the only charter which the Mexican 
 Government proposes to give will appear to be worthless to American contractors ; but as there may be citizens 
 of the United States who might be disposed to accept a charter based on the terms agreed upon, it states that 
 there undoubtedly exists in Mexico a general conviction that railroads are one of the great necessities of the 
 country," although it adds, " that sympathy in favor of railway connection with the United States is not found to 
 
 108. Reasons for the fear which Mexico entertains respecting foreign claims. 
 
 109. Mexico has suffered two wars with the pretext of foreign claims. 
 
 110. Claims of citizens of the United States have not been very moderate. 
 
 111. The Report refers to the clause in the concession about denial of justice. 
 
 113. Probability of obtaining from Mexico the concession for the international railway. 
 
 113. Justice is dispensed in Mexico to Mexicans and foreigners. 
 
 114. Object of the clause on denial of justice. 
 
 115. Suggestion of :jhe Report on the opinion in Mexico regarding the building of an international railway 
 
20 
 
 be so prevalent ;" that " the majority of the most intelligent public men in Mexico believe that the construction 
 of a raihroad from the Capital to the Pacific Ocean, forming, with the Vera Cruz road, an inter-oceanic line, 
 would be more important ;" it asserts that " there exists the behef, not predominant, although very general, that 
 railroad connection with the United States would be the destruction of Mexican nationality, and the future 
 absorption of the country by the American^;" and it concludes by saying " that the politicians of the country know 
 this feeling so well that when it suits their purpose they never fail to appeal to it with marked effect m 
 Congress." 
 
 1 1 6. The Report goes on to relate what occurred in the Eighth Congress, on the discussion of the contract 
 entered into with Messrs. Sullivan & Palmer, and particularly what the Representative, Mr. Alfred Chavero, said 
 in regard to it. Before speaking of this matter it is proper to expose briefly and exactly the state of pubHc opmion 
 in Mexico, in regard to the United States, in order that we may examine afterwards the proposition of Senator 
 Morgan, and the speeches of Deputy Chavero, to which allusion is made in the Report. 
 
 A. State of Public Opinion in Mexico Regarding the United States. 
 
 117. Public opinion in regard to the United States has been as variable as the character of the divers events 
 that have taken place between the two countries. For the (Consideration of this subject two principal epochs may 
 be reckoned upon — that before French intervention in Mexico and that after it. We will speak briefly of each 
 one of these periods. 
 
 a. Public Opinion in Mexico regarding the United States, before the French Intervention. 
 
 118. From the beginning of the present century, Mexico looked upon the United States as a sister nation, 
 and as one setting them an example worthy of imitation. It can be confidently stated, that the leaders of 
 Mexican Independence were inspired by the example of the United States, to begin the work they undertook in 
 Mexico. No sooner was Independence proclaimed than agents were sent to Washington to solicit help to carry 
 it forward. Upon its consummation the first diplomatic representative of the new nation was sent to the United 
 States. As soon as an independent government was estabUshed in Mexico, the regency of the Empire caused 
 the treaty of hmits between Spain and the United States, of February 22d, 1819, to be published, accepting it as 
 our first international compact. The instructions given by Iturbide to one of his agents in the United States 
 (D. Eugenio Cortes) reveal quite extensive views of alliance, and even included the extradition of criminals, 
 which idea, emitted in 1822, is worthy of mention. The United States were the first power in the world to rec- 
 ognize the independence of Mexico. The first constitution of Mexico formed by a National Congress, and 
 promulgated October 4th, 1824, was very much like the constitution of the United States. The first treaties 
 entered into between Mexico and the United States are characterized by an honesty, which shows that cordial 
 relations were enhanced between the two countries, and that there were no interested views on one side, neither 
 distrust nor fear on the other. 
 
 119. This favorable state of things began unfortunately to change a short time after the consummation of 
 Mexican Independence. Some citizens of the United States solicited of Mexico some lands in Texas for colon- 
 ization, offering to be subject to the sovereignty and laws of this country. Mexico responded, with as much 
 liberality as lack of foresight, giving the colonists lands and privileges. Stephen Austin obtained from the Imperial 
 Government of Iturbide, February i8th, 1823, a grant to cblonize Texas. The acts of Iturbide being annulled 
 by Congress, April 8th, 1823, the same Congress authorized the Executive, on the nth of the same month, to 
 confirm the grant made to Stephen Austin, to estabUsh 300 families in Texas, and to pass upon applications of a 
 like nature. In accordance with this, the Executive, the 14th of April, 1823, carried into effect the concession 
 made to Austin. A law on colonization had been passed on the 4th of January, 1823, which was ordered to be 
 suspended in the order of the nth of April following. On the i8th of August, 1824, Congress issued a general 
 law on colonization, with very liberal provisions, authorizing the States to frame laws and regulations for coloniz- 
 ation in their respective territories. By virtue of this law the State of Coahuila and Texas made various grants 
 to other citizens of the United States to colonize Texas. In 1835 'be North American colonists of Tex,as rose 
 up against the Mexican Government, and maintained a long war against it, which was at last disastrous for this 
 country, principally through the intervention of the United States. It can be confidently said that one of the 
 primary causes of that uprising was the question of slavery in the United States, as will be seen further on. 
 
 116. Incidents of the discussion on the contract with Messrs. Sullivan and Palmer. 
 
 117. Public opinion in Mexico regarding the Dnited States. Its two epochs. 
 
 118. Cordiality of the relations between Mexico and the United States until 1835. 
 
 119. The Texas Question. 
 
21 
 
 1 20. Upon the deplorable events of Texas, followed others still more important for Mexico, which brought 
 on a war between the two nations, the results of which were fatal for this country. The policy of the United 
 States towards Mexico during the rule of the Democratic party, whose political creed was to maintain and prop- 
 agate slavery, had to be, in the nature of things, and was in fact, hostile to the Mexican nation, because, not 
 being able to establish slavfery in the Northern States, there remained no other available field for this object than 
 that part of the continent, to the south of the American Union, and because the rapid growth of the northern and 
 western States, where a great antagonism to slavery prevailed, was leaving the southern States in the minority, 
 which States, to preserve their power, were under the imperative necessity of extending their territory in the direc- 
 tion where the establishment and propagation of slavery could be possible. The desire to realize this design of 
 the Democratic party of the United States gave rise to the aggressive policy of that government, which culmin- 
 ated in the war which the United States made against Mexico in the years 1846 and 1847, which resulted in the 
 loss, on the part of Mexico, of nearly half its territory. The dominant party of the United States did not, however, 
 succeed in obtaining the result that had been expected by this war ; inasmuch as of all the great extension of 
 territory acquired by the adjoining nation, by virtue of the treaty of February 2d, 1848, only in the State of Texas 
 did slavery come to be established, while California, Nevada, and all the other States which were formed from the 
 territories ceded by Mexico, became free States, which fact put an end to the predominance of the southern 
 States in the North American Union. 
 
 121. In that sad period the United States urgently exacted the payment of claims of North American 
 citizens against Mexico. Before the war, the i ith April, 1839, an agreement was entered into for the liquidation 
 of those credits in which, contrary to that of July 4th, t868, claims of the United States citizens against Mexico 
 only were admitted, and not those of Mexican citizens against the United States. On the 30th ef January, 1843, 
 another treaty was signed in this Capital for the same object. Besides the indemnity given Mexico by the 
 United States, in the treaty of February 2nd, 1848, they agreed to pay the amount of claims originating before 
 the date of the said treaty, and finally it was impossible to divide among the claimants all the funds devoted to 
 that purpose, from the fact that several of the claims, on examination, proved to be unfounded. 
 
 122. By treaty of December 30th, 1853, the United States succeeded in obtaining still another acquisition 
 of territory from Mexico, and were absolved from the obligation they were under by the treaty of Guadalupe 
 Hidalgo, to prevent Indian depredations on Mexican territory. 
 
 123. It is very natural that after events so grave, and of such important results for Mexico, the impressions 
 and feelings prevailing in this country towards the United States should not be the most favorable or friendly; 
 it was natural that the preponderance of the then governing power in the United States should be looked upon 
 here with distrust, and that the fear should be entertained that those who might follow those then in power 
 should endeavor, without sufficient cause, to provoke difficulties, resulting in new segregations of Mexican terri- 
 tory, for the establishment of slavery and preservation of poUtical equilibrium. It ought not, then, to be esteemed 
 strange, that the disposition held towards the United States, from 1810 to 1835, should undergo a change in 1848. 
 
 b. Public opinion of Mexico after the French Intervention. 
 
 124. In the year 1861 events began to be developed which were almost as important for Mexico as for the 
 United States. The pro-slavery party, having lost its political power on the election of Abraham Lincoln to the 
 Presidency, conceived the project of forming an independent nation of the slave States, which project was vigor- 
 ously opposed by the rest of the Union, and this caused four years of civil war, which will be memorable in the 
 annals of the world, as well for its magnitude as for the importance of its results. The late Emperor of the 
 French, taking advantage of the, time when the United States could not oppose his conquests on this continent, 
 brought upon Mexico the foreign intervention which turned out so badly for him arid afforded Mexico the oppor- 
 tunity of estabUshing truly cordial relations with the United States. 
 
 125. In fact, during the war of intervention that Mexico sustained with France, which intervention was an 
 act as directly hostile to the United States as to Mexico, and after the triumph of the Union cause in the ad- 
 joining nation, that government pursued a friendly and energetic policy in our favor which soon brought the war 
 to a happy termination. During that intervention, and particularly after the termination of the civil war in the 
 
 120. War of the United States against Mexico in 1846 and 1847. 
 
 121. Agreement made with the United States, April 11th, 1839, for the payment of credits. 
 
 122. New acquisition of Mexican territory by the treaty of Mesilla. 
 
 123. Public opinion in Mexico in consequence of these events. 
 
 124. War of secession in the United States, of the intervention in Mexico. 
 
 125. Sympathy and moral help of the United States towards Mexico during the war of intervention. 
 
22 
 
 United States, the people of that nation turned tiieir earnest attention to the Mexican question, and showed the 
 hveliest sympathy in favor of our cause — a cause which, although ostensibly only of interest for Mexico, at the 
 bottom affected the American Union as well. 
 
 126. Happily for the United States and for Mexico, the Republican government, which has ruled in that 
 nation since 1861, redeemed its country from the foul stain of slavery, the defence and propagation of which was 
 the principal motive for desiring the annexation of Mexican territory to the United States, and with the disap- 
 pearance of which has ceased also, the danger which existed before on this point. The Mexican Government, 
 and almost every thoughtful and sensible man in the country, have comprehended clearly this situation, and 
 seeing no immediate danger of difficulties with the United States, they, on the contrary, entertain feeUngs of grati- 
 tude towards the American Union, for the kind services rendered to Mexico during the French intervention, and 
 they are animated with the liveliest desire to cultivate and draw closer the official, social and mercantile rela- 
 tions with that nation, judging this to be one of the means of obtaining the progress and development of Mexico. 
 The educated and intelligent portion of this nation considers that the creation of North American interests in 
 favor of the integrity and independence of this country, is the best means of avoiding future dangers, and that 
 the most efficacious way to obtain this desirable result is to furth^ commerce and the. investment of North 
 American capital in Mexican enterprises. » , , 
 
 127. The profound conviction that there predominates in the great majority of the North American people 
 a sober spirit of justice and .practical wisdom contributes in a great measure to remove from the minds of the public 
 men of Mexico the fear of the United States again adopting tlie aggressive policy against this country which charac- 
 terized the now.remote epoch to which reference has incidently been made; another consideration of equal impor- 
 tance is, that the propriety of a frank and fraternal policy towards Mexico must be apparent to the good sense 
 of the American people, if they wish to preserve their high and respectable position before the world, and con- 
 tinue on in their majestic career of progress and development. On arriving at the greatness of their power, fhey 
 must feel the innate necessity of wisely and rightly guiding certain d^ssimilar and even antagonistic interests 
 which have been forming from its rapidly increasing population, spread over such a vast and fertile territory. 
 For example, agriculture needs a low tariff, and manufactures demand a high one, and from the antagonism of 
 the varied aspirations and legitimate needs of diverse classes in distinct and powerful sections of the country, 
 the necessity of a policy tending to preserve national unity , must be apparent to all, and such a pohcy must flee 
 from undertaking the venture of trying to assimilate an entirely heterogeneous population ; because, even under 
 the supposition that it could be easily reaUzed, the very success of its attainment w;ould be likely to encourage 
 those elements in the United States which desire the dissolution of the Union. 
 
 128. These ideas of peace, friendship and confidence on the part of Mexico towards the United States, 
 which have prevailed here since 1865, and have been daily growing stronger, must necessarily be somewhat 
 affected by the events which will be now spoken of ' 
 
 c. Present State of Public Opinion in Mexico. 
 
 129. The object of this work, as has been already indicated, is partly to state frankly the difficulties there 
 may be in the way of developing the commercial relations between Mexico and the United States, in order that 
 for the welfare of both countries they may be removed, and this object would not be fulfilled if no mention were 
 made of the impression produced upon public opinion in Mexico by the course pursued towards this country by 
 the present Administration of the United States. 
 
 130. It can be confidently stated that the fraternal poUcy shown by the United States during the French 
 intervention, and the grateful sentiments of the Mexican people, almost extinguished the motives for coldness and 
 shyness which the events just spoken of, and particularly the war of 1846 and 1847, had sown in Mexico ; but 
 we have to affirm that the course pursued towards Mexico by the present Administration of the United States has 
 caused a revival of the fears which had almost completely disappeared. 
 
 126. The Cessation of slavery in the United States lias removed the principal cause for desiring the annexation of 
 Mexico. 
 
 127. The danger of the dissolution of the United States removes the fear of new aggressions against Mexico. 
 
 128. The present state of public opinion is unfavorable to the policy pursued by the present Government of the Unit- 
 ed States towards Mexico. 
 
 139. Necessity of speaking of this matter. 
 
 130. Way in which the policy pursued by <;he present Administration of the United States has affected public opin- 
 ion in Mexico. 
 
2^3 
 
 131. The Administration of Sebastian Lerdo de Tejalda terminated on the 20th of November, 1876, by his 
 departure from this capital towards the Pa'cific Coast. On the 4th of January, 1877, he embarked at the bar 
 of ZihuantanejO for Acapulco, and there took, on the 25th of the same month, a steamer of the San Francisco 
 lirte for New York, where he arrived on the 4th of February following: 
 
 132. Jose Maria Iglesias, who, as President of the Supreme Court, had proclaimed himself the legitimate 
 President of the Reputihc, had also to leave in consequence of the turn political matters had taken, and he 
 embarked at Mazatlan January 17th, 1877, arriving at Sd.n Francisco on the 25th of the same month. 
 
 133- Very early in 1877 the two public men, either of whom could claim certain rights to be considered as 
 the legitimate Chief of the Government of this Republic, had arrived in the United States, and that nation could 
 not be ignorant of this, nor of the fact that the only constituted authority in Mexico recognized by the nation 
 was that of the present Government. 
 
 134. The constituted authorities and the armed forces that had recognized the one or the other of those two 
 administrations submitted themselves to the Provincial Government represented by the actual President of the 
 Republic, before the exit from the country of those two leaders, or after notice being received of their embark- 
 ation for foreign laiids ; so that in January, 1877, the only constituted Government in Mexico recognized by the 
 entire nation, witliout exception, was that represented by the actual President of the Republic. 
 
 135. In some cases when there have been two or more Governments in Mexico, each one exercising 
 authority over a more or less extensive portion of territory, the United States have followed the custom of 
 recognizing as legitimate the one having a constitutional title ; but whenever there has existed in Mexico but 
 one Government in undisputed power, the United States, as well as all other nations, have recognized it as 
 ligitimate, without setting themselves to investigate its origin. This was probably the feeling of the late Adminis- 
 tration of the United States, when, as has been assured, it was decided to authorize its Representative in Mexico 
 to recognize the Government of Porfirio Diaz, and this before he was invested with a legal right by the election 
 of February 12th, 1877. But on the 4th of March of the same year the late Administration of the United States 
 came to a close, and after the inauguration of the present one it was not thought proper to make the recog- 
 nition. 
 
 136. On December 23rd, 1876, there was issued a general call, according to the Federal Constitution, for 
 the elections to form the Mexican Congress and for President of the RepubHc, and on the 5th of May, 1876, the 
 constitutional Administration, resulting from these elections, was installed. By virtue of these events, therefore, 
 all motive for delaying the recognition of the estabHshed Mexican Government had ceased, but notwithstanding 
 this, the United States Government did not recognize it till April 9th, 1878 — that is, about a year after the 
 
 ■ establishrnent of the present constitutional Administration, and without appearing to have any ostensible motive. 
 Notwithstanding this lack of official recognition, the Mexican Government was virtually recognized, by the fact 
 of the solicitation for the arrangement of delicate and importat questions pending between the two countries. 
 
 137. This unwarranted delay to recognize a Government legimately constituted, and universally recognized 
 in Mexico has been interpreted as a proof of hostility against Mexico by those who see serious and imminent 
 danger in the preponderance of the United States, and as a symptom of some other motive, probably distinct 
 from what this conduct would infer. 
 
 138. Another event which has contributed to feed these fears, and to cause a reasonably founded motive of 
 displeasure on the part of Mexico, is the order of the ist of June, 1877, from the United States War Department, 
 empowering General Ord, Chief of the military forces on the Rio Bravo Frontier, to authorize the passage of the 
 United States forces into Mexican territory, in pursuit of Indians or marauders, whenever he should think proper, 
 without regard to the consent of the Mexican authorities, and in violation of the rights of sovereignty of this 
 country, recognized by the United States themselves. On various occasions the United States forces have passed 
 over into Mexican territory, in compHance with this order, being an hostile proceeding on the part of that nation, 
 which under given circumstances, might be a cause of grave and transcendent difficulties between the two coun- 
 tries. At a time when the United States Government has repeatedly recognized the present situation on the 
 
 131. Close of tte Government of Sebastian Lerdo de Tejada. 
 
 133. Termination of the political movement of Jose Maria Iglesias. 
 
 133. Both chiefs left Mexico and sought refuge in the United States. 
 
 134. The Army and the whole country recognized the Government of Porfirio Diaz. 
 
 135. Conduct of the United States in recognizing the de facto Government in Mexico. 
 
 136. The United States did not recognize the present Mexican Government until April 9th, 1878. 
 
 137. Effect which the delay of recognition on the part of the United States produced in Mexico. 
 
 138. The Order of June 1st, 1877, for the passage of the Unted States troops into Mexico is a hostile proteediiig. 
 
24 
 
 frontier to be better than before, and when the Mexican Government has manifested to the United States, its 
 disposition to authorize the passage of troops, upon reciprocal bases and proper conditions, the continuance of 
 the said order for more than eighteen months has tended to confirm the opinions of those who consider the 
 United States as harboring feelings of hostility towards Mexico, and as seeking motives or pretexts to raise 
 difficulties between the two nations. 
 
 139. The fact that the United States are as little known here as Mexico is in the United States, has also 
 partly contributed to the formation of erroneous opinions in this country regarding that Republic. The numerous 
 educated, enterprising, industrious and philanthropic classes of the United States, which form a large majority of 
 that nation, and which highly honor it, have been but little known to the generality of the Mexican people. It 
 ought not, then, to appear strange, that in this country, in many cases, even by intelligent citizens, the United 
 States cannot be appreciated, nor social, political and commercial relations with that Republic be properly valued. 
 An intimate and reciprocal acquaintance, therefore, of the two nations, would contribute more than ought else to 
 dissipate the bad impressions that may now be existing, by opening up a broad field to a good understanding 
 between the two people. 
 
 140. It is to be hoped that the visit to this city of a commission of northwestern manufacturers, and of 
 other North American citizens, who are now in our capital^ may, among other good results, bring the popular 
 masses of Mexico into practical acquaintance with the manufacturing classes of the United States ; and that it 
 may also contribute to efface in that nation some errors in regard to Mexico. 
 
 B. Propositions of Senator Morgan and Speeches of Representative Chavero. 
 
 141. The Report cites two incidents to prove the state of public opinion in Mexico in regard to the neigh- 
 boring nation; the first relates to the propositions presented in the United States Senate by Senator Morgan, and 
 the second to the speeches delivered by Representative Chavero in the House of Representatives of the 8th Con- 
 gress, and upon the opening of the gtL Each one of these incidents will be spoken of separately. 
 
 a. Propositions of Senator Morgan, of Alabama. 
 
 142. The Report states that, during the last session of Congress Senator Morgan, of Alabama, presented a 
 series of propositions of the most friendly character towards Mexico, on the political and commercial relations 
 of the two countries, which, in consonance with the dominant idea of American capitalists before referredto, ad- 
 vocated, among other things, the following resolution : 'it is advisable to provide, by means of a treaty, for the 
 protection and encouragement of the citizens of both countries, who, with the consent of the Mexican Govern- 
 ment, may undertake the construction and equipment of a line of railway from the city of Mexico to the Rio 
 Grande.' The Report further states that, 'on the publication of this proposition here, it was denounced as a 
 proposition to establish an American Protectorate in Mexico, with the prospective design of annexation.'" 
 
 143. The quotation made in the Report, of the propositions regarding relations with Mexico, presented in 
 the United States Senate in May, 1878, by the Senator from Alabama, John T. Morgan, afford an opportunity 
 to show that the said propositions, and particularly the speech in which they were presented, demonstrate the cro- 
 rectness of the estimates expressed in the present document. 
 
 144. The text of the propositions presented by Senator Morganis as follows: 
 
 " Whereas, The people of Mexico, animated by a love for free Government which distinguishes the people of 
 the United States of America, have long adhered to the Republican form of Government, as that which is best 
 suited to preserve their liberties, and have maintained their free Republican institutions with an honorable devo- 
 tion to their principles, which merits the sympathy and regard of the American people ; and 
 
 " Whereas, The most essential interests connected with the welfare and prosperity of the people of both Gov- 
 ernments, in their various relations, require that permanent peace should be maintained between them and that 
 confidence, good-will, intercourse, and liberal reciprocal advantages of trade and commerce should be estab- 
 lished; 
 
 139. The lack of knowledge of the two countries produced erroneous opinions which will change with mutual ac- 
 quaintance. 
 
 140. It is to be hoped that the visit of the manufacturers of Chicago wUl contribute to the acquaintance of the two 
 nations. 
 
 141. Incidents of the propositions of Senator Morgan and the speeches of Representative Chavero. 
 143. Judgment of the Eeporc on the incidents of the propositions of Senator Morgan. 
 
 143. The propositions of Senator Morgan support the conceptions of this communication. 
 
 144. Text of the propositions of Senator Morgan. 
 
25 
 
 "Be if Resolved by the Senate, (ike House of Representatives concurring therein.) i. That on defining and 
 settling by treaty the relations of the United States of America with the Repubhc of Mexico, it is just and 
 expedient, and in accordance with the interest which the people of the United States have in the maintenance of 
 the right of self-government on this continent, that the present boundaries between Mexico and the United States 
 shall be guaranteed as permanent and inviolable. 
 
 " 2. That it is proper that both Governments shall engage that the territory of either shall be protected 
 against conquest by any power residing beyond the seas. 
 
 " 3. That it is expedient that liberal provision shall be made by treaty to secure to the people of both coun- 
 tries the equal and reciprocal advantages of intercourse, trade and commerce with each other ; and that to increase 
 the advantages of such intercourse, and to place upon a stable footing the peace and friendship of the two Republics, 
 it is expedient that such mutual agreements shall be entered into as will protect the borders of both countries 
 from the predatory raids of bands of outlaws ; and that persons who are citizens of either country, resident in 
 the other, shall enjoy the rights of hospitality secured to the citizens of the most favored countries, and shall be 
 free from all unlawful interferences with, or arbitrary exactions and assessments upon, their persons or property. 
 
 " 4. And it is also expedient to provide for the protection and encouragement of such citizens of either coun- 
 try as shall, with the consent of the Government of Mexico, build and equip a line of railroad from the City of 
 Mexico to the Rio Grande, in the direction of San Antonio, in Texas, or to any point on the borders of the 
 United States, to connect with a line or Hnes of railroad at the boundary between the United States and Mexico ; 
 and to secure the safe transit of the citizens of each Republic and their property over such line or lines of rail- 
 road within the territory of each country, such commercial regulations as shall from time to time be agreed upon 
 by the respective Governments." 
 
 145. The tenor of these propositions indicates plainly that Senator Morgan had an intelligent comprehen- 
 sion, that while fears existed in Mexico of the United States following an aggressive pohcy, looking to the ob- 
 taining of new acquisitions of territory, some indications which might be interpreted as pointing to the carrying 
 out of that policy would be viewed with distrust ; and that he believed it best to begin to remove every motive 
 of distrust and fear, in proposing that the United States should solemnly covenant not to change the present 
 limits of Mexico, nor to consent to their being changed by any other nation. This idea prevails throughout the 
 speech in which Senator Morgan presented his propositions, on the 15th of May, 1878. 
 
 146. Senator Morgan recognizes that Mexico is not without a motive for feeling distrust towards the 
 United States, in the following words : 
 
 " Mexico is not destitute of a cause to look with a jealous eye upon the people of the United States, while 
 on our part we have the greatest reasons for treating her with a generous and magnanimous spirit." 
 
 147. The propositions of Senator Morgan to the United States Senate, as well as the speech in which he 
 presented them, were published in Spanish by the Monitor Republicano, a political newspaper of this capital, of 
 the 2Sth, 26th and 27th of June, 1878. In commencing to pubUsh the speech, this periodical said in regard to 
 it as follows : 
 
 " Mexico and the United States. — Under this title we begin to-day to publish a translation from the ' Journal 
 of Debates' of the American Congress a speech delivered by Senator Morgan, at the session of May 15th. We 
 recommend this speech to our readers, as it contains, mixed with some erroneous estimates, some ideas which are 
 worthy of the consideration of our Government in treating with the United States upon questions of the 
 frontier." 
 
 148. No allusion or reference to this matter has been found in any other periodical of that time, neither has 
 any mention of it been found in the discussion held in the House of Representatives in considering the contract 
 entered into with Messrs. Sullivan and Palmer for building an international and inter-oceanic railway, in which 
 allusion was made to the relations between Mexico and the United States. There could not, moreover, have 
 been any mention of it in that discussion, because the principal part of said discussion took place before Senator 
 Morgan's speech. It is not easily understood, then, on what foundation the report asseverates ; that on the re- 
 ception here of Senator Morgan's proposition it was denounced as a proposition which had in view the establish- 
 ment of an American Protectorate in Mexico, with the prospective design of its annexation. 
 
 149. It is possible that some newspaper or some public man in Mexico may have commented on those 
 
 145. Senator Morgan comprehended the propriety of the United States allaying the fears of Mexico. 
 
 146. Senator Morgan acknowledges that Mexico has reason for jealousy towards the United States. 
 
 147. The Monitor Bepublicano did not consider Senator Morgan's propositions to te aggressive. 
 
 148. No allusion to those propositions has been found in the newspapers of that time nor in the discussions of Congress. 
 
 149. Even though unfavorable comments may have been made upon the propositions, the Mexican Nation is not re- 
 sponsible for them. 
 
26 
 
 propositions as being unfavorable to the country, and may have even supposed that its object was the final ac- 
 quisition of Mexico by the United States, but this would not go beyond a mere individual opmion, springing, 
 perhaps from the unfounded assertion of Senator Morgan, that there exists in Mexico an annexation party, 
 and would in no wise express the opinion of the people, nor of the Mexican Government. In regard to 
 this point, although there may not be an absolute uniformity of opinion in this country, as has been shown it can 
 still be confidently stated, that the Government and the educated and sensible people of the Repubhc do not 
 cherish any hostiUty whatever against the Government and people of the United States. 
 
 b. speeches of Representative Alfredo Chavero, on the Building of Railroads in Mexico by North American 
 
 Companies. 
 ISO The Report states " the Executive made a contract with an American company for the construction of 
 a railroad from this capital, with one branch to the American frontier and another to the Pacific," but it inserted 
 a provision that the branch to the Pacific should be completed before the one to the frontier was commenced. 
 Notwithstanding this proviso, the charter was defeated in Congress by a decided majority, after which the Lower 
 House voted almost unanimously to confer upon the Executive authority to contract for a line to the Pacific 
 only The reasons given for this action were the bad policy and danger to the country of confemng such pnvi- 
 leges upon an American company, and of extending raihroad connections to the United States. The arguments 
 presented by the principal speaker, Hon. Alfredo Chavero, one of the most experienced and influential men m 
 the Republic, were that "it was very poor policy, very injudicious, to estabUsh within our country a powerful 
 American company;" that "it is^ natural law of history that border nations are enemies;" that nations of the 
 North generally invade the nations of the South," hence "we should fear the United States;" and he closed with 
 the following appeal: "You, the Deputies of the States, would you exchange your poor but glorious liberty of 
 the present for the rich subjection which the railroad could give you ? Go and propose to the hon of the desert 
 to exchange his cave of rocks for a golden cage, and the Hon of the desert with answer you with a roar of Ubeity." 
 
 151. The Report adds that "the Congress recently elected convened in this city last month, and its first ac- 
 tion was to elect the author of the above extracts President of the Chamber of Deputies. And in reply to the 
 address of the President of the Republic, this gentleman took occasion to refer to the action of the previous 
 Congress in rejecting the American charter, claiming that subsequent events had shown the wisdom of that ac- 
 tion. If he represents to-day as fully the spirit of the present as he did that of the last Congress— and there is 
 every reason to believe he does— the hope of favorable or of any legislation for a raihroad to the American bor- 
 der must be postponed at least two years, if not indefinitely." 
 
 152. To duly estimate what transpired regarding the speeches of Representative Chavero on the two occa- 
 sions referred to, and to show how unfounded are the inferences deduced from those incidents, it is necessary to 
 relate what occurred in both cases, beginning by stating the resolurion of Congress respecting the contract en- 
 tered into with Messrs. Sullivan and Palmer. 
 
 §. Contract entered into by the Mexican Government with Messrs. Sullivan and Palmer to build an Inter- 
 national and Inter-oceanic Railway. 
 
 153. The Secretary of Public Works signed a contract with Mr. James Sullivan, November 12, 1877, for him- 
 self and as representative of Mr. William Palmer, for the construction of an International and Inter-oceanie Rail- 
 road from the city of Mexico to the United States frontier, and to the Pacific Ocean, and at the session of the 
 same day it was presented in the House of Representatives for its approbation. On the 19th of the same month, 
 November, the respective committee presented their opinion, advising that the contract should be approved. On 
 the 20th the said committee withdrew their opinion, to present it with some slight modifications on the 2 2d. The 
 discussion of this subject was commenced December 4th, and was not concluded in all the sessions up to the 
 time Congress closed on the isth of the same month. When Congress re-opened April ist, 1878, the House 
 of Representatives took up the discussion of this subject for several days. In the session of the nth of May 
 following the opinion of the committee, which advised the approval of the contract, was generally approved, by 
 69 against 62 votes. The discussion of the particulars of that opinion was tlien continued according to rule, 
 and during that discussion Mr. Chavero delivered, May 22d, his speech to which the Report alludes. 
 
 154. The Report comments on the stipulation of this contract that the Pacific branch should be finished 
 
 150. Opinion of the Report regarding the action of Congress about the Sullivan-Palmer Contract. 
 
 151. .Conceptions of the Report on the opmion of the Ninth Congress regarding the same Sullivan-Palmer Contract 
 lo2. Need of relating what occurred in Congress about the Sullivau-Palmer Contract. 
 
 153. Review of what took placQ in the House of Representatives respecting the Sullivan-Palmer Contract. 
 
 154. Ideas of the Report respecting the building of an interoceanic railway before the iDteruatioual one. 
 
27 
 
 before the branch to the United States, as a demonstration of fear or distrust towards the building of a railway 
 to the adjoining nation. The inference of the Report on this point appears to be without foundation. The 
 Mexican Government, taking into consideration the advantages for the commerce of the world which the Inter- 
 oceanic hne would enjoy, esteemed it of greater importance than a Hne to put the interior of Mexico in com- 
 munication with the United States. Even though this should be an erroneous estimate of the comparative im- 
 portance of the two Hnes, it could not be considered as springing from any hostiHty to the United States, nor as 
 a child of the fear of being put in communication with them. If such had been the case it would have preferred 
 not to have entered into any contract for a line to the United States frontier, but, on the contrary, it has con- 
 tracted for such a Hne on various occasions, and by distinct administrations. Two concession to American 
 companies for an international hne from this city to the frontier can be enumerated, and two for an international 
 line between El Paso or Presidio del Norte and Guaymas, bearing in mind that the last concession in reference 
 to this enterprise, was decreed June 19th, 1877, by the 8th Congress, before which Representative Chavero de- 
 Hvered his speech, on May 22d, 1878, alluded to in the Report. 
 
 155. — It is true that the members of the respective Committees of the House of Representatives, being aware 
 of the difficulty of concluding the matter of the Sullivan-Palmer railway in the few days that remained of the last 
 term of sessions, they, the ist and 2nd committees on industry of the House, by virtue of the extension of time 
 authorized by the interior rules of the said House for securing ample debate, presented, on the 29th of May, 1878, 
 he following opinion as a modification of the projected law on the inter-oceanic railway: 
 
 " Sole Article. — The President of the RepubKc is hereby authorized, in the recess of the Houses, to contract 
 for the construction and working of an inter-oceanic railway, under the condition that the grantee shall be ob- 
 liged to take advantage of Unes granted to States, which States will construct them themselves, or by the com- 
 panies to whom they may give such right. In this way will the Executive count on the good will of the States, 
 and in no case can parallel lines be built to compete with State Unes." 
 
 156. A great number of the Representatives concurring with the preceding opinion, presented by the two 
 Committees on Industry, discussion was waived, and it was approved in general the same day it was, presented, 
 by 116 to 7; and on the same day also it was approved in detail, by 115 to 12. According to the constitution, 
 a proposed law being approved by one House, must pass to the other for its examination and revision. By virtue 
 of this, the proposed law, which was approved by the House of Representatives May 29th, 1878, passed to the 
 Senate for its revision. The Senate has not yet taken up this subject, and it cannot therefore be considered 
 settled. 
 
 157. The real situation of this matter is, therefore, as follows: The House of representatives, in session May 
 nth, 1878, approved the contract entered into by the Executive with Messrs. Sullivan and Palmer, in its gener- 
 ality. Upon discussing the details of this matter, the discussion was very lengthy, and the two Committees on 
 Industry, on the last day but one before the close of the last term of sessions of that Congress, presented a pro- 
 posed law, in which it was suggested to authorize the Executive to contract for the construction of an inter- 
 oceanic railway, in harmony with the power given the Executive to enter into railway contracts with the State 
 Governments. This proposed law was approved by the House of Representatives May 29th 1878, and it passed 
 to the Senate for revision, where it still remains, as yet undetermined: 
 
 1^8. — Another Representative, Mr. Gutierrez Otero, presented the following proposal to the House of Re- 
 presentatives the same day, 29th May, 1878, with the same object as the one already presented. 
 
 " The Executive is authorized, during the recess of Congress, to make contracts for the building and equip- 
 ment of a railway, with a telegraph, which shall be exclusively an inter-oceanic Une, and which, starting from a 
 Mexican port on the Pacific Ocean, shall cross the territory of the Republic, and terminate at a point on our 
 coast in the Gulf of Mexico, with the understanding that the grantee shall immediately and satisfactorily guaran- 
 tee the execution of the work ; that he shall not establish any parallel or competing line with those which have 
 been already granted by the States, and which may be situated on the route determined upon, but rather shall 
 contract those lines with said States, if they should wish it, or shall avail himself of them, if the States prefer to 
 build them themselves by forming small separate companies, or by companies already formed. 
 
 "In the event that the inter-oceanic hne should be surveyed by a different route from that of Unes granted to 
 
 155. The project of a law presented by tlie Committees on Industry for building an interoceanic line of railway. 
 
 156. This project was approved by the House of Representatives on the 29th of May, 1878. 
 
 157. The definitive resolution of the SuUivan and Palmer Contract is still pending in Congress. 
 
 158. Project of a law of Representative Gutierrez Otero with the same object as the proposition of the Committees on 
 
 Industry. 
 
28 
 
 the States, then said line shall terminate in the Capital of the Republic, connecting with the Vera Cruz line 
 with the same gauge. 
 
 " The Executive will endeavor to obtain in exchange, for the advantages which the enterprise will afford to 
 the commerce of the world, a convenient compensation by establishing equitable rates upon the different articles 
 and goods, as well as on the passages of passengers which may traverse the line from one sea to the other." 
 
 159. The author of this proposition asked that it should be put to vote without discussion, and on taking the 
 votes there was no quorum. The House occupied the following day in naming the Permanent Committee, so as 
 to prepare for the close of its sessions without further treating about this proposal, which did not obtain any 
 decision whatever. 
 
 160. From what has been stated it would appear that there has been a want of exactness in asserting, as 
 the Report sets forth, that the contract made with Messrs. Sullivan and Palmer was discarded by the Congress of 
 the Union. Neither was the proposition which was presented for authorizing the Executive to contract the 
 building of an inter-oceanic railway approved by the Legislative Body. Both matters are still pending the defin- 
 itive resolution of the Congress of the Union, and as the present Congress is a different one from that which 
 initiated these projects, there is no motive whatever to venture any opinion regarding the terms upon which it will 
 decide these two important matters. 
 
 161. After this contract the Government of Mexico entered into another with the representatives of the creditors 
 of the Republic, to consolidate and arrange the national debt, combining it with the building of a railway from this 
 capital to the Pacific Ocean, which should pass through the centre of the RepubHc ; and as it might be said 
 that by entering into this contract there was no longer a desire to approve the former one, it is proper to bear in 
 mind that in thedispatch remitting said contract with the creditors of the RepubUc, dated 6th December, 1878, to 
 the Congress, the Department of Finance clearly stated that on entering into this new contract there was no 
 intention whatever to withdraw or to modify the agreement previously made with Mr. Sullivan ; and, in fact, the 
 aforesaid communication reads so : 
 
 " Th^ President has not forgotten, that on the 12th of November, 1877, he sent to the Chamber of Deputies 
 a contract executed by the Secretary of the Interior with Mr. James Sullivan, on his own behalf, and on behalf 
 of Mr. W. J. Palmer and associates, for the construction of an international inter-oceanic railroad, and that that 
 project, which was accepted by the respective Congressional Committee, and declarad in a condition to be voted 
 on in the House, is still pending for resolution. In authorizing the one which the President how sends to the 
 Chamber of Deputies, he has not attempted to retire the former, which he considers compatible with the present, 
 as much because the former treated principally of an international line to put Mexico into communication with 
 the United States, as because the inter-oceanic line which was contracted for in the former could pass under dif- 
 ferent projects through different places in the country, to the greater benefit of this." 
 
 162. Having made these explanations, it is now time to speak of the two speeches of Deputy Chavero, which 
 relate to the contract of the Palmer- Sullivan Inter-Oceanic and International Rail-road, and to which the report 
 refers. 
 
 §§ Speech of the 22d of May, 1878, on the Sullivan-Palmer contract. 
 
 163. In order the better to appreciate the sense of Deputy Chavero's speech, pronounced in the Chamber of 
 Deputies of the 8th Congress of the Union, on the 22d of May, 1878, in discussing the contract for the Inter- 
 Oceanic and International Railroad, entered into by the Government of Mexico with Messrs. Sullivan and Palmer 
 on the 1 2th of November, 1877, it is necessary to lay down its principal features. 
 
 164. Deputy Chavero began by manifesting his doubts that Messrs. Sullivan and Palmer could count upon 
 the necessary means to make the road, and even that the capitalists of the United States would wish to invtst the 
 necessary sums in the construction of that road. That part of his discourse which refers to this matter says : 
 
 " What, then, is the question, so that we may not go outside of the article under discussion, which we ought 
 to examine? It is this: Does it suit the company of Messrs. Sullivan and associates to construct the Inter- 
 Oceanic Railroad ? 
 
 159. The House of Representatives did not approve the preceding project. 
 
 160. There is no exactness in stating that the Congress discarded the Sullivan-Palmer Contract. 
 
 161. The contract of December the 6th, 1878, was not made with the idea of revoking the Sullivan and Palmer Con- 
 tract. 
 
 162. Opportunity of speaking of deputy Chavero's speeches on this matter. 
 
 163. The propriety of laying down the principal parts of the speech of May 22d, 1878. 
 
 164. Deputy Chavero doubts that the grantees count upon the means for building the road. 
 
29 
 
 "I have about this, as I have said, a doubt — a doubt and a fear, and I am going to express them to the Cham- 
 ber with entire frankness. The doubt is this, sir : that there is no such company ; that it has not, commercially 
 speaking, a real existence ; that it has not the miUions necessary to construct the railroad, and that we are simply going 
 to give a title, to be taken from market to market abroad, so that we may go on losing more and more our credit 
 and our honor ; so that we may go on losing more and more our prestige, without any one receiving us to-morrow 
 in the foreign markets. Hence, sir, I think it difficult, if not impossible, that an American company Hke the present one 
 could have sufficient money, the millions necessary to construct a railroad, which, as the Committee has said, is 
 going to embrace all the principal capitals of our Republic ; and I doubt it, sir, because the railroads constructed 
 in the United States have not been built with American money ; the three-quarter parts value of those roads 
 having been constructed with English money. And would it be possible that an American company should bring 
 its money into Mexico, when they do not wish to employ it in their own country for the construction of railroads? 
 The Americans are more given to other business, that produces money sooner. So it is that always, when rail- 
 roads have been constructed in the United States they have applied to foreign markets. It is not, then, from the 
 United States whence money can be brought out by this building company." 
 
 165. Following this, Mr. Chavero manifested the enthusiasm with which the Chamber of Deputies received 
 the said contract, in these terms : 
 
 " I have seen, with real pleasure, the enthusiasm of the Deputies of the States. It seems to them as if the 
 railroad already traversed their broad territories; that already agriculture produces great quantities of cereals, 
 which come to our doors, so that they may not be exported abroad. They see the greatest activity in mining 
 business ; industry is developed in a powerful manner ; and as they beHeve that this will come to pass within five 
 years, they are enthusiastic, and with reason. But can they beHeve that within five years this must happen 
 through a company that has no associated capital ? Through a company that must go begging this capital in the 
 market? As for me, sir, this is what is in the United States called humbug; and among ourselves, with less 
 politeness — a lie.'' 
 
 166. Mr. Chavero, referring further on to the actual views of the United States Government, with respect to 
 
 the establishment of the present administration in Mexico, to which affair he had alluded in another place, spoke 
 
 as follows : 
 » 
 
 " I do not fear to speak of the American question. In the United States Senate they speak of our ques- 
 tions, and they are neither more courageous nor have they more right than we to treat them '' 
 
 " At this moment the United States have s/igA^ difficulties with us ; Messrs. Deputies will see that I am 
 kind, and I call them slight. It is very possible that in the future they will continue having them ; that they 
 will have even more grave difficulties. The whole nation has seen the attitude taken by the United States at 
 the change of the situation, and how much time has passed to bring about the recognition of our Government ; 
 and they did it, not through good will, but because a Senator named Conkling, an enemy of Mr. Evarts, to op- 
 pose him, and not through our suggestions, moved for the recognition of our Government. Thus an inferior 
 question of opposition on the part of Mr. ConkUng, to a transaction on the part of Mr. Evarts, produced this 
 recognition ; it was neither liking nor the acknowledgement of justice on our part that produced it. 
 
 " It is necessary to tell all the truth, and it is known that the difficulties are still pending." 
 
 167. The portion of Mr. Chavero's speech of which the report makes most says : 
 
 " There are two terrible lessons in history — ^lessons that are never to be forgotten. The first is this : neigh- 
 boring peoples are natural enemies. An EngKsh writer has said : ' Happy Great Britain, which has no fron- 
 tiers other than the sea.' And without referring back to history, but looking at contemporaneous facts, who 
 wrested a shce of territory from France ? The neighboring people, Germany. Who, in these moments, invades 
 Turkey ? The neighboring people, Russia. Why is a war being prepared between England and Russia ? For 
 the neighboring possessions of Asia, possessions of England and of Russia." 
 
 " There is, besides, another law in history ; the peoples of the North necessarily invade the peoples of the 
 South. Read the history of the emigrations of the different races, from the pre-historic times, and the peoples 
 of the North will always be seen tending towards possessing themselves of the peoples of the South. Unfortu- 
 nately we do not need to recur to foreign histories ; a rich portion of our territory has been the prize of the 
 United States. And do we not wish to learn — do we not wish to open our eyes ? If, then, history teaches us 
 
 165. Mr. Chavero expresses the enthusiasm with which the Chamber of Deputies received the Sullivan-Palmer 
 
 Contract. 
 
 166. Opinion of Deputy Chavero of the conduct of the present Administration of the United States towards Mexico 
 
 167. Text of the speech of Deputy Chavero, which is cited in the Report. 
 
30 
 
 to fear the United States, what should we wish to obtain ? To make ourselves strong. What should we wish 
 to bring about ? Union among ourselves. What should we wish to do ? To advance, and advance in a man- 
 ner which shall have no dangers for us, not by establishing in our territory an American company \yhich will 
 have a most powerful influence. 
 
 " You, the Deputies of the States, would you change your beautiful though poor liberty of the present for a 
 rich subjugation which could give you the railroad ? Go to the hon of the desert and propose to him to change 
 his lair in the rocky cave for a gilded cage, and the Hon will answer with a roar for liberty." 
 
 i68. From the fragments of the speech of Deputy Chavero, which have just been cited, it clearly appears 
 that his objections against the contract celebrated between Messrs. SuUivan and Palmer for the construction of 
 an International and Inter-Oeeanic Railroad do not consist exclusively in the danger that might happen to Mexico 
 in being placed in communication with the United States by means of a railroad, as might be understood from 
 the terms of the report, but they originated also in the belief of the orator that the grantees could not command 
 sufficient capital to construct the road. 
 
 169. It also appears demonstrated that the motives expressed by Mr. Chavero to form an opinion against 
 the said grant, that is, that the United States are neighbors of Mexico, and that they are to the north of this 
 country, do not constitute a special objection with respect to the United States, but only a general principle 
 which would be applied to any other nation which might have, with regard to Mexico, the same circumstances 
 of neighborhood and geographical situation which the United States occupy. Lastly, it appears that the foars 
 inspired in the mind of Deputy Chavero were greatly inspired by the policy followed by the present Government 
 of the United States towards Mexico. 
 
 170. Chavero repeated these same opinions, considering them as accepted by the Chamber of Deputies, on a 
 subsequent occasion, as will be shown presently ; and this incident also left room for the report to judge erro- 
 neously of the pubHc opinion of Mexico with respect"" to the United States, from which it was attempted to deduce 
 general conclusions from isolated acts, and from the individual opinions of one of our public men. 
 
 §§§ Discourse at the Opening of the Ninth Congress of the Union, on the 16th of September, 1878, 
 
 171. In conformity with article 63 of the Mexican federal constitution, at the opening of each period of Con- 
 gressional sessions the President of the Republic pronounces a discourse, in which he gives an account, in general 
 terms, to the Legislative Power, of the state of the nation, and this discourse is answered also in general terms, 
 by the President of the Chamber of Deputies ; but this answer does not express more than the personal opinion 
 of him who pronounces it, seeing that it is neither discussed nor approved by Congress. 
 
 172. In compUance with this rule, at the opening of the first sitting of the present session of the Congress of 
 the Union, on the i6th of September, 1868, the President of the United States of Mexico read a discourse in 
 which he said, with reference to the railroad from Esperanza to Tehuacan, as follows : 
 
 " The railroad from Esperanza to Tehuacan approaches completion, having been constructed with public 
 funds, and so economically that its cost will not reach as much as the subventions given to others, and under one 
 of the systems that seems more in harmony with the exigencies of our country and the necessities of our traffic." 
 
 173. It is deemed advisable, before going further, and in order the better to understand this matter, to ex- 
 plain what had happened with respect to the railroad referred to in the preceding quotation from the President's 
 address. In consequence of the broken nature of the ground in Mexico, and the copiousness of the rains, the 
 principal roads of the country are frequently thrown out of repair, and outlays relatively strong must be made 
 for their preservation. It is the duty of the Federal Government to keep in order the principal avenues of com- 
 munication, and the Secretary's office of the Interior Department keeps a corps of engineers along the principal 
 roads for this purpose. The directing engineer of one of these roads — that which shoots off from the hne of rail- 
 road in the direction of Oaxaca — thought that with the cost of keeping the road under his care in repair, an an- 
 imal traction railroad might be built. His idea was approved by the Executive, and he commenced the building 
 
 168. The objections of Deputy Chavero also consisted in tte fact that the Company was not solvent. 
 
 169. The objections of Deputy Chavero are not against the United States, but against neighboring nations situated 
 toward the north; 
 
 170. On a subsequent occasion Deputy Chavero concluded that his opinions were accepted by the Chamber of 
 Deputies. 
 
 171. At the opening of each session of Congress the President gives an account of the state of the Nation. 
 
 172. On the 16th of September, 1868, the President alluded, in his discourse, to the Esperanza and Tehuacan railroad. 
 
 173. The railroad built by the Mexican Government from Esperanza to Tehuacan. 
 
81 
 
 of a tramway from the Esperanza station to the city of Tehuacan. Seventeen kilometres are already finished; the 
 rails have been received for eight more; and the remaining twenty-six kilometres are being leveled, waiting 
 only for the arrival of the rails to complete the road. 
 
 174. Deputy Alfred Chavero, whose duty it was, as President of the Chamber of Deputies, in replying to 
 the Presidential address, spoke to the following effect upon this subject: 
 
 "The railroad from Esperanza to Tehuacan is not the least among unquestionable benefits, constructed as it 
 was with public funds, and with such economy that its cost will not reach the subvention accorded to others. 
 This will serve us as a lesson in the future, so that we may not compromise the interests of the Republic through 
 inconvenient concessions; and this will serve also to justify the judicious conduct of the last Chamber of Deputies 
 in the business of the Palmer-Sullivan raihoad." 
 
 175. It is proper to observe, before everything else, that the President of the Chamber of Deputies in Mex- 
 ico is not a functionary equivalent to the Speaker of the House of Representatives of the United States. The 
 latter remains in the discharge of his duties during the whole session of the Congress which elects him, while the 
 former is chosen on the last day of each month, and his duties last only for the period of a month, or fifteen days 
 when the session begins in the middle of a month ; and it has even been seen that on account of political com- 
 binations and the interests of the parties, sometimes persons have been elected who were far from representing 
 the ppinion of the majority, even in questions of vital political importance, much less in other points not political 
 actualities, and which do not form the basis of any of the parties into which the Mexican nation is now di- 
 vided. 
 
 176. For the rest, it is to be understood at once that the object of Deputy Chavero, in his discourse of the 
 1 6th, of September, 1878, was to sustain, upon a solemn occasion, the opinions which he held expressed in the 
 Chamber of Deputies at the discussion of the contract made with Messrs. Sullivan and Palmer, and to consider 
 them as accepted by that Chamber. 
 
 177. The fact, then, of Deputy Chavero having expressed certain opinions with respect to the construction 
 of railroads in Mexico by companies from the United States ; and the fact that after having expressed those opin- 
 ions he was elected President of the Chamber of Deputies for the fifteen days included between the 16th and the 
 30th of September, 1878, does not by any means prove that the Government, or the people of Mexico, or the 
 same Chamber of Deputies of the Eighth Congress of the Union, before which Mr. Chavero pronounced the dis- 
 course alluded to in the Report, had in general approved the contract entered into with Messrs. Sullivan and Pal- 
 mer by a vote of 69 against 62. Perhaps this contract would have been approved with much less difiiculties if it 
 had not been feared, on the part of many, that the contractors did not command sufficient means to build the 
 road; which fear was, to a certain degree, the settled opinions of respectable persons. 
 
 178. Notwithstanding the discourse of Mr. Chavero, the same Chamber of Deputies of the Ninth Congress 
 of the Union which had elected him its President during the first fifteen days of the former period of its sessions, 
 approved, on the nth day of December, 1878, by a vote of 104 against 15, the contract made by the Executive 
 with Mr. Hayden H. Hall, a citizen of the United States, for the construction of the inter-oceanic railroad of 
 Tehuantepec, as will be seen further along. 
 
 179. There is, therefore, no grounds to believe that Mr. Chavero had been elected President of the Chamber 
 of Deputies on account of his peculiar manner of thought with respect to the building of a raihoad to the United 
 States ; but, on the contrary, it may be assured that his opinions in this direction had no influence whatever in 
 his election. 
 
 d. Consequences Resulting from the Preceding Facts. 
 
 180. What has been done thus far is to demonstrate that the Mexican nation harbors no sentiments of ill- 
 will, and far less of hostility, towards the United States ; although this does not prevent that in some circles ; and 
 on the part of some cultivated men of good political position, there is harbored, if not hostiUty, against the 
 
 175. The President of the Chamber of Deputies in Mexico is not tlie same class of functionary as tlie Speaker in the 
 American House of Kepresentatives. 
 
 176. Deputy Chavero repeated his opinions, and gave them as having been accepted by tlie foiiuev Chamber. 
 
 177. This opinion of Deputy Chavero is not that of either the Chamber of Deputies, or of tlic Mexican Executive. 
 
 178. The Chamber of Deputies generally approved the Tehuantepec roailroad grant to Mr. 11. li. Hall. 
 
 179. Mr. Chavero was not elected President of the Chamber on account of his opinions about the international railroad. 
 
 180. The conclusion of the Report, with regard to public opinion in Mexico being against the United States, is not 
 well grounded. 
 
32 
 
 neighboring nation; yet lukewarmness, emanating from a fear that she intends to make new dismemberments of 
 Mexican territory. It ought not to appear strange that such opinions are formed and expressed in the use of the 
 liberty conceded by our Constitution to manifest by word or in print all opinions, until sometimes ideas of the 
 same sort are adverted to in Congress ; but it would be unjust to make the Government and the Mexican nation 
 responsible for these manifestations, which it is not possible to suppress, and which do not express the opinion of 
 the country. 
 
 1 8 1. Because there may be, then, some who see with fear the propositions of Senator Morgan, of the State 
 of Alabama, on account of believing that their object is the absorption of Mexico ; because there may be a Deputy 
 who sees a danger to Mexican nationality in its ties with the United States, by means of railroads, does not prove 
 that the Govermnent or the Mexican people participate in these sentiments; just as in the same when in the 
 United States Mexico is spoken or wiitten against, those manifestations are not judged as emanating from the 
 Government, nor as the sentiment or opinion of the people of North America. 
 
 182. The succinct and exact exposition of the actual state of public opinion in Mexico and the explanation' 
 which has been given of the acts of the Chamber of Deputies, with respect to the construction of the inter- 
 national railroad, and the speeches of Deputy Chavero about this matter, demonstrate that the conclusion in the 
 Report is not well grounded in saying that the former is adverse to the construction of railroads from this capital 
 to the United States frontier. It is true, as has already been shown, that some persons consider dangerous the 
 construction of railroad lines to the United States ; but the generality of the country, and especially the present 
 Government of Mexico, and some of her former ones, far from entertaining these ideas, believe that the building 
 of these lines would be precisely one of the most secure and efficacious means of promoting the development of 
 this nation, and of avoiding, at the same time, future complications and difficulties between the two Republics. 
 
 183. What would be thought in the United States if the representative of Mexico at Washington should take 
 note of what sometimes may be said in Congress about Mexico, now on account of party interest, now because 
 of prejudice, or again through want of a knowledge of the true condition of this country, and that he should 
 present an individual opinion as the sense of the Government of the United States, and of the cultivated classes 
 of that society ? If the exposition of ideas with regard to Mexico should by accident refer to what in the United 
 States is called " manifest destiny," and which impHes the idea of the complete and immediate absorption of 
 Mexico and all the other nations on the North American continent by the United States, could it be believed, 
 then, in Mexico, that the United States was seriously occupied in procuring the absorption of our country and of 
 the others which occupy this hemisphere ? Such conclusion would be as much.in error as those deduced by the 
 Report from the fragments of the speech of Deputy Chavero, which has already been alluded to. 
 
 184. As for the rest, the Report itself takes charge of demonstrating the importance which it gives to the 
 opinions of the Deputy Chavero, and that it does not consider them as the expression of the national opinion 
 when it says that: " The poHticians of the country know so well the popular sentiment upon this point, that when 
 it is convenient for them, they never fail to appeal to it with notable result in Congress." If some politicians in 
 this country, as in some others, appeal to this method for the purpose of making an impression, it proves that in 
 such cases the parties have no confidence that among the cultivated classes of the country the ideas which they 
 propagate will prevail, but only among the masses; because, if it were otherwise, the politicians would not have 
 to recur to this means of causing an impression, but they would hmit themselves to express and sustain in a loyal 
 manner their opinions, which would find echo in the sensible opinion of the country. 
 
 e. There is no difficulty offered on the part of Mexico to the construction of the International Railroad. 
 
 185. From what has been set down it appears that there is no ground for believing that on the part of 
 Mexico there are any difficulties offered to the construction of an international railroad, which would put her in 
 immediate connection with the United States. 
 
 186. If all the Administrations which have succeeded each other in the country since 1865 to this date, no 
 matter how much they may have differed in other points, have been agreed in the system of making contracts 
 
 *• 181. There are some circles, and persons, having lukewarmness, but not hostility toward the United States. 
 
 188. There is no hostility, on the paijt of Mexico,' to the building of the international railroad. 
 
 183. In the United States, opinions contrary to Mexico are also adverted to. 
 
 184. The Report itself demonstrates the transcendency of these conplusiona, when it says that the poUticians know 
 how to use this weapon. 
 
 185. There are no grounds to believe that on the part of Mexico there is any difficulty in the way of the international 
 railroad. 
 
 186. Past Administrtrations have given various concessions for the construction of this road. 
 
33 
 
 with North American companies for the construction of railroads, now from one point to another of the Mexican 
 nation, and again to the frontier of the United States; if all the Mexican Congresses that have succeeded each 
 other from that time have approved, ratified and extended these concessions, as will be made apparent while 
 speaking of the concessions made to North American companies, it is clear that the opinion cannot be sustained 
 that the generahty of the, public men in Mexico consider dangerous the construction of railroads which would 
 put this country in communication with the United States. 
 
 187. In case any of the persons or companies which have asked for concession from Mexico, should not 
 possess any capital or respectability whatever, but have only accepted them in the terms offered solely with the 
 purpose of speculation, and being sure of their inability to realize their engagements, which inability can be tested 
 without much risk, if as the Report states, the solicitors have generally beheved inacceptable the grants in the 
 form deeded by the Mexican Government, then nothing would have been lost in not having made these grants, 
 and this must not be considered as an act of hostility from Mexico against joining its railways with the railways 
 of the United States. 
 
 188. With better reason might it be said, that now there is greater facility than has hitherto been had for 
 the construction of the International Railroad. In fact, according to what is mentioned in the Report, the 
 Southern Pacific Railroad has already reached Fort Yuma, and is almost on the frontier of the United States 
 and Mexico. The International Railroad of Texas has already got to San Antonio, and that of Denver approaches 
 in the direction of Paso del Norte. It is already considered certain that these three lines, or some of them, as 
 trunks, or as branches, as in one or the other case might be required, will be prolonged to the Mexican froj^er, 
 to increase traffic and business in the market of Mexico. If, then, the construction of a railroad line, isolated, 
 from one point in Mexico to the frontier of the United States, could be considered difficult or impossible, because 
 the traffic necessary to sustain or make it lucrative does not actually exist, this danger will no longer exist from 
 the moment in which lines are found already constructed, or about to be so, which, without any reference to ths 
 Mexican market, but for the business that could be done in the territory of the United States, have abready 
 touched, or are about to touch, our frontier. 
 
 189. If it were propable, or even certain, that a line could not be built, for example, from Paso del Norte to 
 Chihuahua, or from Laredo to Monteray, because of fears that the present traffic would be insufficient to sustain 
 it and pay a moderate interest on invested capital, it is clear that if these lines were only branches of a system 
 which would serve to put in communication some of the principal populations of the United States, or their 
 coasts of the Atlantic with those of the Pacific, the line would be lucrative, and its construction might be under- 
 taken as a secure method of augmenting the traffic of the principal lines, with respect to which those that should 
 be constructed in Mexican territory might be considered as branches. This consideration greatly augments, 
 therefore, the probability of the construction of railroads in the Mexican territory, with a direction towards the 
 United States. The same American companies consider not only probable, but certain, the proximate construc- 
 tion of some of these railroads. 
 
 3. SUBVENTION TO RAILROADS. 
 
 190. The Report also refers to the possibility of Mexico paying the subventions which she contracts, on 
 account of the financial situation of the country, its extreme poverty and the great existing difficulties to make 
 the most urgent outlay; deducing therefrom that it is impossible to pay the subvention which would be contracted 
 with the company undertaking the construction of railroads from Mexico to the United States. 
 
 191. With respect to this point the Report sets out with this supposition: "First, That the capital to con- 
 struct the road should come principally from abroad; and, second, that no road can be constructed, or will be 
 constructed, without a subsidy from the Government, in whatever form it may come." It says, that the 
 writer "Will have occasion to demonstrate further along, that Mexico is impoverished in such a manner, 
 in consequence of a long series of revolutions, that she is entirely incapable, of her own effort, to under- 
 take any great work of public improvement ; and that it is an acknowledged fact among all intelligent Mexicans, 
 that capital for a railroad towards the United States must come from the neighboring nation, or through it." It 
 adds: "The subsidy is necessary to induce any solvent company to undertake the work;" and that "This, which 
 may be set down as a general principle, is particularly correct in the present instance, seeing that the road must 
 pass over great deserts of an uninhabited country." And it terminates by the assurance that, " After it is finished. 
 
 1-7. The not giving of concessions to non-solvent companies does not show any want of will on the part of Mexico. 
 1^8. The proximity of American lines to Mexico, renders the construction of the international railroad more probable. 
 
 189. Railroads to the frontier would be lucrative when interlaced with those of the Uniicd S^tes. 
 
 190. Subvention to railroads constructed in Mexico. 
 
 191. The Report considers a subvention indispensable to the construction of the international railroad. 
 
 4 
 
34 
 
 some years will have to pass before it produces much, if it produces anything in addition to the cost of working, 
 as all the traffic of the line is to be created, and that the Mexicans do not hurry themselves in accepting or con- 
 forming to new methods." Lastly, it makes some important references to the Vera Cruz raihoad, which will be 
 examined in another place. 
 
 192. With regard to this matter the following considerations are to be taken into account: 
 
 A. Necessity of the subvention. , 
 
 B. The possibility of paying it, and 
 
 C. The form in which it ought to be given. 
 
 193. For the greater clearness of the matter, each one of these points will be spoken of separately. 
 
 A. Necessity of the Subvention. 
 
 194. The Report starts with the supposition that the payment of a subvention is indispensable to the con- 
 structioa of any raiboad in Mexico. It is only iiecessary to say, with regard to this point, that the Government 
 of Mexico has considered it be so at once when it conceded liberal subventions to all the enterprises with whom 
 it has contracted for the construction of railroads. To the English Company, which constructed the Vera Cruz 
 road, it conceded a pecuniary aid equivalent to $37,000 each kilometre, although paid in various annual sums, 
 and without proportion to the length of the road ; and the subventions which the Government has given to the 
 other companies have been from $7,000 to $10,000 for each kilometre. 
 
 195. For the rest, it ought to be borne in mind that the regions of this country through which the interna- 
 tional railroad would have to pass cannot be called deserts, seeing that it would run through a belt peopled by 
 several millions of inhabitants. It is true that it would also pass through some uninhabited places, but their 
 difficulties, even under this aspect, would be less than many others that have been encountered on various lines 
 of railroads in the United States. 
 
 196. The United States are precisely the ones who have established the principle that railroads serve to 
 develop the resources of a country, and to the practice of this principle is, in a great measure, due to the 
 prodigious development of the west of the neighboring nation, which is in contradiction to the idea which 
 formerly prevailed, to the effect that no railroad could be constructed excepting in a country already developed. 
 Mexico desires to follow the former example ; and those who have tried it in their own country with such good 
 effect should not appear to judge it impracticable in the neighboring one. 
 
 197. A single fact will be sufificient to dissipate the fear of the slowness of the Mexican people to acceptnew 
 customs, which is presented in the Report as another of the difficulties to the construction of the international 
 railro'ad. Tlalnepantla is a town of 5,000 inhabitants, situated ten miles from this capital. In the year 1874 
 there were no other regular means of communication between both places than a single stage-coach, which could 
 not contain more than twelve passengers, and which made every day one round trip (going and coming) ; because 
 even when the stages for Queretaro and other important cities passed there they were nearly always filled with 
 passengers. In 1874 a raihroad from this capital to Tlalnepantla was finished, and from the opening it has trans- 
 ported a number of passengers, which on an annual average will reach 171,243, which corresponds to 468 each 
 day. As much might be said, and yet on a larger scale, of the other towns near the Capital of Mexico, and 
 which have been united to it by railroad— such as Tacubaya, Mixcoac, San Angel, Tlalpani and Guadaloupe- 
 Hidalgo. 
 
 B. Possibility to pay the Subvention. 
 
 198. The Report, considering a subsidy necessary, asks : " What is the probability of obtaining it from the 
 Mexican Government ?" and says that " In the contract made with the international company of Texas, in 1873, 
 to which reference has been made, the Government obliged itself to pay to the company $9,000' for eack 
 kilometre (nearly $15,000 per mile), and to secure this subsidy it pledged eight per cent, of the Custom House 
 dues of the principal sea-ports, and these have been, substantially, the terms which have been proposed to the 
 foreign companies for the last ten years ; that in some cases, or instead of the subsidy, or in addition to this a 
 
 192. Questions relative to this matter. 
 
 193. The necessity of treating each point separately. 
 
 .^n^ 3^ «oyernment of Mexico has followed the system of granting subventions to railroads contracted for 
 
 195. The regions that will be traversed by the ra'lroads are not deserts. 
 
 196. The United States have established the principle of developing the country by means of railroads 
 
 197. The Mexicans are not slow in accepting civilized habits. Example of the Tlalnepantla railroad 
 
 198. The Report considers that Mexico could not pay the subvention which she contracts. 
 
35 
 
 certain amount of waste lands have been offered ; but as such lands are neither marked nor surveyed, and as it is 
 probable that the greater part of the country where it is said these lands are situated is covered by some specie 
 of title or particular concessions, as it is more than 300 years since the country has been occupied, said subsidy is 
 not esteemed of sufficient value to consider it in this article." 
 
 199. In examining this point it is indispensable to speak of the present pecuniary situation of Mexico and its 
 conditions with the actual state and amount of its pubhc debt. 
 
 a. The Present State of the Treasury in Mexico. 
 
 200. The Report expresses, with respect to the possibility of Mexico to pay the subventions which she 
 contracts, that : " The state of the national revenue is such that for more than two and a half years the sub- 
 vention decreed to the Vera Cruz and Mexico City Raikoad has not been paid, and at present there is owing on 
 account of it nearly two millions of dollars ; that the poverty of the revenue is such that recently it was necessary 
 to suspend the pay of the judges and the civil employes of the Government. Its state of anguish is manifested 
 in the fact that during the last months the Diario Oficial (official organ) of the Supreme Government announced 
 that the Executive saw itself obliged to appeal to the patriotism of the civil employes — ^both under the Executive 
 and the Judicial powers — to bear with calmness the suspension of their salaries, because it had been necessary to send 
 $50,000 to the northern frontier to meet the expenses of the projected campaign against the Indians." It adds 
 that, " With a foreign credit and a national revenue in such conditions, it is hardly probable that the Mexican 
 Government could, or would, be disposed to pay $15,000 per mile for the construction of a raibroad which, to 
 many pubUc and even intelligent men, think that eventually would give as a result the national ruin.'' 
 
 201. In the proper place, what Mexico has paid to the Mexico and Vera Cruz Railroad Company (limited) 
 will be spoken of, and also what is owing on account of the subvention. 
 
 202. The possibiUty of Mexico's paying the subventions which she offers to the companies that construct rail- 
 roads in her territory, being related in a direct manner with the financial condition of the country, it is necessary 
 to speak briefly on this point. 
 
 203. The Government of Mexico believes that it would not comply with its duty, and, even more, that there 
 would be a positive detriment to the nation, if it tried to hide the truth of events, no matter how disadvan- 
 tageous these may be for the Republic — ^if it did not set forth the situation of the country such as it really is. For 
 this reason, in as many pubUcations as have been issued from the office of the Secretary of the Treasury, for the 
 past several years, far from trying to diminish the gravity of the financial situation, they have painted it in the 
 most vivid colors. Notwithstanding that the Government had frankly shown on several occasions the state of the 
 pubhc Treasury, as the Report enters into considerations which do not appear well grounded, and deduces 
 erroneous conclusions, it is proper to make some explanation about this important affair. 
 
 b. Cause of Mexico's Pecuniary Difficulties. 
 
 204. The Mexican nation is composed of about 9,000,000 of inhabitants, of which about 6,000,000 are 
 Indians of the pure race, who, by their inveterate customs, their want of civilization, and because, for the greater 
 part, they inhabit the interior of the country, far from the coasts, without navigable rivers, and unprovided with 
 easy and cheap roads, cannot produce the tropical fruits that are in great demand in the foreign market, nor even 
 realize on the little fruit which they do produce for the Mexican markets, when these are far from their towns. With 
 this same difficulty, the greater part of the other inhabitants of the country that do not belong to the pure in- 
 diginous race struggle ; they produce and consume a Uttle more, but they do not produce what they could in pro- 
 portion to their numbers, on account of the disadvantage of the ground where they live, and because of the want 
 of consumers, occasioned principally by the deamess of the means of communication, which ought to be cheap 
 and speedy. 
 
 205. As to the production of Mexico, it may be beUeved that, having extended coasts on both seas, the por- 
 tion at least of the population estabUshed on them would be able to produce fruits which, because of not being 
 charged with heavy freightage on land along the roads to the interior, could be exported with advantage to the 
 
 199. The necessity of speaking of the present pecuniary situation of Mexico and fhe amount of her public debt. 
 
 200. The opinion of the Report with respect to the actual condition of the public Treasary in Mexico. 
 
 201. The Mexico and Vera Cruz railroad will be spoken of in its proper place. 
 
 202. It is necessary to speak of the actual financial situation of Mexico. 
 
 203. An exposition true, as exact, will be made of the pecuniary condition of Mexico. 
 
 204. Natural difficulties that have made progress impossible in Mexico. 
 
 205. The reason why her production does not correspond to the population, nor to the advantages of the land. 
 
36 
 
 country. Unfortunately, the coast of Mexico on both seas is subject, with but few exceptions, to ^-^knesses which 
 do not admit of people easily establishing themselves on it without some danger ; that is, persons !\°t J^™^^^ 
 This circumstance, and the inconvenience of life on the coast, at least durmg *^ S-^-^"* ^^^f ^^/'.^f ^^^^^^^^ 
 of the multitude of insects and other molestations of a warm country, have made the coasts of Mexico re a- 
 tively depopulated; and thus the great mass of the population of the country is found concentrated o^ t"- 
 vated and cold or temperate places, whose indwellers do not go to establish themselves, or to work temporarily 
 on the points along the coasts. It may then be said that, as a general rule, the principal population of he coun- 
 try is in the interior, and that for the fruits produced in it to be able to get to the ports without great charges 
 the construction of railroads is indispensible. 
 
 206. The population of 9,000,000 of inhabitants for a nation whose territory comprises an extent of 109,- 
 434 square leagues, with extensive coasts on both seas, is truly scanty. The necessities of a nation of such vast 
 territorial extension, having a great coast on two oceans and a long frontier with the United States to attend, and 
 another equally extensive with Guatamala, require considerable outlays in proportion, at least, to a population 
 much more numerous. The producing portion of the population that could supply these outlays is relatively 
 small, and may be calculated at two and a half miUions, at most, of inhabitants. The result of these tacts is, 
 then, that at the same time that the public necessities of Mexico are of a great nation, the charges weigh, in reality, 
 upon the shoulders of a small portion of the population. 
 
 207. Hence arises, and has arisen for some time, all the financial difficulties of Mexico. Her requirements 
 have been very superior to her possibility of satisfying them. If to this be added the circumstance that the 
 country has for many years sustained civil wars to emancipate herself from fanaticism, secure her mdependence, 
 to better her social and policical condition, and that she has been obliged to sustain some foreign wars-and it is 
 known that wars considerably increase the public outlays— it will not appear strange that Mexico has been unable 
 to pay the interest on her debt, nor to make with regularity her other outlays ; that a state of deficiency has been 
 her normal condition, and that her credit at home and abroad has suflfered the consequent depreciation. 
 
 208. This explanation being made, which in a few words gives the true financial situation of the country, 
 it is now time to examine the conclusions of the report upon this point. 
 
 e Articles in the Diario Oficial of the Mexican Government, with regard to the sending <?/ $50,000 /<? the 
 
 Northern Frontier. 
 
 209. For the purpose of demonstrating the extreme poverty of the Mexican treasury, and its complete im- 
 possibility to comply with contracted obligations with respect to the payment of subventions to companies con- 
 structing raihoads in Mexico, the report says that it was necessary recently to suspend the payment of salaries 
 of judges and of the employes of the Government, and that in the month of September, 1878, the Government 
 newspaper announced that the Executive saw itself obUged to have recourse to the patriotism of its employes, 
 as well as those of the judicial power, so that they might have patience with respect to the suspension of their 
 salaries on account of $50,000 having been sent to the Northern frontier to pay the expenses of a campaign 
 that had been projected against the Indians. 
 
 210. It is proper to allude to what passed with respect- to this small incident, because the report touches 
 upon it, giving it undue importance. 
 
 211. Notwithstanding the bad condition of the pubhc revenue, according to what has been already shown ; 
 notwithstanding the needs of the treasury, and notwithstanding that from December, 1876, anumerous and larger 
 army than what had existed in other periods, in the year 1877 the outlays of the Administration were made with 
 all due regularity, and the salaries of both civil and military employes were punctually paid in the second six 
 months of that year, even up to half monthly payments, in advance, without there remaining anything owing to 
 them. 
 
 212. The same thing happened in the first six months of the year 1878 ; the salaries of the civil and mili- 
 tary employes were completely paid, and in many cases in fortnightly installments in advance. During the 
 
 206. The productive part of the population is inferior to the requirements of the country. 
 
 207. Philosophical explanation of the financial difficulties of Mexico. 
 
 208. Examination of the conclusion of the Report about the inability of Mexico to pay subventions. 
 
 209. Allusion in the Report to the sending of $50,000 to the northern frontier to pay for a campaign against the Indians. 
 
 210. The convenience of referring to what did take place in connection with this point. 
 
 211. In the second six months of the year 1877, public expenditures were met with regularity. 
 
 212. The same thing happened in the first six months of 1878, but in the second period of that year there was some 
 delay. 
 
37 
 
 second six months of the same year, the payment of these salaries fell somewhat behind ; but this backwardness 
 is not so considerable, if itbe remembered that after twenty-four months, during which the present Administra- 
 tion has ruled the destinies of the country, there is not, on an average, owing to the civil and military employes 
 more than what corresponds to one or two monthly payments. 
 
 213. When these ceased to be made with due regularity, the fortnightly payments in advance to the civil 
 and miUtary employes of the Federal Government, some newspapers in this capital, and principally those that 
 are engaged in opposing the actual order of things, complained of this, and quaUfied it as a great injustice, and 
 tried to excite the minds of the employes, supposing that they had been unequally paid, and that undue prefer- 
 ences had been exercised.- With this motive the official organ had to make some rectifications, explaining that 
 the irregularity of the payments was owing to a reduction in the receipts, and not to either inequality or prefer- 
 ences ; that on former occasions a far greater delay in the liquidation of salaries had happened, and much 
 greater irregularities had taken place than then, without complaints having been made on this account. 
 
 214. To the attacks directed against the Executive because of the irregularities in the payment of salaries, 
 among which figured one from a functionary of a certain category, it was necessary to reply in the Diario 
 Ofieial, explaining the cause of the small delay which had been suffered. In fact, in the number of this newspaper 
 which corresponds to the 6th of September, 1878, the article was pubhshed, from which the following passages 
 are taken : 
 
 " Some persons, not recognizing that the want of regularity which has taken place recently in the payment of 
 salaries is exclusively due to the reduction in the receipts of the pubhc treasury, have concluded to believe that it 
 is the effect of ill-will, or other ignoble motives, and supposing that with letters to the press, or other inconvenient 
 demonstrations, they would prove this, have chosen this course ; which, far from being efficacious in securing the 
 prompt payment of salaries, must necessarily produce contrary results. If an active and honorable administration, 
 like the present, delays one or two fortnightly payments of salaries to its employes, it is simply because it has not 
 been able to avoid the evil ; and all that which introduces anarchy or disorder into the Administration, must forci- 
 bly produce obstacles to the punctuaHty of those same payments." 
 
 " We have thought it convenient to set down these ideas at seeing the magistrate, Mr. Pablo M. Rivera, 
 repeats his attacks against the office of the Secretary of the Treasury, by means of communications to the news- 
 papers, only because it has not been convenient to pay the Judical Power the two fort-nightly instalments for 
 August. In otner periods there have been due to the employes three or four month's salaries, and we do not 
 remember that on this account the Executive was insulted." 
 
 215. On account of having to send, not only $50,000, as the Diario Ofieial ia.iA, but even a greater sum to 
 the northern frontier for the payment of the Federal forces which garrison that line, and especially for the extra 
 expenditures for the campaign inaugurated against the Indians, which is giving such felicitous results, according to 
 data, emanating from the Government of the United States ; and the Diario Ofieial anticipating the attacks that 
 would be directed against the Executive by the opposition press, if by means of making this strong remission of 
 funds the payment of the civil employes' salaries was kept back for some days, the official organ then intimated, 
 that the money which could have been invested in the payment of the employes had been sent to the frontier, 
 wherefore the payment of the pending fortnightly installment would have to be delayed. 
 
 216. The text of the article in the Diario Ofieial vc^on this matter, which was pubUshed in the number cor- 
 responding to the 2rst of September, 1878, to which the Report alludes, is this: 
 
 " The sending of funds to the northern frontier. — The President of the RepubHc, in accordance with what 
 was said in the speech of the i6th instant, at inaugurating the sessions of the Congress of the Union, has decided 
 that an active and efficacious pursuit should be undertaken of barbarous Indians and raiders on the northern 
 frontier, who have caused so much damage to peaceable people on both banks of the Rio Grande. For this pur- 
 pose it has been necessary to place recently in several of the Federal offices on that frontier, various sums to a 
 considerable amount, and for this reason the greater part, if not all, of the second fortnightly payment for August, 
 which is due to the civil listj has ceased to be paid. 
 
 " We beUeve that the nation, and the employes themselves, to whom the amount of one month of their salar- 
 ies has not been paid, will approve this resolution of the Executive, which has been dictated by virtue of sentiments 
 of justice and patriotism, in the good result of which all the RepubUc is vividly interested. 
 
 " Notwithstanding what has been shown, the good season for the ports being now pretty near, and smugghng 
 
 213. Attacks by the opposition papers, caused by the irregularity in payments of salaries. 
 
 214 Reply of the Diario Ofieial of September 6th, 1878, to the preceding attacks 
 
 215. Explanation of the Diario Ofieial about the sending of $50,000 to the northern frontier. 
 
 216. Text of the article of September 31, 1878. 
 
38 
 
 having diminished in consequence of the energetic measures of the office of the Secretary "of the Treasury, which 
 has caused some smuggled goods of importance to be captured recently in different CustomHouses, it is hoped 
 that the state of the revenue will be improved." 
 
 217. This incident, without any transcendent importance, occasioned by the attacks against the Mexican 
 Government, which were suggested by party spirit, could not by any means be taken as a proof which would 
 demonstrate the condition of the Mexican revenues. To judge of this, it would have been more proper, in place 
 of taking an isolated case into which much political passion entered, to examine the total results of the accounts 
 of the Mexican revenues for an economical year. These accounts are printed and circulated regularly, either in 
 the form of monthly, three monthly, or annual statements, to be presented to the Congress of the Union, in 
 compliance with Article 69 of the Constitution, which account accompanies the report of the Treasury, which is 
 profusely distributed. In it is to be found the amounts of the revenue collected in the year, the objects in which 
 they are employed, the sums authorized in the estimates for expenditure during the year, and those which, in fact; 
 are spent. For these reasons, this would form a more certain basis upon which to judge of the state of the public 
 Treasury in Mexico. 
 
 218. The fact could not do less than challenge attention, that notwithstanding the bad condition of the 
 Mexican treasury, its extreme poverty and the difficulty of ftaking payments of any importance, it has been able 
 to punctually cover the three installments due on the debt which Mexico has pending with the Government of 
 of the United States, delivering $300,000 on each one of them, with the amount of exchange premium added, 
 on account of the fall recently suffered by silver in foreign markets, which, in the approaching payment, will 
 probably equal some twenty per cent. This having been done, demonstrates at the same time that the impossi- 
 bility of the Mexican revenue is not so absolute as to prevent the covering of its compromises, and it proves that 
 the Government of the Republic knows how to punctually fulfill the obligations which it contracts. 
 
 d. The actual pecuniary situation of Mexico does not prevent her from paying the subventions which she 
 
 contracts. 
 
 219. Mexico has great elements of riches, and it is certain that once placed in the way of development, not 
 only will she easily cover her expenditures, but also the interest on her public debt, and will even slowly cancel 
 the principal, and at the same time accumulate in a few years considerable sums of money, thus becoming a 
 wealthy nation. But in order that this may come about, Mexico needs, in addition to peace and interior 
 security — which is, without doubt, the first condition — easy and cheap means of communication, as nature 
 has deprived her of water ways, which have so much contributed to the development and prosperity of the 
 United States. The future of Mexico depends upon these two conditions, and to their reahzation the 
 country ought to devote her efforts in preference to all others. 
 
 220. If any one well versed in the affairs of Mexico were asked if with the present revenues of the country, it 
 would be possible to regularly pay its public expenditures, meet the interest on the national debt, and at the same 
 time cover the contracted railroad subventions, his reply could not be other than that of the Report ; but, if 
 because Mexico cannot now count upon sufficient means, or elements, to warrant security in the punctual pay- 
 ment of a contracted subvention, she would have to desist from constructing railroads in her territory. This 
 would be equivalent to shutting up in an absolute manner the gates of progress, and to condemning her to remain 
 indefinitely in her present state of anguish. On the other hand, it is clear that in proportion, as ways of commu- 
 nication are constructed, the elements of wealth in the country wiU commence to be developed, and that these 
 gradually increasing, will bring about the possibility of meeting the pecuniary compromises which Mexico may 
 contract to facilitate the construction of railroads. Under this aspect the Report is not well grounded, nor does 
 it do justice to Mexico's effort to better her present situation. 
 
 221. This nation may be compared to a very rich mine whose owner lacks sufficient capital to work it. 
 However great may be the wealth of the mine, this is contained in the bowels of the earth, and cannot be profited 
 by while there is not the necessary capital to reach it. Once invested, this capital, not only what has been put 
 in to work the mine, but much more, can be taken out. Mexico contains in her soil immense treasures in min- 
 ing and in agriculture, which cannot now be worked because of the want of capital and means of communication. 
 Let these once be constructed, and those treasures will be utilized, and will yield sufficient, not only to- pay the 
 cost of the ways of communication, but to also make the Republic rich and happy. If the owner of the mine. 
 
 ~Yl. It is not prudent to judge of the financial situation in Mexico by an isolated fact. 
 
 218. Notwithstanding the bad pecuniary situation, Mexico has met her obligations with the United Stales. 
 
 219 Mexico has great elements of wealth whose development would enable her to meet her compromises. 
 
 230. No railroad subvention could be paid in advance, but the road would augment the public revenue. 
 
39 
 
 because he cannot dispose of the capital to work it, nor gather into his coffers sufficient means to do it, abstains 
 from taking them on credit, he will never get out of the penury in which he finds himself. 
 
 2 2 2. The question comes, then, finally to be this: Should Mexico exert herself to bring about the construc- 
 tion of railroads in her territory to develop her great elements of wealth, confiding that in this development she 
 will find .sufficient means to pay the subventions which she contracts ; or, because of not having ready the amount 
 of those subventions, ought she to abstain from contracting for the construction of railroads, if, as the Report 
 affirms, no road can be constructed without a subvention, and content herself with being deprived of the means 
 of communication, which are, above all, indispensable to her progress and development ? The Report appears to 
 incline towards the second way. The Government of Mexico beUeves that its duty is to follow the first, making 
 efforts to vanquish all obstacles that may present themselves. 
 
 223. Having made these cursory observations with respect to the actual pecuniary situation of Mexico, it is 
 now time to speak of the public debt of this nation, in order to rectify some points in the Report which refer 
 to it. 
 
 b. The public debt of Mexico. 
 
 224. The report says that "in despatches lately sent to the Department of State, of which those who are 
 interested may obtain copies, if they ask for them, the representative of the United States has demonstrated that 
 Mexico has in Europe a conventionalized and pledged debt which, together with accrued interest, is about 
 $125,000,000, and in the United States, $2,700,000; that to pay the European debt the Goverment has already 
 pledged the disposable incomes of the Custom houses, and it subsequently pledged sixty per cent, of a portion 
 of said income for the payment of the American debt; that it is certain that this Government alleges 
 that the conduct of England, France and Spain in 1861, and 1862, relieved it of the obligation contracted with 
 Europe; but these nations do not admit any such pretentions, and there is no doubt that the pledging made in 
 favor of the American debt is a forcible obligation; and that therefore it results that the pledging of eight per cent. 
 or of any other portion of the revenues from the Custom Houses, is an imperfect guarantee whose validity might 
 be disputed by powerful reclamations; that on the other hand the abihty of the Government to pay any subven- 
 tion is extremely doubtful, and, in case of new revolutions, its absolute inability would be certain ; that it has not 
 paid a single dividend on the half yearly interest of the European national debt for the period, of twenty years ; 
 and that since i86i it has not paid, though it promised to do so, a single dollar of the interest of that debt; and 
 that with regard to the American debt referred to, it has never paid a single semi-annual dividend of interest from 
 the time of making the loan.'' 
 
 225. As to this matter, the data in the Report are, for the greater part, inexact, and the conclusions de- 
 duced from them are completely in error. 
 
 226. Although this work will be enlarged more than was intended when it was commenced, it seems indis- 
 pensable to pause and speak about this affair, whose importance requires some explanations. To proceed in an 
 orderly manner it is indispensable to state what are the sums which constitute the debt of Mexico, and what the 
 condition of that debt. 
 
 Granted that the report limits itself to speaking about what is called the Mexican debt in Europe and of the 
 United States, the explanations that are to be made about the matter will be circumscribed principally to those 
 credits against Mexico. 
 
 Here, then, for the better understanding of the matter, the following points will be spoken of: 
 
 a. The debt contracted in London. 
 
 b. The extinct English Convention. 
 
 c. The extinct Spanish Convention. 
 
 d. The extinct French Convention, and the debt recognized by the Archduke Maximilian in favor of the 
 
 Emperor Napoleon. 
 
 e. Termination of the conventions with European Governments. 
 
 f. The debt contraeted in the United States. 
 
 g. Other debts of the Mexican Government. 
 
 221. The comparison of Mexico to a rich mine. 
 
 222. Mexico needs the building of railroads for her progress and development. 
 
 223. Opportunity of speaking ahout the public debt of Mexico. 
 
 224. Assertions of the Report about the public debt of Mexico. 
 235. Inexact data and consequent errors in the Report. 
 
 326. Necessity of entering into details about the debt of Mexico 
 
 337. Matters connected with the public debt, which will be examined in this communication. 
 
40 
 
 i. Sums paid on account of the Mexican debt. 
 
 j. The pledging of the public revenues of Mexico for the payment of her debt. 
 
 228. Each one of these points will be separately treated, for the better understanding of the various ques- 
 tions connected with the public debt of Mexico. 
 
 a. The Debt Contracted in London. 
 
 229. The origin of that debt : The Government of Mexico, having been authorized by the law of May ist, 
 1823, commissioned Don Francisco de Borja Migoni to negotiate in London a loan of $8,000,000. Migoni 
 entered into a contract with the house of B. A. Goldschmidt & Co., on the 7th of February, 1824, whereby that 
 firm purchased at fifty /^r cent, a fund of $16,000,000, which would commence from the first of October, 1823, 
 to earn interest at the rate of five per cent per annum, payable in half-yearly installraeuts, in advance. 
 
 230. The Executive of Mexico, having been authorized by the Congressional law of August 27th, 1823, to 
 negotiate a loan of $20,000,000, celebrated a contract in this capital on the 25th of August, 1824, with Messrs. 
 Manning & Marshall, Agents of the house of Barclay, Herring, Richardson & Co., London, for the value of 
 another $16,000,000. In February, 1825, the contracting firm negotiated the Mexican bonds for 86f per cent. 
 These bonds earned an interest of six per cent, annually, wRich should commence to run from January ist, 1825. 
 
 231. On account of the penuries of the Mexican Treasury, the interest on these debts could not be paid 
 with regularity, various arrangements were entered into with the creditors by virtue of which some of the inter- 
 ests were celebrated, and some reductions of the capital were made by the creditors. Only the dates of some of 
 these arrangements will be mentioned. 
 
 232. The first was approved by the law of May 20th, 1831; the second celebrated on the 12th, of April, 
 1837 ; the third on the 15th of September, of the same year; the fourth was approved by the Congressional law 
 of June ist, 1839, and regulations of the 29th July following. The law of April 28th, 1845, empowered the Ex- 
 ecutive to regulate the debt contracted in London, upon the basis fixed by the law, and by virtue of this the 
 Executive issued on the 5th of March, 1846, a decree establishing a new consoUdated fund of ,1^4,656, 000 Ster- 
 ling, with the interest of five per cent., to be paid half-yearly, which fund was made payable in ninety-three years. 
 This decree was not comphed with by the Mexican Minister in London, and the financial agents of the Republic 
 in that city entered into a contract with the holders of the bonds of June 4th, 1846, which was approved by the 
 Mexican Government on the 20th of July, 1847. The last contract made with the bond-holders was approved 
 on the 14th of October, 1851, and by it the capital of the debt was fixed at $51,208,250, and the issue of new 
 bonds was authorized, earning three per cent, interest annually, the interest payable half-yearly in London. 
 
 233. Participation of the Bond-holders in the French Invasion. — After the arrangement of October 14th, 
 1851, some coupons of the new consolidated fund were paid, and others were not. The bond-holders, thinking 
 to secure the payment of their interest by the estabUshment of a European government in Mexico, directly aided 
 the foreign intervention and the coming of the Archduke MaximiUan, making with him, before his departure 
 from Europe, new arrangements by virtue of which the accrued unpaid interests were capitalized with the addi- 
 tion of 66f per cent, of the value of the consolidated coupons, which arrangements were set down in the decree 
 executed at Miramar, on the loth of April, 1864. During the French intervention in Mexico some coupons were 
 paid to these creditors ; but some others remained owing to them. 
 
 234. Arrangements proposed and celebrated with the bond-holders. — At the termination of the intervention 
 the bond-holders presented themselves to the Mexican Government, requesting the payment of their interest 
 The Government considered that by the bond-holders' own act of having directly recognized and aided the for- 
 eign intervention in Mexico, they had infringed the neutrality which, as foreigners, they ought to have observed, 
 and for this reason had incurred a penalty which ought to be at least the loss of unpaid accrued interests from 
 the time of the conversion, on October 14th, 185 1, till that of the re-establishment of the national Government 
 in the capital of the RepubUc. 
 
 235. From 1868 to 1871 several negotiations were followed up with the representative of the holders of the 
 London bonds in this capital, they exacting on their part the acknowledgement of the contracts made with the 
 
 328. Bach of these points will be treated separately. 
 
 229. Historical synopsis of the debt contracted in London. The $8,000,000 loan of February 7th, 1824. 
 
 230. The second London loan, August 25th, 1824. 
 
 231. Mexico celebrates different arrangements with her creditors for the payment of accrued interests. 
 
 232. Connection of the different contracts made with the creditors for this purpose. 
 
 333. Participation of the London bond-holders in the Freneh intervention and Maximilian's coming. 
 284. Negotiations initiated by the bond-holders for the purpose of arranging their credits. 
 
41 
 
 French intervention, and Mexico sustaining the nuUity of those contracts, the lapse of that of October 14th, 1851, 
 and the necessity of making a new contract, on the bases already indicated — that they should lose, by way of a 
 fine, unpaid interest up till the year 1867, and that in future they should remain as common creditors of the coun- 
 try, without any special pledging — of the public revenues effecting the payment of their credits. 
 
 236. The bond-holders in London did not wish them to accept these conditions, and the negotiation remained 
 in suspense until the advent of the Administration of Mr. Lerdo de Tejada. During his administration some 
 informal negotiations were followed up, but without any result being arrived at. When the present Administra- 
 tion was established the holders of the London bonds moved, through their representative in this capital, for an 
 arrangement of pending difficulties. After more than a year of negotiations a contract was signed on the 6th of 
 December, 1878, by virtue of which they accepted the conditions which had been offered to them in 187 1, in 
 which the arrangements with Maximilian were completely knocked on the head, one-half of the capital was 
 deducted, and tlie earning of interest modified, which will go on increasing yearly from one and a-half to six per 
 cent, annually, and all interest accrued and unpaid from 1851 to the first half of the year 1867, declared lost, the 
 entire validity of this arrangement with the creditors to depend upon their constructing, without any subvention, 
 a raihoad from the City of Mexico to the Pacific. 
 
 237. This being, a matter of great pubUc interest and directly related to the grave question treated in the 
 Report, it is deemed convenient to insert here some fragments of the communication with which this Secretary's 
 office sent to the Congress of the Union the cited contract of December 6th, 1878. 
 
 " 4. The President has stumbled, notwithstanding, against several obstacles in taking up this matter ; the 
 principal ones being the necessity of punctually complying with what would be agreed upon, to establish the credit 
 of the country; the relatively large Sums necessary to pay the interest on the debt; the great difficulty with 
 which in her actual circumstances the nation could pay an interest, even if very low, and the consideration that 
 it would be preferable to not make any arrangement than to break one that might be made. The President, 
 then, has struggled with the question that to establish credit, which it is hoped would give to the country resources 
 necessary to develop her elements of wealth, it is indispensable to count, at the same time, with resources which 
 unfortunately at present do not exist, and which there is no security will exist', while the present circuriistances of 
 the country do not change. 
 
 " 5. From these grave and patriotic considerations, which for much time have occupied the President's atten- 
 tion, has originated the idea of making the creditors of the country contribute towards the construction of public 
 works of great importance to the nation, and at the same time of great importance to her progress, so that with 
 the increase of receipts in the federal revenues when once these works are completed, the interest of our debt may 
 be paid with security, and without great effort. 
 
 " 6. The nation finds herself actually in the circumstances of a debtor who has sufficient*value and elements 
 of riches to pay aU his debts and remain afterwards in opulence, but who lacks the immediate and indispensable 
 resources to make his riches effective. In such occasions it is usual for the debtor to address himself to his cred- 
 itor, soliciting a renewal 01 credit, which would enable him to work the fountains of wealth that are found choked 
 up for want of the resources necessary to make them productive. This, it has seemed to the President, is, under 
 the present circumstances, the road which the Republic ought to follow with respect to her creditors." 
 
 " 7. It is notorious that one of the most imperious necessities of the country, if not the greatest, is the con- 
 struction of raikoad lines that will place its populated centres in communication with each other, and with the 
 coasts, so that they will develop the interior commerce, and facilitate, among other advantages, the exportation 
 of much of our fruits, which at present does not pay, on account of the high rates of freight which they must 
 meet, in order to reach the place of embarcation. 
 
 " 8. It does not appear too hazardous to assert, that if railroads were constructed in the centre of the 
 country, and between the principal towns, extending them to the Pacific, in combination with the Vera Cruz 
 road, in order to have access to both oceans, the nation would receive an impulse such as that its wealth would 
 be sensibly augmented, and with it the income to the Federal Treasury, which would admit of the punctual pay- 
 ment of the interest on the national debt. The creditors of the country appear to have recognized the truth and 
 the force of these considerations, seeing that they have lent themselves to enter into an arrangement which rests 
 upon the bases of obliging themselves to construct a railroad starting out from this capital and passing through 
 the principal centres of population in the Republic, till it reaches the Pacific, uniting this work with the acknowl- 
 edgement and gradual payment of the public debt, and the creditors accepting other conditions highly advantage- 
 ous to the Nation." 
 
 335. Conditions proposed to the bond-holders by Mexico. 
 
 236. Arrangements celebrated with the bond-holders and other creditors of Mexico, December 6th, 1878. 
 6 
 
42 
 
 238. The British Government has no participation whatever in this debt. It is to be noted that this 
 debt has not, nor has it ever had, an international character ; that it is a debt contracted by Mexico in London, 
 without any participation on the part of the English Government, and that, notwithstanding the many suggestions 
 which the bondholders' have made at different periods, soliciting the interposition of the British Government in 
 their favor, the Cabinet of St. James has constantly refused to have anything to do with this affair, on account of 
 considering it a private contract entered into between certain individuals in London and the Mexican Government, 
 without any intervention on the part of the British Government, and on account of having supported the principle, 
 that in the differences arising from this class of contracts that Government ought not to meddle. 
 
 239. By the preceding simple statement, it will be seen that the debt of Mexico in London, which represents 
 more than one-half of the total debt of the country, is not a debt contracted with the English Government, nor 
 with respect to which that government has pretended to have any part, but that it was contracted with private 
 parties, whose representative has spontaneously consented to renounce the pledge, given by the law of October 
 14th, 1 85 1, accepting in exchange the obligation that the coupons of this debt would be received in payment of 
 ten per cent, of public taxes. .^ 
 
 b. The Extinct English Convention. 
 
 240. In addition to the debt contracted in London, there has been another debt in favor of English subjects 
 established in the Republic, which was also a private debt of Mexico, in favor of particular residents in the coun- 
 try ; and, because of having celebrated diplomatic arrangements with regard to it with the British Government 
 before the French Intervention, it assumed the character of an international debt. This debt comes up to 
 $7,239,269 14, taking into account the capital only. 
 
 241. On the 15th of October, 1842, the Secretary of Foreign Relations of Mexico, Don Jose Maria de 
 Bocanegra, signed a convention with Mr. Packenham, the English Minister, in which it was stipulated that some 
 reclamations to the amount of $250,000 should form a consoKdated fund, whose capital and interest would be paid 
 with a certain percentage of import dues which might accrue in the Custom-Houses of Tampico and Vera Cruz. 
 
 242. This convention was not carried into effect, and on the 4th of December, 1851, the English representa- 
 tive, Mr. William Percy Doyle, signed another, in which were included not only the reclamations included in the 
 former ones, but also others, reaching altogether the sum of $4,984,214, with which a consoUdated fund was 
 formed, which earned an interest of three per cent, annually, it being obligatory to pay off also five per cent, an- 
 nually of the capital. To cover the interest and the amount of the capital to be cancelled, it was agi-eed to 
 devote a part of the product of the custom-houses, making the payments in half-yearly dividends. 
 
 243. Two days after signing the convention with Mr. Doyle, another was signed with Senor Zayas, the 
 Spanish Minister in IV^xico, for the purpose of arranging the acknowledgement and payment of credits proceeding 
 from the funds v/hich had existed in Mexico, corresponding to the Phillipines Mission, called those of the Padre 
 Mora, based precisely on the same stipulations as those of Mr. Doyle. By virtue of this convention a credit of 
 $983,000 was recognised, and it was agreed to pay three per cent, interest and five per ceVit. of the capital. 
 
 244. On account of the firm of Messrs. Martinez del Rio Hermanos, being the same house that was agent 
 for the English Convention of December 6th, 1851, and of the Spanish Convention of the same date, known 
 under the name of the Padre Mora, and the circumstance also of the order having been given to apply to both 
 credits the twelve per cent, of the import dues, without specifying how much belonged to each one, it caused the 
 confounding the sums, and that the agents, Messrs. Martinez del Rio Hermanos should apply ind'iscrimately the 
 funds of the one to the payment of the other account; and this confusion gave origin to the considering cf the 
 credit of the PhiUipines Mission as having been included in the convention with the English Government. 
 
 245. The usurping government of the Republic, estabUshed in this city in i860 by the Convention of Angus 
 loth, 1858, raised to six per cent, the interest of three per cent, fixed to the credit of the English Convention, and 
 designated sixteen per cent, to the payment of both conventions— twelve per cent, being for the English, and six 
 for the Padre Mora. 
 
 237. Explanation addressed by the Executive to the National Congress accounting for the preceding arrangements 
 
 238. The British Government has m part in the debt contracted in London. 
 
 239. The creditors of Mexico agree to renounce the pledge contained in former contracts. 
 
 240. The extinct English Conventions. 
 
 211. Convention of October 15th, 18 2, for $350,000. 
 
 243. Convention of December 4th, 1851, for $4,9 4,914. 
 
 243. Spanish Convention, December 6th, 1851, lespecting the credits of the Phillipines Mission, or Padre Mora 
 
 244. The confounding together of the English and the Spanish Conventions of December 6th, 1851. 
 215. Increase of the interest on the English Convention. 
 
48 
 
 246. Captain Punlop, commandant of the British naval forces in the Gulf of Mexico, obtained from the 
 Constitutional Government, established at Vera Cruz on the 3d of February, 1859, an increase of eight per cent, 
 upon import dues. Captain Aldham, who succeeded Captain Dunlop, made another arrangement on the 15th of 
 December, i860, whereby the assignations for the custom-houses of Vera Cruz and Tampico were increased five 
 per cent. These two assignations of eight and five per cent, are for the purpose of covering $1,800,000 arrears in 
 the payment of the conventions above referred to. 
 
 c. The Extinct Spanish Convention. 
 
 247. On the 17th of July, 1847, Senor Don Jose Ramon Pacheco, as Secretary of Relations, and Senor Don 
 • Juan Rondero, as Secretary of the Treasury, signed, with Senor Don Salvador Bermudez de Castro, Representative 
 
 of Spain in Mexico, a document which was made out in the form of a contract, the object being to provide for 
 the payment of the Spanish reclamations recognized in the 7th article of the treaty of peace with Spain, signed in 
 Madrid on the 28th December, 1838, and from whose inexact repetition several difficulties subsequently arose. 
 In that document it was ordered that all the reclamations against the Government of the Republic presented 
 until that time, or that should be presented in future by the Spanish Legation, would be paid out of a special 
 fund to be named " The Fund for Spanish Reclamation ;" this fund to be composed of three per cent, of all 
 duties that might be caused in the maritime and frontier custom-houses. The reclamations of a privileged 
 character to be paid in a manner to be determined by special arrangements. The fund destined to this payment 
 to be administered by a committee composed of five persons, named by the representative of Spain, which would 
 liquidate their accounts with the General Treasury every six months. The credits recognized and liquidated to 
 earn the legal interest up to their complete payment. To examine and liquidate Spanish reclamations, the 
 Secretary of the Treasury was empowered to name three employes, who would, with the Spanish Ministry, fix 
 the value of the claim and the date from which interest ought to run. These arrangements could neither be altered, 
 suspended, or modified at no time nor under any circumstances, but only by means of an agreement, express and 
 formal, between the Government of the Republic and the representative of Spain. 
 
 248. This Convention did not attain the quality of validity on account of wanting the pre-requisite of being 
 approved by the Congress of the Union, which is required by the thirteenth section of article 50 of the Constitu- 
 tion of October 4th, 1824. Therefore, on the 14th of November, 1851, another Convention was signed by the 
 Secretary of Relations of Mexico, and the representative of Spain, which modified that of July 17th, 1847. 
 
 249. On the 6th of December, 1851, another Convention was celebrate^ with the Spanish representatives 
 for the pupose of arranging the payment of the credit of Padre Mora, proceeding from the possession taken by the 
 Mexican Government of the goods belonging to the PhiUipines Mission, at the decreeing of the expulsion of the 
 Spaniards, which credit was afterwards considered as of the English Convention, for the reasons that have al- 
 ready been explained. 
 
 250. On the 6th of December, 1851, another Convention was signed by the Secretary of Relations of 
 Mexico with the Spanish Minister for the arrangement of the credits of Don Cayetano Rubio. 
 
 251. On the i2th of November, 1853, the last Spanish Convention was signed by the Secretary of Rela- 
 tions of Mexico and the Spanish Minister, which was duly ratified by both Governments, and in the execution of 
 which great frauds were committed in considering credits as being Spanish which were not so in reality, and 
 which could not enter into the Convention, according to its terms. 
 
 252. It is calculated that the credits pending of this nature, without taking into account the interest earned, 
 and deducting the portions recently paid, will reach the sum of $5,174,421 75. 
 
 d. The Extinguished French Convention and the Debt recognized by the Archduke Maximilian in Favor of the 
 
 Emperor Napoleon. 
 
 253. Mexico also celebrated Conventions with France for the payment of the claims of French subjects, 
 with conditions similar to those formed with the Government of Spain and England. On account of the last, 
 signed January loth, 1857, only something like $190,000 were owing, when the French Emperor sent his troops 
 to intervene in the interior affairs of the country, and during the intervention the balance of this debt was paid. 
 
 346. Arrangements of Captains Dunlop and Aldham with the Constitutional Government at Vera Cruz. 
 
 347. First Spanish Convention, July 17th, 1847. 
 
 348. Second Spanish Convention, November 14th, 1851. 
 
 349. Third Spanish Convention, December 6th, 1851, of the credits of Padre Mora. 
 
 350. Fourth Spanish Convention, December 6th. 1851, of the credits of Don Cayetano Rubio. 
 251. Fifth and last Spanish Convention, November 13th, 1853. 
 
 253. Calculation of the sum pending through the extinct Spanish Convention. 
 
 253. French Convention of January 10th, 1857. 
 
44 
 
 2 54- The regimen established in Mexico by the foreign intervention not only paid the small sum which the 
 Convention of January 12th, 1857, had left pending, but paid larger amounts under the title of reclamations by 
 French subjects, and recognized others still larger, in favor of the French Government, under the title of indem- 
 nifications for war expenses. 
 
 255. Claims of French subjects against Mexico recognized by Maximilian. Before the Archduke Ferdi- 
 nand Maximilian of Austria came to Mexico, and when he treated for the assumption by him of the government 
 of this country, he celebrated in Mirania, on the loth of April, 1864, a convention with the Emperor Napoleon, 
 by virtue of which he compromised himself, among other things, to indemnify French subjects who have claims 
 against Mexico, setting apart at once for this purpose, and without examining the claims, the sum of i2,ooo,ooo_ 
 francs of the first loan, which he negotiated also in Europe before coming to the country. When Maximilian 
 came to Mexico he entered into a convention with the French Government, which was signed on the 27 th of Sep- 
 tember, 1865, for the recognition of the claims of French subjects, originating in damages caused to them by the 
 Mexican Government and its agents. Those which were presented to the commission reached the sum of 
 $46,000,000. According to what appears in the Diaro del Ministerio de Hacienda of the 9th of February, 
 i866, drafts were freely drawn in favor of the French paymaster, for 23,660,000 francs, as part of the loan of 
 1865, to cover the amounts resulting from these claims. This sum, and that of 12,000,000 already mentioned, 
 make a total of 35,660,000 francs, which is the largest total sum recognized by the commission in favor of French 
 subjects, the total amount allowed being 31,865,530 francs.* During the regimen of the intervention, the custom 
 house of Vera Cruz paid, in addition, the net balance of the French convention of January 10, 1857, according 
 to what has been already shown. 
 
 256. Recognition by Maximilian of the credits in favor of Nafoleon. The Emperor Napoleon celebrated 
 different treaties with the Archduke Ferdinand Maximilian of Austria, whom he sent to this country and tried to 
 invest with the character of Emperor of this Repubhc, in which treaties very large sums were recognized, alto- 
 gether beyond the possibility of the country to pay, under the title of indemnifications for the war which had been 
 brought to Mexico through personal views, and hostile to this nation as to the United States. But the Mexican 
 nation has not recognized, nor could it recognize, the acts of the foreign intervention in Mexico, and far less 
 those that had for their object that of imposing the obligation of paying the expenses of an iniquitous war, when, on 
 the contrary, Mexico would have the right of collecting from France the costs and damages occasioned by the war. 
 
 257. In fact, all these debts represent a capital of $r92,962,962, which earns the annual interest of $10,377,- 
 777, in this form: 
 
 Debt recognized till the ist of July, 1864, to pay to France the expenses of the war 
 
 against Mexico, with interest of six per cent vr. $40,000,000 
 
 The first loan negotiated by Maximilian with Messrs. Glyn, Mills & Co., bankers, 
 
 London, for 216,000,000 frcs., with interest at six per cent $40,000,000 
 
 Bonds issued for 110,000 francs, bearing 6 per cent, interest, to pay France $10,- 
 
 000,000 cash and 12,000,000 frcs., on account of reclamations by French subjects. . $20,370,370 
 Second loan negotiated by MaximiHan in Paris, at the quotation of 340 francs, for 
 
 500,000,000 francs, bearing interest at s^x per cent $92,592,592 
 
 Total $192,962,962 
 
 258. The Mexican nation has considered that this debt is not legitimate, because it was contracted to bring 
 to the country, and to sustain there, a European intervention which would have converted it into a dependency 
 of France, if the result proposed by the Emperor Napoleon had come about. 
 
 259. It is a custom, authorized by the practice of civilized nations, that when one makes war against the 
 other, that which loses has to pay the cost of the war incurred by that which triumphs. In this case Mexico 
 
 ' triumphed over France, because her forces had to leave Mexico without being able to attain the object proposed 
 by the Emperor MaximiUan at the beginning of the war, which was the overthrow of the Republic and the estab- 
 Hshment of a sham monarchy, which might subsequently be converted into a dependency of France. This power 
 ought, then, to have paid Mexico the costs of the war and the damages caused to the Mexicans, instead of Mexico 
 having to pay those which France caused. 
 
 254. Pecuniary arrangements of the Emperor Napoleon with the Archduke Maximilian. 
 
 255. French claims recognized hy Maximilian. 
 
 256. Debts recognized by Maximilian intavor of Napoleon for the expenses of the war of mterventioh. 
 
 257. Details of the debt contracted in Europe by Maximilian. 
 
 258. The Mexican nation considers the acts of the intervention illegal, and not binding. 
 
 259. The defeated nation should pay the costs of the war. 
 
45 
 
 260. It does not appear probable that the United States, which never recognized the French intervention in 
 Mexico, and which lent their support to the RepubUc during that painful epoch, could consider as obligatory upon 
 Mexico the acts of the foreign intervention. 
 
 261. Comparison of the debt of Mexico with that which the foreign intervention attempted to impose upon her. 
 Before passing on to any other point it is deemed convenient to insert the following comparison of the amount of 
 the national debt of Mexico with that which the regimen of the foreign intervention attempted to mpose upon her, 
 taken from the memorandum of the Treasury of September i6th, 1870 (page 694, paragraph 2,761) : 
 
 Debt of the so-called Mexican Empire, in conformity with the balance to the end of December, 1866, of the 
 Count of Germiny, President of the Treasury-Commission established in Paris by Maximilian. 
 Loan of 1864, at six per cent., including 110,000,000 francs applied to war ex- 
 penses Francs 311,600,100 
 
 Loan of 1865, first series 250,000,000 
 
 Loan of 1865, second series 250,000,000 
 
 English consoUdated debt, 185 1 258,089,580 
 
 do do do 1864 122,592,960 
 
 Total Francs. . . . ; * 1,192,282,640 
 
 There are added for the remaining costs of war, in accordance with the spirit 
 
 of the Miramar Convention Francs 2 16,000,000 
 
 Total Francs 1,408,282,640 
 
 This sum, at the rate of five francs to the Mexican dollar, is equal to $281,656,528 
 
 Anterior Conventions: 
 
 French $190,000 
 
 English 4,175,000 
 
 Spanish 6,633,423 
 
 Padre Mora 825,000 
 
 . The banker, Jecker 14,450,555 
 
 Total $26,274,823 
 
 The amount of the Interior debt recognized by the nation $95,000,000 
 
 Total $402,931,351 
 
 The interest on the indicated exterior debt amounted to more than $14,000,000 annually. 
 The exterior debt in 1862, in conformity with the liquidations of the Republic: 
 
 Bondrholders of London $51,208,250 
 
 English Convention 4,175,000 
 
 Spanish Convention 6,633,423 
 
 French Convention 190,845 
 
 Ditto, of the Padre Mora .- 82 5,000 
 
 Total $63,032,518 
 
 Comparison. 
 Exterior debt of the Republic, according to the operations of 1850, and liquidated 
 
 in 1862 $63,032,518 
 
 Recognized exterior debt of the so-called Empire 3°7)93i!3Si 
 
 Difference $244,898,833 
 
 The exterior liquidated debt of the RepubUc earned an annual interest of a little less than $2,000,000. 
 
 e. The end of the Conventions with European Governments. 
 
 262. As far as concerns the debts legitimately contracted by the Mexican nation, before the foreign inter 
 vention with English and with Spanish subjects, which constitute the debts included in the conventions, it must 
 be taken into account that France, England and Spain, having allied themselves to invade Mexico, by the treaty 
 of October 31, 1861, and England and Spain, after returning from Mexico in 1862, having by their land and sea 
 
 260. It does not appear tliat the United States recognize as valid the arrangements between Maximilian and Napoleon. 
 361. Comparison of the legitimate debt of Mexico with that intended to be forced upon her by the French intervention. 
 363. The Conventions celebrated by Mexico with European Governments were broken by these in declaring war 
 against her. 
 
46 
 
 forces recognized the order of things established here by the French intervention, both nations broke, by their 
 own conduct, the treaties which bound them to Mexico, and in consequence the debts recognized under conven- 
 tion remained in the condition in which they were before the celebration of the conventions which were broken 
 by their own proper acts ; that is, with the character of obligations contracted by the Mexican nation with private 
 persons of different nationalities, residents in this country, without any intervention on the part of the foreign 
 Governments. It cannot help causing some surprise that the Report appears to put in doubt the clear rights of 
 Mexico on this point. 
 
 263. This is the position assumed by Mexico since the year 1867, in which France had to retire her invading 
 forces from here, and which has been sustained by all the administrations that have since then ruled the destmies 
 of the country. Mexico, then, has implicitly supported, and does support with full right, the fact that the con- 
 vention which she had celebrated with England and Spain before the intervention, have been annulled by these 
 nations io making war against Mexico to establish here a foreign intervention, and that the credits to which the 
 said Conventions refer, have remained in the condition in which they were before celebrating the same conven- 
 tions; that is, as an obligation against Mexico in favor of private persons, without any interference of any foreign 
 Governments. 
 
 264. As among the stipulations of these extinct conveigons, figured the special assignments of a part of the 
 pubHc revenues of Mexico for the payment of the debts to which they referred; the natural consequence of their 
 rupture is the ceasing of the hypothecation, and the cons^uent liberty of the Government of Mexico to con- 
 sider her debts, as formerly conventionaUzed, under the same basis as the others, and to attend to them in the 
 same manner, without being bound by the pledges and stipulations of those extinct compacts. 
 
 / The Debt Contracted in the United States. 
 
 265. During the war of intervention sustained by Mexico, first against the three European Powers that 
 signed the Treaty of AMiance on the 31st of October, 1861, and afterwards against France, the Government of 
 the Repubhc found itself under the necessity of sending special agents to the United States, for the purpose of 
 obtaining pecuniary resources to sustain the war of independence. The operations of these commissioners oc- 
 casioned difliculties, which have been detailed at length in a volume published in this capital in 1867, under the 
 title of " Contracts made in the United States by the Commissioners of the Mexican Government during the 
 years 1865 and 1866." 
 
 266. Of all the operations that were attempted to be carried into effect in the United States during the war 
 ot the intervention, the only one which was in part realized was the emission of bonds made by General Jose 
 Maria de Jesus Carvajal, dated in San Carlos, Tamaulipas, July 4th, 1865, whose coiTesponding contract cele- 
 brated with Messrs. Corlies & Co. of New York, was approved by the representative of Mexico in Washington on 
 the nth of September, 1867. The total issue of these bonds, in conformity with the contract, was $2,950,000, 
 the distribution of which appears in detail in the volume alluded to. 
 
 267. By the bonds signed by General Carvajal, aifd authorized by the Secretary of the Mexican Legation in 
 Washington, sixty per cent, of the federal revenues and those of the State was pledged for their payment. The 
 State rents pledged were those of the States of TamauUpas and San Luis Potosi. This arrangement is somewhat 
 different from what might be understood from the terms of the Report, which assures us that sixty per cent, of 
 the custom-house incomes of Mexico was pledged to pay the debt contracted in the United States. 
 
 268. As far as the actuala mount of this debt is concerned, it must be borne in mind that the capital awaiting 
 
 payment is $1,438,050, on account of the rest having been paid in various operations; the corresponding coupons 
 
 still owing on this capital reaching the amount of $r, 366,834, up till the twenty-sixth half-year completed on the 
 
 1st of October, r868. 
 
 g. Other Debts of the Mexican Government. 
 
 269. Although the Report speaks only of the debts that have thus far been mentioned in this communica- 
 tion, which are called " the debts which Mexico owes in Europe," and it considers that the Governments of 
 France, Spain and England have some intervention in them, and it is therefore thought proper, in order to 
 afford a complete idea (as far as possible) of the condition of the public debt of Mexico, to insert the following 
 synopsis of the capital, and its titles against the Mexican revenues, the separate interest on that capital, and the 
 result which would be given by the realization of the arrangement celebrated on the 6th of December, 1876, witli 
 
 263. Mexico has assumed this position and sustained it since 1867. 
 
 834. The rupture of these Conventions has terminated the hypothecation in favor of the credits comprised in them. 
 
 265. Pecuniary negotiations effected in the United States during the war of intervention. 
 
 266. The total issue of bonds made by General Carvajal was equal to $2,950,000. 
 
 267. The Carvajal bonds pledged a part of the Federal revenues and the local rents of San Luis Potosi and Tamaulipas. 
 
 268. The inexactness of the data of the report about the sum due on the Carvajal bonds. 
 369. Synopsis of the legitimate debt of the Mexican nation. 
 
47 
 
 the creditors of the Republic ; which synopsis, corrected up till the present hour, was sent with the explanation 
 addressed by this Secretary's office to the Congress of the Union on that date, when submitting that contract for 
 its approval. 
 
 " Synoposis of the circulating capital under the titles against the federal revenue, of their separate interests, and 
 th^ probable results which would be given by the approval of the contract celebrated with the creditors on the 6th 0/ 
 December, 1878 : 
 
 VII. 
 
 VIII. 
 IX. 
 
 X. 
 
 XL 
 
 XII. 
 
 XIII. 
 XIV. 
 
 XV. 
 XVI. 
 
 XVII. 
 
 XVIII. 
 XIX. 
 
 I. & II. Bonds at three per cent, of the 30th of Novem- 
 ber, 1850 
 
 III. & IV. Bonds at five per cent, of the 19th of May, 1852 
 - V. Bonds created according to the decree of Septem- 
 ber i2th, 1862 (without interest) 
 
 VI. Bonds issued in San Carlos, Tamaulipas, on the 
 4th of July, 1865, capital and interest at seven 
 
 per cent 
 
 Titles issued beforethe 30th of November, 1850, 
 and because deferred by this law they lost their 
 interest. According to the law of November: 
 30, 1850, $12,000,000. Ditto, according toi 
 that of September 12th, 1862, $1,500,000. . 
 Certificates issued by the Treasury of the three 
 and five per cent, bonds, according to the order 
 
 of January 4th, 1861, without interest 
 
 Certificates of the Treasury, according to the 
 order of the 17th of January, 1861, and laws of 
 the 14th and i6th of February, r86i. (No ante- 
 cedents) 
 
 Certificates issued from the Accountant's office 
 and bureaus of liquidation, in conformity with 
 the law of the 19th of November, 1867, without 
 
 interest 
 
 Unconverted credits according to the laws of 
 November 30th, 1850, and 19th of May, 1852, 
 represented by receipts issued by the Bureau of 
 Liquidation, created by the former law. (No 
 
 antecedents.) 
 
 Back pay on account of salaries and pensions, 
 civil and mihtary, loans, &c., from November 
 20th, 1867, till June 30th, 1878, without inter- 
 est. Approximate calculation, there being no 
 
 antecedents 
 
 Certificates for collection (cobre) in Chihuahua, in 
 conformity with the basis agreed on August 20th, 
 
 1868, without interest 
 
 Certificates for collection in SInaloa, issued by order 
 of September 25th, 1875, without interest. Ac- 
 cording to date m the Treasury and the Revenue 
 Office of Sinaloa, nothing is owing, nor does 
 there exist any credits in addition to the $208,- 
 428 60 cancelled; or if so, they must be of very 
 
 httle value 
 
 Mexican bonds issued in London, in conformity 
 
 with the law of October 14th, 1850, (capital). 
 
 Coupons of the Mexican bonds issued in London, 
 
 in conformity with the law of October 14th, 
 
 1850, (interest) 
 
 Bonds issued by virtue of the conventions of the 
 4th and 6th of December, 1 851, without inter- 
 est 
 
 Capital of the bonds issued by virtue of the conven- 
 tion of November 12, 1853, losing their interest. 
 Bonds issued in London in addition to those con- 
 verted by virtue of the law of December 14th, 
 1850, losing their interest. (The sum hquidated 
 as just) 
 
 Capital and inter 
 est till June Blth, 
 
 1S78. 
 
 $1,868,550 29 
 734,160 06 
 
 33>029 24 
 2,804,893 25 
 
 13,500,000 00 
 24,915 93 
 
 Capital and inter- 
 est till June 30th, 
 187t!, reduced to 50 
 per cent. 
 
 $934,275 15 
 376,080 03 
 
 16,514 62 
 2,804,893 25 
 
 6,750,000 00 
 12,457 96 
 
 Interest to be 
 earned at 6 per 
 cent. 
 
 $56,056 SI 
 22,024 80 
 
 990 88 
 100,663 5° 
 
 405,000 00 
 747 48 
 
 6,808,874 22 
 
 5,916,937 iz 
 140,000 92 
 
 3,404,437 II 
 
 202,266 23 
 
 2,958,468 66 
 70,103 46 
 
 51,208,250 oc 
 
 19,240,219 73 
 
 7,239,269 I.-; 
 
 5,174,411 75 
 
 Total. 
 
 2,500,000 oc 
 $117,193,727 86 
 
 177,508 12 
 4,206 21 
 
 25,604,125 00 
 
 9,620,109 86 
 
 3,619,634 57 
 2,587,210 87 
 
 1,125,000 00 
 $59,999,310 54 
 
 1,536,247 50 
 
 577,206 59 
 
 217,178 07 
 
 155,232 65 
 
 75,000 00 
 $3,532,328 54 
 
48 
 
 Note.— According to data in the Memorandum o'f the Treasury, of the loth of December, 1877, corres^ 
 ponding to the year 1876 and 1877, and the balances on the books of the Treasury for the fiscal year of 1868 
 and 1869, and that struck on the 28th of November, 1876, the sum of $406,003 ir in bonds of the o^ conven- 
 tions appears cancelled, without deducting the total sums, on account of not knowmg the quantities whicn corres- 
 pond to each class. The entries of the credits IX., XL, and XIV. are not considered on ^^count of their 
 amounts being unknown, but knowing these, their totals ought to be added, which would probably be compen- 
 sated by the $406,003 II mentioned, and which sum has been cancelled in foreign offices, and ot which the 
 corresponding data are at hand. Mexico, December 6, 1878." 
 
 270. The preceding document shows that the present total estimated capital of the public debt of Mexico is 
 $117,193,727 86, and that once the contract of December 6th, 1878, be approved by Congress, this will be 
 reduced to $59,999,310 54, leaving an annual interest to pay of $3,532,328 54; which sum differs a good deal- 
 from what is set down in the Report. 
 
 h. The sum. of the Public Debt in Mexico. 
 
 271. The. Report calculates at $125,000,000 the debt of Mexico in Europe. Probably this calculation was 
 based upon a note sent by the Mexican Legation in Washington to the Department of State, and published 
 among other documents contained in the message which the President addressed to the House of Represent 
 atives, on the 20th of March, 1866, in reply to a resolution of that House, asking for such information as the 
 Executive might have about the condition of affairs in Mexico, approved December nth, 1865. (XXXIX Con- 
 gress, first session; Executive Document No. 73.) It is to be noted that in this note, which emanated from the 
 Mexican Legation in Washington, was comprised only the debt of Mexico on account of the two loans contracted 
 in London, in 1824, by the EngUsh, French and Spanish conventions, and by reclamations pending with subjects 
 of these nationahties, expressing separately the capital and interest of these debts, up till the 30th of June, 1862, 
 in the following form : 
 
 Debt contracted in London and the English convention, its interests and English 
 
 claims $69,3 1 1,657 00 
 
 Spanish convention, interest and claims 9,460,986 00 
 
 French convention and pending claims 2,859,917 00 
 
 Total $81,632,560 00 
 
 272. Separating what corresponds separately to capital and interest of these debts and the amount of pend- 
 ing claims, the following result is obtained: 
 
 For Capital. 
 
 To English subjects $55,383,25° °o 
 
 To Spanish subjects 6,633,423 00 
 
 To French subjects 190,000 00 
 
 Total $62,206,673 °o 
 
 For Interest. 
 
 To English subjects $13,231,793 00 
 
 To Spanish subjects i,549>S63 0° 
 
 Total ; $14,781,356 00 
 
 For pending Claims. 
 
 To English subjects $696,614 00 
 
 To Spanish subjects 1,278,000 00 
 
 To French subjects 2,669,917 00 
 
 Total $4,644,531 00 
 
 Total of the debt $81,632,560 00 
 
 273. As the note referred to, of the Mexican Legation in Washington, had for its principal obj ect that of making 
 a comparison between the debt of Mexico, as recognized by the Constitutional Government of the RepubUc, and 
 the enormous charge which the pretended Empire of Maximilian wished to weigh down upon the country, 
 
 270. The interest on the debt, in conformity with the Convention of December 6th, 1878, is equal to $3,533,328 54 
 
 371. Probable origin of the report with respect to the debt of Mexico with France, England and Spain. 
 
 373. The confounding of the capital with the separate interests of this debt. 
 
 273. The principal object of the note concerning the public debt of Mexico sent to the Department of State in 1866. 
 
49 
 
 through Its onsrous contracts made abroad, and its extravagant expenditures in Mexico, all the claims pending 
 before the Constitutional Government of the Republic, and the capitalized separate interests on the debt were 
 included, and under these bases, and with data not completely official, but furnished by an employe of the gen- 
 eral Treasury of the Mexican Government, the annual interest on the debt of the RepubHc was fixed at 
 $2,760,022. 
 
 274. The Report, probably starting out with this data regarding the interest and the $81,632,560 set down 
 in the note of the Mexican Legation as the sum of the capital of the debt in June, 1862, calculated that actually 
 the debt of Mexico is near $125,000,000, including in this sum the interest of ten years on $81,632,560, at the 
 rate of $2,760,022 annually. 
 
 275. It appears from the liquidation that has now been completed with all the different classes of titles that 
 form tlie Mexican debt, and which is more exact than any former information, that the total is $117,193,727 86 ; 
 a result which is notably different from that given by the Report, seeing that in this is included only what is called 
 the debt of Mexico with England, France and Spain, and the liquidation mentioned embraces all the pubHc debt 
 of Mexico, including that contracted with the United States, which the Report names separately. 
 
 276. Indeed the Report says that the debt which Mexico has contracted with the Governments of France, 
 England and Spain reaches, inclusive of its interest, $125,000,000. It has already been shown that actually 
 Mexico has no debt contracted with European Governments ; that during some time this character could be 
 given to the debt called the " English and the Spanish Conventions," whose capital hardly reaches at present 
 $12,413,690 89; that the debt contracted in London, which forms more than half of the total debt of the Mexi- 
 can nation, has never been under convention, nor has the English Government ever had any interference with 
 it ; and that, even supposing, as is indicated by flie Report, it should be given by the European Governments 
 the character of a Mexican debt, the same as the extinct English and Spanish Conventions and the debt con- 
 tracted in London, the capital of them all would hardly reach $63,621,940 89, in following form : 
 
 Capital of the bonds issued in London, by virtue of the law of October 14, 1850. .$51,208,250 00 
 
 Bonds of the extinct English conventions 7,239,269 00 
 
 Bonds issued by virtue of the extinct Spanish convention 5,174,421 75 
 
 Total of these credits $63,621,940 89 
 
 277. And even if to this sum the interest is added, and if the terms fixed by the Mexican Government in 
 the contract of the 6th of December, 1878, be not admitted, that debt would hardly reach $112,416,659 53. It is, 
 therefore, not exact, as the Report asserts, that it represents $125,000,000, and that to the payment of it nearly 
 all the disposable part of the income from the maritime custom-houses is pledged. The contract of December 
 6th, 1878, once accepted, the only assignment made in favor of the Mexican debt will be the ten per cent, of the 
 product of the federal revenues of the RepubUc. 
 
 z. Amounts paid an account of the Mexican debt. 
 
 278. The Report says that Mexico has not paid, for the space of twenty-four years, a single six-monthly divi- 
 dend of interest upon what is called the European debt, and that from 1861 she has not given a single dollar on 
 account of these interests; but neither is this statement exact. Without including considerable sums paid by 
 Mexico to her European creditors from 1858 to 186 1, when the foreign intervention commenced, it must be re- 
 membered that the Government of Maximilian, which pretended to assume the representation of Mexico, paid 
 considerable amounts, as well to the Mexican bond-holders in London, as to the creditors comprised in the Eng- 
 lish, French and Spanish conventions. 
 
 279. It would seem convenient, on this account, to give the following statement of the sums paid by Mexico 
 to her foreign creditors, as mentioned in the memorandum of this Secretary's office on the i6th of September, 
 1870, (page 556, paragraph 2,120): 
 
 274. Explanation of the inaccuracy of the Keport. 
 
 275. Specific and exact statement of the amount of the public debt in Mexico. 
 
 276. Correction of the data in the Report with regard to the public debt in Mexico. 
 
 277. The sum total of the debt of Mexico to which the Report refers. 
 
 278. Inaccuracy of the Report in saying that Mexico has paid nothing on account of the interest on the debt 
 
 since 1861. 
 
 379 Statement of the payments made by Mexico to English, Spanish, and French subjects. 
 
 7 
 
50 
 
 GENERAL SYNOPSIS OF WHAT HAS BEEN PAID TO ENGLAND, SPAIN AND FRANCE. 
 
 England. 
 
 Paid to the bondholders on account of cancellation in $z9iS35i937 94 
 
 To Don Pedro Anzoategui for several English subjects 88,543 00 
 
 To Drusina for the same 123,210 00 
 
 To Don Francisco Murphy 64,402 00 
 
 To Jamisson & Co i9>674 0° 
 
 To several English subjects. 6,132 00 
 
 To Don Santiago Humphry 3,445 °° 
 
 To Walter Logan ■ "8,750 00 
 
 To the same 74i°°° 0° 
 
 To Don Sylvestre Mercia ' 1,800 00 
 
 To several, on account of conventions and other claims 5,475)5^4 73 
 
 Ditto, on account of the conducta of San Luis Potosi 253,603 73 
 
 Ditto, on account of the conducta of Laguna Seca 428,461 54 
 
 » 
 
 Total $36,193,478 65 
 
 Spain. 
 
 Paid to the firm of Martinez del Campo • $105,919 00 
 
 Ditto, to the house of Don Juan Manuel Lasquetty 23,313 00 
 
 Ditto, to several, on account of the first convention, for interest 424,971 37 
 
 Ditto, to the credits of the Padre Mora, capital and interest from 1845 to June, 
 
 1861 684,037 40 
 
 Total $1,238,240 77 
 
 France. 
 Paid on account of the claims of 1840, after the bombardment of Uloa and Vera 
 
 Cruz $600,000 00 
 
 Paid in 1850 and 1851, to Don Jose Cavalier 107,800 00 
 
 To Doa Jose Limantour 1 60,000 00 
 
 To Don Carlos Dubois de Luchet 73,000 00 
 
 To Don Adolfo Delong 28,000 00 
 
 To Don Luis Cavalier 3, 001 00 
 
 To Baron Norman 5, 000 00 
 
 To Legrand Brothers 3,246 00 
 
 To Francisco Duval 1,500 00 
 
 To Teodoro Boulanger 1,800 00 
 
 To J. A. Redonet 60,057 00 
 
 To Luis Fort 11,250 00 
 
 To Serment, P. Fort & Co., for the first French Convention 1,124,287 47 
 
 To Jecker, Torre & Co., for the second French Convention 109,143 00 
 
 To Mr. Julio Raillard 70,383 93 
 
 To several, for the third convention 1,183,769 57 
 
 Jecker bonds cancelled at par in the offices of Mexico in 1859 and i860 544,127 00 
 
 Total • $4,086,364 97 
 
 Grand total $41,518,079 39 
 
 280. From what is given above, it appears that the conclusions of the Report are inexact with regard to the 
 Mexican Government having pledged nearly all the incomes of the maritime custom-houses, which form the 
 principal basis of its revenue to European Governments, for the payment of the debts which it is supposed to have 
 incurred with them. The hypothecations agreed to with the holders of the Mexican bonds in London, which 
 bonds, as has already been said, form more than one-half of the public debt of Mexico, have ceased, by virtue of 
 the reasons elsewhere expressed, and the creditors themselves have recognized this fact by the contract which 
 their representative entered into with the Mexican Government on the 6th of December, 1878. The hypotheca- 
 
 280. Mexico has not pledged the income from her custom-houses for the payment of her foreign debt. 
 
51 
 
 tions embraced in the English and the Spanish Conventions have in the same manner ceased, because Great 
 Britam and Spain made war against Mexico in t86i, and because of having, after 1862, broken the neutraUty 
 which they owed her, by recognizing the order of things which the Emperor Napoleon attempted to establish 
 here. 
 
 281. The best proof that can be given that the hypothecation is imperative, though the Report assures the 
 contrary, as to that of the custom-house incomes, is the fact that all the companies which have solicited conces- 
 sions for the construction of railroads in Mexico have urgently asked for this same hypothecation, to secure them- 
 selves in the payment of the subsidy offered, and that when it has been possible to concede this, they have 
 accepted it with satisfaction ; understanding that Mexico has conceded it in some cases wherein the notorious 
 convenience of pushing forward the improvements proposed to be reached by means of the contracts, 
 appeared superior to considerations of another kind, which have kept the Mexican Government from contracting 
 that class of obligations. Such have been, for example, the cases of the Vera Cruz railroad, during its construc- 
 tion, and the international railroad of Texas. 
 
 282. No news has been received to the effect that these new hypothecations have produced any reclamations 
 by the governments of England or Spain. 
 
 4. RAILROAD PRIVILEGES GRANTED BY MEXICO TO AMERICAN COMPANIES OR CITIZENS. 
 
 283. Facts demonstrate that, far from the Mexican nation or the Government thinking it dangerous to grant 
 railroad or other concessions to North American citizens, these have constantly received them. 
 
 284. It is deemed convenient, in order the better to clear this point, to make a statement of the concessions 
 to North American companies, and the facts occurring since the war of intervention will be only spoken of, 
 because from that time the construction of works material to the progress of the country has been pushed with 
 more earnestness. With the same object there will also be mentioned some concessions of another kind, which 
 have been made to the citizens of the United States. < 
 
 A. STATEMENT OF THE RAILROAD CONCESSIONS MADE TO NORTH AMERICANS. 
 
 28s. Some of the concessions that are mentioned in the following statement, such as the road from Paso, 
 or Presidio del Norte to Guaymas, of the 5th of April, 1865, were not originally made to citizens of the United 
 States, but they were given with the fore-knowledge that they would be transferred to American citizens, or after- 
 wards the transfers were formally approved. In othet cases, like that of the concessions ma^e to Messrs. 
 SuUivan and Palmer, on the 12th of November, 1877, the contract signed by the Executive has not yet been 
 approved by Congress. In each case its present condition will be given. 
 
 a. Railroad from Paso, or Presidio del Norte to Guaymas. 
 
 286. By decree of the isth of April, 1865, the company represented by General Angel Trias was authorized 
 to construct a railroad, starting from Presidio del Norte, or from the town of El Paso, and terminating in the 
 port of Guaymas, to unite by this means the United States system of raihoads with our frontier, and with one of 
 our ports on the Pacific. By the concession referred to there was ceded to the company half of the waste lands 
 that might be found within a league of each side of the road, throughout the length of the line ; bearing in mind 
 that at that time there was in the States through which this raihoad should pass a great deal of waste lands, 
 which since that time are being progressively located by private parties. 
 
 287. The company which General Trias represented, and to whom the concession was given, was estab- 
 lished in New York, and Mr. James R. Whiting became its president, a gentleman who is a citizen of the United 
 States, and a resident of that city. 
 
 288. The company represented by Mr. Whiting did not comply with the conditions of its contract, and 
 therefore the Congress of the Union conceded, by virtue of the law of January 13th, 1869, permission to the 
 
 281. The pledging of her revenues is inoperative, seeing that those who offer to construct railroads ask for it. 
 
 283. No news has been received to the effect that European nations have made reclamations on account of the assign- 
 ments made by Mexico. 
 
 383. Eailroad concessions made by Mexico to companies and to citizens of the United States. 
 
 384. Statement of the railroad concessions from the war of intervention till 1865. 
 
 385. An exact statement of the actual condition of each concession granted. 
 
 286. Concession of April 15th, 1865, of the Presidio or Paso del Norte and Guaymas railroad. 
 
 387. Transfer of this concession to the North American company of which Mr. Whiting was president. 
 
 288. Concession of the Presidio del Norte and Guaymas railroad made on January 13th, 1869, to Mr. Julius A. 
 Skilton. 
 
52 
 
 company represented by Mr. Julius A. Skilton, who at that time had the character of United States Consul m 
 Mexico, to construct a railroad from Presidio, or from Paso del Norte, to the port of Guaymas, or to any other 
 point on the Gulf of California on the coast of the State of Sonora. 
 
 289. The company represented by Mr. Skilton not having complied with its contract, a new one was made 
 on June i6th, 1875, with Mr. David Boy le Blair, for the construction of this railroad, whose contract was sup- 
 plemented on November 3d of the same year, and declared lapsed June isth, 1877, on account of non-compli- 
 ance with the conditions. 
 
 290. On the loth of June of the same year the same concession was newly made to Messrs. Robert Symon 
 and David Fergusson. This concession was supplemented October 12th, 1877. 
 
 291. With the Commission of the Manufacturers of the United States, which has just arrived in this city, 
 come one of the grantees of this raikoad, Mr. Robert Symon, who reports that the company has akeady made 
 the necessary arrangements to at once construct this road in connection with the Atchison, Topeka and Santa 
 Fe railroad. 
 
 292. Six times, then, has the Government contracted with North American companies for the construction 
 of this Une ; on April isth, 1865, with the company represented by General Angel Trias ; January 13th, 1869, 
 with Mr. Julius A. Skilton; June i6th, 1875, with Mr. David Boy Le Blair ; November 3d of the same year 
 with the same Mr. Boy Le Blair; June 17th, 1877, with Messrs. Robert Symon and David Fergusson; and 
 with the same parties on October 12th, 1877. 
 
 293. It seems proper to mention here what the representative of the United States said in a discourse pro 
 nounced by him in New Orleans November i8th, 1875, with respect to the concession granted to Mr. David 
 Boy Le Blah in the same year, and which has been alluded to in another place. It is as follows : 
 
 " During the same period of its sessions, Congress decreed the building of a railroad which, starting from 
 Guaymas, State <?f Sonora, would reach the dividing Une with the United States in the direction of Tucson, capital 
 of the Territory of Arizona. This raikoad has been contracted for with Messrs. David Boy Le Blair & Company. 
 For the purpose of co-operating in the realization of this project the government proposes the magnificent 
 donation of alternate sections of waste land of thirty-five square miles, in that State, for each lineal mile of the 
 road, exempting the road from taxes and conceding to it other privileges similar to those conceded to the project 
 that I have before spoken of" 
 
 b. Tehuantepec Canal and Railroad. 
 
 294. The President, who was amply invested with extra powers, issued in Paso del Norte, on the isth of 
 October, 1866, a decree, declaring that the concession made September 7th, 1857, to the Tehuantepec Company 
 of Louisiana, for the purpose of opening up inter-oceanic communication oh that isthmus, had lapsed on account 
 of non-compliance with the conditions imposed by the concession, and gave it to another North American 
 company called the Tehuantepec Transit Company, whose president was Mr. Charles Knap, of New York, and 
 whose agent had been sent to Paso del Norte in the person of Mr. Henry Roy de la Reintrie. 
 
 295. Not having complied with its engagements, the concession of the Tehuantepec Transit Company 
 was declared to have lapsed, and on the 6th of December, 1867, the President of Mexico, who was invested with 
 extra powers, granted to Mr. Emilio de la Sere, a citizen of the United States, or to the company which he 
 might form, a concession for the opening up of inter-oceanic communication through the Isthmus of Tehuante- 
 pec. The terms were very liberal, and are too long to be here ennumerated. 
 
 296. This concession was modified by a law of the Mexican federal Congress, enacted December 29th, 
 1868, at the petition of the parties interested. 
 
 297. The Mexican Congress conceded to the same North American Company who had been anthorized 
 to construct this railroad, by virtue of the law dated on December 14th, 1870, the right of constructing a canal 
 for navigation on the Isthmus of Tehuantepec. The terms were equally liberal. 
 
 289. Concession of June 16th, 1875, in favor of Mr. David Boy Le Blair. 
 
 290. Concession of June 1 9th, lb77, made in favor of the same line to Messrs. Robert Symon and David Fergusson. 
 
 291. Arrangements that have already been made for the construction of this line. 
 
 293. This line has been six times contracted for by the Mexican Government with North American companies. 
 
 293. Mr. Foster's views with regard to this concession. 
 
 294. Concession of October 15th, 1866, to the Tehuantepec Transit Company of Mr. Charles Knap. 
 
 295. October 6th, 1867, concession given on Tehuantepec to Mr. Emilio La Sere. 
 
 296. Modification of this concession by the law of Congress, December 29th, 1868. 
 
 3ii7. December 14th, 1870, concession granted the same company to construQt the Tehuantepec canal. 
 
53 
 
 298. The concession granted by the laws of December 28th, 1868, and of December 14th, 1870, having 
 expired without any of the works contracted for having been constructed, the grants were renewed on the 22nd 
 of May, 1872. 
 
 299. These new periods for fulfiUing the contracts having expired, the concessions were again renewed for 
 the space of one year, on the isth of January, 1874. 
 
 300. The law of December 14th, 1874, conceded new and important advantages to the company that 
 undertook the construction of the canal for navigation on the Isthmus of Tehuantepec, and among them a sub- 
 vention of $7,500 for each kilometre of railroad that might be constructed on the Isthmus. 
 
 301. On January 19th, 1878, the Government of Mexico entered into a new contract with Mr. Henry de 
 Stuckle, representative of Mr. Edward Learned, President of the North American Company, for the construction 
 of the Tehuantepec railroad. 
 
 302. Before receiving the approval of Congress this contract was modified and another executed on the 31st 
 of October, 1878, with Mr. Hayden H. Hall, who represented the same Mr. Learned, for the same purpose. 
 This contract, wherein a large pecuniary subvention and grant of waste lands were given to the builders of the 
 railroad, was submitted to Congress for its approval. The respective committee of the Chamber of Deputies 
 made a favorable report, the discussion of the matter was commenced during the last period of the session and 
 was in general approved, the result remaining pending for the approaching session. The report was ap- 
 proved, in general, by 100 against 28 votes, a thing which shows the feehng of the majority of the Chamber of 
 Deputies with regard to railroad grants in favor of North American companies. 
 
 303. Nine times, then, has the Government of Mexico contracted, in a little less than ten years, with North 
 American companies, for the construction of the inter-oceanic canal and railroad of the Isthmus of Tehautepec, 
 without having accompHshed the construction of a work so important to the world's commerce; and, notwith- 
 standing, according to data existing in this Secretary's office, the traffic in merchandise proceeding^from the colonies 
 of Australia, islands of the Pacific, China, Manila, Batavia and California, destined to Europe, and going from 
 Europe to those countries, is equal to 2,004,119 tons a year, of which quantity it is calculated that 1,570,511 
 tons would pass over the Tehuantepec railroad, and leave an earning of $7,852,555, charging at the rate of five 
 dollars a ton for carrying it. 
 
 304. Referring to the additional time conceded by the Mexican Congress, through the law of December 14th, 
 1874, the representative of the United States in Mexico said, in his speech pronounced in New Orleans, on the 
 t8th of November, 1875, as follows: 
 
 " For the fourth time the concession for the Tehauntepec railroad has been renewed to an American 
 company, a railroad which must cross that isthmus, and a subvention of $2,000,000 has been decreed in favor of 
 it, with special privileges regarding the precious woods there found, and with exceptions, &c. The object of this 
 concession is to open for New York and for all the ports and cities on the Gulf new ways of communication with 
 our States on the Pacific, with China, and with the islands of the ocean. 
 
 d. Tuxpam and Pacific Railroad. 
 
 305. By the law of December roth, r87o, the Congress of the Union also conceded to Messrs. Richards, 
 Smith and Brennan, who were considered as the agents of General Rosecrans, the right of constructing an inter- 
 ocean railroad, which, starting from any point situated between the bars of Tecolutla and Tampico, should termi- 
 nate at another point situated between Zacatula and San Bias, on • the Pacific Ocean. By the law of October 
 loth, 1872, the Executive was authorized to modify the terms of this concession. 
 
 h. 2 he Vera Cruz and Pacific Railroad passing through Anton Lizardo, Tehauntepec, Cuernavaca and 
 
 Acapulco. 
 
 306. The law of December 14th, 1870, conceded to the American citizens Rene Masson and Felix Wyatt 
 
 298. May 32d, 1873, renewal of the preceding concessions. 
 
 299. Another renewal, January 15tli, 1874. 
 
 300. Law of December 14tli, 1874, granting new advantages and a pecuniary subvention to the same company. 
 
 301. Contract of January 19th, 1878, with Mr. Henry de Stuckle, for the Tehuantepec railroad. 
 303. The last contract for the same line, made with Mr. H. H. Hall, October 81, 1878. 
 
 303. The Tehuantepec concession has been granted nine times to American companies. 
 
 304. Mr. Foster's views with respect to the concessions made to this company. 
 
 305. Tuxpam and Pacific railroad concession made on December 10th, 1870, to Messrs. Richards, Smith and Brennau. 
 806. Concession of December 14th, 1870, to Messrs. Masson and Wyatt, for a road from Vera Cruz, ma Anton Lizardo, 
 
 to the Pacific. 
 
54 
 
 authority to construct and work a railroad and telegraph line running from Vera Cruz to its junction with the 
 inter-ocean railroad of the Isthmus of Tehauntepec, passing through Anton Lizardo, and so on from that point, 
 or other convenient one, through Matamoras, Izucar and Cuernavaca, to the point of Acapulco, on the Pacific. 
 
 /. Railroad from Leon to the frontier of the United States. 
 
 307. The International Railroad Company of Texas, which ought to be a respectable company, seeing that 
 it has already built many miles of its line, which now reaches San Antonio, according to what is stated in the 
 Report, solicited and obtained a concession from the Mexican Government through its agent, Mr. Edward Lee 
 Plumb, for the construction of a railroad from the Rio Grande to the city of Leon, in the centre of this RepubUc. 
 The law of May 29th, 1875, granted this concession, but neither has this road been constructed by the company. 
 
 308. In speaking further on of the raihoad from Mexico to Leon, contracted for on December 30th, 1874, 
 with Messrs. Sebastian Camacho and Jose Antonio Mendizabal, this concession will be again mentioned and its 
 advantages explained. 
 
 309. It seems proper to record the interesting observations made on this occasion by the representative of 
 the United States in Mexico, in the speech which he delivered before the New Orleans Chamber of Commerce 
 on November i8th, 1875, which are as follows : 
 
 " While the Southern Pacific Railroad will bring to the United States the inexhaustible wealth of the precious 
 metals hidden in the high Sierra Madre, affording to us the agricultural advantages of the northern states of 
 Mexico, it is paraHzed and languishes for the want of government aid ; and while the construction of the inter- 
 national railroad of Texas, which must reach the Rio Grande, has been embarrassed by delays which have their 
 origin in the legislation of that State, Mexico has given evident proofs of her desire to protect any practicable 
 railroad project that would facilitate railroad communication with the United States, or that would tend to 
 develop the commercial relations with us. 
 
 " During the ^t period of the sessions of the Mexican Congress a law was passed whereby a contract was 
 made with the International Railroad Company of Texas, represented by the Hon. Edward L. Plumb, for the 
 construction of a railroad from the Rio Grande to the city of Leon, a distance of about from 600 to 700 miles, 
 and where it will unite with the raihoad system of that country ; and the government has agreed to pay, as a 
 subvention to the company, $15,288 per mile, with an additional premium if the road be finished before the ex- 
 piration of the time named in the contract, and the road has been exempted from all taxes, admitting free of duty 
 all the materials to be used on it." 
 
 g. Railroad from the City of Mexico to the Pacific, and to the American Frontier. 
 
 310. In another part of this communication it has already been stated that on November 12th, 1877, a con- 
 tract was signed by the Secretary of the Interior, who represented the Executive, and Mr. James Sullivan, for 
 himself and for Mr. WiUiam Palmer, for the construction of a railroad starting from this capital and terminating 
 at the Pacific, on the one hand, and on the other going to some convenient point along the frontier of the United 
 States. Having already stated everything relating to this affair, it is deemed unnecessary to repeat it here. 
 
 h. The Vera Cruz and Alvarado Railroad, with its branch to Anton Lizardo. 
 
 311. The government of Vera Cruz contracted, on March 26th, 1878, for the construction of a railroad from 
 Vera Cruz, with a branch to Anton Lizardo, and the concession was transferred on the 8th of the present month 
 to Mr. John Dunn, of Wilmington, Delaware, a citizen of the United States. Although this concession was es- 
 pecially given through the government of that State, it may be enumerated among those conceded to American 
 citizens, by virtue of the contract above named. 
 
 B. Concessions of other kinds granted to North American companies. 
 
 312. For the purpose of demonstrating that there does not exist in Mexico any predjudice against the 
 United States, it is deemed proper to mention that in addition to the preceding railroad concessions, other con- 
 
 307. Concession for the railroad from Leon to the United States, granted to the International Company of Texas, 
 May 39th, 1875. 
 
 308. While speaking of the Central railroad, the Leon and Frontier line will again be mentioned. 
 300. Mr. Foster's views about this line. 
 
 310. Contract of November 12th, 1877, with Messrs. Sullivan and Palmer, for the international and inter-oceanic 
 railroad. 
 
 311. Contract for the building of the Vera Cruz, Alvarado and Anton Lizardo railroad. 
 813. Concessions of other kinds granted to North American companies. 
 
55 
 
 tracts of considerable interest have been made with companies or citizens of that nation, of which the following 
 are the principal : 
 
 a. Submarine Cable from Mexico to the United States. 
 
 313. Other contracts have also been made with American companies for the construction of a submarine 
 cable from any point on the Mexican coast to any other on the coast of the United States. The first contract 
 made with Mr. Henry G. Norton was approved December 13th, 1870, by Congress. This concession was modi- 
 fied at the petition of the party interested, and by virtue of a Congressional law dated October 27th, 1871. The 
 period fixed for the construction of the work was prolonged for another year by the law of April nth, 1872. 
 Until the present, it has unfortunately not been possible to contract or lay this cable. 
 
 b. Contracts with North American citizens for the renting of mints. 
 
 314. The contracts for the renting of mints, which are the most lucrative sort of business in this country, 
 have also been done with citizens of the United States, which shows that they are looked upon as all the other 
 inhabitants of the country, and that in nothing, nor for anything, have they been excluded or looked upon with 
 any want of confidence. 
 
 C Short statement of the contracts conceded to North American companies. 
 
 315. From the preceding data it appears that from the year 1865 Mexico has granted to companies or citi- 
 zens of the United States nineteen concessions for the construction of railroads in the Republic, in the following 
 order : To the Ime from Paso del Norte to Guaymas, six times ; to that of the Isthmus of Tehuantepec, nine 
 times ; once to each of the lines from Tuxpam to the Pacific ; from Vera Cruz to Anton Lizardo, to the Isthmus 
 of Tehuantepec, and from San Anton Lizardo to Matamoros Izucar, Cuernavaca and Acapulco ; from Leon to 
 the frontier of the United States, and from Mexico to the Pacific and to the frontier of the United States ; and, 
 as has already been stated, additional concessions have been made to them for the laying of submarine cables, 
 and for other purposes. , 
 
 316. The speech of the Hon. John W. Foster, pronounced November 1 8th, 1875, iii New Orleans, which 
 has already been cited, contains the following important expressions about the railroad concessions made by 
 Mexico to American companies : 
 
 " AU these concessions have been made in favor of American citizens; I trust that our capitalists will kno.w 
 
 how to utiHze them, and that even in this period of mercantile prostration and of paraUzation in railroad 
 
 enterprises, the initiative and efforts of Mexico will be received favorably as possible, seeing that she wishes to 
 make us participants in her yet undeveloped wealth." 
 
 5. RAILROAD CONCESSIONS MADE TO COMPANIES OTHER THAN AMERICANS. 
 
 317. The best proof that could be given that Mexico has no hostility or ill will against the employment of 
 North American capital in railroad enterprises throughout her territory is to be found in a comparison of the 
 number of concessions made to North American companies, which have just been mentioned, with the number 
 of concessions granted to companies of other nationalities, including the Mexicans, and excepting only the con- 
 tracts recently made with Governors of the States, which will be spoken of hereafter, for it will thus be seen that, 
 relatively, the greater number of concessions has been granted in favor of North American citizens. 
 
 318. For this purpose, then, the following statement of concessions granted since 1865 to companies or 
 private persons of other nationalities than that of the United States is made, this being the period embraced in 
 the preceding summary: 
 
 A. STATEMENT OF THE RAILROAD CONCESSIONS MADE TO COMPANIES OTHER THAN AMERICANS. 
 
 319. As succinct a statement as the preceding one will be made of the concessions for the construction of 
 railroads which have been made in favor of companies or private persons, not Americans, and all those approved 
 
 S13. Different concessions given to Mr. Henry G. Norton, for the construction of a submarine cable. 
 
 314. Contracts for the renting of mints to North American companies. 
 
 315. Synopsis of contracts with North American companies for the construction of railroadti in Mexico. 
 
 316. The views of Mr. Foster upon the concessions made to American companies. 
 
 317. Kailroad concessions made to companies other than American. 
 
 318. Concessions posterior to October loth, 1865, will be mentioned. 
 
 319. Detailed statement of railroad concessions given to companies that were not American. 
 
56 
 
 by Congress will be explained and their conditions given, and the statement will conclude a summary of these 
 concessions. 
 
 a. Railroad from Mexico to Vera Cruz. 
 
 320. Although the concession for the construction of the raibroad from this capital to Vera Cruz dates from 
 a period long anterior, it will here be mentioned, nothwithstanding that on the 27th of November, 1867, a contract 
 was executed with the Mexican Railroad Company, limited, for the purpose of arranging the difficulties caused 
 through the contracts made by it through the French intervention, and to faciUtate the finishing of the said line. 
 The contract underwent some modifications under the law of November nth, 1868, and by the agreement made 
 March 15th, 1873, and approved by Congress on the 17th of December following. This matter will be spoken 
 of further on in detail, and especially. 
 
 b. The Tux-pam, Pachuca and Mexico Railroad. 
 
 321. On the 15th of October, 1867, the corresponding authorization was conceded to Messrs. Antonio Mor- 
 ales Montenegro and Manuel B. de Cunha Reis, for the construction and working of a railroad starting from the 
 north-east of this capital and running past Tlalnepantla, Cautitlan, Zumpango, Tizayuca, Tulancingo, Huachin- 
 ango, Xico, and ending at a navigable point on the river Tuxpam, the rest of the route to the port of Tuxpam 
 to be made by steamers. From any point tobe chosen by the company a branch should start to Pachuca. This 
 contract, which was the second made in the matter of railroads by the Government of Mexico after occupjdng the 
 capital of the RepubUc upon the fall of the so-called Mexican Empire, lapsed on account of Messrs. Morales 
 Montenegro and Cunha Reis not having complied with the obligations imposed by article 30. 
 
 c. The Vera Cruz, Puebla, Jalapa and Perote Railroad. 
 
 322. A concession was granted on May 23d, 1868, to Mr. Ramon Zangroniz to follow up the construction 
 of a railroad between Vera Cruz and Puebla, passing through Perote and Jalapa. This concession was renewed 
 and modified by flie law of May 24th, 187 1 , but lapsed on account of having been ceded to a corporation without 
 
 the consent of the federal Government. 
 
 323. This same railroad was afterwards contracted for, with slight modifications, with? the Mexican Railroad 
 Company of Vera Cruz and Mexico, limited, in the contract of March isth, 1873, which will be spoken of while 
 speaking about that line. The road is built for animal traction only, and reaches but to Jalapa. 
 
 d. The Mexico, Toluca and Cautitlan Railroad. 
 
 324. By decree of October loth, 1870, Senor Don Mariano Riva Palacio, or the company which he might 
 form in the State of Mexico, of which he was then Governor, was authorized to construct and work a railroad 
 and telegraph line from the City of Mexico to that of Toluca, with a branch to Cautitlan, conceding to that 
 enterprise the subvention of $3,000 for each kilometre of road that might be constructed, and exemption from 
 export duties at the rate of $20,000 per kilometre. The railroad should have been finished in six years. This 
 concession was the first in which a narrow gauge road was estabUshed. 
 
 325. Governor Riva Palacio tranferred the concession on the 30th of the same month of October to the 
 Mexico, Toluca and Cautitlan Railroad Company, giving at the same time plans of prehminary surveys of the 
 ground, projects and estimiates for the railroad, which he had ordered to be made in anticipation. In the deed of 
 transfer of the concession, the capital of the company was fixed at two millions of dollars, which sum was equal 
 to the estimates for the road, including building, rolUng stock, stations, work-shops and accessories for the line 
 between Mexico and Toluca, with the Cautitlan branch. The principal road, according to this primitive project 
 which was adopted with hardly any alteration in the portion built, measured 93 kilometres, and the Cautitlan 
 branch 23^^. 
 
 326. The part of the road called for by the concession was not. constructed, and the time was prolonged by 
 the law of May 21st, 1872, laying down that ten kilometres should be built by September 30th, 1872. The 
 company built sixteen and a-half kilometres between Mexico and Tlalnepantla, opening them for public service 
 in April, 1874. 
 
 320. Concessions made to companies of the Mexico and Vera Cruz railroad. 
 
 331. Concessions .given to the Tuxpam and Pachuca railroad, October 15, 1867. 
 
 333. Vera Cruz, Puebla, Perote and Jalapa railroad, May 23, 1H68, 
 
 323. This concession was transferred to the Vera Cruz railroad company. 
 
 324. Concession of October 10th, 1873, for the construction of a railroad between Mexico, Toluca and Cautitlan; 
 335. Transfer of this concession by Don Mariano Eiva Palacio to the Toluca and Cautitlan railroad company. 
 326. Extension of time May 31st, 1872, in favor of the same company. 
 
37 
 
 327. The concession was again renewed by the law of December 22d, 1877, by virtue of which the sub- 
 vention was increased to eight thousand dollars for each kilometre of road constructed, and a new period of nine 
 months from the date of that law was fixed for the construction of ten kilometres, and one of two and a-half years 
 for the finishing of all the road, together with its branch. 
 
 328. Within the nine months corresponding to the first period, the company put sixteen and a-half kilometres 
 in working order, inaugurating. May 2d, 1878, the branch from Mexico to Cautitlan, a distance of thirty-three 
 kilometres ; and, posteriorly, it has built and placed in working order a section of the principal road from Tacuba 
 to San Bartolome Naucalpan. The length of this way is five and a-half kilometres. Besides this, it has another 
 section of seven and a-half kilometres finished between San Bartolome and the Cuartos farm, on the principal 
 line. The company has punctually received payment of the subvention contracted for with it. 
 
 e. Catorce Railroad — From Mexico to the Pacific, and to the frontier of the United States. 
 
 329. The Executive, being authorized by the law of December loth, 1872, to receive proposals for the con- 
 struction of railroads, contracted with a Mexican and foreign company for an international and inter-oceanic 
 railroad and telegraph, which hne was called the Catorce, and which contract was approved by Congress, Decem- 
 ber nth, 1874. This line was not constructed, and on May 4th, 1874, the contract was declared to have 
 lapsed. 
 
 f. Mexico and Leon Railroad. 
 
 330. The bad result of the concession given to the "Catorce" was. attributed to the fact that too much had 
 been attempted in contracting for the construction of an international and inter-oceanic railroad. To obviate 
 this evil, it was thought convenient to reduce the length of the line, and confine it to the section from this capital 
 to the city of Leon, which covers the most thickly populated part of the country. 
 
 331. As a company of the " Catorce" did not accomplish the building of this line, and the concession was 
 declared lapsed on May 4th, 1874, another contract was made December 30th, 1874, with Mr. Sebastian Cama- 
 cho and his associates, for the building of a line from Mexico to the city of Leon, in the State of Guanajuato, 
 which was called the Central Railroad. 
 
 332. For the purpose of making this an international Une, and at the same time of dividing the construction 
 of the work among several companies, in order to facilitate it, the concession for making the railroad between 
 Leon and the frontier was given to Mr. Edward Lee Plumb, a citizen of the United States, and representative 
 of the International Railroad of Texas (which Une reached San Antonio), as has already been said. 
 
 g. Railroad from Ometuzco to Pachuca. 
 
 333. The law of May 28th, 1873, authorized Mr. Justino Fernandez, at that time Governor of the State of 
 Hidalgo, to construct a railroad between the city of Pachuca and any other point on the Hne between Mexico 
 and Vera Cruz. 
 
 334. Neither was this line built, and the concession has been renewed in favor of the present Governor of 
 the State of Hidalgo, by virtue of the law of December 14th, 1877, as will be shown when speaking of the con- 
 tracts made with the Governors of States. 
 
 h. Puebla and Matamoros Izucar Railroad. 
 
 335. The law of May 29th, 1873, modified by the law of January 29th, 1874, authorized Messrs. Joaquin 
 Ruiz'Vicente Hidalga and D. J. Velasco to construct a raikoad from Puebla to Matomoros Izucar. Neither 
 was this Une built and it was contracted with the State of Puebla. 
 
 337. New extension of time, December 33d, 1877. 
 
 338. Opening of tlie Cautitlan branch and the line of San Bartolo Nacalpan. 
 
 339. Concession of November 39tli, 1873, to the Catorce company, for the inter-oceanic and international railroad. 
 330. The line contracted for by the Catorce company not finished. 
 
 381. Concession for the Central railroad, December 30th, 1874, to Messrs. Camacho and associates. 
 
 382. Concession to the International Company of Texas, for the prolongation of the Central railroad to the United 
 States frontier. 
 
 388. Concession of May 28th, 1878, to the Governor of Hidalgo, for the construction of the line to Pachuca. 
 834. Non-construction of this line and subsequent renewal of the concession to the present Governor. 
 335. Concession of May 28th, 1873, for the construction of the Puebla and Matamoros Izucar railroad. 
 8 
 
58 
 
 i. Railroad from Merida to Progreso. 
 
 336. The law of April 22d, 1873, modified by that of April 29th, 1875, authorized Messrs. Rendon 
 Peniche and Pedro Contreras Elizalde to construct a railroad from Merida to Progreso. 
 
 337. Twenty kilometres of this road have already been constructed. 
 
 / Railroad from Vera Cruz to Zatnorana. 
 
 338. The law of May 4th, 1875, authorized the Directing Committee of the Mexican Company to construct 
 a railroad from Zamoranato Medellin. 
 
 k. Vera Cruz and Oajaca Railroad. 
 
 339. The law "of May 29th, 1875, authorized Mr. Jose Esperon to construct a railroad from any point on 
 the Vera Cruz Une to the city of Oajaca. 
 
 340. This hne, the same as all the foregoing ones, was not built, and the present Governor of the State of 
 the State of Oajaca made, on March 8th, 1878, a contract with' the Federal Government for the building of a 
 road that would be carried on to the Pacific. ' 
 
 /. The San Fernando and Mata?noros Railroad. 
 
 341. The law of June 17th, 1875, authorized Mr. Sebastian Camacho to make a canal through the Laguna 
 Madre, and to construct a railroad from the port of Matamoros to the bar at Jesus Maria. 
 
 //. Toluca and Ixtajiam del Oro Railroad. 
 
 342. On November 30th, 1878, a contract was entered into with the citizen Jose Maria Amat, for the con- 
 struction of a road between the city of Toluca and the mining town of Ixtapam del Oro, which contract is 
 awaiting the approval of Congress. 
 
 B. SYNOPSIS OF THE CONCESSIONS MADE TO COMPANIES OTHER THAN AMERICAN. 
 
 343. Of the fourteen concessions made by the Government of Mexico from 1867 till the present time, to 
 companies or persons whose nationalities have not been American, not including concessions recently granted to 
 Governors of the States, only four were given in favor of foreigners, and the remaining ten were in favor of 
 Mexicans. 
 
 344. The summary, then, of all these important data is, that since the year 1866 to this date the Mexican 
 Government has granted, without counting the contracts made with the Governors of States, thirty-three railroad 
 concessions, of which ninetaen have been given in favor of citizens of the United States, four in favor of citizens 
 of other nationalities, and the remaining ten in favor of Mexicans. 
 
 345. It seems impossible to present a more eloquent demonstration than that which the preceding facts 
 bring up to show that, so far from the assertion being demonstrable that Mexico looks with jealousy or hostility 
 upon the building of raihoads which would put her in communication with the United States, or that even with- 
 out this circumstance, that the roads should be constructed by North American companies, the truth is that she 
 has, on the contrary, granted them a marked preference up to this time. 
 
 346. That which concerns lines of railroad contracted for with Governors of States of the Mexican Con- 
 federation, requires detailed explanations, which will be made below. 
 
 6. Railroad Concessions made to the States of the Mexican Confederation. 
 
 347. The Report states that "It appears that the decision of Congress has placed a very important obstacle 
 
 339. 
 
 336. Concession of April 23d, 1874, for the Merida and Progreso railroad. 
 
 337. Building, in part, of this railroad. 
 Concession of May 4th, 1875, for the Vera Cruz and Zamorana railroad. 
 Concession of May 29th, 1875, for the construction of a line from Vera Cruz to Oajaca. 
 
 840. Renewal of this concession. May 28th, 18V8, to the Governor of Oajaca 
 
 341. Concession of June 17th, 1875, for the San Pemandi and Matamoros railroad. 
 
 343. Contract of November 30th, 1878, for the construction of the Toluca and Ixtapam del Oro railroad. 
 
 343. Synopsis of the concessions made to Mexicans and foreigners. 
 
 344. Number of concessions made to Mexicans and foreigners. 
 
 345. The construction of railroads by North Americans has not been prosecuted with zeal in Mexico. 
 
 346. Concessions made to Qovernors of the different States. 
 
59 
 
 in the way, so far as concerns the construction of a railroad towards the American frontier ; that after having re- 
 jected the American concession, to which I have made reference, the Congress confirmed the powers to the Exe- 
 cutive to make contracts with the Governors of the States, or with other authorities, for the construction of rail- 
 roads within their respective limits ; that with this authorization the Federal Government has made thirteen dif- 
 ferent contracts and concessions, promising subsidies from the Government ; that these concessions cover the 
 most valuable and important parts of the road to the frontier of the United States ; that it would be a reason for 
 congratulation, and not of regret, to know that these same Mexican authorities had undertaken the whole or an 
 important part of this great work, if there was any security that they would carry it on till felicitously completing 
 it; but that an intelligent Mexican engineer, while reporting to the present Congress, under date of September 
 17th, 1878, upon these concessions, said that the most felicitous construction of a railroad that had been carried 
 out until then by a Mexican company was that of a league (2^ miles), which had been completed in twelve 
 months, and that under the present auspices in fifty years one could go by railroad from this city to Quentaro 
 (one hundred and fifty miles), and added in a pathetic tone : ' Do we need to go ourselves ? No ; let such a 
 blessing be reserved for our grand-children.' " The Report ends by saying that : " Even when it might be possible 
 to obtain a concession from the Mexican Congress without the objectionable conditions insisted upon by all the 
 Congresses and all the Administrations that have existed for years back, yet it would be necessary to undertake 
 negotiations with the Governors and with the Legislatures of the different States to purchase the concessions re- 
 ferred to, or discard them." 
 
 348. The observations contain several points of interest which it is convenient to examine separately, and 
 they are as follows : 
 
 A. Concession granted to the State of Guanajuato, December 15th, 1877, for the construction of a railroad 
 from Celaya to Leon. 
 
 B. Conditions of this concession. 
 
 C. Reasons for the Congressional laws of December 15th, 1877, and of May ist, 1878, which authorized the 
 Executive to contract with the Governors of States for the construction of railroads. 
 
 D. Contracts made by the Executive with thirteen States, by virtue of this authorization. 
 
 E. These contracts will not impede the construction of raihrpads with foreign capital. 
 
 F. Opinion of the engineer Ibarrola upon the construction of railroads in Mexico. 
 
 A. CONCESSION GRANTED TO THE STATE OF GUANAJUATO, DECEMBER ISTH, 1877, FOR THE CONSTRUCTION OF 
 
 A RAILROAD FROM CELAYA TO LEON. 
 
 349. The hopes that foreign companies with whom the various contracts mentioned in the preceding pages 
 had been made would construct railroads in Mexico, having been so often frustated, as, out of the thirty-three 
 concessions which had been granted since 1865 till the present only a single company had built a road contracted 
 for, the Legislature of the State of Guanajuato, one of the richest and most populous in the Republic, although of 
 small territorial extent, took steps for the execution of a contract with the Executive, which was signed October 
 i6th, 1877, for the construction of a railway from Celaya to Leon, which should pass through the centre of the 
 State. The contract was submitted for the approval of Congress. 
 
 350. In view of the doubt which has always existed, emanating from non-compliance with the foregoing con- 
 tracts, that the foreign companies could construct the railroad, and considering that the State of Guanajuato was 
 more directly interested in the construction of the Hne within her own territory, the corresponding concession was 
 granted to her by the decree of December 15th, 1877. 
 
 351. The State of Guanajuato was not able to construet the railroad which she had contracted for by the 
 law of December 15th, 1877, wherefore she has petitioned the Congress of the Union for an extension of time. 
 
 B. CONDITIONS OF THE CONCESSION GRANTED TO THE STATE OF GUANAJUATO, DECEMBER 15TH, 1 877. 
 
 352. As the conditions laid down in the concession that was given to the State of Guanajuato on December 
 iijth, 1877, for the Celaya and Leon railroad, have served as a basis for all the other concessions made to other 
 
 347. Conclusions of the Report with regard to railroad concessions granted to Governors of the different States. 
 
 348. Points that will be considered when speaking of this business. 
 
 349. The State of Guanajuato made a contract with the Executive, October 16th, 1877, for the construction of a 
 
 railroad. 
 
 350. Congressional concession to the State of Guanajuato, December 15th, 1877. 
 
 351. Guanajuato failed to construct the railroad contracted for. 
 353. Conditions contained in the foregoing contract. 
 
60 
 
 states, in conformity with the law which authorized the Executive to make said contracts, which will be spoken 
 of afterwards, it is proper to enumerate the principal conditions of that concession, which are as follows : 
 
 I. The State of Guanajuato is empowered to work a railroad and telegraph, which is to be built on her own 
 account, or by means of a company which may be organized by her, for ninety-nine years, after which the hne 
 will revert to the possession of the nation. 
 
 II. The survey of the line will be commenced at once, and before beginning the work the corresponding 
 plans will be submitted to the office of the Secretary of the Interior for approval. 
 
 III. The works of construction will commence within six months from the date of the concession ; and after 
 the approval of the respective plans they will continue without interruption, it being obhgatory to finish the road 
 within the perion of four years. • ' 
 
 IV. Within the first year at least twenty kilometres of raihroad will be finished, under the penalty of forfeiture of 
 the concession. 
 
 V. The exemption of federal and local duties for twenty years upon materials coming from abroad, and 
 necessary for the construction and working of the railroad and telegraph. 
 
 VI. The exemption, also for twenty years, of all taxes upon capital employed in the construction of the road, 
 or in its dependencies. 
 
 VII. The right of way to the breadth of seventy metres along all the hne of the raihroad, and the cession of 
 national lands through which the line may pass. 
 
 VIII. The enterprise has authority to freely issue shares, bonds and obligations, to dispose of them and to 
 pledge the railroad and its appurtenances, giving to the pledging creditors the right of working the road, in all or 
 in part, but the amount of the pledge is not to exceed $8,000 for each kilometre. 
 
 IX. A subvention of $8,000 for each kilometre which the enterprise may construct, with the addition of one 
 thousand dollars in case the building be finished in shorter periods than those designated. 
 
 X. The enterprise is placed under obligation to charge freightage for each ton of one thousand kilogrammes, 
 and for each kilometre of distance, at the rate of five cents for first-class merchandise, four for the second and 
 three for the third; and one and a-half cents for first-class passengers, one for the second and half a cent for the 
 third-class, respectively. 
 
 XL It is prohibited to transfer the enterprise to a foreign Government, and to allege being aUen, in the 
 terms which have already been explained in speaking more at length in another place upon this point. 
 
 XII. Reversion of the concession of the road should not be constructed in the stipulated periods, or on 
 account of transferring the privilege or conveying or pledging it to any foreign Government, or admitting a 
 foreign Government as shareholder. 
 
 C. REASONS FOR THE CONGRESSIONAL LAWS OF DECEMBER ISTH, 1877, AND OF MAY 1ST, 1878, WHICH AUTHORIZED 
 THE EXECUTIVE TO CONTRACT WITH GOVERNORS OF STATES FOR THE CONSTRUCTION OF RAILROADS. 
 
 353. In discussing the contract with Messrs. Sullivan and Palmer, the Eighth Congress felt the difficulties 
 which are in the way of terminating the discussion and approval of a contract that always provokes debate, and 
 at the same time preserve the routine of the interior regulations of the Chamber. It is believed that the easiest 
 way to obtain the reahzation of the work, with the despatch demanded by the necessities of the country, was to 
 authorize the Executive to make the corresponding contracts under certain bases which were laid down. 
 
 354. Other States of the RepubUc being encouraged by the example of Guanajuato, the spirit of enterprise 
 revived in them, together with the wish to construct railroads in their own territories, and several of them peti- 
 tioned the Congress of the Union for the corresponding concessions, signing beforehand the contracts with the 
 Executive. The Congress not being able to approve of the contracts executed with the States, because of the 
 same reasons which have already been shown, the Executive was authorized to grant concessions in favor of the 
 said States. 
 
 355. The first authorization of this kind, approved December 13th, 1877, was for the Executive to grant the 
 State of Morelas a concession for a raikoad which should start from this city, pass through the capital of that 
 
 353. Reasons whicLi decided the dictation of the law of December 15th 1878. 
 
 354. These provisions were made common to the other States who might wish to accept them. 
 
 355. December 14th, 1877, authority given to the Executive to contract with the States of Morelos, Queretaro and 
 Michoacan. 
 
61 
 
 State, and be carried on as far as the river Amacusac, the conditions of this concession being the same as those 
 approved by Congress for the railroad of Guanajuato. The second authorization, approved on the same date, em- 
 powered the Executive to contract with the State of Queretaro for the construction of a railroad under bases 
 and conditions to be afterwards definitely approved by Congress, the road to start from Celaya and to terminate 
 at the Puerto de Palmillas, the boundary of the State of Queretaro with that of Hidalgo. The third authoriza- 
 tion, approved December isth, enabled the Executive to contract with the Government of Michoacan for the 
 construction of a raikoad starting from Salamanca and terminating at a point on the boundary of the States of 
 Michoacan, or Guerrero, following the shortest route. The bases of this contract to be the same that might be 
 approved of for the Guanajuato railroad. 
 
 356. The Congress, encountering difficulties because of want of time and the delays occasioned through its 
 previous regulations, to then especially authorize tlie Executive in each case to grant concessions to State Gov- 
 ernments for the construction of railroads in their respective territorries, determined, by means of the law of De- 
 cember iSth, 1877, to concede to it general authority to contract with State Governments for the building of 
 roads within their own boundaries, under the bases that were definitely approved of for that of Guanajuato ; that 
 is to say, from the i6th of December, 1877, to the 31st day of March, 1878. 
 
 357. On December isth, 1857, the Executive was also authorized by Congress to grant permission to all 
 who should solicit it to establish railroad lines in the Federal District, under certain conditions named in the 
 same decree. It is not thought necessary to speak further about this incident, because the construction of these 
 roads possesses only local importance, and they are being carried on with good results by Mexican companies. 
 
 358. The authority conferred by Congress upon the Executive by the decree of December 15th, 1877, 
 having ended March 31st, 1878, to empower the States to build railroads within their respective boundaries, and 
 all the contracts asked for by the States not having been then executed, the Congress of the Union renewed to 
 the Executive its authority, by virtue of the law of May ist, 1878, to contract for the construction of a railroad 
 from the city of Puebla to Matamoras de Izucar, under the same conditions as the Guanajuato railroad, and by 
 virtue of this authority executed the contract of the 6th of the same month. 
 
 359. As the authority given by Congress to the Executive had only been to execute contracts with the 
 governments of States, perhaps this sprung from the fear that the petitioners who had presented themselves for 
 railroad grants did not have the necessary capital to carry out the work which they offered to execute, and that 
 their principal object was to build the road with the subvention. It was beheved that between making the con- 
 cession to private parties without capital, or the probable means of obtaining it, and consequently without the 
 means of executing the work, or to the Governors of the States, the latter were preferable. 
 
 D. CONTRACTS MADE BV THE EXECUTIVE WITH THIRTEEN STATES FOR THE CONSTRUCTION OF RAILROADS WITHIN 
 
 THEIR RESPECTIVE LIMITS. 
 
 360. By virtue of the congressional law of December 15th, 1877, "which has already been spoken of in 
 another place, the Executive made with the Governors of the States of the Mexican Confederation the following 
 contracts for the construction of raihx)ads in their respective territories : 
 
 a. State of Michoacan Railroad from Salamanca to the Pacific, with branches to Celaya, Zamora, Maravatio 
 
 and Zitacuaro. 
 
 361. On January 28th, 1878, the Governor of the State of Michoacan was authorized to construct a rail- 
 road between Salamanca and the Pacific coast, with branches to Celaya, Zamora, Maravatio and Zitacuaro, there 
 being conceded for this purpose a subvention of $8,000 for each kilometre. 
 
 362. The time fixed by article 8 of this contract for the commencement of work having expired and noth- 
 ing having been done, the contract lapsed, and to revive it Congress prolonged, by means of the law of Decem- 
 ber 15th, 1878, for six months, the stipulated periods granted for its construction. 
 
 356. This authority to contract was made common to all the States. 
 
 357. Decree of December 15, 1877, upon the building of railroads in the Federal District. 
 
 358. New authority given to the Executive, May 1st, 1878. 
 
 359. The reasons for granting this authority. 
 
 360. Contracts made with the Governors of States, by virtue of the law of December 15th, 1877. 
 
 361. Contracts with Michoacan, made January 38th, 1878, for the railroad from Salamanca to the Pacific. 
 363. This contract lapsed, and to revive it the time for building the road was prolonged for six months. 
 
62 
 
 b. State of Hidalgo. Cautitlan, Ometusco, Pachuca and Tulancingo Railroad. 
 
 363. On February 2nd, 1878, the Governor of the State of Hidalgo was authorized to construct a railroad 
 starting from Cautitlan, or from another point on the interior railroad, or from Ometusco, or other point on the 
 Vera Cruz raiboad, and ending at Pachuca, with a branch to Tulancingo. A subvention of $8,000 for each 
 kilometre was granted. 
 
 c. State of San Luis Potosi. Railroad from San Luis to Tantoyuquita. 
 
 364. On February 14th, 1878, Mr. Benigno Arriaga was contracted with, as the representative of the govern- 
 ment of San Luis Potosi, for a raiboad between that city and the boundary of the State of Tamaulipas at a point 
 near Tantoyuquita. A subvention of $8,000 for each kilometre was granted. 
 
 d. State of Jalisco. Railroad from Lagos to San Bias. 
 
 365. On February 27th, 1878, a contract was entered into with Mr. Henrique Pazos, the representative of 
 the State of Jalisco, to construct a railroad which should extend from Lagos and Guadalajara, uniting them with 
 the port of San Bias, and with permission to prolong it to the boundary of the State of Guanajuato, between the 
 cities of Lagos and Leon. A subvention of $8,000 for each kilometre was granted. 
 
 e. State of Queretaro. Railroad from Palmillas to Celaya. 
 
 366. On February 28th, 1878, a contract was executed with Mr. Enrique M. Rubio, representative of the 
 government of the State of Queretaro, to build a railroad that should connect the city of Celaya with that of San 
 Juan del Rio, or with the Puerto del Palmillas, on the boundary of the State of Hidalgo. A subvention of $8,000 
 for each kilometre was granted. 
 
 f State of Oajaca. Railroad from Tehuacan to Huajuapam and Puertom Angel. 
 
 367. On March 22d, 1878, a contract was entered into with Mr. Pablo Pantoja, who represented the State 
 of Oajaca, for the construction of a railroad between a point situated in the outskirts of Tehuacan, or of Huaju- 
 apam, on the boundary of the State with that of Puebla and Puerto Angel, passing through the capital of the 
 State. A subvention of $8,000 for each kilometre was granted. 
 
 g. State of Vera Cruz. Railroad from Vera Cruz to Alvarado and Anton Lizardo. 
 
 368. On March 26th, 1878, a contract was made with the Governor of the State of Vera Cruz, to construct 
 two raikoads, the first from Vera Cruz to Alvarado, with a branch from Hato or any otlier point that might be 
 convenient, and another to Anton Lizardo. A subvention of $8,000 for each kilometre was granted. 
 
 369. The periods named in articles 8, 9 and 10 of this contract having expired, and the portions of the road 
 mentioned in them not having been built, the contract lapsed, and to renew it, it became necessary for Congress 
 to extend the periods stipulated in the contract, which was done by means of the law of December loth, 1878, 
 which prolonged them for nine months. 
 
 h. State of Tamaulipas. Railroad from Tantoyuquita to the line of the San Luis Potosi. 
 
 370. On March 27th, 1878, a contract was made with Mr. Benigno Arriaga, as representative of the govern- 
 ment of the State of Tamaulipas, to construct a railroad between Tantoyuquita or otlier' point on the Tamesi 
 river, from the head of navigation, for craft drawing a metre or more, and the boundary of the States of Tamau- 
 Kpas and San Luis Potosi. A subvention of $8,000 for each kilometre was granted. 
 
 /. States of Zacatecas, San Luis, Aguascalientes and Jalisco. Zacatecas, San Luis, Aguascalientes and Lagos 
 
 Railroad. 
 
 371. On March 28th, 1878, a contract was entered into with Counsellor Genaro Raigosa, in the name of 
 the governments of the States of Zacatecas and San Luis, with Mr. Ignacio T. Chavez, for that of AguascaHentes, 
 
 363. Contract with the State of Hidalgo, February 2d, 1878, for the Cautitlan, Pachuca and Tulancingo railroad. 
 
 364. Contract of February 14th, 1878, with the State of San Luis Potosi for the Tantoyuquito railroad 
 
 365. Contract of February 27th, 1878, for the Lagos and San Bias railroad. 
 
 366. Contract of February 38th, 1878 with the State of Queretaro for the Palmillas and Celaya railroad 
 
 367. Contract of March 22d, 1878, with the State of Oajaca for the Tehuacan, or HTuajuapau and Alvarado railroad. 
 
 368. Contract of March 26th, 1878, with the State of Vera Cruz, for the Anton Lizardo and Alvarado railroad. 
 
 369. This contract lapsed, and to revive it the periods allowed for the building of it were prolonged for nine months. 
 
 370. Contract of March 27th, 1878, for the Tantoyuquito railroad. 
 
 371. Contract of March 28th, 1878, for the Zacatecas, San Luis, Aguascalientes and Lagos raUroad. 
 
68 
 
 and with Messrs. Salvador Camarena and Gabriel C. Navarro for that of Jalisco, for the construction of two lines 
 of railroad, one of which should unite the city of Zacatecas with that of San Luis Potosi, and the other the city 
 of Zacatecas with those of Aguascalientes and Lagos. A subvention of $8,000 for each kilometre was granted. 
 
 j. State of Yucatan. Merida and Peto Railroad. 
 
 372. On March 29th, 1875, a contract was made with Messrs. Augustin del Rio and Vicente Mendez Echa- 
 zarreta, as the representatives of the government of Yucatan, for the construction of a railroad between the city 
 of Merida and the town of Peto, passing through the Tecula and Tekax. A subvention of $8,000 for each kilo- 
 metre was granted. 
 
 k. State of Colima. Manzanillo and Tonila Railroad. 
 
 373. On March 30th, 1878, a contract was entered into with Mr. Isaac Banda, as representative of the 
 State of Colima, for the building of a railroad between the port of Manzanillo and the Barranca of Tonila, the 
 boundary of that State with Jalisco. A subvention of $8,000 for each kilometre was granted. . 
 
 /. State of Puebla. Puebla and Matamoros Izucar Railroad. 
 
 374. On May 6th, 1878, a contract was made with General Juan N. Mendez, as representative of the 
 government of Puebla, for the construction of a railroad between that city and that of Matamoros de Izucar. A 
 subvention of $8,000 for each kilometre was granted. 
 
 375. This contract was executed by virtue of special authonty conceded by Congress to the Executive, by 
 the law of May ist, 1878, which has already been spoken of. 
 
 E. THE PRECEDING CONTRACTS WILL NOT IMPEDE THE BUILDING OF RAILROADS BY FOREIGN CAPITAL. 
 
 376. The Report considers it very difficult, and almost impossible, for the States to build the Unes that they 
 have contracted for. In support of this assertion it cites the opinion of a Mexican engineer, whom it calls intelli- 
 gent, and who, in reporting to the Congress of the Union under date of September 17th, 1878, upon the concessions 
 made to those States, said that the most felicitous construction of a raihoad by a Mexican company had hardly 
 come up to a league, or two and five-eighths miles, in twelve months, which is equivalent to hardly any building 
 power. 
 
 377. A short period having been fixed in the contract with each State during which certain works must be 
 constructed and a certain number of kilometres of the road made, it is clear that if this period be exceeded with- 
 out the works contracted for being executed the concessions must lapse and the field will be free to any com- 
 pany, North American or of another nationality, to obtain the same concessions. But even if this were not so, in 
 view of the difficulties which the State governments have to face in undertaking to build the railroads contracted 
 for by them, and all having the greatest desire to have those roads built, because this would redound to the bene- 
 fit of the State, augmenting its revenue and the prestige of its authorities, the company which might attempt to 
 construct an international railroad could count upon the decided support of the States, who would probably either 
 transfer to it their concessions or resign them so that the Congress of the Union could dispose of them in favor 
 of such company. 
 
 378. It is clear that the States will either construct the Unes they have contracted for, or that they will not 
 do so. In the first case this will favor the construction of the international line, because it will diminish the out- 
 lay which the company undertaking it might have to make, from the time in which a portion of the line would be 
 completed by any Mexican company or companies ; and in case the States could not construct the lines, nothing 
 would be lost, because, as they desire the building of the roads, there would be no inconvenience in ceding their 
 contracts, these being still in force, to any company that might have the capital necessary to complete the hne. 
 
 379. It may be well to mention, in proof of this assertion, that the contract of March 26th, 1878, with the 
 State of Vera Cruz, for the construction of a railroad from the port of Vera Cruz to Alvarado and Anton Lizardo, 
 
 373. Contract of March 39th, 1578, with the State of Yucatan, for the railroad from Merida to Peto. 
 
 373. Contract of March 30th, 1878, with the State of Colima for the railroad from Manzanillo to the Barranco 
 de Tonila. 
 
 374. Contract of May 6th, 1878, for the Puebla and Matamoros Izucar railroad. 
 
 375. The authority wherehy this contract was made. 
 
 376. The Report doubts that the States will construct the roads contracted for. 
 
 377. The contracts made with the States will not impede the construction of other lines, 
 
 378. The building of the roads by the States would be advantageous, and if the lines are not constructed in this way, 
 concessions will be granted. 
 
 379. The concession given to Vera Cruz has been the subject of a contract with an American citizen. 
 
64 
 
 has formed the matter for a contract with a citizen of the United States, as has akeady been said in the proper 
 place. 
 
 380. Another proof that the concessions made to the States do not constitute a great obstacle to the con- 
 struction of the international railroad, is that Messrs. Sullivan and Palmer, with whom the contract of November 
 12th, 1877, .was made, have not desisted in it, nothwithstanding that posteriorly to this date all the contracts 
 have been made with the States, and that the representatives of Mexico's creditors, with whom the contract of 
 December 6th, 1878, was made, do not consider them as impediments to an agreement for the construction of a 
 railroad from this capital to the Pacific. 
 
 381. Besides, it must be taken into account that the concessions granted do not amount to an exclusive 
 privilege ; others could, notwithstanding, be granted to North American companies. 
 
 382. Lastly, it should be borne in mind that of all the contracts made with the State governments, only that 
 of Guanajuato has till now built ten kilometres of road, and that of Morelos four. Extra official news has been 
 received from some of them, as Puebla and Queretaro, that they are engaged in leveUng the ground necessary for 
 the road, and that others, as Hidalgo and Zacatecas, have ordered a portion of the rails necesssry for the line 
 •contracted for. 
 
 F. OPINION OF THE ENGINEER IBARROLA UPON THE CONSTRUCTION OF RAILROADS IN MEXICO. 
 
 383. To prove the slowness with which Mexican companies construct railroads, and the almost impossibility 
 which there will be for the international road to be built by only the efforts of Mexican companies, the Report 
 cites the opinion of a Mexican engineer^ who is called intelligent, emitted in an explanation dated September 
 17th, 1878. It is deemed convenient to explain the cause which gave rise to that explanation, and what was said 
 in it, in order to be able to duly appreciate this incident. 
 
 384. It was precisely on account of what Deputy Chavero said on September i6th, 1878, upon the 
 raihoad question, as President of the Chamber of Deputies of the Ninth Congress of the Union, in reply to the 
 discourse of the President of the Republic, and to impugn the conclusions of the reply, that the civil engineer, J. 
 Ramon de Ibarrola, published, on September 17th, 1878, a pamphlet, which is not addressed to Congress, though 
 the Report intimates that it is, and in which the text of both discourses — ^in so far as it related to this matter — 
 was inserted, showing that the road which is being constructed from Esperanza to Tehuacan could not serve as 
 a model to the international railroad. 
 
 385. Speaking of the contracts made with the State governments for the construction of railroads, and pre- 
 cisely to demonstrate the difficulties and almost impossibility of their being built by the States that had contrac- 
 ted for them, Mr. Ibarrola said as follows : 
 
 " Fifteen concessions which the Secretary of the Interior cannot deny, seeing that those who asked for them 
 had the right to do so ; fifteen concessions which he signed, and which were elevated to the importance of de- 
 crees, in place of one only which he had contracted for with the Palmer-Sullivan enterprise ; fifteen concessions 
 that were not carried into effect, seeing that to do this somethimg more than good will was necessary; fifteen con- 
 cessions that not even now are profited by, because I must say that the only advantage that can accrue to the 
 country would be to distract public opinion, as upon another occasion I have said about angry political questions, 
 in order to turn us towards others of veritable utility. I may be answered immediately, and 'therefore I reply be- 
 forehand, asking if those concessions are not going to be acted upon ? Have we not before us the example of 
 Guanajuato, that has already built five kilometres of a road, and has given nine orders for rails? Very well, then ; 
 Guanajuato, has made in one year five kilometres of a road, and during the incoming one will make other five 
 kilometres, and will continue, like the Toluca road, making one league a year, because there are no other means 
 than those afforded by this last company. But this is not building raihroads; to construct them the example 
 should be taken from the motor which they employ, and imitate its rapidity. By any other manner the object 
 will not be attained, and it will not serve us in any way, who now hve, to think that within fifty years one might 
 go to Queretaro by raihroad. We need to go ourselves, and not that such a boon be reserved for our grand- 
 children. Where are the elements which the State governments can count upon, or the companies to be organ- 
 
 380. Messrs. Sullivan and Palmer do not consider the concession to the States an obstacle. 
 
 381. The concessions granted do not amount to an exclusive privilege. 
 
 383. The condition of the works commenced by the States, by virtue of the concessions. 
 
 383. Conclusions of the Report with regard to the slowness with which railroads in Mexico are built. 
 
 384. Opinion of the engineer Ibarrola upon this subject. 
 
 385. Text of the conclusions of the engineer Ibarrola 
 
ized for the construction of railroads? The States cannot acquire them otherwise than by voluntary subscription, 
 or by contributions ad hoc. The first will never be realized, because no one has confidence in the governments, 
 and this is nothing but the fruit of what they themselves have sown ; the contributions, if they be paid, will never 
 suffice for the 'object; and besides, there are no guarantees that they would be invested in the work for which 
 they would be destined. The public conscience answers for me, because the contribution which has so long 
 been collected for the draining of the valley of Mexico cannot be forgotten, as it has been applied to everything 
 but the purpose intended. As for the companies that may be organized in the States, could they be in any better 
 condition than that of Toluca ? " 
 
 " Yet, notwithstanding, what has been built in Toluca ? One league a year, and nothing more." 
 
 386. It was very far from the imagination of Mr. Ibarrola, when he wrote his essay, to think that the same 
 Unes whereby he proposed to impugn the conclusions of the President of the Chamber of Deputies, and to main- 
 tain that the great railroads required by Mexico would have to be constructed by foreign capital, exaggerating, 
 as they did, the difficulties which have presented themselves in the building of railroads by Mexican capital, 
 should serve the representative of the United States in Mexico to prove that the construction of railroads by 
 Mexican capital is next to impossible. 
 
 387. As for the rest, the assertion of the engineer, Ibarrola, with respect to the most felicitous example of 
 the construction of railroads is at the rate of one league in twelve months is not correct. Guanajuato has con- 
 structed ten kilometres in less than one year ; Morelos, four in about six months, and the Company of the 
 Mexico, Toluca and Cautitlan railroad has built twenty-two kilometres in the last year, and is about finishing 
 seven more. The lines of the Federal District have also constructed several kilometres in the last year. 
 
 Y. THE (limited) MEXICAN COMPANY OF THE MEXICO AND VERA CRUZ RAILROAD. 
 
 388. The Report, with the idea of making patent the impossibihty of constructing the International railroad 
 from the City of Mexico to the United States frontier, and in analyzing the assistance which Mexico could give 
 for the accomplishment of this important work, lays down the principle that our country, impoverished by a long 
 series of revolutions, is in a condition absolutely impossible to undertake by herself any great work of public im- 
 provement, and that all intelligent Mexicans recognize that the capital necessary for an International railroad 
 must come from the United States, or be had by means of them. It lays down, in addition, the general principle 
 that a subvention is necessary in order that respectable companies should undertake works of this nature, espe- 
 cially that of the International railroad to the frontier of the United States, for the reason that the line would 
 have to traverse long distances of desert and unpopulated lands, and that some years would have to pass after 
 finishing it before the working of it would yield any return over and above the expenses, seeing that the com- 
 merce along the line has to be created, and that the Mexicans are slow to adopt new customs. In confirmation 
 of all these assertions the Report presents, as an example, the experience of the only finished line of railroad in 
 the United States, that of Vera Cruz to Mexico. 
 
 389. The conclusions which the Report comes to with respect to the Vera Cruz railroad are few, but they 
 weigh much, and are of transcendent gravity. It says that, " The experience furnished by the only railroad that 
 has until now been finished in the country amply confirms these assertions with regard to the small profits which 
 railroads in Mexico afford, seeing that the Mexican railroad, which connects the capital with the principal sea- 
 port which traverses one of the most populous and wealthy parts of all the Republic, and which is, comparatively, 
 a short line, has never been able to pay more than five per cent, on its capital (while the greater part of the 
 bonded debt, and with a mortgage on the road, earns eight per cent.) even during the time in which the Govern- 
 ment regularly paid the subvention ; and as it is more than twelve years since this has been paid, from the time 
 of the first armed demonstrations of the last revolution, it is actually only producing three per cent, above the cost 
 of working." 
 
 390. The forcible consequence of this explanation would be to establish, not the impossibility of building 
 railroads in Mexico, as the Report has led us to beUeve, because we cannot form a general rule from judging of 
 a single case, least of all in complicated questions like the present, without demonstrating that in the work of 
 building the Vera Cruz railroad special circumstances have existed which, while they made it expensive, prevent 
 
 386. Object of the engineer Ibarrola's pamphlet. 
 
 337. The Mexican companies have built more than a league a year. 
 
 388. The Report considers that the international railroad can only be carried into effect by subsidized American 
 
 companies. 
 
 S89. Conclusion of the Report about the small profits of the Vera Cruz railroad. 
 
 9 
 
66 
 
 ts being made the object of comparison with similar works. Even if the data in the Report were exact, it would, 
 be erroneous to generalize the conclusions. 
 
 391. If, in reality, the Vera Cruz and Mexico railroad, which is an exceptional work in the country, as will 
 be shown hereafter, could be taken as a basis of what may be expected from the construction of railroads in 
 Mexico, the expectation of speedily completing them would, perhaps, not be very flattering ; but taking into 
 consideration very important circumstances which eliminate from the question the seriousness implied by the 
 simple enunciation, isolated from the facts mentioned in the Report, it must be allowed that the soHtary example 
 of a Hne in whose survey, building and working, grave errors (which considerably augment its cost) have been 
 committed, could not serve as a basis to show the development of traffic imparted to Mexico by the construction 
 of railroads. 
 
 392. In order to explain what has occurred in connection with this line, it is indispensable to give a brief 
 exposition of the following points : 
 
 A. Summary of the building of the Vera Cruz railroad. 
 
 B. Sums granted by the Government of Mexico as a subvention to that line. 
 
 C. Sums paid on account of that subvention. 
 
 D. The sum owing by Mexico on account of the same subvention. 
 
 E. Social capital of the enterprise. 
 
 F. Entire cost of the Mexico and Vera Cruz railroad. 
 
 G. Errors committed in its construction. 
 
 H. The earnings and expenses of working and profits of the work. 
 I. The freight rates collected. 
 
 ■A. SUMMARY OF THE BUILDING OF THE VERA CRUZ RAILROAD. 
 
 393. The work of the Vera Cruz railroad has had to suffer not only those contrarieties which pohtical 
 changes in the country unavoidably bring about, and which work was planned in the year 1825, when Mr. 
 Francisco Arrillaga's ideas for its execution were initiated, to whom the Administration of General Bustamtnte 
 conceded the first privilege for the construction of that road, but also from the changes that took place among 
 the different companies charged with making it, during the thirty-five years that have passed till the finishing of 
 this road. These different changes will be briefly spoken of. 
 
 a. Concession to Mr. Francisco Arrillaga. 
 
 374. The privilege conceded to Mr. Francisco Arrillaga, by the decree of August 22d, 1837, provided that 
 the work on the railroad should commence within two years, counting from the date of the concession, and that 
 the road should be completed, with the branch to Puebla city, in five years from the same date. Far from receiv- 
 ing any subvention from the treasury, the grantee was obliged to pay in a milHon of dollars, in twenty annual 
 installments of $50,000 each, which installments began to count ten years after the finishing of the raildroad, 
 and they would correspond to the last twenty years' duration of the concession, which was for thirty years. 
 
 395. The concession to Mr. Arrillaga produced no more practical result than that of making preliminary 
 surveys for the purpose of locating the track of the road, and making estimates for it; the tracing was directed 
 between Orizaba and Jalapa to the vicinity of Apizaco, counting the length of the principal road at seventy-two 
 leagues, or about 302 kilometres, and calculating the cost of the work, at that time, at five miUions of dollars, 
 without including the branch to Puebla, which, as was afterwards effected, should have started from Apizaco, and 
 whose cost was judged to be half a million of dollars. 
 
 396. The death of Mr. Arrillaga, promoter of the work, and the war with France, which happened in 1838 
 were the obstacles that at that time prevented the carrying out of that important project. 
 
 b. Contract with the Creditors of the Toll Fund. 
 397. On May 31st, 1842, the idea was given a new form by means of the decree of that date, which con- 
 
 390. The case of the Vera Cruz railroad insufiBcient to establish general rules 
 
 391. Reasons in support of the foregoing assertion. 
 
 393. Points which ought to be examined in treating of this question. 
 
 393. The general circumstances of the country and the change of the companies delay the building of the railroad. 
 
 394. The concession of August 22d, 1837, granted to Mr. Francisco Arrillaga. 
 
 395. The only practical result of Arrillaga's concession was the surveying of the ground. 
 The death of Mr. Arrillaga and the war with the French, in 1838, prevented the execution of the project. 
 
 396. 
 
 397. Contract for the railroad from Vera Cruz to San Juan river, with the creditors of the toll fund. 
 
67 
 
 tracted with the creditors of the toll fund for the construction of the railroad from Vera Cruz to the San Juan 
 River, imposing a duty at the same time, which was called the tax on account of "deterioration," and it was 
 made to consist of two per cent, on the import dues collected at the port of Vera Cruz. The amount of this 
 duty was assigned to the construction of the railroad from Vera Cruz to San Juan, whose collection was pledged 
 to the creditors, until their credits should be extinguished. 
 
 398. Agreeably to the bases of the contract made with the creditors of the toll fund, these parties worked 
 on the raihroad from Vera Cruz to San Juan, from May, 1842, till September, 1851; for, by the law of Novem- 
 ber, 30th, 1850, which consolidated the public debt, the contract of May 31st, 1842, relative to the arrangement 
 with the creditors of the toll fund was abrogated, which abrogation had been beforehand proposed to the Cham- 
 ber of Deputies, on account of the non-fulfillment of the stipulations in the contract on the part of the creditors. 
 
 399. In nine years the creditors of the toll fund built eleven and a-half kilometres of the raihroad from 
 Vera Cruz to San Juan, the work and material on which were valued at $500,000; while the sum received by 
 them from the duty on account of "deterioration" amounted to $1,939,131 ; that is to say, the cost of the work 
 was at the rate of $168,620 for each kilometre. 
 
 c. Construction of the Railroad from Vera Cruz to San Juan by the Government. 
 
 400. The third period of the Vera Cruz railroad commenced with the Mexican Government's receiving the 
 works done by the toll fund creditors from 185 1 until the finished part of the railroad was sold to Mr. Antonio 
 Escandon, by virtue of the privilege which was conceded to him on August 31st, 1857 In this third period the 
 work was directly under the charge of the Government, and in six and a-half years twelve and a-half kilometres 
 of the line were built, which, including material over and above the necessary amount, cost the Government 
 $715,234, or at the rate of $57,218 per kilometre. In about seventeen years twenty-four kilometres of the road 
 had been built, which cost the Government $2,654,373, or $110,598 for each kilometre. 
 
 401. Until the granting, in August 31st, 1857, of the pri\'ilege to Mr. Antonio Escandon, for the construction 
 of the railroad from Vera Cruz to the Pacific, the building of that from Vera Cruz to the City of Mexico had gone 
 on very slowly. It was then agreed to sell to the new grantee of the privilege the finished works of the railroad 
 from Vera Cruz to San Juan. The company acquired, therefore, the twenty-four kilometres of the road already 
 built, for the sum of $750,000; that is to say, at the rate of $31,250 for each kilometre, and with the loss of 
 $1,904,373 to the government. 
 
 d. Line from the City of Mexico to Guadaloupe Hidalgo. 
 
 402. The new company also acquired the small branch of near six kilometres, constructed by Messrs. Mosso 
 Brothers, from the city of Mexico to Guadaloupe Hidalgo, by virtue of a concession which was obtained from the 
 Mexican Government on August 2d, 1855, and whereby the arduous task was undertaken to build, without any 
 subvention, a railroad that would join that from Vera Cruz to the San Juan river with the Pacific Ocean ; but 
 finding it impossible to carry out so great an undertaking, the company transferred the concession and the branch 
 which they had constructed and were working, to the new grantee of the privilege for the Vera Cruz and Pacific 
 railroad for the small sum of $200,000, according to publications made by Mr. Manuel Payno, who was inter- 
 ested in the concession of Messrs. Mosso. Mr. Escandon commenced then, by uniting in his own hands the 
 thirty kilometres of railroad built up till that time, having obtained them for less than $1,000,000. 
 
 e. The first concession to Mr. Antonio Escandon. 
 
 403. As has already been intimated, on August 31st, 1857, the government of General Ignacio Comonfort 
 conceded to Mr. Antonio Escandon the exclusive privilege for the construction of a railroad from Vera Cruz to 
 Mexico, and from this city to the Pacific. From here it may be said that the history of the railroad from Vera 
 Cruz to Mexico commences. 
 
 398. The contract with the toll fund creditors was abrogated by the law of November 30th, 1850. 
 a99. The toll fund creditors built eleven and a-half kilometres, which cost $1,989,131, and the work was valued 
 at $500,000. 
 
 400. The Government built twelve and a-half kilometres for $715,834. In ten years twenty-four kilometres were 
 constructed and cost $2,654,373. 
 
 401. The twenty-four kilometres were sold to Mr. Antonio Escandon for the sum of $750,000, and government losing 
 $1,804,:^73. 
 
 403. Mr. Escandon purchased the branch from Mexico to Guadaloupe Hidalgo, acqairing the thirty kilometres then 
 
 built. 
 
 408. The first concession to Mr. Antonio Escandon, August sist, 1857. 
 
68 
 
 404. The new concession created a consolidated fund of public debt to the amount of $8,000,000, payable 
 in fifty years, and with interest at the rate of five per cent, per annum, receivable by the raihoad company as a 
 subvention, which should be delivered in exchange for an equal amount of, paper chargeable to the revenues. 
 
 405. As a compensation for this auxiHary, and for all the others, including the concession, the grantee was 
 obliged to build a penitentiary and a home for invaUds, whose cost should not be under one million of dollars ; 
 to give the government twenty out of one hundred per cent, of the profits of the hne ; to carry the pubUc corres- 
 pondence free of cost ; and to hmit the fares of civil and miUtary employees to one-quarter of the usual rates. 
 
 406. A few months after Mr. Escandon's receiving this privilege the coup d' etat by President Comonfort took 
 place, which caused on the one side the capital of the RepubUc and many important States to fall into the hands 
 of the rebels against the constitutional Government, and on tlie other Mr. Juarez to assume the reigns of govern- 
 ment in his character as constitutional Vice-President, seeing himself obliged to accept the struggle provoked 
 against the institutions of the country — a struggle which lasted three years and ended at the close of i860 by the 
 triumph of the constitutional cause. As it was to be expected, those three years were lost to the work of build- 
 ing the Vera Cruz Railroad, for Mr. Escandon had hardly commenced to survey the ground in order to fix the 
 line and cost of the road — an undertaking that was confided to the American engineer, Mr. Talcott— who felt 
 sure that the work would cost $14,000,000. 
 
 f. Second concession to Mr. Antonio Escandon. 
 
 407. The Constitutional Government was hardly re-installed in the city of Mexico when the suggestions 
 were renewed before it by the grantee of the concession, who had with good results negotiated with the adminis- 
 tration of General Miraman, and the Constitutional Government lent itself to modify the grant, notably amplify- 
 ing by decree of April 5th, 1861, the concessions contained in that of August 3tst, 18^7. "By this new decree 
 Mr. Escandon was reheved of the obligation to construct the penitentiary and the home for invalids ; and 
 touching the stipulations directly connected with the raikoad, he was reheved of the obligation to give to the rev- 
 enue twenty per cent, of the profits of the line, and was, besides, gratuitously conceded the half of the waste 
 lands surveyed in the Isthmus of Tehuantepec and in the State of Sonora. The liberality of the Government was 
 so complete that, besides this increase to the assistance formerly conceded, an additional duty of fifteen per cent.' 
 on imports was decreed, so that the company which the grantee might form should receive this from all the mari- 
 time custom-houses in exchange for railroad shares, which the Government accepted at par, while in the market 
 they were realizable only at a great discount. To secure the payment of the interest on the fund of $8,000,000, 
 in conformity with the decree of August 31st, 1857, the Government issued bonds which were called twenty 
 per cents., receivable in all the maritime custom-houses in payment of the duty on material improvements, 
 and at once delivered to the grantee bonds to the value of $2,000,000 for their reahzation in the ports by the 
 company itself, so that with the amount of this duty on material improvements the $400,000 interest on the 
 $8,000,000 was covered, and also the $160,000 of the two per cent, on the cancellation of this fund. It is to be 
 noted that in spite of stipulating that two per cent, annually should go to the cancellation of the $8,000,000, it 
 was agreed that the annual "payment for interests should be $400,000, as if that cancellation was not to be 
 verified. 
 
 408. Among these stipulations it was agreed in the concession of April 5th, 1861, that without prejudice to 
 the continuation of the works on the raikoad from Vera Cruz to the city of Mexico, the tropical portion of the 
 road should be pushed on in preference, and also the branch indispensable to connect the capital with the 
 city of Puebla. 
 
 409. On December 17th, 1861, a httle after renewing the concession to Mr. Escandon, the occupation of 
 the port of Vera Cruz by the allied forces of France, Spain and England happened, in consequence of the conven- 
 tion signed by the three nations on October 31st, 1861, which event involved the country in the war of inter- 
 vention. 
 
 410. Before the French army occupied the city of Puebla and the capital of the RepubUc, events which took 
 
 404. A fund of $8,000,000 as a subsidy to tLe railroad company. 
 
 405. Obligations contracted by the grantee of the concession, by that of August 31st, 1857. 
 
 406. Surveys and estimates for the railroad made by the American engineer Talcott. 
 
 407. Second concession to Mr. Escandon, relieving him of the heavy obligations which he had contracted by the first, 
 and amplifying the subsidies. 
 
 408. Preference established in the concession of April 5th, 1861, for the construction of the road from Mexico to Puebla 
 
 409. Beginning of the war of intervention through the triple convention of London, October 31st, 1861. 
 
 410. Mr. Escandon contracted with the French army for the building of the road from the Tejeria to Ohiquihuite. 
 
69 
 
 place m May and June, 1863, the grantee of the concession already had, on December 23d, 1862, made an 
 agreement with the French army to build, as a contractor, the branch of the railroad between the Tejeria and the 
 Chiquihuite. The agreement resulted in the contractor's building a section of seventy kilometres between the 
 Tejeria and Paso del Macho, for which Mr. Escandon received from the French army the sum of 9,682,491 02 
 francs, or about $1,924,667 13, a sum which later on was repaid to the French army by the custom-house of Vera 
 Cruz. 
 
 411. Thus, then, from the beginning of the French intervention the grantee of the concession broke by his own 
 proper acts his contracts with the Mexican Government, by making new stipulations with the invader. The 
 Archduke MaximiHan having possessed himself of this capital and estabhshed his ephemeral Empire, the grantee 
 went to him, asking that he should approve the cession of his privilege, which, in September, 1864, he had made 
 to the " Mexican Railroad Company (limited)," by virtue of which it took in charge the building of the railroad 
 from Paso del Macho to Guadaloupe Hidalgo, and the working of the two sections at that time finished, trans- 
 ferring to the company, by the same cession, the contract which Mr. Escandon had formerly made with the Messrs. 
 Smith, Knight & Co. (Hmited), of London, whereby these gentlemen agreed to build the trunk Hue and Puebla 
 branch of the same road, witli the corresponding telegraph of three wires, together with all the lands, works of 
 skill, stations, store-houses, and rolling stock of the railroad, and telegraph apparatus, for the sum of ;^5, 239,120, 
 or about $26,195,600. 
 
 4r2. The Archduke Maximilian approved of the passing of the concession to the "Mexican Railroad 
 Company (limited)," and also modified the grant of April 5th, 1861, by his decree of January 6th, 1865, repro- 
 ducing, in substance, the stipulations of the concession of the Republic; but modifying, notwithstanding, the 
 periods for the payment of the subvention, which the company was to receive quarterly in the General Treasury. 
 
 413. In the years 1865 and 1866 the company built the 133 kilometres that there are between Guadaloupe 
 Hidalgo and Apizaco. 
 
 g. Rehabilitation of the Company which received the concession, and its re-instatement by the Mexican 
 
 Govern7}ient in Escandori s privileges. 
 
 414. The fall of the Empire and the reinstallation of the Republican Government in Mexico ought to have 
 produced, and in fact did produce, new and transcendent changes in the important business of the Vera Cruz 
 railroad. 
 
 415. At once it became obvious that the national Government could not recognize in the question any per- 
 sonality ir\ the Limited Company, nor give any vaUdity on this point to the legislation of the so-called Empire. 
 The company, which, without the approbation of the Government of the Republic, as required by its laws, had 
 consented to compromise its interest with the invader, could not, in good faith, avail itself before the Constitu- 
 tional Government of any legitimate right. As far as the Repubhc was concerned the only existing thing was the 
 Escandon concession, forfeited on account of having passed the time, and also because, in conformity with the 
 law which had to be promulgated as a supreme means of national defence, to deprive it of the capital of the in- 
 vader, Mr. Escandon had lost his rights in all the business, including even the railroad and its existing appurten- 
 ances, on account of having made a contract with the French army and with the authorities set up by it. 
 
 416. But in those circumstances the national government did not lose sight of the great importance of accel- 
 erating the finishing of the railroad, which undoubtedly would have been more difficult if the terrible penalties to 
 which the grantee and the company had made themselves amenable had been severely carried into effect, and so 
 far from using such severity the government was abundantly benign and generous, pardoning the company by the 
 decree of November 27th, 1867, the penalty of forfeiture, legaHzing its rights and amplifying the concessions 
 which had formerly been granted to Mr. Escandon. The decree of November 27 th reproduced, substantially, 
 the former stipulations on the matter; but it introduced some innovations which gave origin to a series of en- 
 lightning debates, in consequence of which the concession was modified by the Congress of thej Union, on No- 
 vember nth, 1878, with the consent of the company. Only the most important stipulations of this decree will 
 be mentioned here, upon which stipulations action was subsequently taken by the national Congress. 
 
 417. The concessions of 1857 and of 1861 granted to Mr. Escandon the exclusive privilege to construct 
 
 411. Transfer of the privilege to the Mexican Railroad Company (limited) and the contract of Smith, Knig^ht & Co. 
 
 413, The Archduke Maximilian approves of the transfer, and grants newly the concession, with few changes. 
 
 413. The Company builds, from 1865 to 1866, the distance of 133 kilometers of road between Apizaco and Guadaloupe. 
 
 414. Fall of the Empire and re-installation of the republican Government in Mexico City. 
 
 4!5. The Republic could not recognize the transfer of the concession, which had lapsed, in conformity with the laws. 
 
 416. Excusing the Company's derelictions by means of the third concession, November 27th, 1867. Its stipulations. 
 
 417. Newly granting the concession in contravention of constitutional precepts. 
 
70 
 
 and work the railroad, which privilege, nothwithstanding its being opposed to an express precept of the federal 
 constitution of 1857, was re-affirmed by the decree pardoning the company, which has already been referred to. 
 
 418. By the preceding concessions power was granted the company to construct branches within a radius of 
 twenty-one leagues on either side of the principal Une, and by that of November 27th, 1867, the preference 
 in right above all other persons or companies that might solicit it, was. given to build such branches. 
 
 419. The concession of November 27th, 1867, fixed December 31st, 187 1, as the time for finishing the 
 branch to Puebla. 
 
 420. Upon the installation of the Congress of the Union, in December, 1867, a strong opposition was form«?d 
 in that body against the concession of November 27th, and, after heated debates, the law of November nth, 
 1868, was promulgated, which introduced material modifications into the former decree. The following changes 
 should be mentioned, reserving remarks referring to the subvention and the rate of freights and passages to a 
 more opportune place. 
 
 42 1 The character of a privilege was taken from the grant, as this was unconstitutional, the Government 
 compromising itself not to subsidize, during the period of sixty-five years, any other railroad enterprise between 
 Vera Cruz and Mexico, or the intermediate points, with the exception of that already subsidized for the building 
 of a railroad from Vera Cruz to Jalapa. The preference formerly given to the company to build branches was 
 taken away. The obligation was imposed on the company, laying down that the branch from Apizaco to Puebla 
 should be finished and put in working order by December 31st, 1869, .and the principal line between Paso del 
 Macho and Apizaco by December 31st, 1872. 
 
 422. Lastly, the Government established the right of inspecting the building' arid working of the road; 
 resolving that the by-laws of the company should be presented to the Government for approval, in which it should 
 be prescribed, that without permission from the Government the society s capital could not exceed $27,000,000; 
 that this should be divided half into shares and obligations not earning more than eight per cent, annually; and, 
 lastly, that the Government, without prejudice to its representation as a shareholder, should be represented on 
 the board of directors of the company by persons nominated by it, in the proportion which was expressly laid down. 
 
 423. The preceding narrative enables it to be understood how, from 1857, the time of the first concession 
 to Mr. Escandon, up till 1868, when the Constitutional Government definitely approved of the transferririg of 
 the grant to the Mexican railroad company, and the mutual rights and obligations of the Government and of 
 the company were defined with respect to the building and working of the road, this important work was seen on 
 the one hand more and more protected by the Government, and on the other constantly retarded,- as much 
 by the interruptions originating from the general state of the country, as in the want of organization on the part 
 of the company. But, finally, and in conformity with the decree of November nth, 1868, the work reached its 
 termination, and the branch from Apizaco to Puebla was opened September i6th, 1869, which placed this city in 
 communication with the capital of Mexico, and the main line was inaugurated January ist, 1872. 
 
 B. SUMS GIVEN BY THE GOVERNMENT AS SUBVENTIONS TO THE VERA CRUZ LINE. 
 
 424. By the law of November 27th, 1867, modified by that of November nth, 1868, pecuniary aid and ex- 
 emption from certain payments were granted, which indirectly increased its funds and diminished the outlay which, 
 without such exemption, the company would have been obliged to make. The sums in cash paid over to the 
 company were of two classes — gratuitous subvention and the purchase of shares. 
 
 425. The subvention newly granted to the enterprise was fourteen millions of dollars, payable in twenty- 
 five annual instalments of $560,000, without striking any difference between capital and interest, although in 
 reaUty this sum, at the interest of seven per cent, was equal to the eight millions of the fund estabhshed from the 
 first granting of the privilege. The subvention, in conformity with the law of November nth, 1868, was payable 
 during the four years fixed for the building of the road, in "bonds of the Vera Cruz raihoad," which would be 
 admissable in payment of twelve per cent, of import duties occasioned in the custom-houses of Vera Cruz, Tam- 
 
 418. The preference given the Company in building of the branches. 
 
 419. The concession of November 27th, 1867, fixed December 31st, 1871, for finishing the road. 
 
 430. Congressional opposition to the decree of November 27th, 1867, and its modification by that of November 11th, 
 1868. 
 
 431. Extinction of the concession and the preference in building the branches. Time for. completing the work. 
 
 422. Fixing of the sum of the Company's capital, and intervention of the government in the work. 
 
 423. The governments constant protect the work. Finishing of it on December 31st, 1873. 
 
 424. Direct and indirect pecuniary aid conceded to the Company. 
 
 425. Gratuitous subvention of $560,000 for twenty-five years and the method of paying it. 
 
71 
 
 pico, Matamoros, Manzanillo, and Mazatlan ; it being stipulated that the quota of duties that might be paid in 
 bonds would subsequently be fixed at twelve per cent., more or less, accordingly as it might be necessary, so that 
 the annual subvention of $560,000 should be covered. The twelve per cent., or quota of import duties equal to 
 the subvention of $560,000, could be paid only in "railroad bonds." during the four years designated for its build- 
 ing, under the penalty of compelling those breaking this rule to pay a second time. The company was prohibi- 
 ted from selling bonds at a higher price than their nominal value, and exemption was granted it from the pay- 
 ment of export duties on the amount of its receipts from the subvention. After the building of the railroad the 
 subvention was to be paid by the general Treasury in three monthly accrued instalments. By. decree of Decem- 
 ber 17th, 1878, it was again laid down that the subvention should be paid by the five maritime custom-houses 
 already named. 
 
 426. The law of November 27th, i868, made no reference to the fund of eight millions of credit which the 
 former grantee should have paid to the Mexican Government, in conformity with the decrees o'" 1857 and 1851, 
 nor the considerable sums that had been received both from the Mexican Government, the French army, and 
 the authorities that emanated from the intervention; but by the decree of November nth, 1868, the company 
 became pledged to deliver within three months into the general Treasury of the federation the bonds and in- 
 terest coupons of the fund of $8,000,000 which had been delivered to Escandon, the grantee, in conformity with 
 the first grant, it being declared at the same time that these titles had ceased to be of value. 
 
 427. At the purchase of shares which the company might issue as parts of its associated capital, the fifteen 
 per cent, on the duty on imports for the term of four years to be occupied in building the road was included. 
 
 428. The exemptions, which amounted to a direct pecuniary assistance, because they relieved the company 
 from expenses which, without them, it would have been obliged to make, consisted of three clases : 
 
 ist. Exemption for twenty-one years from the duty on the exportation of monies over and above the sum of 
 560,000, the amount of the annual payment which the company should receive on account of the subvention 
 contracted for. During the building of the road this indirect auxiliary would probably produce effective means 
 to the corporation, because it did not require large sums in the country, and it was at liberty '-^ negotiate its per- 
 mits for free exportations. 
 
 2d. Exemption for ten years ending on November loth, 1878, from the payment of duties, and from all 
 classes of taxes upon building materials, necessaries, carriages, machinery, tools, &c., which the Company might 
 devote to the construction and working of the railroad and telegraph lines. . 
 
 3d. Exemption of the road from taxes for ten years, counted for each section from the time in which it 
 would be' opened for public service. 
 
 C. SUMS PAID ON ACCOUNT OF THE SUBVENTION. 
 
 429. From the first concession made to Mr. Escandon, in 1857, and posteriorly removed, as already said, 
 the grantee commenced to receive divers sums either from the National Government or from the French interven- 
 tion charged to the credit of the subvention offered for the work from the time of the first grant, or for shares in 
 the undertaking. In the following summary of the sums paid by the Government in aid of the road, there are 
 included (with due distinction) the sums which had been paid to the grantee anteriorly to the law of November 
 27th 1867, whether under the title of a subvention or in payment of shares ; it being necessary to bear in mind 
 that with respect to the liquidation of the amount belonging to the subvention, a suit is pending in the Federal 
 tribunals in consequence of the Company's non-acceptance of the several charges made against it in consequence 
 of the balance struck by the General Treasury of the Nation, upon whose operations the summary is based : 
 
 Net sum received by the grantee on account of the subvention during the period em- 
 braced between August 31st, 1857, and May 31st, 1863 $252,814 57 
 
 Received by the grantee from the French army for the construction of the section of 
 
 railroad from Tejeria to Paso del Macho 9,682,491 02 frs 1,924,667 13 
 
 Received by the grantee and the Company on account of the subvention 937,145 34 
 
 Balance of a loan of $200,000 made by the French intendencyto the house of Messrs. 
 
 Barrow Forbes & Co. for advances to the Mexican railroad 67,501 26 
 
 Carried forward $3,182,128 30 
 
 426 Return by the Company of the $8,000,000 in bonds delivered to Mr. Escandon. 
 
 437 Purchase of shares from the Company for the four years' work on the railroad. 
 
 438 The exemptions which amounted to indirect pecuniary aid. 
 
 4-'9 The Company received $T,056,619 23 on account of the subvention, up till the time of finishing the road. 
 
72 
 
 Brought forward $3,182,128 30 
 
 Sum which appears charged on the books of the Central Treasury of the so-called Em- 
 pire as having been delivered to the railroad company, April 27th, 1866, charged to 
 the Revenue Commission in Paris 49,3 ^9 97 
 
 Total received by the Company on account of the subvention up till the date of the 
 
 law of November, 27th, 1867 $3,231,448 27 
 
 Received by the Mexican Raihoad Company on account of the first four annual install- 
 ments of the subvention, running from November, 1868 to 1872 2,240,000 00 
 
 Total received on account of the subvention during the construction of the road $5,471,448 27 
 
 Received by the Mexican Railroad Company, in payment of the subvention after the 
 
 building of the road, and up till June, 1876 $1,566,270 86 
 
 Received by the Company on account of the subvention from October to 
 
 December, 1876 $18,900 10 1,585,170 96 
 
 Total ^ $7,056,619 23 
 
 430. The Company received, as an indirect pecuniary auxilliary, during the four years embraced between 
 September nth, 1868, and the same date in 1872, that of the exemption from the payment of export duties on 
 $560,000, the amount of the annual subvention which it received in these four years. The auxiUiary amounted 
 to the sum of $173,000 in the four years, reckoning the export duty at eight per cent, up till June 30th, 1872, 
 and at five per cent, from that date. 
 
 431. Since the finishing of the road the company has continued to enjoy the exemption, and by virtue of it 
 has exported from November nth, 1872, till the same date in 1878, the amount of six annual payments of the 
 subvention, or $3,600,000, whose duty amounts to $168,000, which the company has neglected to cover, so that 
 this exemption has produced to the company a saving of outlay from November, 1868, to November, 1878, repre- 
 sented by the sum of $341,000. The company has commenced to use during the current year the right conceded 
 to it to export in this time, free of duty, the sum of $560,000. 
 
 432. Sharespurchasedfromthe Vera Cruz Railroad Company. — By virtue of the concession of April 5th, 1861, 
 repeated in that made to the company by the pretended Empire, and lastly in the laws of November 27th, 1867, 
 and November nth, 1868, the Government compromised itself to the purchase of shares at par from the com- 
 pany to the amount of the re-payment of the fifteen per cent, of the import duties on foreign goods. This pur- 
 chase was hmited by the law of November nth, 1868, to the period of four years, which the building of the road 
 ought to have lasted, and this limitation was faithfully observed. The sums which the company received from 
 the Mexican revenue on account of the value of shares, up to the finishing of the railroad, are the following : 
 
 Sum received by the grantee in conformity with the law of April 5th, 1868 $56,52 1 88 
 
 Sum received by the company during the period of the French intervention 1,009,352 21 
 
 Sum produced by the fifteen per cent, of the duties on importation during the four years 
 
 embraced between November nth, 1868, and November nth, 1872 2,823,800 00 
 
 Total amount to invest in shares $3,889,674 09 
 
 433. It is also to be observed that with regard to the shares taken in the enterprise two differences appear 
 between those to the fore in the general treasury of the Federation, which amount to $3,669,252 21, and those 
 correspondmg to the sums which appear in the books of this office as settled by the amount in shares, and they 
 are, as has been already stated, $3,889,674 09. The first of these differences consists in the sum of $200,000, the 
 value of a draft of the central treasury of the pretended Empire of Maximihan in favor of the company and 
 against the Revenue Commission in Paris, for the value of shares which have not been received, the company 
 alleging that said draft was not paid ; but as it has not returned to the Treasury charge is made against it for this 
 sum, and the question is pending also for judicial solution. The second difference refers to. shares to the amount 
 of $20,421 88, which the Treasury alleges have not been received, and the company asserts have been dehvered, 
 
 430. Tlie-Company received by exemption, from the payment of export duties up to the time of finishing the road, 
 $473,000. 
 
 431. The Company has exported $1,360,000, the amount of six annual payments of the subvention, since finishing 
 the road. 
 
 433. Shares purchased from the Company to the amount of $3,889,674 09. 
 
 433. DifEerences between the Treasury and the Company about the amount of shares. 
 
73 
 
 so that there is no doubt but this sum should appear among the values given by the nation as direct assistance 
 for the work of the railroad. The shares to the fore in the Treasury amount to $3,669,200, and a receipt for 
 part of another amounting to $52 21. 
 
 434. The pecuniary aid which Mexico has lent to the company, according to the foregoing data, makes the 
 sum of $11,457,293 32, divided as follows: 
 
 Sums received on account of the subvention $7,226,619 23 
 
 Amount of export duties from the payment of which the company was exempted 341,000 00 
 
 Amount for shares purchased by the Government 3,889,674 09 
 
 . "^o*^^^ $11,457,293 32 
 
 D. THE SUM OWING ON ACCOUNT OF THE SUBVENTION. 
 
 435. It has been seen that during the building of the railroad the subvention was wholly paid, and in the 
 same way the promise was fulfilled of devoting to the purchase of shares the fifteen per cent, on import duties. 
 
 436. From November, 1872, till the same month of 1878, the company should have received six annual 
 payments of $560,000 on account of the subvention, which is equal to the sum of $3,360,000, but it received in 
 this period only, from June, 1873, till June, 1876, the sum of $1,566,270 86; so that there is due to it the sum of 
 $ii793,729 14- The subvention is now in the way of being paid, and its payment is arranged from the month of 
 January, 1879, in conformity with the law of December 17th, 1873, out of the seven and a-half per cent, of the 
 amount on import duties in the maritime custom-houses of Vera Cruz, Tampico, Matamoros, Mazatlan, and 
 Manzanillo. The company has enjoyed, nothwithstanding, up till now, the right of annually exporting $560,000 
 free of duty. 
 
 E. ASSOCIATED CAPITAL OF THE VERA CRUZ AND MEXICO RAILROAD COMPANY. 
 
 437. Before the law of November nth, 1868, the Government of Mexico had not taken any measure with 
 regard to fixing the associated capital of the Mexican Railroad Company, but the first section of the second 
 article of that law provided that it should not exceed $27,000,000, and that it would be divided by halves into 
 shares and securities, not to exceed the interest of eight per cent, per annum. The same section also laid down 
 that the associated capital of the company could not be increased without the consent of the Government, nor 
 the proportion between the shares and the securities, as already indicated. 
 
 438. In conformity with the same law of November nth, 1868, the by-laws of the company were presented 
 for the approval of the Government, in which the restrictions as to the amount and the division of the company's 
 capital was set forth ; also, that it had accepted a contract made between Mr. Antonio Escandon, as grantee, 
 and Messrs. Smith, Knight & Co., of London, as contractors, by virtue of which these gentlemen had undertaken 
 to construct, for the sum of _;^5,239,i2o, or $26,195,600, more or less, the railroad and telegraph line between 
 Vera Cruz and Mexico, with a branch to Puebla, furnishing it with all the workshops, warehouses, machines, 
 apparatus, utensils and necessary accessories for working and repairing of the sections already made from Vera 
 Cruz to Paso del Macho, and from Mexico to Vera Cruz, the cost of all which was included in the $26,195,600. 
 
 439. Hardly had the road between Mexico and the port of Vera Cruz been placed in working order, when 
 the company petitioned the Government for substantial changes in the concessions ; those which related to the 
 associated capital were the following: First, the power to substitute un-issued shares for new securities, which 
 would cover the nominal value of such shares, and which would earn an interest of not more than twelve per 
 cent. Second, to issue new securities bearing the same interest, for the payment of the company's debt on 
 account of the transportation of stationary and roUing stock of the Une from Mexico to Puebla. Third, to issue 
 new securities, or preferred shares, bearing interest not exceeding eight per cent, per annum, to pay off outstand- 
 ing interest, and that accrued since the end of the year 1873, on account of the debts contracted with the approval 
 of the General Committee of shareholders of the corporation. 
 
 440. The Government granted these petitions of the company, and made a contract with it on March 15th, 
 1873, whereby the authority asked was conceded, also other stipulations relative to the rates of fare in the work- 
 
 434. The Government has aided the work on the railroad to the extent of $11,457,893 33. 
 
 435. During the period of building the Government complied with the engagements which it had contracted. 
 
 436. The Government owes on account of the subvention $1,793,739 14 
 
 437. Capital stock of the Company legally fixed by the concession of November 11th, 1868. 
 
 438. By-laws of the Company, approved by the Government, and the engagements contracted by them. 
 
 439. Substantial changes with regard to the associated capital of the Company, as solicited by it. 
 
 440. Execution of the contract of March 15th, 1873, approving the said changes. 
 
 10 
 
74 
 
 ing of the road, including the acquisition by transfer of the grant for the railroad from Vera Cruz to Puebla, by 
 way of Jalapa, and the construction of a wharf in the port of Vera Cruz, all of which will be spoken of in the 
 proper place. 
 
 441. The contract of May isth, 1873, was approved by the law of December 17th, of the same year, and 
 by virtue of it the company acquired the right of issuing securities bearing twelve per cent, interest, to cover the 
 nominal value of the $2,184,773 48 in shares which had not been placed; to issue other securities with the 
 same interest for $3,310,847, the amount of the freight on rolling material of the section between Mexico and 
 Puebla, and to issue securities or preferred shares, with the interest of eight per cent., on $5,059,800, the amount 
 of interest then owing, and which would be earned from the company up till the end of December, 1873. 
 
 442. By virtue of the approbation of the contract of May isth, 1873, the authority to fix the associated 
 capital of the company was modified in the following terms : 
 
 Capital issued in shares $11,315,226 52 
 
 Capital issuable in securities as a substitute for the amount of shares not issued 2,184,773 48 
 
 Capital issuable in securities, according to the law of November nth, 1868 13,500,000 00 
 
 Capital issuable in securities to cover the freight on material belonging to the section 
 
 between Mexico and Puebla 3,310,847 00 
 
 Capital issuable in securities, or preferred shares, to cover unpaid interest up till Decem- 
 ber 31st, 1873 5,059,800 00 
 
 Total $35,370,647 00 
 
 443. As article thirteen of the law of December 17th, 1873, authorized not only the change of securities for 
 unissued shares, but also their circulation in quantity sufficient to cover the value of the shares which they went 
 to replace, it is clear that the amount of the second item in the preceding summary might practically exceed the 
 $2,184,733 48, to which the value of the non-issued shares amounted, the greater or lesser increase of this sum 
 depending on the favor with which the new securities would be received, and the style of their circulation, which 
 was effected in circumstances acknowledgedly unfavorable, because they were offered in payment of a heavy debt. 
 In reality, when putting in practice the authority conceded to the company by the law of December 17th, 1873, 
 it was found that the new circulation of securities brought the company to the verge of ruin, and then, at the 
 proposal of Messrs. Juan N. Adorno and Ignacio Ibarrondo, directors of the railroad, representing the government, 
 the issuing of the new securities in substitution of shares not issued, as authorized by article thirteen of the said 
 law, was dispensed with, and the creditors accepted preferred shares in place of them. These shares earned a 
 conditional interest of eight per cent, annually, that is, in case there should be surplus funds after paying each 
 half-year the expenses of working the road and the interest on the securities borne out against the company. By 
 this arrangement the credits which were to be paid with the pledged securities ceased to acquire a privileged 
 character. 
 
 444. With respect to the payment of unadjusted interests up till December 31st, 1873, preferred shares were 
 also issued, bearing a conditional interest of six per cent, which would be paid only in case that earned by the 
 eight per cent, preferred shares should be paid over each six months. 
 
 445. This advantageous arrangement, suggested by Mr. Adorno, allows it to be hoped that the ordinary 
 shares of the railroad, among which are counted about $4,000,000 belonging to the Mexican Government, will 
 recover their value in proportion to the rate at which the company frees itself of the obligations which it now 
 supports. 
 
 446. By these arrangements the capital of the company is formed in the following manner : 
 
 Ordinary Shares $7,625,552 43 
 
 Shares belonging to the Mexican Government 3,689 674 00 
 
 Preferred shares bearing interest at the rate of eight per cent, per annum 12,707 500 00 
 
 Preferred shares bearing the conditional interest of 6 per cent, per annum 5,059,800 00 
 
 Bonds A, with interest at eight per cent, per annum 2 800 000 00 
 
 Bonds B, with interest at seven per cent, per annum e goo 000 00 
 
 ^°^^^ $37,782,526 52 
 
 441. Law of December 17th, 1873, approving of the contract of May 15th. 
 
 44?. Capital of the Company in conformity with the decree of November 17th, 1873. 
 
 443. The difficulties of augmenting the liabilities on the railroad and issue of preferred shares. 
 
 444. Issue of preferred shares for the payment of overdue interest. 
 443. Advantages of the arrangements proposed by Mr. Adorno. 
 
 446. Capital of the Company, by virtue of the arrangement agreed upon, $37,782,526 52. 
 
75 
 
 447- The issue of bonds A is reduced to $2,050,000, on account of having called in securities to the amount 
 of $750,000. Also, there has been paid up $713,000 of the primitive value of bonds B, of whose issue paper 
 remains out to the amount of $5, 187,000. On account of these cancellations of securities the company's capital 
 is reduced to $36,317,566 52. 
 
 F. EFFECTIVE COST OF THE MEXICO AND VERA CRUZ RAILROAD. 
 
 448. The amount of capital of the Mexican Railroad Company having been fixed, it is convenient, in order 
 to reduce the conclusions of the Report to their just value as to the profits rendered by the capital in this enter- 
 prise, and upon the result which, in its view of .this railroad, it might be conjectured that others built in Mexico 
 would reach, to enter into some considerations that will make clear the true cost of the railroad now treated of, 
 and that to which it might have been reduced without those grave errors which were committed in carrying on 
 the works of the enterprise. From these data, compared with the net product of the working, it can be seen 
 whether or not the capital employed in the raihroad does not yield a reasonably good interest. It would be neither 
 logical nor just to establish general rules deduced from an isolated case, and one in which many unfavorable 
 circumstances have centred. 
 
 449. In the first place, it must be noted that in conformity with the contract made by the grantee with 
 Messrs. Smith, Knight & Co., and recognized by the company in the agreement for transferring the concession, 
 the total cost of the railroad and telegraph, with all their stations, workshops, machines, apparatus and equip- 
 ment, was fixed at the sum of $26,195,600; and as the principal line and the Puebla branch measure 470 
 kilometres, the result is that the average price for each one, in conformity with that contract, is $55,735. But 
 as in this estimate the value of the sections already finished by Mr. Escandon was included, there should be 
 deducted from the cost the sum of two millions, which the company assigned to Mr. Escandon, giving him- twenty- 
 five per cent, of the amount of the subvention, and therefore the estimate for the raihroad will be reduced to 
 $24,195,600. 
 
 450. The company issued bonds during the building of the road to the value of $11,315,226 52, including 
 those belonging to the Government of Mexico, punctually paid, and issued two classes of securities : These were 
 the bonds A and B; of which two issues, that of the bonds A was made for the sum of $2,800,000, sub- 
 divided into denominations of ;^ioo each, earning eight per cent, interest annually, and they were realized at 
 eighty per cent, interest on their face, therefore the product of this issue was reduced to the sum of $2,240,000. 
 That of the bonds B was made for the sum of $5,900,000, in denominations of ;£^ioo each, which earned seven 
 per cent, annually, and were reahzed at the rate of seventy per cent, of their face value, so that for this issue the 
 cash received by the company was reduced to $4,130,000. 
 
 451. There is to be added to this amount the sum of _;^8oo,ooo, or about 4,000,000 obtained by the com- 
 pany as a loan from the years 1868 to 1870, these quantities being represented by paper which has now been 
 called in, and which earned twelve per cent, per annum. 
 
 452. The securities issued by the company amounted to $12,800,000, whose annual interest reached the 
 enormous sum of $1,116,000 ; but this sum was not uniformly earned from the beginning, but only in propor- 
 tion to the issuing of the securities. 
 
 453. During the construction of the railroad the section between Vera Cruz and Paso del Macho was 
 working, and it was afterwards extended to Fortin, in the same way that that of Mexico yrent out to Apizaco, 
 and was more recently carried forward to Puebla. From the working of these sections the company received, 
 up till the end of the year 1872, a net benefit of $1,378,792. The subvention produced in the same period, and 
 in conformity with the laws November 27th, 1867, and November nth, 1868, the sum of $2,240,000. It re- 
 ceived, in addition, $173,000 from the amount of the duty on import which it did not pay on that sum, and 
 which it probably negotiated in the market of the day, obtaining cash receipts for this exemption, seeing that 
 during the period of the building of the road larger sums were needed in the country. The product of the sub- 
 vention and that of the right of importation together make the sum of $2,413,000; but as a quarter part of this^ 
 or about $603,250, must be assigned to the concellation of the $2,000,000 corresponding to the transfer made 
 
 447. Posteriorly there has been paid up $1,463,000 in securities, leaving the capital reduced to $36,319,526 52. 
 
 448. The convenience of buying-in the amount of the capita] with the sum of the cost of the road. 
 
 449. The estimates of the worli are reduced to $24,195. 
 
 460. Securities issued by the Company at seven and eight per cent. 
 
 451. The loan of $4,000,000 at an annual interest of twelve per cent. 
 
 453. Amouni of annual interest reported by the Company. 
 
 453. Net product of the operation of the road during the time of its building. 
 
76 
 
 by Mr. Escandon to the company, this corporation could freely dispose of only $1,809,750 of the amount of the 
 subvention during the period of building the road. 
 
 454. The dates above given show that during the execution of the work on the railroad the company had 
 at its disposal the following sums : 
 
 Value of shares sold • $11,315,226 52 
 
 Amount realized from the sale of bonds A 2,240,000 00 
 
 Amount realized by the sale of bonds B 4,i3°>°°° °° 
 
 Amount of the loan at twelve per cent, interest 4,000,000 00 
 
 Earnings of the finished sections of the road • 1,378,792 00 
 
 Net product of the subvention paid from 1868 to 1872 1,680,000 00 
 
 Amount of the right of exportation on the above sum i29,75° °° 
 
 Total disposable $24,873,768 52 
 
 455. If this sum could be bought with the value of the part of the road which the company had to build, 
 deducting it from the contract of Messrs. Smith, Knight & Co., which amounted to $24,195,600, as has been ex- 
 plained, there remains a difference of $678,168 52 over anS above in the funds disposable by the company, with 
 respect to the estimated cost of the railroad in working order. 
 
 456. From what has been said it appears that during the execution of the work the company was able to 
 dispose of a greater sum than the entire cost of the railroad; so that the $27,000,000 of associated capital au- 
 thorized for the company by the law of November i ith, 1868, and which the company hafl in anticipation inserted 
 in its articles of incorporation, were disposable for the work. 
 
 457. But as, notwithstanding, the company afterwards solicited and obtained, by the law of December 17 th, 
 1873, an increase of its capital to the sum of $37,782,526 52, as has been shown, a surplus of $10,782,526 52 
 is shown in the cost of the work over and above the estimates. 
 
 458. The president of the company explained this difference before an extra general meeting, held in London 
 on November nth, 1874, saying that the road had been built at a cost within the estimates, and that the excess 
 of expenditure came from the unsettled interest on the securities given up on the road, and the amount of fre:ght 
 of the rolling stock of the section from Mexico to Apizaco and Puebla. 
 
 459. As has already been said, the unsettled interest up till December 31th, 1873, amount to $5,059,800, 
 for which sum preferred shares were issued, with the conditional interest of six per cent, yearly, and $3,310,347 
 ori account of the freights just named, both sums making a total of $8,370,147. 
 
 G. ERRORS COMMITTED IN THE BUILDING OF THE RAILROAD. 
 
 460. It has already been said that the company thought the railroad could be built for a sum within $26,- 
 195,600, at which its cost was calculated by Messrs. Smith, Knight & Co. The president also intimated that the 
 company attributed the excess of cost over that which was calculated for the work to the amount of freight on 
 the rolling stock of the section between Mexico, Apizaco and Puebla, and the interest on capital placed upon the 
 road and not paid during its building. , 
 
 461. As to the first point, that is, the cost of the freight on the rolling stock of the section between Mexico 
 and Puebla, it must be noted that the error' of desiring to build this section before the rest of the railroad from 
 Vera Cruz to Apizaco occasioned an exorbitant outlay ; for the freights were contracted at the rate of eighty- 
 eight, ninety-six and even up to one hundred and twenty-five dollars a ton from the port to the several points along 
 the line where material had to be left, this expenditure reaching $3,310,847 ; that nearly all this could have been 
 avoided by prosecuting the work from Vera Cruz towards Mexico, and the company carrying its material upon 
 its own road, without expenditure. But it went to work under the supposition that the operating of the sections 
 from Mexico to Apizaco and Puebla during the time of the construction of the railroad alone would leave a net 
 profit of $1,157,005 ; that is, nearly one-half of the cost of transporting the material of this section. 
 
 454. During the building the Company was able to dispose of $34,873,768 52 in cash. 
 
 455. Difference between the disposable funds and the estimates of Messrs. Smith, Knight & Co. 
 
 456. The Company was able to cover in due time the entire amount of the estimates. 
 
 457. Increase of the Company's capital to the sum of $37,586 53. 
 
 458. The difference comes fiom unpaid interest and freight for material on the Puebla section. 
 
 459. The expenses of the Company, outside the estimates, amount to $8,370,147. 
 
 460. Errors committed in the building of the railroad from Mexico to Vera Cruz. 
 
 461. The error of building first the section between Apizaco and Mexico. 
 
77 
 
 462. The circumstance of Mr. Escandon being the grantee of the railroad and at the same time proprietor 
 of lands and factories in the neighborhood of Orizaba, had a great share in another of the grave errors which 
 were committed in the execution of the work by tracing it from Orizaba without taking into consideration the 
 central tracing between Jalapa and Orizaba, proposed by Mr. Arrillage, who, having caused engineers' formal ex- 
 plorations to be made, projected a Une which he recommended with powerful reasons. In his idea it obviated 
 some expensive works that had to be made on the Orizaba road, affording at the same time the advantage of 
 reducing and regularizing the place of ascent which should indispensably have to be overcome to get over the Cordil- 
 lera and reach the valley of Mexico; and, lastly, it considerably lessened the distance which the railroadhad to run. 
 This circumstance alone, even when other difficulties existed, was very deserving of attention, above all, in treat- 
 ing of the first railroad in the country, in order to diminish its great cost, while local traffic and that of exportation 
 could be created under its shadow. The project of Mr. Arrillage fixed the total length of the Hne between Vera 
 Cruz and Mexico by way of Apizaco at seventy-two leagues, or 302 kilometres, and according to the adopted 
 tracing the line measures 423 kilometres without counting the branch from Apizaco to Puebla. 
 
 463. If the estimates of Messrs. Smith, Knight & Co. be taken as the basis, the result is that the average cost 
 is $55,735 for each kilometre, so that for the 121 kilometres — being the difference between the tracing of Arril- 
 laga and that by way of Orizaba — there will be a difference of $6,743,935 in the cost of the work ; that is to say, 
 from only the two errors which have been pointed out. That is, the primitive building of the section from 
 Mexico to Puebla and the adoption of the injudicious tracing by way of Orizaba produced an excess of expendi- 
 ture which may be set down at $10,054,782, a sum which in itself almost equals the excess of the cost of the road 
 over the estimates, without including the considerable cost of the assigned interests up till December, 1873. 
 
 464. It may be asserted, then, that the execution of the work suffered from grave errors, which uselessly in- 
 creased the cost, and it would remain plainly proved that to them very principally it must be due that the capital 
 invested in the enterprise does not gain an adequate profit; especially if, even setting aside other considerations 
 it could be estabUshed that with the cost of the road reduced to the $27,000,000 capital stated in the company's 
 articles of association, and even in the disadvantageous conditions under which the road has been worked, the 
 working is not ruinous but productive, and capable of raising hopes of better results in the future. 
 
 465. The statement should not be omitted here, although it is difficult to formulate general observations on 
 bint, that the company contracted at the beginning to pay very onerous interests. Fortunately the paper 
 
 |ch samed twelve per cent, has already been called in — a rate that perhaps could not be avoided — and fortun- 
 ately also this rate was not accepted, but that of eight per cent., for the securities issued by virtue of the decree of 
 December 17th, 1873. 
 
 H. THE PRODUCT AND EXPilNSES OF WORKING, AND PROFITS OF THE VERA CRUZ RAILROAD. 
 
 466. The considerable increase in the cost of the railroad, which the errors just mentioned produced, and 
 which amounted to the unnecessary outlay of millions of dollars, is one of the reasons in which the opinion 
 already given is founded, to the effect that the fact of the Vera Cruz and Mexico railroad, not having until now 
 produced favorable results, could not be taken as a basis on which to calculate the profits of railroads, that might 
 be constructed in Mexico, seeing that it was built under exceptional circumstances, which probably wiU not be 
 repeated. But this reason, taken by itself, would not be sufficient to clearly explain why the traffic on the Vera 
 Cruz railroad has not, during the first years of its working, considerably increased, a circumstance which is owing 
 to the concurrence of other powerful causes that it is necessary to mention in order to disprove the assertion 
 made on this point in the Report, to the effect that the Mexicans are remiss in the adoption of new methods. 
 
 467. Until now, and notwithstanding that the road is more than five years in working order, not a single 
 branch has been built to place it in communication with other markets, so as to furnish it with some additional 
 traffic to that which has always existed between Mexico and Vera Cruz. Even the branch between Esperanza 
 and Tehuacan is not yet finished. The company was bound by the contract of March 15th, 1873, to build a 
 branch from San Marcos to Jalapa, but it has not complied with this stipulation, and intends to free itself from it. 
 As the railroad now exists, it is only an isolated line, which has not much more traffic than that which there was 
 between Mexico and Vera Cruz and intermediate points before the building of the road; and this, doubtless. 
 
 462. The grave error of having built the railroad by way of Orizaba. 
 
 463. Both errors produced the useless outlay of $10,054,788. 
 
 464. But for these errors the railroad would now be paying. 
 
 465. Heavy charge owing to the onerous interests earned by the securities. 
 
 466. These errors, and other causes, prevent the calculation of the working of other roads in Mexico, upon the pres- 
 ent results of that of Vera Cruz 
 
 467. Causes which impede the increase of the traffic on the Vera Oruz railroad. 
 
78 
 
 comes from the want of branches to put it in communication with other centres of production and consumption, 
 which thus might contribute to the general movement. Without those branches, and there being no other rail- 
 road in the country which could join itself to that of Mexico and Vera Cruz, it is clear that the general condition 
 of mercantile traffic now exist in the interior of the country in nearly the same state as before the working of the 
 Vera Cruz and Mexico railroad. For this reason all the States which supply themselves with foreign merchandise 
 imported through VeVa Cruz, do not yet obtain a positive advantage from the railroad, so far as refers to the cost 
 of interior transportation ; because they are yet under the necessity of using the common wagon road for nearly 
 all the distance which separates them from the city of Mexico, the centre of the traffic. In so far as concerns the 
 time of receiving that merchandise, they have been only partially benefitted ; for as the railroad facilities are 
 reduced to the line between Vera Cruz and Mexico, the slow and difficult means of communication by ordinary 
 wagon roads still subsists ; and this, during the rainy season, which lasts half the year, makes traffic very expensive, 
 and produces great damage to the goods — circumstances which nearly paralyzes the commercial movement in the 
 wet season. 
 
 468. Notwithstanding, it cannot be denied that the railroad has gone on improving year by year in the work- 
 ing of it, as the following data will prove : 
 
 Number of tons of rooo kilogrammes transported by the railroad from Vera Cruz to Mexico. 
 
 From Vera Cruz From Mexico 
 Years. to Mexico. to Vera Cruz. Total. 
 
 1874 84,Qpr 30,026 114,027 
 
 1875 88,345 3S,978f 124,323! 
 
 1876 87,259 36,258 123,517 
 
 1877 98,232^ 47,o94f i45,327i 
 
 469. The following figures show the movement of passengers on the raihoad during the years embraced in 
 them : 
 
 Number of passengers transported by the Vera Cruz Railroad. 
 
 Years. 1st Class. 2(1 Class. 3d Class. lbs. Total. 
 
 1875 17,267 47,944 180,469 5,221 250,892 ^ 
 
 1876 12,363 25,334 143,271 3,°°i '^^'S^IIT'^ 
 
 1877 15)795 44,362 204,002 4,005 268,r64' 
 
 *i878 9,125 23,662 99,096 2,3r8 134,201 
 
 * From January till June. 
 
 470. The general products of the road; the expenses and surplus are the following : 
 
 Years. Total Receipts. Cost of Working. Net Profits. 
 
 1873 $2,117,553 1,290,563 1,826,990 
 
 ^874- 2,347,576 1,225,131 I,I2T,445 
 
 1875 2,370,606 1,249,332 1,121,274 
 
 1876 2,178,147 1,348,465 829,682 
 
 1877 2,700,007 1,535)91° 1,104,997 
 
 *i878 1,527,401 757)955 769,446 
 
 * From January till June. 
 
 471. The above data show that notwithstanding the circumstances which have contributed to produce the 
 result that the operating of the railroad remains almost limited to the traffic carried on by the port of Vera Cruz 
 with the city of Mexico, the trade has increased considerably, principally in the years 1877 and the first six 
 months of 1878. 
 
 472. In their twenty-seventh half-yearly report the directors of the company state that the interest on the 
 bonds A and B are punctually paid. 
 
 473. It should be remembered that the foregoing data refer only to the line from Vera Cruz to Mexico* and 
 the branch to Puebla. But besides, by the agreement of March 15th, 1873, approved by the law of December 
 of the same year, the transfer to the Mexican Railroad Company was approved, whereby it obtained the conces- 
 
 468. 
 469. 
 470. 
 471. 
 472. 
 
 Figures of the freight carried by the railroad from 1874 to 1877.. 
 
 Figures of the passengers carried by the railroad from 1875 to June, 1878. 
 
 Earnings, expenditures and profits of the working from 1873, to June, 1878. 
 
 The preceding data prove that the traflBc of the line of "Vera Cruz is increasing. 
 
 The directors of the Vera Cruz railroad recognize that the interest on the secrities A and B, are paid. 
 
79 
 
 sion to build a tramway from Vera Cruz to Jialapa, and a railroad from Jalapa to join the line from Vera Cruz 
 to Mexico at San Marcos j and, therefore, the enterprise reports, in addition to the legitimate securities of the 
 Vera Cruz railroad, others issued by the company to the amount of $1,330,000 in denominations of ;£'ioo each, 
 which earn an interest of seven per cent, yearly, and which were negotiated at seventy per cent, on their face. 
 These securities are charged to the Vera Cruz railroad. 
 
 474. The obligations imposed upon the Jalapa road, and at the same time upon that of Vera Cruz, to face 
 the payment of the amount of freight incurred by the former, and at the same time to continue building it, which 
 obligations were negotiated at a discount of $399,000, are, and will be, an onerous charge upon the Vera Cruz 
 hne, while the former is not united with the latter by the building of the branch from Jalapa to San Marcos, 
 affording by this means a double road to Vera Cruz, and direct traffic with Puebla, without the roundabout by 
 way of Apizaco. The products of the Vera Cruz road have been used to pay for the price of the transfer, 
 settled at $1,250,060, payable at once, and $20,000 annually for the period of twenty years, for the payment of 
 interest on the securities referred to, which, at the commencement, amounted to $93,100, but which are now 
 only $66,188 50, on account of having cancelled securities of this sort to the value of $384,450, and to continue 
 the road to Jalapa, whose cost was calculated at the time of executing the transfer at the rate of $12,400 each 
 kilometre ; and, as the company had to build fifty-nine out of the ninety-eight, which there are between the 
 Tejeria and Jalapa, an approximate expenditure of $731,000 is the result deduced from these data. 
 
 475. The line of Jalapa has not yielded profits since the first six months of 1878, in which period the 
 receipts were $39,257, and the expenditures $36,657, leaving a small surplus of $2,600, which falls far short of 
 repaying the losses of former years, and, of course, of freeing the Vera Cruz line from the charges which 
 it supports, on account of the exceptional situation of that of Jalapa. 
 
 476. From what has been said, the result is that the line from Vera Cruz to Mexico, from the commence- 
 ment of its operation in general, and even from the time when only some of its sections were opened to public 
 service, has paid expenses and kft profits which have gone on gradually increasing, and which, on an average, 
 can be estimated at $1,060,950 yearly, independently of the amount of the subvention, which is again nearly in 
 the way of being paid. It is necessary, however, to note, that the earnings of the year 1877, and those of the 
 first half of 1878, admit of hope that the surplus over working expenses will exceed the average just given. 
 
 477. If the railroad had been built without the errors which have already been noted, and at a cost within 
 that estimated by the company, the average earning thus far obtained in the operation of it, over and above the 
 expenses and the subvention, would be producing six per cent, on the $27,000,000 of the company's primary 
 capital. But as it appears from what has been said, that the railroad has cost $36,319,526 52, and that to this 
 amount must be added the sum of $945,550, the value of the securities of the Jalapa tramway, the result is that 
 the earnings ought to be compared with the total cost of the road, which is $37,265,076 52, and, therefore, the 
 profits reach only four per cent, on the capital invested. 
 
 478. The foregoing data clearly show that the assertion in the Report with respect to the Vera Cruz rail- 
 road yielding only from three to five per cent, on its capital is at bottom correct ; but at the same time the ex- 
 ceptional circumstances of this line are sufficiently explained, and it remains proved that the fears based upon 
 the working of this road, which are entertained, to the effect that capital invested in Mexican railroads would 
 not yield paying profits, rest upon an unfavorable and isolated event, and therefore it can not serve as a 
 basis from which to deduct general conclusions, which would be inapplicable to[the case. As for the rest, as the 
 average of the annual interest of money in Europe is from three to four per cent., it could not be said that this 
 profit from Mexican raikoads would be unacceptable, although it might be gathered from what has been set down 
 that greater profits could be obtained. 
 
 479. When the Board of Directors of the Vera Cruz raihroad gave an account in London to the sharehold- 
 ers, at their periodical meetings, setting forth the state of the enterprise and the progress which it has made, those 
 who are interested expressed their satisfaction, especially regarding the last years, by means of a vote of thanks 
 
 473. The Vera Cruz railroad Company reports, besides, $1,330,000 for the line from Vera Cruz to Jalapa. 
 
 474. Charges reported by the Vera Cruz line, until the Jalapa and San Marcos branch be built.. 
 
 475. The line from Vera Cruz to Jalapa reports losses instead of gains in its workings. 
 
 476. Present favorable state of the railroad from Vera Cruz to Mexico. 
 
 477. If errors had not been committed the railroad would pay six per cent, on its capital, instead of four, which it 
 now does 
 
 478. Ths conclusions of the Report with respect to the interest which the Vera Cruz Railroad pays on the capital in- 
 vested in it. 
 
 479. The shareholders of the Vera Cruz Railroad show themselves satisfied with the results. 
 
80 
 
 to the Board of Directors. When the parties interested express themselves satisfied with their business, it does 
 not appear that there is reason to look upon the enterprise of the Vera Cruz railroad as a bad investment. 
 
 I. THE RATE OF FREIGHTS CHARGED BV THE VERA CRUZ AND MEXICO RAILROAD. 
 
 480. It has been sufficiently explained that because of the errors committed in the building of ^the railroad 
 from Vera Cruz to Mexico, its cost was increased, and the interests of the company very considerably compro- 
 mised. If to these powerful reasons be added that of high freights which the Vera Cruz Railroad company had 
 charged up till November 24th, 1878, for the transportation of merchandise, which held out no inducements for 
 the exportation of national fruits, the exceptional circumstances which have occurred in the railroad from Vera 
 Cruz to Mexico will be well understood, notwithstanding the advantages of the tracing, relatively short, and of its 
 traversing a rich and well populated section of the country, have been such that they have not favored the crea- 
 tion of the traffic which railroads excite. 
 
 481. The law of November 27th, 1867, established a rate of freights between Vera Cruz and Mexico which 
 should not exceed the following prices : 
 
 # Equivalent per ton of 
 
 2,240 lbs. of 1.000 kilogrammes. 
 
 ist class, $14 00, cargo of i6@ 77 29 76 65 
 
 2d " 12 00 " i6@ 66 25 65 18 
 
 3d " 1000 " i6@ 5520 5432 
 
 482. The freight on partial sections was to be proportional to the distance covered. It was also laid down 
 that after ten years the rates of freight should, upon hearing the company, be modified ; but in such manner as 
 that these modifications should not impede the distribution of dividends among its shareholders, so that they 
 would not fall below twelve per cent. 
 
 483. The same law also estabhshed the following reductions on national goods : For national goods from 
 Mexico to Vera Cruz, forty per cent. 
 
 Equivalent per ton of 
 3,240 lbs. of 1,000 kilogrammes, 
 
 ist class $8 40 cargo of 16 arrobas , 46 37 45 63 
 
 2d " 7 20 " " " 39 75 39 II 
 
 3d " 6 00 " " " 33^ 12 32 59 
 
 By the law of November nth, 1868, the following reductions were established: For national goods from 
 Mexico to Vera Cruz, 60 per 100. 
 
 ist class, $5 60, cargo of 16 arrobas $30 91 30 42 
 
 2d " 480 " " 2650 2607 
 
 3d " 4 00 " " 22 08 21 73 
 
 484. The law of November nth, 1868, modified the rules cited in that of November 27th of the previous 
 year, laying down that the reduction to be enjoyed by national goods in the rate of transportation from Mexico 
 to Vera Cruz should be sixty per cent, and twenty per cent, on the same class of goods that might be transported 
 from Vera Cruz towards Mexico, and lastly that the government should modify the rates, after hearing the com- 
 pany, and two years from the time of putting the railroad in working order; but without preventing the profit on 
 the shares from falling below twelve per cent. 
 
 485. Fixed as the basis was for the lowering of the freights, without preventing the shares of the enterprise 
 from earning twelve per cent, annual profit, it will be understood that the power of the government to lower them 
 was illusory. For this reason the basis was completely changed in the agreement of March 15th, 1873, approved 
 by the law of December 17th of the same year, whose first articles fixed the maximum rate of freight for goods 
 intended for perpetual exportation at two dollars for the cargo of sixteen arrobas, or $11 04, more or less, for the 
 EngKsh ton. As by the same law the company was authorized to construct and work a metallic wharf in the 
 
 The freights charged by the railroad from Mexico to Vera Cruz have prevented the increase of traffic. 
 
 Freight regulations by the contract law of November 27th, 1867. 
 
 The rate of freights should be modified each decade, but so as to secure twelve per cent, dividend to share- 
 
 480. 
 
 481. 
 
 482. 
 
 holders. 
 
 483. Modification of the freights established by the contract of November 27th, 1867. 
 
 484. Regulation of the law of November 11th, 1868, concerning freights. 
 
 485. Regulation concerning freights made by the contract of March 15th, 1873, approved by the law of December 
 17th, following. 
 
81 
 
 port of Vera Cruz, it was established that the maximum freight for goods intended for exportation, when the 
 wharf was used, should be $3 for the cargo of 16 arrobas, or $16 56, more or less, for the EngUsh ton of 2,240 
 pounds. To the maximum of this tariff the company had adjusted its prices on all classes of goods up till Novem- 
 ber 24th, 1878, after which date the rate laid down on the nth of the same month came in for all national goods 
 intended for exportation which might be conveyed from Mexico to Vera Cruz, which divided merchandise 
 
 into three classes, fixing the following prices : 
 
 Equivalent per ton of 
 2,3 to \\)9.. ot 1,000 kilogrammes. 
 
 ist class $3 per cargo of i6@ 1656 1629 
 
 2d " 2 " " " i6@ II 04 1086 
 
 3d " 125" " " i6@ 690 679 
 
 486. It is to be hoped, with the freights reduced in the proportion above cited, that the development of the 
 export trade will speedily be felt to the benefit of the trade and of the enterprise. To this end it does not seem 
 hazardous to consider as assured the extinction of the company's heavy debt, and later on a certain profit to the 
 share-holders ; a profit which will come all the sooner by the company's taking into account the necessity of 
 aiding the creation of local commerce and exportation through the cheapness of its freight rates. 
 
 487. It will operate, doubtlessly, in the operating of the branches from Esperanza to Tehuacan, from 
 Matamoros Izucar to Puebla, and from Pachuca to Ometusco, which are now in course of construction, and 
 which can bring to the Vera Cruz railroad the agricultural and mineral products of important sections of the 
 country. 
 
 8. SUMMARY OF RAILROADS BUILT IN MEXICO AND THE AMOUNT OF SUBVENTIONS PAID. 
 
 488. This Study, which has just been made of the railroads in Mexico, would not be complete without setting 
 down, before finishing it, the number of kilometres that have been built in the country, and how many have been 
 paid by the pecuniary subventions contracted with the different Unes constructed. 
 
 A. SUMMARY OF THE RAILROADS BUILT IN MEXICO. 
 
 489. The railroads mentioned in the following statement from the office of the Secretary of the Interior are 
 those which have been, up till the present, built in Mexico : 
 
 " Mexican Repubhc — Offifce of the Secretary of the Interior, Colonization, Industry and Commerce — 
 
 Mexico. 
 
 " Statement which shows the length in kilometres of the railroads built : 
 
 Kilometres. Metres. Totals. 
 The Vera Cruz line has built from that port to this city 423 750 
 
 Branch from Puebla to Apizaco 47 
 
 470 75° 
 
 The Une from Mexico to Toluca has built from Mexico to Cautitlan. . . 33 130 
 
 From Tacuba to San Bartolo, in the direction of Toluca 5 360 
 
 • • 38 490 
 
 The line from Merida to Progreso has built 24 
 
 The Hne from Celaya to Leon 10 
 
 The line from Tehuacan to Esperanza 17 
 
 The Une from Morelos to the Garita de San Lazaro, and thence forward 3 
 The Une from Tlalpam, Tacubaya and other connections of the Federal 
 
 District RaiUroad Company has built 70 167 
 
 The Une from Vera Cruz to Jalapa has built 112 
 
 The Une from Vera Cruz to MedeUin 22 
 
 Total 767 4^7 
 
 Mexico, January 9th, 1879. (Signed) Riva Palacio." 
 
 400 The foUowing statement, also furnished by the office of the Secretary of the Interior to that of Finance, 
 
 gives the number of railroads contracted for with the Governors of States, their length, and the sums which they 
 
 ought to receive as subventions, and also the conditions of their payments. 
 
 486 It is to be hoped that with the reduced freights the traffic on the road will increase. 
 
 487 The branches from Esperanza to Tehuacan, from Ometusco to Pachuca, and from Puebla to Izucar, will give the 
 
 same results. 
 
 488. Summary of the railroads built in Mexico and the amounts paid for subventions. 
 
 489 Information given by the Secretary of the Interior with respect to the railroads built in Mexico. 
 
 490 Information from the Secretary of the Interior concerning railroads contracted for and about to be built. 
 
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83 
 
 B. SUMS PAID BY MEXICO FOR THE BUILDING OF RAILROADS. 
 
 491. Notwithstanding that the financial situation of the Republic has been faithfully sketched in the preced- 
 ing observations, she has been able to pay up till now, with more or less difficulty — sometimes behindhand — the 
 amount of the subventions contracted by her. 
 
 492. The following statement formed by the General Treasury of the nation shows the sum which each rail- 
 road contracted for by Mexico has acquired through subvention, what has been paid on account, and what is due 
 up till this date : 
 
 " General Treasury of the Federation, First Bureau, Section Third. 
 
 " Statement of the payments made in the periods expressed herein on account of the General Department of 
 Railroads. 
 
 From Vera Cruz to Mexico by way of Orizaba. 
 
 On account of subvention $7,056,619 23 
 
 On account of shares 3,669,252 21 
 
 Total $10,725,871 44 
 
 From Vera Cruz to Jalapa. 
 On account of subvention in conformity with the decree of May 26th, 1868 $290,000 00 
 
 From Merida to Progreso. 
 
 Decreed on December 17th, 1874, subvention $6,000 for each kilometre. 
 
 Subvention earned on 20 kilometres already finished $120,000 00 
 
 Paid till December 31st, 1878. •. 117,676 32 
 
 Balance in favor of the road $2,323 68 
 
 From Mexico ta Tlalpam. 
 
 Shares purchased from the old company at the cost of the revenue $291,850 00 
 
 Disposed of at public sale 203,400 00 
 
 On hand $88,450 00 
 
 From Vera Cruz to Medellin. 
 
 Subvention paid in conformity with the decree of September 6th, i860 $10,000 00 
 
 Shares purchased at the cost of the Federal Revenue 55, 000 00 
 
 Total $65,000 00 
 
 From Mexico to Toluca and Cautitlan. 
 
 Subvention earned in conformity with the law of October loth, 1870 $48,000 00 
 
 do do December 22d, 1877 80,000 00 
 
 Total $128,000 00 
 
 Paid up till December 31st, 1878 $128,258 14 
 
 Balance against the road $258 14 
 
 From Tchuacan to Esperanza. 
 Invested up till December 31st, 1878 $128,172 29 
 
 From Pachuca to Tulancingo. 
 InvesteduptiU December 31st, 1878 $8,858 71 
 
 491. Mexico has paid the subventions granted to railroad lines. 
 
 493. Statement of the General Treasury, with regard to the amounts paid for railroad subventions. 
 
84 
 
 From Mexico to Amacusac. 
 
 Subvention earned in conformity with the contract of April i6th, 1878. $24,000 00 
 
 Paid up till December 31st, 1878 10,937 80 
 
 Total $i3>o62 20 
 
 From Texmelucan to Panzacola. 
 Invested up till December 31st, 1878 $S;37S 74 
 
 From Celaya to Leon. 
 
 Subvention earned in conformity with the decree of December 21st, 1877 $80,000 00 
 
 Paid up till December 31st, 1878 76,3Si 89 
 
 Balance in favor of company $3)648 1 1 ^ 
 
 From Celaya to San Juan del Rio. 
 Invested up till November 30th, 1878 $7)76s 95 
 
 From San Luis to Tamesi. 
 Invested up till November 30th, 1878 $2,624 87 
 
 Summary of what has been paid. 
 
 To the Vera Cruz Railroad $10,725,871 44 
 
 do Vera Cruz and Jalapa Railroad 290,000 00 
 
 do Merida and Progreso Railroad 117,676 62 
 
 do Mexico and Tlalpam Railroad 291,850 00 
 
 do Vera Cruz and Medellin Railroad 65,000 00 
 
 do Mexico and Toluca Railroad 128,258 14 
 
 do Tehuacan and Esperanza Railroad 128,172 29 
 
 do Pachuca and Tulancingo 8,858 7 1 
 
 do Mexico and Amacusac Railroad io,937 80 
 
 do Texmelucan and Panzacola Railroad 5,375 74 
 
 de Celaya and Leon Railroad 76,351 89 
 
 do Celaya and San Juan del Rio Railroad 7,765 95 
 
 do San Luis and Tamesi Railroad 2,642 87 
 
 Total $11,858,761 15 
 
 " Note. — The subvention of the Vera Cruz and Jalapa Railroad has been refunded to the revenue in accord- 
 ance with the terms of the decree above cited. In the fixed sum the item of $16,500 which was paid under 
 order of June 19th, 1877, as an extra subvention, is not included." 
 
 " Note. — The difference between what has been earned and what has been paid, with respect to the Mexico, 
 Toluca and Cautitlan road, will be applied to the new section that is in course of construction." 
 
 "Mexico, January loth, 1879. 
 
 J. E. Perez (signed) Bonifacio Gutierrez. Revised — Cardena." 
 
 493. The result of the preceding data is that out of a total debt of $11,877,795 M, incurred by Mexico on 
 account of rail subventions for existing contracts, the nation has paid, notwithstanding its financial difficulties, 
 the sum of $11,858,761 15 and that only the following sums are awaiting payment : 
 
 To the Merida and Progreso Railroad $2 ^2^ 68 
 
 " Celaya and Leon " , 5^3 j j 
 
 " Mexico and Rio Amacusac Railroad i , 062 20 
 
 '^°'^^1 $i9,°33 99 
 
 494. It is true that the Vera Cruz railroad was not paid the subvention of $560,000 a year, from July, 1876, 
 till October, 1878 ; but as, according to the Hquidation made out by the General Treasury of the Federation in 
 
 493. Statement of the sums owing on account of railronds built in Mexico. 
 
 494. Causes by which the subvention to the Vera Cruz railroad is not considered as pending. 
 
85 
 
 August, 1872, the company appears owing to Mexico the sum of $3,240,500 48, which exceeds the amount of the 
 subvention corresponding to the same period, the Mexican Government could not be considered as debtor to the 
 company for that subvention. It is true that the company did not accept this hquidation, and that it resorted to 
 the courts, where the question is still pending ; but while a decision has not been given against Mexico, the gov- 
 ernment IS in the right to consider as good the liquidation rendered in its own offices. But even if this were 
 otherwise, Mexico would not be owing the sum of $1,260,000, which represents something hke ten per cent, of 
 the total amount paid for railroad subventions. 
 
 495. If Mexico has been able to pay nearly all the sums that she has conceded as subventions to railroads, 
 devoting to this object the heavy amount of $11,858,761 15 of her scanty revenues, and if she has been able to 
 make these payments while she was impoverished and nearly ruined, having her public treasury in disorder, 
 because the outlays greatly exceed the income, with her debt depreciated on account of not having been able for 
 a long time to pay the interest on it, how will it be when, through the building of the railroads, they begin to de- 
 velope her immense elements of wealth ? It seems certain that then it will be possible to pay, with greater ease 
 than now, the subventions contracted for, notwithstanding that their amount may be much greater. 
 
 9. SUMMARY OF THE DIFFERENT FACTS REFERRING TO THE CONSTRUCTION OF A RAILROAD FROM THE CITY OF 
 
 MEXICO TO THE FRONTIER OF THE UNITED STATES. 
 
 496. From the preceding statement the following facts appear demonstrated, relating to the building of rail- 
 roads in Mexico, and especially of a hne from this city to the frontier of the United States : 
 
 First, That the conditions laid down by Mexico in the concessions which have been granted for the building 
 of railroads in her territory have not for object that of rendering these works difficult in execution, but only to 
 prevent the abuse of such concessions, which might be used to the prejudice of Mexico, and which by means of 
 the- conditions cited, it has been intended only to counterbalance the rights of foreign grantees with those enjoyed 
 by the Mexicans. 
 
 Second, That these conditions do not render the building of railroads impossible, seeing that in conformity 
 with them the principal line now in the country has been constructed from the city of Mexico to Vera Cruz, and 
 that several others are in the way of being built, although of smaller extension and less importance. 
 
 Third, That the clause referring to the renouncement of justice, which has generally been included in these 
 concessions, has not for object that of depriving the grantees from the ample resources conceded them by the 
 laws, and in general to all the inhabitants of the country, but only to avoid the abuse which would result to 
 the Republic if the private and interior affairs of Mexico were converted into diplomatic and international 
 questions. 
 
 Fourth, That there is actually no hostility or resistance, on the part of the Mexican nation or of its Govern- 
 ment, to the building of railroads within its territory, by companies or private parties belonging to the United 
 States; for, though before the war of intervention public opinion might be considered as but little favoring those 
 concessions, this has changed remarkably since then, notwithstanding the fears which the conduct of the present 
 Administration in the United States has inspired in Mexico. Neither has the state of pubhc opinion in Mexico 
 before the intervention prevented the granting of several important concessions for the construction of railroads 
 in the country to North American citizens, admitting that in that period valuable concessions were granted to 
 American citizens. The first temporary privilege to introduce steam engines into Mexico were conceded by 
 Iturbide in 1822, to James Smith Wilcox. The first stage line that ran from Mexico to Jalapa was established in 
 1 83 1, by a North American enterprise. In the year 1851 a concession was granted to Jonas P. Levy to connect 
 the Gulf with the Pacific across the north of the Isthmus of Tehuantepec; and this concession included a line of 
 steamers. In October 31st, 1853, a privilege was conceded to Mr. Alexander Antocho, an American citizen, to 
 construct a railroad from Paso del Norte to Guaymas. On November 15th, 1854, a privilege for the working of 
 coal and iron mines was given to Lorezo de Zavala, Edward Lee Plumb and C. Maillard, the first two being 
 American citizens and the last a Mexican. November 24th, 1854, a privilege was granted to J. R. Moore and 
 associates to build a railroad from the northern frontier to some point on the Pacific. 
 
 Fifth, That it does not appear that Mexico has viewed with fear the proposition which Senator Morgan, of 
 the State of Alabama, presented in the Senate of the United States, in May, 1878, with respect to the building 
 of a railroad from Mexico to the frontier of the United States, under the guarantee of the Governments of both 
 countries. 
 
 495. Probabilities that Mexico will pay the sums contracted as subventions to railroads. 
 
 496. Summary of the facts concerning the building of the railroads in Mexico, and of the international line. 
 
86 
 
 Sixth, That the speeches pronounced by the Deputy Alfredo Chavero, on May 22d, 1878, in the Chamber 
 of Deputies, and on September i6th, of the same year, at the installation of the Ninth Congress of the Union, 
 with respect to the construction of railroads in Mexico by North American companies, besides not expressing the 
 opinion either of the Government or of the country upon this subject, was not founded alone in the danger that might 
 result to the independence of Mexico in making these concessions, but also in the motives and considerations that 
 are appUcable only to a sohtary case, among which considerations figured the fear that the company which 
 solicited the concession was not solvent, and also the jealousy inspired by the policy followed by the present 
 Administration in the United States towards Mexico. 
 
 Seventh, That even supposing that the opinions of Deputy Alfredo Chavero had the character imputed to 
 them by the Report, they could not be taken as the opinion of the Government of Mexico, nor of the people, 
 with regard to the building of railroads in this country by companies composed of citizens of the United States. 
 
 Eighth, That in the United States opinions contrary to the interests of Mexico are freequently expressed, 
 without giving place to the belief that therefore we think here that the feelings of the Government, or of the 
 people of that nation, are thus expressed. 
 
 Ninth, That in consequence of the proximity of the United States lines oi raihroads to the Mexican frontier, 
 the building of the international road appears now more ]»obable than formerly. 
 
 Tenth, That with regard to pecuniarily aiding the building of raikoads in Mexico, the Government of this 
 country has followed the system of conceding a subvention in all contracts made to this end. 
 
 Eleventh, That it is not correct that the international raiboad would have to pass over great deserts, nor 
 that it would encounter difficulties through the slowness of the Mexicans to accept the habits of more civihzed ■ 
 life. 
 
 Twelfth, That even when the state of the public treasury in Mexico has been, and is, unsatisfactory, this has not 
 prevented, until now, the regular payment of the subventions contracted with the companies building the rail- 
 roads. 
 
 Thirteenth, That as the contruction of railroads in Mexico would develop the elements of her vast national 
 wealth, it would also increase the public revenues to such manner as to permit the payment of the stipulated 
 subventions. 
 
 Fourteenth, That the publications made in the case mentioned by the Report, leferring to the sending of 
 $50,000 to the northern frontier for miKtary outlays, had for object that of answering charges made by the 
 opposition press of Mexico, and they cannot be taken as a measure of the pecuniary situation of the country. 
 
 Fifteenth, That it is not correct that Mexico has in Europe a debt amounting to $125,000,000, guaranteed 
 by treaties, seeing that the amount of the capital of former conventionalized debts was hardly $12,413,690 89, 
 and on account of the European nations that had allied themselves against Mexico, having recognized the order 
 of things established by the foreign intervention, the treaties were broken, and the debt lost the character given 
 to it by the old conventions, and it remained as a debt of Mexico in favor of private parties, without any inter 
 vention on the part of the respective Governments. 
 
 Sixteenth, That the total debt of Mexico, in conformity with the last liquidation made, and the arrangement 
 entered into with the creditors on December 6th, 1878, is only $117,193,727 86, which capital remains reduced 
 by the ratification of these arrangements to $59,999,310 54 paying an interest of $3,532,328 54 yearly, which 
 will commence to wholly run after the finishing of a railroad from this city to the Pacific, to which work the cred- 
 itors themselves have agreed, and at the end of six years from the date of the agreement. 
 
 Seventeenth, That the debt which Mexico contracted with the United States in 1865 and 1866, does not 
 represent a capital of $2,700,000, as is said in the Report, but a capital which only amounts to $1,869,764 eg, 
 and its separate interests to $1,366,843 25. 
 
 Eighteenth, That the pledge which Mexico could ofi'er on her pubUc revenues has not been questioned, and 
 it is eagerly sought by companies and by private parties who enter into contracts with this country. 
 
 Nineteenth, That the number of concessions granted for the building of railroads since 1865, up till this 
 date, in favor of companies or private parties belonging to the United States, shows that, far from there having 
 been jealousy or want of will on the part of Mexico, with respect to citizens of the United States, they have re- 
 ceived the greatest number of concessions that has been granted in favor of citizens of any other foreign nation- 
 ality, or even Mexicans, if the contracts recently entered into with the several State governments be excepted, 
 admitting that nineteen concessions have been granted to citizens of the United States, while all the concessions 
 granted to persons of other nationaUties since then are but fourteen, of which four were given to foreigners and 
 the rest to Mexicans. 
 
87 
 
 Twentieth, That the object of the authority conceded by Congress to the Executive, on December 15th, 1877, 
 to contract with the governors of States for the building of railroads in their territory, has not been that of ex- 
 cluding American citizens or their capital from the construction of railroads in Mexico, but of the realizing of 
 sucli works by the States that are more directly interested in their construction, seeing the difficulties that have 
 presented themselves to the building of such roads by companies or citizens belonging to the United States, 
 and admitting that since 1865, up till now, no American company has build the lines contracted for by it. 
 
 Twenty-first, That up till now thirteen contracts have been executed with the governors of States for this 
 purpose, and that only three States have commenced to build the works contracted for, the result being that the 
 other contracts will lapse through non-fulfillment. 
 
 Twenty-second, That even though the contracts entered into with the States for the building of railroads in 
 their territories do not lapse on account of non-fulfillment by the States of the conditions stipulated in their re- 
 spective contracts, this would be no obstacle to the construction of an international line from Mexico to the 
 United States by a North American company, or by citizens of the United States, with capital of the neighboring 
 nation. 
 
 Twenty-third, That is not correct that the Mexican companies which have build railroads in Mexico could 
 not build more than a league in a year, seeing that some of them have constructed larger sections in the time 
 mentioned. 
 
 Twenty-fourth, That during the first years after Mexico had emancipated herself from Spain she attempted 
 to carry out the building of a railroad from Mexico to Vera Cruz, co-operating in the realization of the work 
 and augmenting her assistance to the enterprise to which she addressed herself, and faithfully complying, during 
 the execution of the work, with her promise in giving pecuniary aid to push it on. 
 
 Twenty-fifth, That the delays caused by the general state of the country and some grave errors committed 
 in the direction of the work gave, as a result, the useless expenditure of more than $10,001,010, to the loss of the 
 capital invested in the railroad. 
 
 Twenty-sixth, That from the commencement of the partial operation of the several sections of the road, and 
 from the time of opening all of it for pubhc service, the line-has made its expenses, and left remainders which on 
 an average amount to $1,061,000 00, nothwithstanding that the road was charged with the costs of the Vera 
 Cruz and Jalapa railroad, which have diminished the direct profits of the principal line. 
 
 Twenty-seventh, That isolated as the railroad is, without branches to facihtate local commerce, nor with 
 connection with other railroads to feed its workings or extend its benefits to distant sections, the general com- 
 merce of the country remains in nearly the same circumstances which characterized it before the finishing of the 
 Vera Cruz railroad. 
 
 Twenty-eighth, That notwithstanding these circumstances the road yields, over and above expenses, a profit 
 equivalent to six per cent, on the company's primary associated capital, which somewhat exceeded the calculated 
 cost of the work, and four and a-third per cent, on the capital employed in its construction and the tramway from 
 Vera Cruz to Jalapa, which interest cannot be considered as insignificant, if we take into account the average 
 rate of interest on money in Europe, and the average profit of railroads in England. 
 
 Twenty-nmth, That the high rates of freight had prevented the development of the export trade, from which 
 the railroad would derive better receipts, and that, therefore, the reduction of the rates made by the company on 
 November 25th, 1878, will push forward the export trade, from which good results may be expected for the Vera 
 Cruz railroad and for the country. 
 
 Thirtieth, That even though it be at bottom correct, the assertion in the Report as to the profits obtained 
 by capital employed in the Vera Cruz railroad, it is not applicable, as a general rule, to the railroads to be built 
 in Mexico, because it refers to an isolated and exceptional case. 
 
 Thirty-one, That out of a total debt accepted by Mexico for a subvention to 767,407 kilometres of rail- 
 road built in her territory, amounting to $11,877,795 i4> she has paid, notwithstanding her difficult pecuniary 
 circumstances, $11,858,761 15, and owes only $19,033 99, which leaves room to beheve that she will in the 
 future pay the subventions contracted by her. 
 
PART SECOND. 
 
 THE TARIFF, MEXICAN LAWS AND CUSTOMS RELATING TO COMMERCE. 
 
 497. After the Report had made the foregoing observations with respect to the present means of communi- 
 cation on the part of Mexico for foreign commerce, and examining the various questions relating to this matter in 
 the manner which has been referred to, its second part is devoted to the Mexican tariff and the laws, regulations 
 and practices governing foreign commerce, saying that the business that offered to American enterprise in Mexico 
 would be as much of a mineral as a commercial nature. 
 
 498. From this fact, then, proceeds the division of this matter into two principal points, which are : first, 
 commerce ; second, industry ; each one of which will be spoken of separately. 
 
 I. THE COMMERCE OF MEXICO. 
 
 499. The part of the Report referring to Mexican commerce treats of the following points : 
 
 1. Prohibitive duties imposed in the tariff of February ist, 1872. 
 
 2. Importation to Mexico of machinery and implements for agriculture and mining. 
 
 3. The want of ports of deposit in Mexico. 
 
 4. Local duties collected on foreign merchandise. 
 
 5. The expenses of transporting merchandise to the place of consumption. 
 
 6. The despatch of merchandise in the city of Mexico. 
 
 7. The metaUic wharf of the Vera Cruz railroad. 
 
 8. Exchange. 
 
 9. Periods of credit for the payment of foreign merchandise. 
 
 10. Free trade and the protective systems in Mexico. 
 
 500. Each one of these questions will be treated separately, and an endeavor made to examine them under 
 all their phrases, so that this important subject may be the better understood ; and in addition, the following 
 points, also related either directly or indirectly with the commerce of the United States and Mexico, wiU be 
 considered : 
 
 11. The actual commerce of Mexico with the United States. 
 
 12. The development which has characterized the commerce of the United States. 
 
 13. Method for increasing the commerce between Mexico and the United States. 
 
 14. Summary of the facts relating to the Mexican laws governing foreign commerce. 
 
 I. PROHIBITIVE DUTIES IMPOSED BY THE TARIFF OF JANUARY IST, 1 87 2, UPON FOREIGN MERCHANDISE. 
 
 501. With regard to this point the Report says : " That many believe that the tariff of the United States 
 greatly requires revision and a reduction in several matters of interest, but that the Mexican tariff is yet more 
 protective and prohibitive, and that in this there is to be noted the want of many rules of the North American 
 tariff whereby the import trade is facihtated and protected." 
 
 502. In order to duly treat this matter the following grave questions relating to the duties collected on 
 foreign merchandise by Mexico, will be considered : 
 
 A. The Mexican tariff. 
 
 B. Rates of the Mexican tariff on some sorts of merchandise produced in the United States. 
 
 497. Second part of tlie Report, concerning commerce and mineralogy. 
 
 498. Each one of these matters will be spoken of separately. 
 
 499. Matters considered by the report in the part relating to commerce. 
 
 500. Other matters which ought to be considered while speaking of commerce. 
 
 501. Ideas of the Report with respect to the highness of duties by the tarifE of Mexico. 
 503. Matters considered in speaking of the duties imposed by the Mexican tarife. 
 
89 
 
 C. Corrections of the list contained in the Report as to the kinds ol merctiandiLe produced in the United 
 States which are dutiable by the Mexican tariff. 
 
 D. The cause of the high duties in the Mexican tariff, and general considerations on this head. 
 
 E. Comparison of the duties imposed by the Mexican tariff on certa'n classes of merchandise with those in 
 the United States. 
 
 F. Articles of Mexican production that are hampered with high import duties in the United States. 
 
 A. THE MEXICAN TARIFF. 
 
 503. The question of the Mexican tariff being presented in the manner which the Report has done, it seems 
 that the import duties collected in Mexico on foreign merchandise would become not only highly protective, but 
 really prohibitive. This is not wholly correct, and in order to form an idea of the progress which Mexico has 
 made in this branch, it is necessary to enter into considerations that are not to be found in the Report, and 
 Avithout which it is not possible to know the preseat state of this important question. 
 
 504. These considerations refer principally to the following points, which will be considered in a special 
 manner, so that this matter may be the better understood : 
 
 a. Goods prohibited by the Mexican tariff. 
 
 b. " free of duties " " " 
 
 c. The tariff rates at present in force, compared with those of former times. 
 
 d. The imposition of duties by means of a fixed rate, in preference to the collection by appraisement or the 
 value of the invoice. 
 
 e. Unification in the present rates of tariff. 
 
 f Commerce by scale and transit in Mexican ports. 
 
 g. The commerce in transportation over Mexican territory. 
 
 h. The coasting trade by foreign vessels. 
 
 i. Opening of the Mexican coasts to the export trade. 
 
 505. It would be necessary to execute an extensive work in referring to all the progresses accompUshed by 
 Mexico in her fiscal legislation. A slight examination of the preceding points will be sufficient to prove that for 
 a long time she has followed in this matter the road indicated by liberality and progress, and that her intention 
 is to adopt in her legislation all those reforms that may be convenient or conducive to her interests and advance- 
 ment. 
 
 506. Some representatives of the United States have recognized this liberal tendency of Mexican legislation 
 referring to the import trade. The Honorable Thomas H. Nelson, Envoy Extraordinary and Minister Plenipoten- 
 tiary of the United States in Mexico, in a communication addressed from Terre Haute, Indiana, on December 
 13th, 1872, to H. J. N. Oglesby, President of the New Orleans Chamber of Commerce, and which was trans- 
 mitted to the Department of State of the United States, with a note dated in this capital on February loth, 1373, 
 and published with the documents referring to the exterior relations of the United States, accompaning the mes- 
 sage addressed by the President to Congress December ist, 1873, said, when alluding to the present tariff in 
 Mexiccv, that of January ist, 1872, as follows (page 651) : 
 
 " During the years that have passed since the overthrow of the ephemeral Empire Mexico has increased her 
 products in the Gulf States ; her fiscal legislation has been reformed by means of a comparatively liberal tariff 
 which came into operation on the first of last July ; and above all, she has finished the most important railroad 
 that interests maritime commerce." 
 
 a. Goods Prohibited by the Mexican Tariff. 
 
 507. The nation having inherited from the metropolis a legislation positively prohibitive, has not been able, 
 excepting slowly and by great efforts, to goon changing by degrees the prohibitive and retrogade Spanish legislation 
 of the colonial system for the liberal and progressive ideas of the English system. This change assumes special 
 prominence in view of what has occurred with respect to the prohibition of importing certain kinds of goods into 
 Mexico. 
 
 503. The tarifE imposed by Mexico does not constitute a prohibition. 
 
 504. Matters considered in speaking of the Mexican tariff. 
 
 505. The tendency of Mexican legislation is in favor of liberality and franchises to the commerce. 
 
 506. The Mexican tariff has gone on increasing its liberal provisions with the progress of time. 
 
 507. The efforts that have been necessary to change the principal prohibitions of the Spanish legislation. 
 
 12 
 
90 
 
 508. In fact, one of the principal conquests in economy that we have accomplished since the war, from 1857 
 to i860, called the War of Reform, has been the absolute abolition of the prohibitions. The Executive, following 
 out the liberal spirit of our poUtical constitution, took off, on January 21st, 1868, all sorts of prohibitions. From 
 that date this conquest has remained definitely assured. It is truly surprising the number of goods, many of them 
 being of the first necessity, which in no very remote period came, through extravagant ideas of economy, to be 
 included in the prohibited list. The tariff of October 4th, 1S45, went so far as to prohibit sixty-two articles of 
 commerce, among which were comprised rice, coffee, flour, soap, salt, cotton fabrics and others. By the tariflf of 
 June ist, 1853, this long list was reduced to fifty-three articles, and to eighteen by that of January, 1856. The 
 present tariff of January ist, 1872, suppressed the hst of prohibited articles, in compliance with article 28 of the 
 Federal Constitution, which provides that there shall be no prohibitions in Mexico, on the score of protecting 
 national industries. In speaking of the goods admitted into Mexico free of all duties, the regulations of former 
 tariffs and of the present, with respect to the prohibitions, will be mentioned. 
 
 b. Goods free of Duties by the Mexican Tariff. 
 
 509. A progress in the contrary direction has been followed with respect to articles exempted from duties, 
 for in each new tariff" that has been circulated for foreign commerce in the Repubhc, the number of articles free 
 of duty has been increased. So as to proceed in regular order, it is proper here to state what has been done in 
 this matter by the former Mexican tariffs, and what is laid down by the present. 
 
 § Goods free of Duty on the former and on the present Tariff. 
 
 510. As in proportion, by the study of political economy, the old ideas have yielded the field to modern 
 doctrines, and the prohibitions went on losing ground until they became extinct ; so the number of articles com- 
 prised under the heading of free importation has been increased. The tariff" of December 15th, 182 1, contained 
 a list of nine fractions, in each one of which were enumerated one or more prohibited articles, and another also 
 of nine fractions of free articles. The tariff of November i6th, 1827, increased the number of free articles 
 to sixteen, and that of those prohibited to fifty-six ; that of March nth, 1837, reduced the list of the former to 
 eleven and that of the latter to fifty ; that of April 30th, 1842, contained fifty-one fractions of prohibited articles 
 and fifteen free ; that of September 23d, 1843, declared fifty-eight articles prohibited and nineteen free. This 
 last number was repeated in the tariff of October 4th, 1854 ; but it increased, notwithstanding the fraction of 
 prohibited goods, to sixty-two, as has already been indicated. The tariff of June 1st, 1853, comprised fifty- 
 three fractions of prohibited grades against twenty-one free; and that of January 31st, 1856, contained eighteen 
 prohibited articles against thirty-four free. 
 
 §§ Goods free of Duty, in accordance with the Provisions of the present Tariff. 
 
 511. While the tariff" of January ist, 1872, does not contain any prohibition against merchandise imported 
 into the Republic, it increases the number of free articles to sixty-three. It is proper to insert here this list, so 
 that the articles which are free from all kinds of duties may be known : 
 
 Article 16. The following articles are free from all kinds of import duty in the Republic: 
 
 1. Arms for the National Guard of the States, when the Governors, in concert with the respective Legisla- 
 tures, ask such exemption from the Executive. 
 
 2. Telegraph wire, whose destination is proved by the parties interested in the maritime custom-houses. 
 
 3. Iron or steel wire for carding, from No. 26 upwards. 
 
 4. Animals of all kinds, aUve or prepared for cabinets of natural history, excepting the class of horses 
 known as geldings. 
 
 5. Crude alabaster. 
 
 6. Oil and the waste of sperm and other whales. 
 
 7. Bar iron for mines. 
 
 8. Timber and anchors for vessels of all kinds. 
 
 9. Plows and harrows for agriculture. 
 
 10. Oats in grain and in the ear. 
 
 11. Quicksilver. 
 
 508. The proMbition to import foreign articles has gone on decreasing until it is completely extinguished. 
 
 509. The provisions of the present tariff will be examined, and also those of former ones affecting goods exempt from 
 duties. 
 
 510. Number of articles free of duties in the former tariffs, and in the present one. 
 
 511. Articles free of duty by the present tariff of January 1st, 1873. 
 
91 
 
 12. Fire engines and pumps of all sorts and materials, for the purpose of irrigation. 
 
 13. Bill-hooks {machetes) ordinary, without sheath, scythes, hoes, rakes, shovels, picks, spades, pick-axes, for 
 agriculture. 
 
 14. HydrauHc lime. 
 
 15. Piping of all sorts, sizes and materials. 
 
 16. Wire and vegetable cards set in frames and fixed in machinery. 
 
 17. Hand cars, of one or two wheels, and borriquetes. 
 
 18. Crucibles of all kinds and materials. 
 
 19. Cars and trucks for railroads. 
 
 20. Coal of all kinds. 
 
 21. Mineralogical and geological collections of all the branches of natural history. 
 
 22. Wooden and iron dwelhng houses complete. 
 
 23. Designs and models for machinery, buildings, and vessels. 
 
 24. Staves and bottoms for barrels. 
 
 25. Vessels of all kinds and forms, whether nationalized, for sale, or introduced to navigate the bays, lakes, 
 canals and rivers in the Republic. 
 
 26. Iron and steel wrought into rails for railroads. 
 
 27. Fruits and fresh vegetables, with the exception of those specified. 
 
 28. Guano. 
 
 29. Ice. 
 
 30. Maize flour. 
 
 31. Scientific instruments. 
 
 32. Printed books, in rustic or in paste binding, with the exception of those specified in article 18 of this 
 tariff. 
 
 33. Wood. 
 
 34. Bricks and refractory earths. 
 
 35. Printing type, including letters, shields, spaces, vignettes and plates. 
 
 36. Ordinary building wood and roof scantling, and for packing. 
 
 37. Indian corn. 
 
 38. Geographical and t)rpographical maps, nautical charts, terrestrial and celestial globes. 
 
 39. Machinery and apparatus of all kinds for agricultural industry, mineralogy, science and art, and their 
 loose or extra parts. The loose pieces of machinery or apparatus, such as crude iron, hooping in bars or casks, 
 oils, cloths, canvases of linen or other material, hides, tanned or otherwise, even when they come together with 
 machinery, will be subject to the payment of duty according to this tariff. 
 
 40. Machinery, steam engines and locomotives, sleepers for railroads, and other accessories belonging to such 
 roads. 
 
 41. Crude marble, and in squares of all dimensions for floors. 
 
 42. Box wood. 
 
 43. Collections of coins, ancient and modern. 
 
 44. Precious metals, in paste or in dust. 
 
 45. Moulds and measures for the arts. 
 
 46. Fuses for mines. 
 
 47. Legal money, in gold or silver, of all the nations. 
 
 48. Objects of natural history for museums and cabinets. 
 
 49. Plants and seeds for the improvement of agriculture. 
 
 50. Dry feed in straw. 
 
 51. Slates for roofing and flooring. 
 
 52. Lithographic stones. 
 
 53. Powder for mines. 
 
 54. Pus for vacination. 
 
 55. Oars for small boats. 
 
 56. Common salt, to be introduced by way of Paso del Norte. 
 
 57. Saltpetre. 
 
 58. Sulphate of copper. 
 
 59. Wooden types and other materials for Uthography. 
 
 60. Printing mk. 
 
 61. Hammering blocks for silversmiths. 
 
92 
 
 62. Rags of all sorts, for the manufacture of paper. 
 
 63. Anvils. 
 
 512. Following the same system of exempting from duties all those articles whose cheap acquirement is 
 deemed necessary, a decree posterior to the date of the tariff of January ist, 1872, has been promulgated making 
 the following goods free of import duty: 
 
 Sulphur, hypo-sulphate of soda and iron girders for roofs. 
 
 513. Attention should be called to the fact that the articles which are produced in the best quality, and which 
 are sold at the lowest prices in the United States, such as machinery of all classes, are completely free of import 
 duties in Mexico. It is also to be observed that by virtue of this circumstance the respective classes of goods are 
 also exempt from such duties as the States may have imposed upon them, because these duties are collected at 
 the rate of so much per cent, on the quoted amount of import dues. 
 
 514. In its proper place the ideas of the Report will be examined with reference to the probabilities which 
 there are that the importation of goods exempted from duties will increase commerce between Mexico and the 
 United States. 
 
 c. Rates of the present Mexican tariff oempared with the former ones. 
 
 515. With regard to the rates of the Mexican tariff, incontestable improvements have been made, as wiU be 
 seen in the following brief statement touching the regulations of former tariffs, and their comparisons with the 
 arrangements provided in the present one. 
 
 516. The tariff of December 15, 1821, which is without doubt the most simple and based on good economic 
 principles, laid down (in Article 30, Chap. I.) that all the goods of every nation which might be imported into 
 this country should pay a single duty to the pubhc treasury, which was twenty-five per cent, on the rate annexed 
 to the said tariff law. The tariff was divided into six sections, each one comprising the merchandise of its own 
 class, and contained 472 fractions, each one of which comprised a class of goods. Chapter II. enumerated in 
 its nine articles as many sorts of merchandise, which, on account of having variable prices, were not comprised 
 in the rates of duties, and which merchandise should pay twenty-five per cent, upon appraisement, this being effected 
 by the custom-house inspector with the knowledge of the collector. Article 8 of Chapter I. ordered that all 
 merchandise not comprised in this tariff should pay duties corresponding to those specified in it, and with which 
 they might be most analogous. 
 
 5r7. The tariff of November i6th, 1827, changed these bases. In this tariff, which is subdivided into nine 
 sections, that comprise goods of all sorts in alphabetical order, though each' letter is divided into corresponding 
 sections, there are 496 fractions or classifications of merchandise. On each one of these comprised in the tariff 
 a certain rate of import duty was imposed. Article 1 5 provided that goods not specified in the tariff should pay 
 forty per cent, on the appraisement that might be made upon them in the port. A notable fact is the small 
 number of fractions included in the tariff of 1827 with respect to that of 1821. 
 
 518. The tariff of March nth, 1837, adopted precisely the system of valuation fixed in the former one. Its 
 rate is, notwithstanding, notably reduced, because it is composed of six sections, with only seventy-nine fractions 
 or classifications of merchandise. This decrease is explained by observing that in Article 42 there are enumer- 
 ated fourteen classes of merchandise which ought to pay import duties at the rate of thirty per cent, on the 
 invoice, calculated with the addition of a certain percentage, which varied according to the nature of the goods. 
 The abuses committed in the declaration of the value of the invoice are so old that the corresponding article in 
 this tariff, which ordered that the import duties should be collected upon that value provided that there should be 
 added to it a rate of from ten per cent. — as in the case of cloths and silk fabrics — up to twenty-five per cent., 
 as in that of cloths and fabrics of cotton. Articles 46 and 48 decreed, in addition, other measures to cut off the 
 abuses which up till then were frequent, of greatly undervaluing the prices of the invoices. 
 
 519. The tariff of April 30th, 1842, repeated nearly textually the provisions of that of 1837. Its rates were 
 
 512. Articles declared free of duties after the adoption of the present tariff of January 1st, 1873. 
 
 513. The United States produce many of the articles that are free of duty in Mexico. 
 
 514. The ideas of the Report with respect to the increase of commerce between the two countries, will be examined 
 in another place. -» 
 
 515. In the rates of the present Mexican tariff, incontestable advances have been made with respect to the former 
 ones. 
 
 516. Provisions of the tariff of December 15th, 1831. 
 
 517. Rates of the tariff of November 16th, 1837. 
 
 518. Rates of the tariff of March 11th, 1837. 
 
 519. Rates of the tariff of April 30th, 1843. 
 
93 
 
 composed of eight sections having 119 fractions or classifications of merchandise. The goods not comprised in 
 the rates were to pay twenty-five per cent, on appraisement (Article 10.) In order to form this appraisement, or 
 market value, it was provided by article 1 1 that there should be added to the value of the invoice a sum which 
 varied from twenty per cent, on ordinary mercer's goods and woolen fabrics, to one hundred per cent, on plate 
 and window glass, according to the several sorts of merchandise enumerated in twenty fractions (Article 11). 
 
 520. The tariif of September 26th, 1843, is based on the same system as the foregoing. Though preserv- 
 ing the system of the foregoing tariff as to the collection upon appraisement, its rate is, notwithstanding, consid- 
 erably increased, being composed of five sections, with 218 fractions or classifications of merchandise. All the 
 merchandise not comprised in the scale of rates (Article 11) had to pay thirty per cent, upon appraisement. 
 
 521. The tariff of October 4th, 1845, differs substantially from the preceding ones. Its rates for the collec- 
 tion of duties for goods which paid a fixed percentage are composed of eight sections, with 842 fractions or 
 classfications of merchandise. Those contained in the scale of rates had to pay (Article 12) the designated 
 percentage fixed by the custom-house inspectors who passed the goods, which duty was that designated in the 
 rates for merchandise to which they most nearly corresponded, and those not included inthig'case were appraised 
 at the market value; from this price a reduction of thirty per cent., and on the net remainder duties were col- 
 lected at the rate of thirty per cent. Both in the appraisement, and in the classification of rates by analogy the 
 Collector had to invervene. 
 
 522. The duties fixed by this tariff were so high that the law of May 3d, 1848, reduced them to sixty per 
 cent. The law of November 24th, 1849, repealed Article 18 of the tariff, which contained the rates on drugs 
 and chemical products, and ordered that the 394 species of merchandise contained in.it, less 63 that are men- 
 tioned in Article 8 of the same law, should pay forty per cent, duties on the value of the invoice, instead of the 
 fixed rates, there being a reduction of sixty per cent, on the remaining rates, decreed by the law of May 3d, 
 1848. 
 
 523. The so-called Ceballos tariff of January 24th, 1853, does not deserve the name of tariff, for it is reduced 
 to the reformation of some of the provisions of that then in existence, moderating them greatly, and making 
 furtjier concessions to commerce. 
 
 524. The tariff of June ist, 1853, is a reproduction of that of October 4th, 1845. It has a scale of rates 
 made up of eleven sections and 475 fractions or classifications of merchandise, in which a fixed amount is set 
 down for each one. Article 9 lays down that, similarly to the twelfth article of the tariff of 1845, such merchan- 
 dise as is not named in the fixed rates should pay the duty assigned in it for goods having the greatest analogy to 
 them, and that such as might not be brought under this heading should be appraised at the market value and 
 pay twenty per cent, upon the amount of the appraisement. Although the rate was lower, the thirty per cent. 
 reduction was taken off the appraisement, which was ordered to be effected in accordance with the tariff of 1845. 
 Jewelry was, however, excepted from this provision, and it paid six per cent, upon the value of the invoice, as 
 the only duty. 
 
 525. The ordinance of January 31st, 1856, came in to substantially change the system up till then observed. 
 In its rates, which were composed of only one section, similarly to the tariff of 1827, there were enumerated 525 
 species of merchandise; a number inferior, speaking absolutely, to that of the tariff of 1845, but really equal, 
 because 394 fractions which that tariff devoted to drugs and chemical products were comprised in a sole fraction 
 of this one. The order of the fractions is not rigorously alphabetical, seeing that each one of the letters 
 appears the same as in the tariff of 1827, giving merchandise of different sorts and materials, as cotton, groceries, 
 &c. 
 
 526. In this tariff, notwithstanding the difference with former ones, as has already been indicated, not only 
 the merchandise which paid a fixed rate of import duty was set down, but also there figured in it such goods as 
 paid by appraisement, including drugs, jewelry, &c. The second paragraph of article 8 provided that all goods 
 not specified in the rates, and which were not expressly prohibited, should pay twenty-five per cent, on the whole- 
 sale market price, the day on which they might be passed by the custom-house. 
 
 530. Rates of the tariff of September 26tli, 1843. 
 
 531. Rates of the tariff of October 4th, 1845. 
 
 533. Reduction in the preceding tariff, made by the laws of May 3d, 1848, and November 24th, 1849. 
 
 533. Rates of the Ceballos tariff of January 1st, 1853. 
 
 534. Rates of the tariff of June 1st, 1853. 
 
 535. Bates of the tariff of January 31st, 1856. 
 
 536. Differences between this tariff and the former ones. 
 
94 
 
 527. The existing tariff of January ist, 1872, introduced important modifications in this matter, with the 
 object of simplifying the custom-house operations and those of the importers. In it an endeavor was made to 
 profit by former experience, for the purpose of simplifying the tariff as much as possible, and, in consequence, 
 the operations of the custom-house and commerce. For this reason the system of imposing duties at fixed rates 
 was, as a general rule, "adopted, and only in such cases as where insuperable difficulties were felt was the rule 
 established of collecting a certain percentage upon appraisement or the value of the invoice. 
 
 528. The present tariff of January ist, 1872, is divided into ten sections, as follows : 
 
 First, Cottons. 66 fractions 
 
 Second, Linen and hemp 56 
 
 Third, Woolens 54 
 
 Fourth, Silks 36 
 
 Fifth, Mixtures of different materials 1 1 
 
 Sixth, Groceries and provisions 102 
 
 Seventh, Crystal, glass and crockery 10 
 
 Eighth, Mercer's goods, hardware and ironmongery 321 
 
 Ninth, Medicines and druggists' goods i 
 
 Tenth, Miscellaneous and unclassified objects 117 
 
 Total number of fractions 774 
 
 529. It was resolved that merchandise not named in the tariff should pay fifty-five percent, on the market 
 prices by appraisement ; because this was, as a general rule, the proportion which ruled between the duties on 
 merchandise quoted in the tariff and their market values. 
 
 530. Posteriorly to January ist, 1872, on which date the existing tariff came into operation, other articles 
 have been placed on the list of fixed rates ; among them are drugs and medicines, which, in conformity with the 
 rates of this tariff, paid 88 per cent on the amount of the invoice. The number of articles specified reaches at 
 present 1378. The merchandise which has to pay duty on the amount of the invoice remained reduced to ready 
 made clothing, drugs and medicines, gold and silver jewelry, gold or silver headed walking sticks, and watches. 
 Article 22 of the tariff laid down that if when the goods were passed the lowness of their prices in the invoice 
 was noticed, and that there was reason to suspect fraud, the appraisement of them should be proceeded with by 
 the assistance of three experts, one to be named by the custom-house, another by the importer, and the third, or 
 umpire, by these two. 
 
 d. The imposition of Import Duties by means of fixed rates in preference to collection upon Appraisement on the 
 
 sum of the Invoice. 
 
 531. It is proper to explain the system followed by the Mexican tariffs in the imposition of import duties on 
 foreign merchandise by means of fixed rates. 
 
 532. In the first tariffs, those of December 15th, 1827, and November i6th, the import duties on foreign 
 merchandise named in them were fixed by their respective number, weights and measures, and appraisement was 
 only resorted to for merchandise not classified in the tariff list, and for others having variable prices. This previ- 
 sory determination was relaxed in subsequent tariffs to the degree that on December 31st, 1856, the collection of 
 duties by appraisement was directed in the scale of fixed rates itseff. 
 
 533- Experience has demonstrated that the system of duties on appraisement and the value of the invoice 
 have great inconviences, as much for commerce as for the custom-house. For commerce, because the market 
 value is subject to the variations and caprices of position and the charges caused by a scarcity or an abundance 
 in the supply, leaving no basis on which to calculate the cost of orders; and for the custom-house because of the 
 questions which arise in the despatch of business when fixing the market value of various articles not consumed 
 there, questions that have to be solved by the judgment of experts, whose decisions, on account of their generally 
 being merchants, are mostly against the interests of the revenue. 
 
 527. Rates of the present tarifE of Januarv 1st, 1873. 
 
 528. The present tarifE is divided into ten sections with 774 fractions. 
 
 539. Merchandise not specified in the present tarifE to pay 55 per cent, upon the appraised value. 
 
 530 Number of articles of commerce placed on the tarifE rates of January 1st, 1873, and under the posterior enactments. 
 
 531. System of the Mexicjn tarifE with regard to theimposition of rates of import duties on foreign goods. 
 
 533. The tarifE of December loth, 1831, and of November 16th, 1837, imposed duties on a fixed scale. 
 
 533. Advantages of this system over that of appraisement and the amount of the invoice. 
 
95 
 
 534- The payment of duty upon the value of the invoice lends itself, in addition, to many abuses and even 
 frauds, which happen to the prejudice of the revenue and of the honest merchant. A continuous experience has 
 proved that in those cases in which merchandise pays duties on the value of the invoice, it frequently happens 
 that the importer causes to be sent on, to present it to the custom-house, a file of invoices in which the price of 
 the merchandise is reduced to a third or a quarter part of its true cost. As the custom-houses are frequently in 
 want of the lists of prices current of foreign markets, they have no means of verifying the exactness of the prices 
 set down in the invoices. If, on account of their seeming very low, the judgment of experts is appealed to, these 
 nearly always decide, through motives already indicated, in favor of the merchant. The same thing happens if 
 the custom-houses have the prices current, and on account of finding a great difference between these and the 
 prices, the judgment of experts is resorted to. 
 
 535. These considerations, in which hardly the inconveniences of collecting the duties by appraisement, or 
 the amount of the invoice are touched, brought about that in the existing tariff of January ist, 1872, the duties 
 by fixed rates should always be imposed, when possible, leaving the basis of the value of the invoice to be em- 
 ployed only in exceptional cases, and which have been reduced to very few, appealed to only when the other 
 system presents greater difficulties. 
 
 c. Unification of rates in the existing Tariffs. 
 
 536. One of the most positive impirovements in the present tariff is the unification of the rates which for- 
 merly constituted the import duties, and which, under different names, were collected on foreign merchan- 
 dise. This has contributed remarkably to simplify the labors of importers and the operations of the custom- 
 houses. 
 
 537. It is truly incredible to persons unacquainted with our tariff legislation, the multitude of imports 
 which, under different denomination, were collected on imported merchandise. 
 
 538. The tariff of December isth, 1821, established (art. 3, chap, i) that a single duty should be collected 
 on account of the public treasury on the entry of foreign goods ; but by former provisions duty was collected on 
 damaged effects. The law of August 4th, 1824, established a duty upon sending goods into the interior, which 
 was to be collected, together with that of importation, in the ports and frontiers, at the rate of fifteen per cent, 
 upon tariff quotations, with one-quarter part added. By the pa)rment of this duty foreign goods were allowed to 
 circulate freely in the interior of the Republic. The decree of December 22d, r 824, authorized the States to 
 impose a duty of three per cent, on foreign goods, as a duty on consumption, on appraisements made in the 
 maritime custom-houses at the time of their introduction. 
 
 539. The tariff of November 1 6th, 1827, was not hmited to the estabfishment of a single duty, like the 
 former one, but it expressly provided (article 17) that the duty on damaged effects was suppressed, and all the 
 additional ones, which under various names were paid to the federation for the importation of foreign merchan- 
 dise. A little afterwards, notwithstanding, the law of August 22d, 1829, authorized the States to impose a duty 
 of two per cent, on the consumption of foreign goods, in addition to the three per cent, which they were author- 
 ized to collect by the law of December 22d, 1824. 
 
 540. The law of August 24th, 1830, increased the duty on consumption five per cent, on "clothes, fruits, 
 and goods coming from abroad " (article ist), and ten per cent, which had been decreed on "November 9th, 
 1829, upon liquors coming from the same source" (article 2d). A fifth part of the five per cent, of this duty, and 
 a tenth of the ten per cent., was for the States, and the rest for the federal revenue. The law of April 31st, 1831, 
 ordered that this duty should be paid in the respective maritime or frontier custom-house at the time of despatch- 
 ing the goods to the interior. The law of May ist, 1831, extended for six months, with one per cent., the duty 
 on consumption of foreign goods, collectable in the port at the time of despatching them to the interior. After 
 this period, one per cent, was to be added to the duty upon despatching for the interior, payable without the 
 credit periods conceded for this duty by the present tariff. 
 
 534. Abuses that could be practiced in tbe collection of duties on the amount of appraisement or of the invoice. 
 
 535. The tariff of January 1st, 1873, imposes duties by fixed rates. " 
 
 536. The present tarifE unifies the different rates which were formerly collected on imported foreign merchandise. 
 
 537. The confusion formerly occasioned by the system of imposing various rates of import duties and foreign mer- 
 chandise. 
 
 538. Arrangements with respect to this matter made in the tariff of December 15th, 1831. 
 
 539. Arrangements with respect to this matter made in the tariil of November 16th, 1837. 
 
 540. Arrangements with respect to this matter made by the laws August 4th, 1830, and April 1st, 1831. 
 
96 
 
 541. The tariff of March nth, 1837, abolished the duty on anchorage (article 2d), and through it solemnly 
 fixed theimport duty in conformity with the tariff; it ordered that the custom-houses should continue collecting the 
 five and the ten per cent, on consumption, and the eleven per cent, on importation. The law of May 23d, 1837, 
 decreed an impost of four cents on each square yard of foreign ordinary cotton fabrics, payable in the port from 
 whence the goods should be despatched to the interior. The law of November 26th, 1839, increased to fifteen 
 per cent, the duty on consumption in the maritime custom-houses, in accordance with the law of April 2d, 1831. 
 The law of September 4th, 1841, came in to repeal the ten per cent, additional on the duty on consumption, de- 
 creed by that of November 26th, 1839. The law of November isth, 1841, established (article 12, one-eighth per 
 cent, on the import duties, collectable in the places where the mercantile tribunal might be established, and 
 destined to pay the expenses of it. The decree of December 2d following increased to one-half per cent, on the 
 value of foreign goods the duty for the mercantile tribunal. 
 
 542. The tariff of April 30th, 1842, only imposed the duty on importation in conformity with the rates and 
 appraisements which it estabUshed, but ordered (article 98) that in addition to this duty there should be collected 
 on foreign merchandise, upon its importation, the one per cent, estabhshed by the decree of March 31st, 1838, 
 and the muncipal and local duties of the ports. The decree of June 27th, 1842, fixed new bases for the collection 
 of duties on consumption. The decree of February 28th, 1*43, made applicable to all the ports the two per cent, 
 on damaged effects, which at that time was collected only in Vera Cruz and Tampico. 
 
 543. The tariff of September 23d, 1843, ordered (article 95) that there should not be collected upon the 
 importation of merchandise more duties than those fixed by it, besides the one per cent. estabUshed by the de- 
 cree of March 31st, 1838, the two per cent, on damaged effects which has just been spoken of, and the muncipal 
 and local duties in the ports. 
 
 544. The same provision was repeated in the tariff of October 4th 1845, (article 102.) The law of October 
 9th, 185 1, estabhshed an eight per cent, duty on consumption upon goods introduced from the maritime and 
 frontier custom-houses into the interior of the Republic, payable in the place of consumption. One-half of the 
 product of this duty went to the Federal revenue and the other .to the States. This law repealed those of Decem- 
 ber 22nd, 1842, and August 22nd, 1829, which imposed the three and the two per cent, for the States, and left 
 in operation those of August 24th, 1830, and April 2nd, 1831, which created the duty of five and of ten per cent, 
 upon foreign goods and hquors, collectable in the respective custom-houses, giving it the name of the duty of dis- 
 tribution in the interior. The decree of March 8th, 1853, reduced to five per cent, the duty on consumption, or- 
 dering that the distribution should be made in the manner provided by the law of October 9th, 1851. 
 
 545. The tariff of June ist, 1853, estabUshed (article 93) that no duty excepting that for the national treas- 
 ury should be coUected on foreign merchandise upon their importation ; also, the one per cent, decreed on March 
 31st, 1833, the two per cent, on damaged wares decreed February 28th, 1843, and the municipal and local duties. 
 The decree of July 29th, 1853, ordered (article 3d), that the interior custom-houses should collect for duty on 
 consumption a quarter part of that upon importation, Uquidated in accordance with the tariff of 1853. The law 
 of April 28th, 1855, estabUshed the payment of fifteen per cent, import duties in bonds of the foreign debt, 
 which provision should only last for one year. This provision was repealed by the law of October 17th of the 
 same year of 1855. In the law of December 31st, 1855, (article ist, part 37), twenty per cent, of the additional 
 duties was assigned to the cancellation of what was called the interior debt. 
 
 546. This superficial statement, though succinct and incomplete, of the provisions of the former tariffs, with 
 regard to the duties imposed on foreign merchandise, and of the laws which augmented or modified them, gives 
 an idea of the real chaos which the branch of duties on importation had fallen into. Always when it was thought 
 necessary to increase these duties, others of different characters were created, and which fell upon the import 
 duty ; and although in estabUshing the ones of different denominations it was decreed that they should be paid in 
 other places, yet their payment carne to be always exacted in the ports. 
 
 541. Similar arrangements of the tariff of Marcli llth, 1837, and the laws of May 23(1, 1831, and of November 26th, 
 1839, and of September 4th, November 15th, and December 2d, 1841. 
 
 542. Arrangements with respect to this matter made in the tariff of April 30th, 1842, and the decrees of June 37th, 
 1842, and February 38th, 1843. 
 
 543. Arrangements with respect to this matter made in the tariff of September 23d, 1843. 
 
 544. Arrangements with respect to this matter made in the tariff of October 4th, 1845, and posterior laws. 
 
 545. Arrangements with respect to this matter made in the tariff of June 1st, 1853, and posterior laws. 
 
 546 Summary of the arrangements made with respect to this matter in the tariffs anterior to that of Januai^ Slst, 
 1856. 
 
97 
 
 547- The ordinance of January 31st, 1856, came in and brought system out of this disorder, giving a differ- 
 ent name to each one of these duties, making them uniform and general. Differing from former tariffs, it estab- 
 lished the import duties only as a basis which should be collected at fixed rates, or by appraisement, according to 
 the tariff scales, and upon these (Article 1 1) the additional duties, which are: the municipal, material improve- 
 ments, interior distribution, check register, and cancellation of the debt. These additional duties, excepting the 
 municipal, which consisted in twelve and a-half cents on each package of 200 lbs., made up the rate of eighty per 
 cent, upon import duties, all payable in cash, excepting that on the cancellation of the debt, which amounted to 
 twenty-five per cent., and which might be paid in securities of what is called the interior debt. The principal ob- 
 ject of this subdivision of the duties was to leave free a sufficient sum to pay the expenses of the Administration 
 without neglecting to pay that coiTesponding to the foreign conventions, which had a certain percentage set apart 
 for them from the import duties. 
 
 548. The several duties created by the tariff of January 31st, 1856, soon come to suffer different variations, 
 and when the law of January ist, 1872, was circulated, they represented seventy per cent, of the import duties, 
 of which fifteen per cent, was payable in shares of the Vera Cruz railroad, and the remainder in cash. In five 
 of the principal custom-houses twelve per cent, was payable in other paper of the same company. 
 
 549. It is easy to see, in view of this brief statement, the confusion and difficulties against which foreign 
 commerce stumbled in its importing trade with Mexico. The simplification of this system, reducing to one sole 
 scale the various duties which weighed upon foreign merchandise, was a real necessity that was realized by Ar- 
 ticle 19, of the present tariff, which provided that these goods should pay, upon their introduction into Mexico, 
 as the only duty, the scale of rates designated in this same tariff. 
 
 f. Commerce conducted according to the scale and transport by foreign vessels in American ports. 
 
 550. The tariffs which until now have been in force throughout the Republic have applied to sailing vessels, 
 because steam communication is of relatively recent use. In the first of them, that is, that of December 15th, 
 1821, and in that of November i6th, 1827, a foreign vessel was not allowed to carry merchandise any other way 
 than from a single foreign port to a single Mexican port. The tariff of March nth, 1837, then authorized, in 
 Article 17, the carrying of merchandise from several foreign ports to a single Mexican port. The tariff of April 
 30th, 1842, in prohibiting foreign vessels from carrying goods according to scale, or engaging in the coasting trade 
 in Mexican ports, authorized them, in Article 109, to touch at another Mexican port, different from the one of 
 entry, although for the sole purpose of taking in national goods intended for exportation. Article 2 of the tariff 
 of September 26th, 1843, prohibited all vessels, whether national or foreign, from bringing foreign goods to more 
 than one Mexican port, and punished the infraction of this prohibition with the pain of confiscation of both vessel 
 and cargo destined to the same port; but in Article 105, while prohibiting foreign vessels to make voyages accord- 
 ing to scale, or to engage in the coasting trade at Mexican ports, authorized them to finish discharging in the 
 port of their destination, and enabled them to receive national goods in any Mexican port open to commerce on 
 the high seas or the coasting trade. These same provisions were repeated in Articles 2 and no of the tariff of 
 October 4th, 1845. The same prohibitions and authorization were reiterated in Articles 2 and 100 of the tariff 
 of June ist, 1853. 
 
 551. The tariff of January 31st, 1856, was the first that mentioned steamers, though only to place them on 
 a better footing than sailing vessels, in what concerns the payment of anchorage dues (Article 3, fraction II.) In 
 Article 18 it is permitted for foreign saihng or steam vessels, after discharging in the port of entry, to pass to 
 another Mexican port open to high sea navigation or the coasting trade, only for the purpose of carrying the mails 
 or passengers. Fraction V. of Article 2 1 authorized, besides, foreign vessels to carry cargoes for three or four 
 Mexican ports. Fractions V. and IX. of Article 3 preserved to foreign vessels the right of loading with national 
 goods at one or more Mexican ports, open to high sea commerce or the coasting trade. 
 
 552. The tariff of January ist, 1872, although preserving the relatively high import duties, contains more 
 liberal measures for foreign commerce than all the former ones. Fractions II. and V. of Article 6 preserve the 
 
 547. Arrangements made with respect to this matter in the tariff of January 31st, 1856. 
 
 548. Amount of duties that were collected at the time of circulating the existing tariff of January 1st, 1873. 
 
 549. Advantages of the existing tariff with respect to former ones, upon this point. 
 
 550. Arrangements anterior to January 31st, 1856, with respect to the carrying trade by scale and transit in Mexican 
 
 ports. 
 
 551. Arrangements made by the tariff of January 31st, 1856, with respect to the carrying trade by scale and transit iu 
 
 Mexican ports. 
 
 553. Arrangements of the present tariff of January Ist, 1872, with respect to the carry trade by scale and transit iu 
 
 Mexican ports. 
 
 13 
 
98 
 
 freedom of the former tariff for all vessels, as far as anchorage dues are concerned, and the 8th concedes other 
 new ones to them. Article 45 expressly authorized foreign vessels to carry cargoes to two or more Mexican ports. 
 The 49th authorized them to carry the mails and passengers from one to another Mexican port. The 29th gave them 
 power to touch at any point on the coast, even though it might not be open to high sea navigation or the coasting 
 trade, to load national goods, with the object of facilitating their transportation. The 77th authorized the transit 
 of foreign goods crossing the territory of the Republic. 
 
 553. As foreign mail steamers frequently came to the port of Vera Cruz, carrying cargoes for foreign ports, 
 in addition to what they brought to those of Mexico, the Secretary of the Treasury decided, on January i ith, 
 1875, that they should be permitted to carry on the transit trade. This resolution was circulated on the same 
 date in the~custom-houses of Tampico, Tuxpam, Campeche and Progreso, in which ports the steamers receiving 
 the privilege were in the habit of touching ; and, besides, the Secretary of State was communicated with, and 
 also the Consul of the Repiiblic at New Orleans, without notifying any of the custom-houses on the Pacific. 
 
 554. On February 28th, 1877, the order of January nth, 1875, ^^^ made applicable by the Secretary of the 
 Treasury to all Mexican ports. 
 
 555. With the object of making uniform in all the ports of the Republic the different orders and regulations 
 touching this point, they were embraced in the regulations of the Secretary of the Treasury, which was circulated 
 September 8th, 1877. 
 
 556. The present Government of Mexico, desiring to make these liberal arrangements applicable to sailing 
 vessels arriving in our ports, ordered, on April nth, 1878, that after August ist, following, such saihng vessels 
 as might touch in Mexican ports would be authorized to do a transport business ; that is, they might carry, in 
 addition to foreign goods destined for Mexican ports, others destined for foreign ports. 
 
 g. The Transit Trade through Mexican Territory. 
 
 557. The transit trade was unknown in the tariffs before that of January ist, 1872, and all goods which 
 passed through any Mexican port, or touched at any points of the territory of the country, had to pay import 
 duties, even when they were destined for consumption in another nation. The law of December 24th, 1871, 
 authorized the transit trade across the frontiers and ports of the Republic, precisely for the benefit of the nations 
 bounding with Mexico ; that is, the United States and Guatemala ; and the provisions of this law were incorpor- 
 ated in the tariff of January ist, 1872. 
 
 h. The Coasting Trade dotie in Mexican Ports by Foreign Vessifs. 
 
 558. The best proof that could be presented that Mexican legislation concerning commerce has a tendency 
 towards conceding the greatest possible privileges, is the concession made to foreign vessels, enabling them to do 
 a coasting trade in Mexico, which is reserved by nearly all nations to their own vessels as an efficient protective 
 measure of the commercial marine. 
 
 559. Nearly all the Mexican tariffs had prohibited in the most absolute manner foreign vessels from engaging 
 in the coasting trade; but since 1872 this prohibition has been reduced to the degree of conceding to foreign 
 vessels, with very few limitations, as will speedily be shown, the privilege of doing the coasting trade. 
 
 560. On June 2d, 1875, this Secretary's office sent out the circular No. 25, in which it was ordered that on 
 account of some doubts which had arisen with regard to the orders of December 3d and 23d, 1872, which 
 permitted the participation of foreign sailing vessels and steamers in the coasting trade, the custom-houses should 
 observe the following rules : 
 
 ist. When there are national vessels doing the coasting trade, foreign ones shall not be permitted to 
 participate in this traffic. 
 
 2d. When there are no national vessels, foreign ones, either sailing or steam, will be allowed to engage in 
 the coasting trade. 
 
 3d. When the amount of merchandise intended for embarcation from one port to another in the Republic 
 is too small to load a national vessel, its embarkation will be allowed in a foreign steamer. 
 
 553. Posterior arrangements to those of the tariff of January 1st, 1872, with respect to the same matter. 
 
 554. Arrangements of February 28, 1877, with respect to the same matter. 
 
 555. Eegulations of the Secretary of the Treasury, of September 8th, 1877, with respect 10 the same point. 
 
 556. Regulations of April 11th, 1878, with respect to the same point. 
 
 557. The tariff of January 1st, 1872, authorized the transit of trade across Mexican territory, 
 
 558. Provisions of the Mexican laws with respect to.the coasting trade by foreign vessels. 
 
 559. Tariffs anterior to the existing one prohibit foreign vessels from engaging in the coasting trade. 
 Orders of the Secretary of the Treasury, authorizing foreign vessels -to engage in the coasting trade. 
 
 560, 
 
99 
 
 4th. The fact of a foreign vessel arriving in a port of the Republic, bringing goods despatched from another 
 national port, will not subject either the vessel or the merchandise to any penalty, for should there be any 
 irregularity in the despatching of the vessel, the collector of the custom-house passing her will be held responsible. 
 
 561. On August i2th, 1875, Circular No. 25, reforming No. 25, was sent out in consequence of reasons 
 manifested by the Governor of the State of Campeche, in the following terms : 
 
 " ist. Collectors of maritime custom-houses will permit foreign saiUng vessels or steamers to do a coasting 
 trade always when there are no national vessels with open register in port and going to the same place to which 
 the others may be bound. 
 
 "2d. No penalty will be imposed either upon foreign vessels or the merchandise they may carry on account of 
 having been permitted to do a coasting trade, for the responsibihty will rest with the collectors of the custom- 
 houses from whence they proceed, if at the time of despatching them they should not have observed what is laid 
 down in paragraph No. i." 
 
 562. On the 23d of May, 1876, another circular was issued ordering that foreign vessels, whether sailing or 
 steam, should not be permitted to do a coasting trade in the ports of Tampico, Taxpam, Vera Cruz, Coatza- 
 coalcos, Frontera, Isla del Carmen, Campeche, Progreso, nor in any of the intermediate ones, on account of 
 there being in them a sufficient number of national vessels devoted to this traffic. 
 
 563. On the 31st of July, 1877, another different circular was issued addressed to the Gulf custom-houses, 
 directing that they should allow foreign vessels, whether sailing or steam, to carry gold and silver coin from one 
 port to the other in the Republic, so that they should not, on account of the want of cash, miss the mercantile 
 transactions connected with the exportation of national fruits ; and that in order to avoid abuses the custom- 
 houses should issue a certificate and accept security for the return of the proper acknowledgements from the offi- 
 cials in other ports where such vessels might touch. 
 
 564. On September 8th, 1877, orders and regulations were issued from this Secretary's office, to which all 
 steamers arriving in ports of the Republic were obliged to conform, and in the 12th and 13th the following is 
 ordered : 
 
 "i2th." That the authorization contained in the circulars dated August 12th, 1875, and May 23d, 1876, be 
 continued to steamers which run to the Pacific ports, enabHng them to do a coasting trade under the conditions 
 laid down in such orders ; and that concerning the carrying of gold or silver coin, the custom-houses of the same 
 ports will observed the rules prescribed for those of the Gulf in the circular of July 31st, 1877. 
 
 " 13th. That the authorization conceded under date of July 31st, 1877, to steam and sailing vessels running on 
 the Gulf, be continued, so that they may carry gold and silver coin from one Mexican port to another, under the 
 conditions and circumstances laid down in the same order." 
 
 565. From this superficial statement of the existing arrangements upon this matter, it appears that foreign 
 steam or sailing vessels can do a coasting trade in national and nationalized merchandise in the ports of the Re- 
 pubHc in the Gulf of Mexico, those of Tampico, Tuxpam, Vera Cruz, Coatzacoalcos, Frontera, Isla del Carmen, 
 Campeche, Progreso and the intermediate ones, being subject to the provisions of the circulars of June 2d, 1875, 
 and August 12th, of the same year. The same foreign vessels could also carry gold and silver coin from one port 
 to another in the RepubUc, including those excepted in the foregoing paragraph, by giving the required security 
 of presenting the proper official acknowledgement and complying with the other requirements of the circular from 
 this Secretary's office, dated July 31st, 1877. 
 
 i. Thrmving open the Mexican coast to the export trade. 
 
 566. Another of the most liberal reforms comprised in the Mexican tariff, the object of which is to facihtate 
 the development of many important branches of our scanty production, is the broadening of the privileges con- 
 ceded to foreign vessels to discharge or to land national goods in our ports. In former tariffs, and even in that of 
 July ist, 1853, (Article 2,) vessels coming from a foreign port, even though they were national bottoms, were pro- 
 hibited from touching at any other port than that of entry, and very severe penalties were imposed upon the in- 
 fringement of *his provision, even upon those that carried goods destined for two or more Mexican ports. For- 
 tunately this extreme rigor has been moderated by posterior arrangements, and in the present tariff the point re- 
 quired by public convenience has been reached. 
 
 561. Arrangement of August 12th, 187.5, on the same point. 
 
 563. Circular of May 33d, 1876, upon the coasting trade by foreign vessels in Mexican ports. 
 
 563. Circular of July 31st, 1877, which permits the carrying of^ money by foreign vessels. 
 
 564. Order from the Secretary's oflBce of the Treasury, September 8th, 1877, respecting the same point. 
 
 565. Summary of the existing orders about scale trips by foreign vessi'ls. 
 
 566. Opening of the Mexican coast to the export trade by the tariff of January 1st, 1873. 
 
100 
 
 567. Article 79 of the present tariff of January ist, 1872, authorizes foreign vessels arriving in any of our 
 ports open to high sea navigation, when there are no national vessels, after having discharged, to pass to any 
 point on the coast, even when there may be no custom-house there either for high sea navigation or the coasting 
 trade, for the purpose of taking in national goods, with the previous permission of the collector of the correspond- 
 ing custom-house. 
 
 568. This privilege has opened all the coast of Mexico to the export trade, giving authority to foreign vessels 
 to take in national products on any part of the coast where they might have the greatest facility for loading there, 
 even when such ports are not open to high sea navigation or the coasting trade. 
 
 RATES OF THE MEXICAN TARIFF UPON SOME GOODS THAT ARE PRODUCED IN THE UNITED STATES. 
 
 569. The Report inserts a hst of articles which in its opinion the manufacturers of Chicago would try to 
 import into the Mexican Republic, and mentions the duty which each one of those articles pays in conformity 
 with the existing tariif, with the object of showing that those duties are prohibitive, and that while they subsist 
 they will form a great obstacle to the prosperity of the commerce between the two countries. 
 
 570. In order to methodically examine this point, it is convenient first to give the list of the articles, with 
 their respective rates of import dues inserted in the Report, than rectify the mistakes incurred in it, compare the 
 rates of the present Mexican tariff with some of those of the United States tariff, and' lastly, to make some general 
 observations upon the same matter. 
 
 571. The Ust of foreign goods which the Report considers weighed down by such high duties that they are 
 called prohibiture, and therefore their importation into this country is thought difficult, is the following : 
 
 Cottons (domestics) unbleached, per square metre $0 07 
 
 CaHcoes o 16 
 
 White thread, kilogramme o 60 
 
 Colored " " o 95 
 
 Spool thread, per dozen o 14 
 
 Cassimers and similar woolen goods, per square metre i 14 
 
 Open carriages, or coupes 1 76 00 
 
 Coaches, phaetons, landaus 396 00 
 
 Buggies 132 00 
 
 Sulkies . ". 66 00 
 
 Carts 80 00 
 
 Harness for carriages, per kilogramme 2 00 gross. 
 
 Harness for carts o 86 " 
 
 Furniture 55 per cent, on the Manufacture and 25 per cent, additional. 
 
 Pianos Kilogram $00 43 gross weight 
 
 Flour : « 00 10 nett weight 
 
 Wheat ■. " 0004 
 
 Barley " 0003 
 
 Rice " 0007 
 
 Hops " 0018 
 
 Smoked ham " 00 24 
 
 Smoked and salt meats " 00 24 
 
 Hog's lard " 0018 
 
 Butter " 0024 
 
 Cheese : " 00 14 
 
 567. Article 79 of the same authorizes foreign vessels to take in national goods on any part of the coast. 
 
 568. This privilege has opened the Mexican coast to foreign commerce. 
 
 569. Opinion of the Report as to the difficulty presented by the rates of the Mexican tarifi to the commerce of the 
 United States. 
 
 570. The propriety of inserting the list of the goods mentioned in the report, in order to make the corresponding cor- 
 rections. 
 
 571. List of merchandise produced in the United States and rated on the tariif rates which are mentioned in the 
 lleport. 
 
101 
 
 Tallow candles Kilogram oo 08 gross weight 
 
 Stearine " 00 1 9 " 
 
 Paraffine " 00 38 " 
 
 Crackers " 00 1 2 " 
 
 Canned fruits, including can " 00 50 nett weight. 
 
 Canned meats and fish " 00 72 " 
 
 Pickles, including bottles " 00 48 " 
 
 Fine toilet soaps " i ig gross weight. 
 
 Common soap " ... $00 30 to 00 80 " 
 
 Common window glass " 00 1 7 " 
 
 Powder " 200 " 
 
 Iron nails of all kinds " 00 1 2 " 
 
 All kinds of tools of iron, steel or wood for mechanics ... " 00 19 " 
 
 Ready-made clothing " 132 per cent. 
 
 India Rubber Coats " $ i 43 gross weight. 
 
 " Shoes " 00 43 
 
 Oil cloth for tables " 0029 " 
 
 " " floors " 00 29 
 
 Boots of yellow sheepskin Dozen 1650 " 
 
 " " calfskin or morocco " 27 00 " 
 
 Men's common shoes of calfskin or morocco " 7 00 " 
 
 " fine " " 1650 
 
 Women's fine " " 17 00 " 
 
 " common leather shoes " 5 5° " 
 
 Carpets 2x3 Square metre 00 80 " 
 
 " fine Brussels " °° 95 " 
 
 " velvet " 140 " 
 
 Mats, palm leaf Kilogram 00 16 " 
 
 Vinegar, in barrels " 00 05 nett weight. 
 
 " in bottles " 0010 " 
 
 Whiskey, in barrels " 00 33 " 
 
 " in bottles " 00 38 " 
 
 Beer, in barrels " 00 10 " 
 
 " in bottles " 0020 " 
 
 Petroleum, including cans " 00 09 " 
 
 Rosin " 00 25 gross weight. 
 
 Tar " 0003 
 
 Salt " 0005 
 
 Potatoes " 00 02 " 
 
 Onions " 0002 " 
 
 C. Rectification of the List of North American Merchandise rated by the Mexican Tariff, contained in the 
 
 Report. 
 
 572. The rates affixed to the major part of the articles contained in the preceding list are correct, but 
 regarding some of them, there were typographical errors in the Report, or else the report itself was incorrect. It 
 is therefore necessary to make the following specifications : 
 
 573. It is true that the white and unbleached cotton cloths pay, according to the Mexican tariff, the rates of 
 9 and 16 cents, but the Ust does not say which of them pays the first of these rates, and which the second, but 
 all the unbleached are rated at 9 cents and the bleached at 16 cents. It might be thought, consequently, that 
 the "Imperial," " MadapoUam" and other cloths of like class, had to pay the rate of 16 cents per "square metre," 
 which is not true, for only the fine white cotton cloths have to pay this rate, and only those are considered as 
 such that count more than 33 threads of warp and woof in half a centimetre square on each side. The relatively 
 few cloths of this class imported to the Republic cannot be confounded with what is commonly called in Eng- 
 lish " bleached domestics." 
 
 573 Rectification of tlie misstatements contained in the list of the Report. 
 573. Rectification of the rate on white sunbleached cotton cloths. 
 
102 
 
 574- Cotton thread on reels pays, as stated, the rate of 14 cents per dozen, according to the tariff in foroe; 
 but the Report does not state that these reels, under and subject to this duty, can measure up to 275 metres. 
 According to the United States tariff the same article pays, for every 100 yards or fraction thereof, 6 cents per 
 dozen of reels, and an additional duty of 35 per cent; it is, therefore, burdened there with a rate very much 
 higher, when the reels are of 300 yards or 274.32 metres. The white and colored threads, which are rated in 
 the list at 60 and 96 cents the kilogram, are the white, unbleached and colored yarns, as those are the articles 
 which pay those duties. 
 
 575. Meats and fish in tins, which, according to the Mexican tariff, pay 72 cents per kilogram, nett, are 
 those which are only consumed by the richer people ; therefore, the mentioned rate is in relation to their first 
 cost, and is no obstacle to their sale. It should have been stated in the Hst that sardines or any other fish or 
 shellfish, pickled, salt, sahed down or in oil, including sardines in tomato or butter, pay only a rate of 14 cents. 
 These classes are of much larger consumption than the first. 
 
 576. Common soap bears a rate of 15 cents per kilogram gross weight, and does not pay from 30 to 80 
 cents, as the list states. 
 
 577. Fine powder for hunters pays, as stated, $2.00 per kilogram, gross weight; but the Report omitted to 
 saythat this rate has been reduced one-half by the decree of August 31st, 1878, which is to take effect on the istof 
 February next. It is proper to state here, also, that all kinds of mining powder is exempt from duty, and that 
 which is imported, and in considerable quantities, comes from the United States. ■ 
 
 578. Men's fine gaiter boots pay $13 per dozen, women's $13 when of leather, and $17 when of silk. The 
 list says nothing of women's leather gaiter-boots, apd gaiter-boots are called "shoes," for shoes are rated as if 
 they were gaiter-boots. No account is made, therefore, of the distinction in the tariff between men's and women's 
 shoes and gaiters, for the former pay $7 and the latter $13, and there is no rate of $16 50, as the Report states, 
 on men's fine shoes. Women's shoes and gaiters bear the following rates: 
 
 Low shoes of leather or material other than silk $5 5° 
 
 " " of silk, with or without ornament 10 00 
 
 Gaiter boots of leather or material other than silk, with or without ornament or elastics 13 °o 
 
 Gaiter boots of silk with ornament or elastics i7 °° 
 
 579. Moreover, the Report makes no mention of shoes and gaiters for children, which bear lower rates, of 
 $5, $7 and $10, according to their class, and limited to eighteen centimetres of sole. 
 
 580. Palm leaf mats pay 12 cents per kilogram, and not 16 cents as the Report states. This last rate would 
 be correct according to provision 500 of the tariff; but before this went into force it was abrograted by the decree 
 of June 28th, 1872, in its fifth article, which declared the said provision null and void, and in force only the 93d, 
 which assigns 2 1 cents for the same class of mats. 
 
 581. It is stated in the preceding Hst that furniture pays 55 per cent on the invoice price, and 25 per cent, 
 additional. In another part of this communication it has already been shown that the Mexican tariff does not 
 impose additional duties on any class of merchandise upon its importation into the Republic. Furniture pays 
 according to provision 735 of the tariff in force, 55 per cent, on appraisement, and as this appraisement is made 
 by augmenting the invoice price nearly 25 per cent, when the declaration of the invoice is considered 
 exact the result is the same as if the duties were levied on the declared value, with 25- per cent additional ; but 
 the Report falls into the mistake of calling additional the difference between the invoice and the market value. 
 
 D. Cause of the High Duties of the Mexican Tariff and General Observations on this Subject. 
 
 582. It is^true that the Mexican tariff generally imposes high duties on foreign goods ; but it is also a fact 
 that some articles rated in the schedule of the tariff pay relatively low duties, and that many of the said articles 
 are of American production. Wines and groceries, for example, bear generally lower duties in the Mexican 
 tariff than in that of the United States. 
 
 574. Rectification of the rate on cotton thread in reels. 
 
 575. Rectification of the rate on meats and fish in cans. 
 
 576. Rectification of the rate on common soap. 
 
 577. Rectification of the rate on fine powder. 
 
 578. Eectification of the rate on men's fine gaiter-hoots. 
 
 579. Eectification of the rate on gaiters and children's shoes. 
 
 580. Rectification of the rate on palm-leaf mats. 
 
 581. Rectification of the rate on furniture. 
 
103 
 
 583. It cannot be denied that the high duties imposed upon the importation of foreign goods is a great 
 obstacle to the increase of their consumption, for the poor class of the people, who compose the majority of the 
 inhabitants eveiywhere, find it difficult to provide themselves with these articles, because of the high prices at 
 which they are sold in consequence of those duties ; and it is a well-known maxim of political economy that the 
 cheapness of goods increases their demand, and on the contrary, the high price of an article obstructs the increase 
 of, and in many cases lessens its demand and consumption. 
 
 584. Aside from these general considerations, however, it must be borne in mind that there are certain 
 goods the consumption of which is not impeded by the increased price caused by the high import duties, or other 
 causes, as occurs, for example, with tobacco, sugar and other articles of general use, which, in spite of the high 
 rates they pay in many countries, are imported in great quantities, figuring largely in the proceeds of the custom- 
 houses. 
 
 585. Governments generally have two reasons for imposing high duties on certain foreign goods: First, as 
 an important means of contributing to the public finances ; and, second, to protect the national production of 
 like articles ; and either for some one of these two reasons, or for both combined, various nations, the most 
 advanced in the science of political economy, impose heavy duties on certain foreign goods, and it can be 
 assured that among these nations the United States occupies an important place. 
 
 586. In regard to Mexico, the cause of the relatively high duties imposed on various foreign goods of larger 
 consumption, has been the fact that these duties form the principal basis of the federal finances, being that the 
 proceeds of them form two-thirds of the income of the Treasury. Not having been able to form any internal 
 revenue upon products sufficient to meet the public expenditures, it was necessary to levy a heavy tax on foreign 
 goods of larger consumption in the country, such as Unens and the ordinary fabrics of cotton and hnen. 
 
 587. While the high import duties are uniformly imposed by all the other nations, no one of them can 
 allege any special prejudice of its inteirests, and this is precisely the state of the case in regard to the duties 
 imposed by the Mexican tariff on foreign goods. 
 
 588. If nails are not manufactured in Mexico, and their use is needed, it is plain they will be imported from 
 abroad, and that the high duty they bear will not impede their importation, because the importer will only have 
 to add to the price of the nails the import duty. The same thing can be said of hams and of the other goods 
 mentioned in the Report. 
 
 589. If the United States should desire differential rates for their goods, less than the goods of other nations 
 pay, this would be the subject of a reciprocity treaty, which subject will be spoken of especially further on. 
 
 5 90. The rates of the Mexican tariff do not, therefore, appear censurable ; the United States having also followed 
 a strictly protective system, which in many cases has come to be prohibitive. In fact, the comparing of some 
 rates of the Mexican tariff with those imposed by the United States tariff on the same articles demonstrates the 
 exactness of this assertion. 
 
 591. The Report acknowledges that in the opinion of many citizens of the United States their tariff needs to 
 be revised, and in many points reduced, and it is a fact that the economic system which has prevailed for some 
 years in the United States is the protective one, by means of which manufacturing industry has acquired an ex- 
 traordinary development in that neighboring nation. This will appear more clearly demonstrated upon drawing, 
 further on, a comparison between some rates of our tariff and that of the United States. But even though the 
 United States tariff were the lowest and most liberal, it does not appear that therefore the fact should not be 
 recognized that Mexico has introduced into its commercial legislation various and important reforms, and that 
 notwithstanding the difficult situation it has been in for a long time, on account of its internal dissensions and 
 foreign wars, it has gone on changing, little by little, as circumstances have permitted, the prohibitive system of 
 colonial times for another, partly protective, it is true, but founded on appreciable reasons. Whenever the state 
 
 ,"i82 The Mexican tariff does not impose higher rates tlian the United States on every article. 
 
 583. High duties are an obstacle to consumption. 
 
 584. In many countries high duties are imposed on certain articles without their consumption being impeded thereby. 
 
 585. Governments have two reasons for imposing high duties on foreign goods. 
 
 586. Import duties had to form, in Mexico, the principal revenue. 
 
 587. The import duties of Mexico are uniform to all nations. 
 
 588. The import duties do not weigh upon the importer, but upon the consumer. 
 
 589. Further on the propriety of entering into a reciprocity treaty with the United States will be spoken of. 
 
 590. The United States have followed a thoroughly protective system. 
 
 591. Mexico introduces into its commercial legislation important reforms, wherever circumstances permit. 
 
104 
 
 of the treasury has permitted, the Mexican Government has granted new privileges to commerce ; it has unceas- 
 ingly studied the question of the reduction of rates whenever this has been asked ; and if some of these rates are 
 still so high that they weigh too heavily on the consumers, the reason lies in the pecuHar circumstances of the 
 country, which make any reform in its revenue laws necessarily gradual. 
 
 592. In order not to prejudice legitimate interests by too violent a reduction of the rates which in our tariff 
 are imposed on articles of larger consumption, such as plain linens and prints, and by reason of a petition to the 
 Executive for the reduction of those rates, two circulars were issued July 20th, 1878, in which the manufacturers 
 and merchants of the country and several public officers of various States were asked to express their opinion on 
 the convenience or inconvenience of the proposed measure, in order to decide as wisely as possible so important a 
 question. The replies to the said circulars are numerous, and have thrown light on the question, as they contain 
 commercial statistics which were not before obtained ; and the study of the matter being thus facilitated, the 
 Executive will be able to work for the best interest of the public; but no decisive steps will be taken until all the 
 circumstances have been taken into consideration which may exist for or against the adoption of the proposed 
 measure. The Government of Mexico has thus evidenced that it considers a radical reform in its tariffnecessary, 
 by taking under consideration, as it has already done, the principal point of the question, that of cotton cloths. 
 
 593. The duties which to said cloths are assigned by our tariff are really high, because in some cases they 
 amount to more than one hundred per cent, upon the invoice value ; but the importation of white and printed 
 cotton cloths of European manufacture, far from ceasing until now, on account of these high tariffs, all the 
 quantity which can be consumed of them in the " RepubHc" has been and continues to be imported, the impor- 
 tation of the brownest only having diminished, in consequence of the extraordinary development which their 
 manufacture has taken in the country. 
 
 594. The same reasons and considerations which are had in the United States to keep a highly protective 
 tariff, which might otherwise be considered in certain cases as prohibitive upon imported articles, whose equals 
 are produced in that country, have been the ones which have urged until now the conduct observed by the 
 Mexican Government with respect to the duties imposed by its tariff. 
 
 Mexico could provide the United States with considerable quantities of certain products if it were not that 
 the tariffs which that nation imposes are so high upon these articles that necessarily they have to look for their 
 reaHzation in othtr markets. Although it should not be understood that it is intended to censure the fiscal 
 legislation of the United States, for each nation ought to procure, before all, its own good, and with that end 
 protect its established industries, creating at the same time sufficient rents to provide for its needs. The truth is 
 that Mexico cannot find in the United States as much facility for the realization of certain products as in Europe, 
 where these products have incomparable smaller duties. If to this circumstance is added the fact that the 
 articles of greatest consumption in this country have not been obtained until now with as much commodity in 
 the North American markets as in Europe, it will readily be understood that although the traffic with the United 
 States is capable of considerable increment, it is not easy, however, that the commercial legislation which actually 
 reigns in that country can help its citizens to replace the Europeans in the sale of the principal articles of our 
 consumption. It is furthermore necessary to have in mind that exaggerated protectionism is capable of injuring 
 the same industries which it was intended to protect. For although it may assure itself against foreign competition, 
 the lucrative production of all quantities consumed in the country prevents those which might be reahzed abroad. 
 
 595. From this it has resulted that the United States have not been able to compete in the rate of many 
 articles in foreign markets with other nations, as England, France and Germany, which have established their 
 industries, in virtue of a moderate protection, which was given to them at the beginning, and which has gone on 
 diminishing as circumstances have permitted. 
 
 596. The Report appears to recognize the force of these considerations, for it sets forth that many citizens of 
 the United States agree in the opinion that the import tariff of that country urgently needs revision, and further 
 on he calls attention to the mining interests of Mexico, which he considers to be the only one which, being freed 
 from the many incumbrances that now weigh upon it, and having the necessary guarantees of future exemption 
 therefrom, would be the making of the prosperity of the country, for the products of that industry realizable 
 abroad would increase extraordinarily. The Report recognizes in this that the legislator ought not to lose sight of 
 the importance of encouraging the production of exportable articles. 
 
 593. Circulars of July 30tli, 1878, on the reduction of the rates on common cotton cloth 
 
 593 
 
 Cotton cloths are imported in quantities necessary for consumption, except the coaise unbleached 
 
 Mexico 
 
 594. The reasons which determined the United States to decree a high tariff are the same that have influenced in 
 ;ico. 
 
 595. Reason why the United States cannot compete with othsr nations in certain goods. 
 
 596. The Report recognizes the propriety of revising the tariff of the United States. 
 
105 
 
 597- A large proportion of the articles coming from the United States, which are imported into the Re- 
 pubUc, are, as has already been elsewhere stated, entered free of duty. If the rest are not imported in larger 
 quantities it is not because they pay duties which are too high (for in such case they would not be imported from 
 other countries), but because other nations produce them cheaper. 
 
 E. The rates of the Mexican and United States tariff on certain goods compared. 
 
 598. In order to judge, from a knowledge of the case, to what degree the estabUshed import duties of the 
 Mexican tariff may be an obstacle to the development of commerce with the United States, it is proper to make 
 a slight comparative examination of the duties imposed on certain goods by the tariffs of Mexico and the United 
 States. 
 
 599. Although according to the tariff of the United States some articles pay lower rates than those imposed 
 on the same by the Mexican tariff, it is not so with some others. It is notable that in that country they 
 have followed the system of protecting established industries, and that in certain cases that protection has a 
 marked tendency to completely impede the competition of foreign manufacture. 
 
 600. For the reason that the United States has generally arranged its tariff at so much per cent, on each 
 article, an exact comparison cannot be made, for our tariff has but few articles but what have a fixed rate, which 
 is, undoubtedly, an advantage, as it makes the collection of duties more uniform. Notwithstanding it can be 
 easily seen that many articles which in that country pay an import of so much per cent, on their value, bear 
 duties much higher tliere than under the fixed rates imposed by the Mexican tariff, although an exact calculation 
 cannot be made of the difference or proportion between the duties of the one and the other tariff. 
 
 601. Another advantage not to be despised, which our tariff has over that of the United States is, the levy- 
 ing of a single duty, while in that country many articles pay two rates at the same time, one fixed on weight or 
 measure and the other so much per cent, on their- value. This system naturally makes the operation of the 
 custom-houses difficult in despatching the goods and the Hquidation of their duties, and it establishes besides a 
 prejudicial inequality in trade, through the diverse estimates made of the value of the goods. 
 
 602. On some occasions it has been asserted by persons who knew httle about our laws in reference to for- 
 eign commerce, that these are very complicated and need therefore to be profoundly studied. The examination 
 and comparison which have been made in this Department, of the existing tariff and those of other nations, have, 
 however, demonstrated, that ours, in spite of the various defects it suffers, and which make a radical reform neces- 
 sary, may be considered less complicated than those of other nations. 
 
 603. The nomenclature of the United States import tariff contains more than 2,000 articles, and of them 
 1,824 3-re rated at so much per cent, on their respective values. The tariffs of other nations have also a very 
 extensive nomenclature, and in some of them the system of levying the duties at so much per cent, on the value 
 of foreign goods has been adopted, and also of establishing differences between the classes or kinds of merchan- 
 dise and of fixing the legal appraisement according to their prices at different times. It can be seen, then, that the 
 system observed by Mexico, instead of being called complicated, may on the contrary be considered as clearer 
 and simpler. 
 
 604. While our tariff estabUshes, besides import duties, only tonnage, light-house anchorage and pilot dues, 
 that of the United States contains a long list of different dues, resulting from various custom-house regulations • 
 another Ust equally extensive for the custom-houses of its northern, north-east and north-west frontiers; and by 
 these lists it can be seen that the despatching of goods in the custom-houses of that country is more complicated 
 than in those of Mexico, as well for the captains of vessels as for the consignees of merchandise. 
 
 605. The following comparative statement of the duties imposed on certain kinds of goods by the Mexican 
 and United States tariffs demonstrate that the duties imposed by our tariff are not so exaggerated, or at least it 
 is not ours that levies the highest duties on those goods. 
 
 597 It is not tlie high duties that have impeded the importation of some North American goods into Mexico. 
 
 598 It is proper to make a comparison between the rates of certain articles in the tarifEs of both nations 
 
 599 In the United States tariff some articles are higher and some lower than in that of Mexico. 
 
 600 Many articles pay more, according to the United States tariff, although an exact comparison cannot be made. 
 
 601 The system adopted by the United States makes the operations of the custom-houses difficult. 
 603 The Mexican tariff is less complicated than those of other nations. 
 
 603 The system adopted bv Mexico for the rates of the tariff is clearer and simpler. 
 
 604 The United States tariff contains a long list of dues resulting from certain custom-house regulations. 
 
 605 Comparative statement of the duties imposed on certain goods by the United States and Mexican tariffs. 
 
 14 
 
« 
 
 106 
 
 Comparative Statement of some rates' of the Mexican tariff with the duties of the same articles pay accord- 
 ing to the tariff of the United States of America. 
 
 Rates according to the 
 Mexican tariff of Jan- 
 uary 1st, 1873, and 
 Acetates : later regulations. 
 
 Of Ammoniac Kilogram, nett o 
 
 " Barytes " o 
 
 " Copper " o 
 
 " Iron " o 
 
 " White lead " o 
 
 " Magnesia " o 
 
 " Potassa " o 
 
 " Soda " o 
 
 " Zinc " o 
 
 Almonds in shell " o 
 
 shelled " o 
 
 Playing cards, common Kilogram, gross 12 oo 
 
 " " fine " " 1200 
 
 Silk Cravats Kilogram, nett.$i8 00 
 
 IS 
 15 
 IS 
 IS 
 IS 
 IS 
 IS 
 IS 
 IS 
 10 
 20 
 
 Gold jewelry with precious stones. 
 Iron water pipes . 
 
 Iron cauldrons 
 
 Iron anchors 
 
 Iron anvils 
 
 Cast iron gas tubing . , 
 Forged iron gas tubing . 
 
 Kilogram 
 
 Iron screws, less than 2 in. 
 Railroad spikes 
 
 Rails for Railroads . 
 
 13 per cent. 
 Free. 
 
 Free. 
 
 Free. 
 
 Free. 
 
 Free. 
 
 Free. 
 
 00 19 
 Free. 
 
 Free. 
 
 Equivalents of the 
 rates of the import 
 tarifi of the United 
 
 States. 
 
 ° Sir 
 
 O 2 2"' 
 
 ° 55" 
 
 22°'' 
 
 1 io'» 
 
 o SS™ 
 ° SS°' 
 o 5S°' 
 o 13" 
 
 O 2 2'» 
 36 00 
 
 50 40 
 
 60 per cent. 
 25 per cent. 
 
 Liquorice paste " 
 
 Brandies : 
 
 Gin in bottles ". " 
 
 " in barrels " 
 
 Rum, arrak and kirsh, in bottles " 
 
 " " " in barrels " 
 
 Whiskey, in bottles " 
 
 " in barrels " 
 
 Brandy, grape or cane in bottles " 
 
 " " in barrels " 
 
 Liquors, in bottles " 
 
 Wine in barrels: 
 
 White, 2d class " 
 
 " ist class " 
 
 Red 2d class " 
 
 " . ist class " 
 
 Wine in bottles: 
 
 Champagne « 
 
 in I bottles Do^en. 
 
 ini " « 
 
 whole " II 
 
 in larger bottles, on the excess, gal 
 
 00 
 
 20 
 
 00 
 
 48 
 
 00 
 
 38 
 
 00 
 
 S7 
 
 00 
 
 48 
 
 00 
 
 38 
 
 00 
 
 33 
 
 00 
 
 38 
 
 00 
 
 33 
 
 00 
 
 23 
 
 00 
 
 17 
 
 00 
 
 17 
 
 00 
 
 10 
 
 00 
 
 10 
 
 00 23 
 
 $0 02" 
 00 03^' 
 
 00 04™ 
 00 05" 
 
 00 03'^ 
 
 00 07" 
 00 24^" 
 
 00 05'' 
 00 05" 
 
 00 58™ 
 00 58" 
 00 58" 
 00 58" 
 00 58" 
 00 58" 
 00 58" 
 00 58™ 
 
 00 58" 
 
 00 17" 
 00 29** 
 00 17*' 
 00 29*' 
 
 1 S° 
 3 00 
 6 00 
 
 2 00 
 
o 20 
 
 44 
 
 :o 00 
 
 35 26 
 
 19 
 
 27" 
 
 14 
 
 27" 
 
 2 00 
 
 2 20'» 
 
 3 00 
 
 13 22" 
 
 05 
 
 05" 
 
 Free 
 
 02™ 
 
 Free 
 
 04^° 
 
 Free 
 
 01" 
 
 Free 
 
 02«» 
 
 Free 
 
 02" 
 
 [2 00 
 
 35 26 
 
 12 00 
 
 52 88 
 
 65 
 
 66" 
 
 Free 
 
 08'' 
 
 Free 
 
 15 
 
 Free 
 
 I 00 
 
 107 
 
 JVbte. — Other wines in bottles pay, according to the United States tariff, the same rates as the wines in 
 barrel. All the brandies, liquors and wines in bottles pay, according to the same tariff, an additional duty of 3 
 cents per bottle. 
 
 Bates according to the Equivalents of the 
 Mexican tariff of Jan- rates of the tariff of 
 ' uary 1st, 1873, and the United States 
 
 subsequent regulations, of America. 
 
 Nutmeg Kilogram 
 
 Morphine and its salts " 
 
 Olive oil, in flasks or bottles • ■ ■ • " 
 
 " jars or tins " 
 
 Opium " 
 
 " extract " 
 
 Plums, dried 
 
 Saltpetre, crude " 
 
 refined 
 
 Railroad rails, iron " 
 
 " iron and steel " 
 
 steel 
 
 Strychnine " 
 
 salts of 
 
 Nuts 
 
 Copper, sulphate of " 
 
 Shingles per 1,000 
 
 Lumber for building per 1,000 feet 
 
 Note. — Lumber other than common bears various much higher rates. 
 
 606. As has aheady been said, an exact comparison cannot be made regarding many other articles, for the 
 reason of their being quoted in the United States tariff at so much per cent, on their value ; but there is no doubt 
 that many of them bear rates much higher in the United States than in Mexico. 
 
 607. Among the articles which, according to the United States tariff, pay two rates at the same time, one on 
 so much per cent, of its value, and the other fixedon its weight or measure, the following are burthened with 
 higher rates there than in Mexico : 
 
 UNITED STATES TARIFF. MEXICAN TARIFF. 
 
 Add. rates 
 at so much 
 per cent. 
 
 Buttons of wool or wool covered pound. $0 05 50 Kilo, gross. $0 29 
 
 Segars, besides revenue stamps, gross weight " 2 50 25 " nett. 4 90 
 
 Cigarettes " " " " 2 50 25 " " i 25 
 
 Aniline " 050 35 " " 015 
 
 Cotton thread on reels of 300 yards dozen. o 18 35 dozen. o 14 
 
 Plain woolen flannel pound. 050 35 Sqr. metre. 022 
 
 Mining powder " o 06 20 " Free 
 
 Sewing machine needles per 1,000 i ao 35 " Free 
 
 Wooden pencils of lead or chalk gross. o 50 30 Kilo, gross. o 19 
 
 Steel pens " ° 1° 25 " 086 
 
 Sulphur ton 2000 ^5 " ^ree 
 
 Cologne and lavender water gaUon 3 00 50 Kilo, nett o 50 
 
 Toilet vinegar " 3 0° 5° " ° 5° 
 
 Varnish " ° 5° 20 to 25 " 016 
 
 Telegraph wire pound 002 15 " Free 
 
 Wool in the fleece " ° 1° " " ° '2 
 
 F. Articles of Mexican production burdened with heavy import duties in the United States. 
 
 608. If the United States should consider as an obstacle to the development of its commerce with Mexico 
 the fact that some articles of North American production, such as hams, cut-nails, etc., are burdened in Mexico 
 
 Fixed 
 rates. 
 
 606. On many other articles the rates of the United States tariff are higher than in that of Mexico. 
 6O7' Comparison of the rates of some articles which in the United States pay additional duties. 
 608. Mexico has reason to consider the import duties on some of its products as prohibitive. 
 
108 
 
 by relatively high duties, Mexico could allege, in its turn, the same reasons to consider as an obstaele to the devel- 
 ment of its commerce with the United States the rates imposed by the North American tariff on certain articles 
 of Mexican production. 
 
 609. We insert the following list of articles of national production which, by reason of the import duties they 
 have to pay in the United States, are of no use to Mexico in its trade with that nation : 
 
 List of articles of Mexican production bearing import duties in the United States. 
 
 Sugar cane brandy gallon . 
 
 Mezcal " " 
 
 Sugar, white refined pound 
 
 medium classes. 
 
 " Muscavado " 
 
 Animals, cattle 
 
 Dried beef pound 
 
 Salt beef " 
 
 Barley per 48 lbs. 
 
 Fresh vegetables 
 
 Copper pound 
 
 $2 
 2 
 o 
 o 
 o 
 o 
 o 
 o 
 
 o 
 o 
 
 o 
 
 00 
 00 
 
 04 
 
 02f 
 
 02} 
 02 
 
 Sundries, bags. 
 
 1 
 
 01 
 01 
 IS 
 
 °3 
 02 
 
 03 
 04 
 
 OS 
 
 20 per cent. 
 
 10 per cent. 
 
 35 per cent. 
 35 
 
 o 01 { 
 
 O 10 ( 
 
 .ftl^ 
 
 CI 
 
 |zo 
 
 10 
 
 20 
 
 130 
 ill 
 
 2S 
 
 00 
 
 SO 
 
 Chocolate " 
 
 Sweetmeats 
 
 Wax and lucifer matches 
 
 Fresh fruits 
 
 Dried " 
 
 Flour 
 
 Soap pouud 
 
 Wool in fleece (with 10 per cent, discount) " 
 
 Crockery 
 
 Timber for building per 1,000 
 
 Indian corn per 56 lbs. 
 
 Lard pound 
 
 Marble cubic foot 
 
 Molasses pound 
 
 Honey gaUon 
 
 Potatoes per 60 lbs. 
 
 Pickled fish barrel 
 
 Salt " « 
 
 Palm mats per 56 lbs 
 
 1 ecah stone per cubic foot o 50 & 20 per cent. 
 
 Stone filters 
 
 Panocha pound 
 
 Lead << 
 
 Cheese , » 
 
 Rope 
 
 Salt 
 
 Tallow 
 
 Riding saddles 
 
 Silk hats 
 
 Straw hats 
 
 Manufactured tobacco pound 
 
 o 10 
 
 02 
 
 1 00&25 percent, 
 o o\\ 
 
 o 20 
 
 IS 
 
 1 so 
 
 2 00 
 
 o 10 
 
 .per 100 lbs. 
 . pound 
 
 o oif 
 
 .0 02 
 o 04 
 
 o 08 
 o 01 
 
 30 per cent. 
 
 Leaf 
 
 Wheat 
 
 Sole leather 
 
 .per 60 lbs 
 
 3 5 per cent. 
 40 " 
 40 " 
 2 50& 25 per cent. 
 
 o 35 
 o 02 
 
 25 per cent. 
 
 609. 
 
 List of articles of Mexican production, with their import duties in the United States. 
 
109 
 
 6io. The preceding list demonstrates that there are articles of Mexican production, and principal among 
 them brandies, sugar, and tobacco, that could be sent to the United States in considerable quantities if they did 
 not have to pay very high and almost prohibitive duties. 
 
 6 1 1. Although generally the United States tariff is more Hberal than our own, for it imposes lower rates on 
 the majority of articles, and contains, besides, a larger number of exemptions, the fact ought not, however, to be 
 ignored that in comparing their tariff with those of other nations with which Mexico trades, it is proved that, far 
 from bemg able to produce the articles of our consumption at prices sufficiently low to compete with European 
 nations, there exists in that country a marked tendency to protect, by means of high rates, their national produc- 
 tion or manufacture, and to pay much more attention to the interior consumption of those manufactures than to 
 what they might realize abroad if the protection were less efficatious, and industry should be allowed to take a 
 more natural development. 
 
 612. Mexico might, then, consider, with as much or more reason than the United States, that some of the 
 rates of the North American tariff constitute an obstacle to the increase of commerce between the two countries ; 
 and can sustain, by the very testimony of the United States Representative in Mexico, that of the governments of 
 the two Republics, that of Mexico is the one that has done most to promote the development of trade. In fact, 
 the Honorable John W. Foster said, on this point, in his speech before the Chamber of Commerce of New 
 Orleans, November i8th, 1875, aheady mentioned, as follows: 
 
 " . . .Second.' — Very little has the United States done to promote this trade. 
 
 " I believe I am exact when I say that Congress only once, and that more than 15 years ago, made an ap- 
 propriation to establish communication or to help those who had been sufficiently enterprising to start lines of 
 steamers between our ports and those of Mexico ; and I doubt if that at any time, when paying attention to the 
 tariff on importations, the idea of favoring the products of that neighboring sister RepubKc has been taken into 
 consideration ; though it is true that we have given large subsidies to other lines of steamers to carry on trade 
 with the other side of the globe, in China, Japan, beyond Ecuador, and in Brazil; we have entered into a reci- 
 procity treaty with our monarchial neighbors of Canada ; we are very conveniently occupying ourselves with 
 another, and have received with distinguished honors the King of 60,000 subjects in some small islands 2,000 
 miles away from our most distant Pacific coast, entering into a liberal reciprocity treaty with him. 
 
 " Let us compare this conduct with that of the Mexican Government. There are now seven lines of steam- 
 ers visiting Mexican ports and coming from foreign countries ; five on the Gulf (without counting the New York 
 and New Orleans Hnes), and two on the Pacific coast. Of these seven lines, three are subsidized by the Mexican 
 Government, and the three are American lines, that of New York, of New Orleans, and that between Panama 
 and San Francisco, the Pacific Mail, while the English and French Governments each subsidize a line from their 
 respective countries. 
 
 " If it were not for the subsidy which the American steamers are receiving from the impoverished treasury 
 of Mexico, none of these lines could be sustained." 
 
 2. IMPORTATION TO MEXICO OF MACHINERY AND TOOLS FOR AGRICULTURE AND MINING. 
 
 613. The Report states, in reference to this point, that: "Of the articles duty free, like steam engines and 
 machinery intended especially for mining operations, and agricultural implements, a larger importation could be 
 made of these from the United States if it were not for two reasons : the first, that in the case of machinery, the 
 cost of transportation is so exorbitant that the demand is consequently reduced and will continue lessening until 
 the means of communication are made easy and freights reduced ; that to the railroad freights have to be added 
 the larger expenses of interior transportation by roads, which, by reason of revolutions and an exhausted treasury, 
 are in a state of complete abandonment ; that in regard to agricultural implements, their use is hardly compre- 
 hended, and husbandmen accept them very slowly ; that the instrument that was used on the plains of Asia three 
 thousand years ago is the one generally predominating in this country ; but that in time there will be a demand 
 for modern instruments." 
 
 614. The unavoidable conclusion from these premises, in the form in which they are presented, would be 
 that the importation of North American machinery to Mexico is of very little importance, and that it would never 
 amount to much. 
 
 610. Mexican aricles that cannot be sent to the United States by reason of the high duties they pay. 
 
 611. The protective system pursued by the United States prevents them from competing with other nations. 
 
 613. Hon. John W. Poster acknowledged on November, 1875, that Mexico had made greater efforts than the United 
 States to promote trade. 
 
 613. Causes which, according to the opinion of the Eeport, impede the use of machinery in Mexico. 
 
 614. The deduction would be that the importation of machinery into Mexico never could acquire much increase. 
 
110 
 
 6 IS- Although it is true that foreign machinery has never been imported into Mexico to the degree that was 
 to be desired, to facilitate the development of its elements of wealth, it is a fact, however, that the importation of 
 foreign machinery has increased considerably in these later years. For a long time the only machinery coming 
 to Mexico was from England. Since a few years ago North American machinery has began to be imported in 
 large quantities, as well for mines as for agriculture and other uses, and it can be said that the latter is now 
 obtaining the monopoly of this market. The large quantity, relatively, of foreign machinery introduced into 
 Mexico can easily be appreciated by simply comparing its value with that of foreign dutiable goods imported into 
 the country. In fact, of $20,000,000, to which, approximately, the factory value of foreign goods annually 
 imported to Mexico amounts to, according to the commercial estimates made by the maritime and frontier custom- 
 houses (the larger part of which carry a duty which amounts on the average to more than 55 per cent, of their 
 market value), a little less than $3,000,000 is the invoice value of articles that bear no duty, and a large part of 
 this is machinery coming from the United States. 
 
 616. The first reason expressed by the Report, on examining the difficulties presented to the importation 
 of machinery to Mexico on a large scale, is well founded, and demonstrates the exactitude of what has abeady 
 been said in this exposition, that Mexico cannot attain to the future to which nature seems to have destined her 
 without the construction of railways to facilitate the transportation of machinery, tools and necessary effects for 
 increasing production, to the productive centres of the country, and for the transportation of its products to foreign 
 markets. 
 
 617. The high rate of interior freights impedes, in fact, as general a use as could be desired of the heavy 
 and costly machinery that is needed for the better development of the country's elements of wealth ; but this 
 circumstance has not impeded, so far, the setting up of machinery in certain districts, both mining and agricultural, 
 which, although in the interior of the country, are under favorable conditions to be worked. 
 
 618. In various mineral districts steam engines of large power are found for pumping out water and other- 
 wise facilitating the working of the mines and elimination of their metals ; in many of the districts of the " M 
 lands " there are also steam engines and the most modern compUcated and costly apphances for the elaboration 
 of sugar, without the high rate of land freights being an absolute impediment to the introduction of this 
 machinery. 
 
 619. This difficulty disappears almost entirely on the coasts of Mexico, and for this reason it is observed that 
 in the State of Yucatan, which is generally level, there is a larger amount of machinery in proportion than in 
 other places in the country. It can be asserted that in the State of Yucatan alone there exists a quarter part of 
 all the steam machinery in the Republic, which demonstrates the fact that when the want of means of communi- 
 cation does not stand in the way, modern instruments and machines are generally nsed 
 
 620. On the other hand, the introduction of machinery into Mexico, and its appUcation to various existing 
 industries, does not meet with any more resistance here than it has met with in other countries. Routine is a 
 great drawback to the introduction of new system; the few shops there are in the country for repairing machinery 
 and the making of worn-out or broken parts, and the consequent suspension of the operation of machines when 
 some one of its principal parts are lacking, are, without doubt, one of the greatest difficulties to the general use of 
 machinery in Mexico ; but these difficulties have been experienced everywhere, and have been conquered in the 
 course of time. The very nations that have been the cradle of the most notable inventions of this kind have not 
 shown a general acceptance of their own inventions, until after the lapse of a more or less extensive period of 
 time. 
 
 621. The prospect for the introduction of machinery into Mexico is therefore of some importance, and 
 whilst its present importation is worth considering, it will assuredly be incomparably larger when the many aven- 
 ues of wealth in this country have been brought to the degree of development of which they are capable. 
 
 622. In regard to the instruments of agriculture the Report falls into an error, when it states that their use 
 is hardly understood, and is accepted very slowly, and that the instrument that was used on the plains of Asia 
 three thousand years ago, is the one generally obtaining in the agricultural labor of this nation. 
 
 615. Proportion of goods imported free into Mexico from 1877 to 1878 to the total importation. 
 
 616. Need of railways in Mexico for the exportation of products and transportation of machinery. 
 
 617. In spite of the high freights, heavy and costly machinery has been set up in Mexico. 
 
 618. On mining as well as in agriculture, heavy and costly machinery is employed. 
 
 619. In the States of the coast heavy machinery is more used on account of low freights. 
 
 630. Other difficulties which the introduction of machinery has met with in Mexico. 
 
 631. The importation of machinery into Mexico will increase with the development of the elements of wealth of the 
 
 country. 
 
 Agricultural machines and implements are not unknown in Mexico. 
 
II] 
 
 623. There exist in Mexico not a few, but many, agricultural enterprises which use implements of the most 
 recent invention and use in Europe and the United States. On the estate of San Antonia,very near this capital, 
 hardly three leagues distant, agricultural operations may be seen, conducted on the most improved system, and 
 with the most modern machinery, and there are many other estates like this in different parts of the country. 
 There are besides many sugar estates, in which, as has already been stated, the most intricate and modem 
 appliances are used for all the operations of cane culture, and for refining of sugar and brandy. Foreign plows 
 harrows, rakes, sowers, reapers, winnowers, and all other appUances and instruments, such as hoes, shovels, cut- 
 lasses, etc., of the latest invention of Europe and the United States are successfully used on those estates which 
 may be considered the most advanced. Next in order are the second-class estates, which, by reason of their 
 small capital, as well as their limited business, and their small extent of land, cannot use the costly and compli- 
 cated machinery found on first-class estates ; but they do, however, use modern implements, such as plows, rakes, 
 etc., many of which are manufactured in this country. The poorer class of Mexico, formed of Indians, which in 
 some parts have no lands of their own, but sow on lands belonging to the commons, and limit themselves to sow- 
 ing what is absolutely necessary for their subsistence ; this class also use plows, some of which are of an antique 
 pattern, and are, undoubtedly, those to which the Report refers when it says they are the same used on the plains 
 of Asia three thousand years ago. Without examining the truth of the classification, it is proper to bear in mind 
 that those sowings made on a small scale do not form what is called the agricultural industry of the country, for 
 they are personal sowings, so td'speak, which have no further object than the production of just enough for the 
 support of the laborer's family. 
 
 624. In regard to this subject, it must also be borne in mind that peculiar conditions of land require methods 
 especially adapted to them, and it frequently happens that agricultural implements which give a very good result 
 in certain localities, by reason of the circumstances of the soil, do not succeed as well elsewhere. This occasions 
 frequently that modern appUances do not in every place bring about the results that are described, and, without 
 fixing upon the cause of this, causes them sometimes to be discarded as useless. It is necessary, therefore, that 
 the peculiarities of every locality should be studied, and that an endeavor should be made to adopt the appHances 
 designed for this market, to such peculiarities, all of which requires study and practical application on the part of 
 those who import them. It is quite certain that after such study there will be no danger of any want of success 
 regarding agricultural implements manufactured for the Mexican market. 
 
 625. The importation into Mexico of agricultural implements and machinery that are exempt from duty is 
 undoubtedly one of the branches of commerce having a larger opening for the future, and of which the manufac- 
 turers of the United States might avail themselves in case a larger development of the elements of wealth of this 
 country and of commerce between the two nations. 
 
 626. The Mexicans are not slower than the inhabitants of other countries in adopting the use of implements 
 and machinery to shorten and lessen labor. It can be assured, for example, there is not a family in Mexico, whose 
 circumstances permit them the expense of a sewing machine, which does not use one. The writing machine has 
 just been invented, and it is already in use in Mexico ; and many of the most modern and most intricate apph- 
 ances of industry and agriculture have been introduced here a very short time after their invention, and almost 
 simultaneously with their use in some countries more advanced in civilization. 
 
 627. The Hon. John W. Foster appeared to attach the exemption of duty on machinery, etc., the importance 
 it bears to the commerce of the United States, when, in a speech he delivered before the New Orleans Chamber 
 of Commerce, November i8th, 1875, he said in reference thereto as follows: 
 
 " The high rates of tariffs of both countries are a great obstacle to the development of trade, especially as 
 relates to our manufactures and some of our natural productions ; but the best of articles admitted duty free into 
 Mexico affords us some opportunities which have been made use of to some degree, and from which larger ad- 
 vantage can yet be reaHzed. Permit me to mention some of the articles on the free list : agricultural implements 
 and machinery of all kinds, plants and seeds, books, ink and printing materials, corn, corn meal, oats and hay, 
 machines and machinery of every branch of industry, forming a long and liberal list ; mining implements and ma- 
 chinery powder etc. ; railway supplies, locomotives, cars, etc. ; vessels of all kinds and materials pertaining to 
 them, masts and ship timber, etc." 
 
 623. Agricultural estates in Mexico which use modern and costly machinery. 
 
 624. The peculiar conditions of each soil require the use of special implements. 
 
 625 The free importation of machinery into Mexico ought to be advantageous to North American manufacturers. 
 
 636 Mexicans do not oppose the use of machines and instruments for reducing the cost of labor. 
 
 627 Opinions of Mr. Foster's speech in New Orleans on the importance of the exemption of duty on machinery. 
 
112 
 
 3- Want of Ports of Deposit in Mexico. 
 
 628. The Report goes on to say that " the system of ports of deposit has not yet been adopted in Mexico, 
 and notwithstanding that this city is the centre of importation for the middle country, and is in railway communi- 
 cation with the port, no arrangement has been made by which goods may be deposited in the capital, the duty 
 paid and despatch done there," and he dwells on some other considerations on this matter which will be spoken 
 of further on. 
 
 629. The preceding conceptions embrace several important questions. At this point we shall only examine 
 what refers to the lack of ports of deposit in Mexico, and the terms for payment of import duties, leaving the 
 rest to be concluded in its proper place in this exposition. 
 
 A. Ports of Deposit 
 
 630. The governing powers of Mexico cannot but recognize in principle the convenience of ports of de- 
 posit, because it is clear that to the degree that more privileges are granted to commerce the larger will be the 
 production of the country, and the aggregate welfare of the inhabitants of the Republic. It is to be desired that 
 this improvement should be established in Mexico, as it is ^e wish that our country should adopt everything' else 
 that may contribute to the welfare and prosperity of the nation. But in practice it has been found that the 
 establishment of ports of deposit would bring with it grvae dangers — considered greater than the advantages 
 flowing from it, and therefore the way has not been open to institute them. 
 
 a. Advantages of Ports of Deposit. 
 
 631. There are two quite different things concerning ports of deposit — ^the terms for payment of import 
 duties, and the power of re-exporting the goods without paying other than warehouse duties. 
 
 632. The first of these objects can be obtained without the need of ports of deposit, by simply giving the 
 importer time for the payment of the duties to which he is Hable, requiring, meanwhile, security therefor. The 
 second, which is free re-exportation, is the principal object for which ports of deposit are instituted, and which 
 properly constitutes them. 
 
 633. Without doubt ports of deposit may bring about a prodigious development of commerce in some places 
 possessed of peculiarly favorable circumstances for the trade of the world ; but they cannot /(?r se be the making 
 of the ports in which they are established. If the inter-oceanic railway or canal were constructed, Tehauntepec 
 and Minatitlan might come to rival some of the most flourishing cities of Mexico, upon being declared ports "of 
 deposit ; but in the present state of both of those towns and of the entire Republic, it is not probable that creat- 
 ing ports of deposit would bring about the prosperity of the places where they might be established. To make 
 our ports, in any real sense, ports of deposit, it would be necessary that they all should have ample and secure 
 harbors, wharves sufficient for vessels to come alongside of, as they arrive and discharge, without delay, and that 
 our ports should communicate with each other by comparatively short and direct inter-oceanic railway commu- 
 nication, with low rates of freight. Until this is realized it cannot be expected that making our ports into places 
 of deposit would be a measure which would alter the aspect of them or of the nation. 
 
 634. If, then, it is certain that they would not produce the advantages expected of them, and if at the same 
 time there exists a certainty that they would occasion grave evils, it seems the part of prudence to defer their 
 establishment until such time as it would produce fewer inconveniences than at the present time. 
 
 b. Inconveniences of Ports of Deposit. 
 
 635. The inconveniences of ports of deposit are also of two kinds — the first, because being equivalent 
 to granting time, the Treasury would immediately be obliged to wait in almost all cases the year granted the 
 merchants for keeping their goods on deposit, to be able to realize the duty on them, or to enter into arrange- 
 ments for the anticipated payment of duty from the importers, and both extremes would be equally ruinous. 
 
 638. Considerations of the Report on there being no ports of deposit in Mexico. 
 
 629. The lack of ports of deposit and time for payment of import duties. 
 
 630. Ports of deposit cannot yet be established in Mexico on account of the grave evils they would bring with them. 
 
 631. Ports of deposit have two advantages for commerce. 
 
 632. The advantage of time for the payment of duties can be granted without the need of deposit. 
 
 633. The advantage of re-exportation would be dangerous in the present condition of the country. 
 
 634. The establishment of ports of deposit will have to be deferred. 
 
 635. In the present state of the Treasury long time cannot be granted for the payment of import duties. 
 
• 113 
 
 636. If there were nof constant danger of the perturbation of public peace; if the Treasury were not 
 always threatened with all the dangers and evils of a deficit, and if the Government did not have to live from day 
 to day without being able to use in any direction the resource of credit, the Executive would be the first to pro- 
 pose the granting of time for the payment of import duties as a liberal and beneficial measure for the country ; 
 but in the necessity of sacrificing the lesser interest to the greater, it has not been deemed prudent to grant this 
 privilege, which only in countries enjoying complete security and welfare in public revenue can it be productive of 
 good results. 
 
 637. The second inconvenience of ports of deposit, greater even than the first, consists in the great facilities 
 it would afford for contraband, in positive damage to the Treasury and legitimate trade. The goods deposited 
 could be re-shipped, and in such case would be free from import duty. To prove their re-shipment, a certificate 
 from the Mexican consul or consul of any friendly nation residing in the port to which the goods had been 
 carried, stating their importation thereat, would have to be considered sufficient; and this certificate would be 
 presented, for example, six months after the re -shipment was asked, while it would be feasible to extend this time 
 under various reasons of apparently easy justification. 
 
 638. As Mexico has at the present no consuls except in a few of the commercial centres of the United 
 States and in some few ports of South America, and as it is not probable that it will have them for some time in other 
 commercial cities of the world, by reason of the suspension of official relations with various European nations, 
 such justification would come to depend upon the integrity or efficacy of foreign agents. The only effective 
 guarantee that there could be in this case is the morality of the employees of our custom-houses, and the tempta- 
 tions would be always very great for the commission of fraud. 
 
 639. It is easy to imagine to what a state the custom-house revenues would be reduced, which are the 
 principal resource the Government counts upon for its existence, the day that foreign merchandise could be con- 
 sumed in the country without pa)dng import duty, under the pretext of having been re-exported. 
 
 640. Ports of deposit have, besides, another inconvenience which, though of little importance, cannot be 
 passed unnoticed in our circumstances ; to wit, the necessity of paying out large expenditures in the construction 
 of warehouses, with all their requirements, in all our custom-houses ; for, although many of them more or less 
 adequate, they are not sufficient to contain all the goods that can be imported in a year. A considerable 
 number of employees would also have to be created to take care of such warehouses. 
 
 c. Ports of Deposit have already been tried in Mexico without success. 
 
 641. Ports of deposit are not a novelty amongst us. They have already in other times been tried, and the 
 best proof that can be presented that they have not resulted the same as in other countries, is that they could not 
 be preserved as a useless institution, and were at last aboKshed. 
 
 642. The decree of April nth, 1837, estabUshed two ports of deposit — one on the Pacific and the other on 
 the Gulf of Mexico. For this the two ports of largest importance at that time were designated. Vera Cruz and 
 San Bias. No record has remained of the degree of prosperity attained by those ports during the time they were 
 places of deposit. The danger of fraud in re-exportation presented itself then, as now. with probabilities so large 
 that in the decree of April nth, 1837, the free exportation of deposited goods was expressly prohibited. This decree 
 said very judiciously : "Considering that from the geographical situation of the Republic, the re-exportation of 
 goods once introduced is not economical, and that permitting re-shipment without paying duty would most likely 
 serve only for the perpetration of fraud, to the prejudice of the Treasury and of ligitimate commercej etc." In 
 exchange double times of payment were granted ; that of deposit, properly so-called, which was one year 
 (Art. 5th), and that which the ruling tariff at that time granted after the exit of goods from the warehouse. The 
 law of February 28th, 1843, established a port of deposit in Acapulco, on basis identical with the law of April 
 
 636 The Government is under necessity of counting upon efEeotive resources, and should not be placed in a position 
 in which they might be sacrificed. 
 
 637. Facility that ports of deposit would afford for smuggling. 
 
 638 The justification of re-shipment and re-exportation would depend in many cases on the integrity of foreign agents. 
 
 639 The revenue of the custom-houses, principal resource of the Government, would diminish considerably in con- 
 sequence of smuggling. 
 
 640 The necessity of expending heavy sums to construct store-houses and to sustain a considerable number of em- 
 
 Til n^p^s 
 
 641. The ports of deposit, established at a previous time, did not prove successful and were abolished. 
 
 643 Decree of April 11th, 1837, prohibiting the free re-exportation and conceding long terms for the payment of the 
 
 duties. 
 
 15 
 
114 
 
 nth, 1837. Acapulco remained for some time as a port of deposit, and neither have we any data of prosperity- 
 attained by that port during the time it enjoyed those immunities. 
 
 B. Terms for Payment of Import Duties. 
 
 643. The tariffs anterior to the one now in force established a long term for the payment of import duties 
 on foreign goods coming to Mexico, which was done for the purpose of granting privileges to foreign commerce. 
 These terms came to extend as far as ninety days, the importing merchant took out his goods, giving security for 
 the payment of the import, dues at the expiration of the term, and disposed of them as he pleased before the pay- 
 ment of the duties. This system, liberal and plausible in principle, produced very bad results in Mexico, because 
 of the pecuUar circumstances of this country. On one hand the urgent need which the treasury is generally ' 
 under for funds, that in order not to await the three months, term of the importing merchants for the payment 
 of their duties, these were negotiated, with a discount that amounted sometimes to as high as 25 per cent. On 
 the other hand, the accumulation of large sums in some ports where the payments were on long terms excited 
 the spirit of disorder and rebellion which has brought most lamentable results upon the country, and sometimes 
 tumults were raised, with the principal object of gaining possession of those resources. 
 
 644. A sad experience, then, determined the Mexican»Government, to collect all duties immediately on im- 
 portation, which was done by the decree of August i8th, i860, and since then this system has been followed. 
 In the present tariff up to 25 days are granted for the hquidation of duties; if, before satisfying them, the mer- 
 chant wishes to take out his goods from the warehouses of the custom-house, he must secure their amount to the 
 satisfaction of the Administrator of that office, which is certainly more liberal than the system followed in the 
 custom-houses of the United States. It has been impossible to estabhsh ports of deposit in this country, or to 
 even give importers the right to leave their goods on deposit until taken out for sale with duties unpaid until such 
 time, for the motives we have just set forth. 
 
 645. In fact, when there had accumulated in a custom-house considerable quantities of merchandise, there 
 was a great temptation for uneasy spirits to subvert order there, for the purpose of getting hold of the duties 
 caused by those goods, even though the subversive movement should have no poUtical design, but only the object 
 of collecting those duties to protect the flight of their leaders in case the movement should not be seconded. 
 This, which is only one of the perils which the port of deposit system would present, has, up to the present time, 
 prevented its being estabUshed in this country. It is to be hoped that, pubHc peace becoming definitely estab- 
 hshed, and our institutions assured, the custom-house deposit system may be adopted along with many other 
 measures that bring privileges to commerce and result in growth and prosperity. 
 
 4. LOCAL DUTIES IN MEXICO ON FOREIGN GOODS. 
 
 646. The Report states that there is in this country a bad systsm of collecting municipal and State duties on 
 foreign goods, which goods, after passing through the custom-house and complying with the tariff, are bur- 
 dened with another import for the benefit of the municipaUty on leaving Vera Cruz; and when carried into an- 
 other State they have to pay there still another additional duty. It states : " As this import is decreed by the 
 State Legislatures, it is different in each State ; for, in the Federal District, that is, in this city, it is only two per 
 cent, on the import duties ; but in the adjoining State of Hidalgo it is 1 2\ per cent, on the same, and in some 
 other States up to 25 per cent." The Report adds that "this system of interior custom-houses, besides being 
 pecuniarily burdensome, is exceedingly annoying to the merchant, as in every point the goods have to pass 
 through the local custom-house, be unpacked and examined, pay costs of carriage, &c. ; that this is an evil the 
 most intelligent pubhc men of the country recognize and confess ; that the Federal Constitution expressly pro- 
 hibits this system, and the Supreme Court has so declared ; but ' necessity knows no law,' and therefore the 
 Supreme Court does not put itself about much to attend to what political eeonomy advises and commerce re- 
 quires ; that the States and municipahties are always in great difficulties to raise funds sufficient to cover ordinary 
 expenses, and in trying to solve this problem they find that foreign goods are those on which taxes can be best 
 imposed, and hence it is that the State Legislatures are in discord with the Constitution and the Supreme Court 
 of the country." 
 
 647. The various questions presented in the Report in reference to municipal and local duties collected in 
 Mexico on foreign merchandise, and to decisions of the Supreme Court of Justice on the matter, will be briefly 
 considered. 
 
 643. Unhappy consequences of the terms granted by preceding tariffs for the payment of import duties. 
 
 644. Circumstances obliged the Government to decree the cash payment of duties, and to grant 85 days for deposit in 
 warehouses. 
 
 645. The accumlation of goods in warehouses would cause grave dangers. 
 
 646. Conceptions of the Report on municipal and local duties levied on foreign goods in Mexico. 
 
 647. The various questions which the Report presents in reference to local duties will be briefly considered. 
 
115 
 
 A. Municipal Duties Levied on Foreign Goods. 
 
 648. There is nothing in this Department by which it appears that the Council of Vera Cruz collects a 
 municipal duty on foreign merchandise brought into that port. When there prevailed in Mexico the system of 
 collecting an import duty on a given quota, and on this various others under the name of additional duties, then 
 figured among these the municipal duty which in every port was collected by the custom-house, and delivered to 
 the respective municipaUty. This duty, at the issue of the tariff of January ist, 1872, represented 3 per cent, on 
 the import quota of the tariff of January 31st, 1856. All additional duties being embodied in the tariff now 
 extant, the municipal was also, and its amount is now a part of the present import duty. At the end of each 
 
 .month the custom-house reports to the respective municipal Treasury 1.37 per cent, of the import dues taken in 
 during the month, which sum represents the municipal duty according to the tariff in force. 
 
 649. The recovery of municipal dues on the basis of the tariff does not represent, therefore, an additional 
 duty, nor a levy on the tariff, nor is it an impediment to commerce, for it is made by the maritime custom-house 
 upon realizing the recovery of import duties. If the Council of Vera Cruz collects any other duty, it is done 
 illegally, for it is unauthorized by Congress, and moreover there is nothing by which it appears in this Depart- 
 ment that such levy is made. 
 
 £. Local Duties Levied by States on Foreign Goods. 
 
 650. The first division of the 112th article of the Mexican constitution determines that the States cannot, 
 without consent of the Congress of the Union, incumber importations or exportations, and this provision is similar 
 to that contained in the 20th paragraph of the loth section of article ist of the Constitution of the United States. 
 Notwithstanding that some States have imposed duties, called duties of consumption on foreign goods, establish- 
 ing various quotas based on the duties of import, and without having had the consent of Congress therefor. 
 Such duties are, therefore, recovered illegally, and the recourse of appeal provided in articles loi and 102 of the 
 Federal Constitution is in order. 
 
 651. It must be noted that not all the States levy duties of consumption on foreign goods. In regard to the 
 amount of duty recovered by some States it is proper to bear in mind that according to the data existing in the 
 Department the rate varies from two to sixteen per cent, on the duties of importation, excepting only foreign 
 liquors, which in some States pay 20 per cent. We have no notice that any State recovers 25 per cent., as the 
 Report states. 
 
 652. The State of Hidalgo levies 10 per cent, on foreign goods consumed in its territory, and not 12J per 
 cent, as the Report says ; and only on liquors does it collect 20 per cent, although on these quotas there is the 
 federal tax to pay, which amounts to the quarter part of the principal impost 
 
 653. It ought to be noted also that such impost does not bear alone on foreign goods, but that national 
 goods are subjected to imposts, which in some States amount to 18 per cent on their value. 
 
 654. But in all cases these duties are not imposed for the mere transit of goods through the States, but for 
 the fact of being consumed within the State itself The case, therefore, will not occur, as the terms expressed in 
 the Report might lead one to think, that the same goods pay twice over the duties of consumption. 
 
 655. In regard to the duties of consumption paid in the federal district, to which also the Report refers, they 
 will be specially spoken of further on. 
 
 c. Decisions of the Supreme Court on Local Duties. Mode of avoiding their Payment. 
 
 656. The levying of local duties on foreign goods being illegal, where the State 'authorities have not the 
 previous permission of Congress, which is generally the case, the recourse of appeal granted by Arts. loi and 
 102 of the constitution is open, and by virtue thereof the payment of the said duties can be avoided. 
 
 657. In several cases the recourse has been instituted by merchants interested, and the Supreme Court, in 
 almost every case, has granted the relief, a fact which the Report recognizes and confirms. 
 
 648. The municipal dijty is embodied in the rate of import according to the tariff in force. 
 
 649. The recovery of municipal duty does not occasion any incumbrance or impediment to the importer. 
 
 650. The Mexican Constitution authorizes the States to incumber importations, with the consent of the General Con- 
 gress. 
 
 651. Not all the States levy duties of consumption, and these do not go beyond 10 per cent, on importation. 
 
 652. The State of Hidalgo recovers 10 per cent, duty of consumption and 20 per cent, on liquors. 
 
 653. The States impose heavier duties on national goods. 
 
 654. Duties of consumption are not caused by the passing through of goods. 
 600. Duties on consumption in the Federal District will be spoken of afterwards. 
 
 656. Means of avoiding the payment of local duties by means of suit of relief. 
 
 657. The Supreme Court has granted relief from payment of local duties when application has been made. 
 
116 
 
 658. The merchant, then, who objects to pay the duty of consumption, levied in a State without the consent 
 of Congress, can apply to the Judical Power, enter his suit for reUef, and he will probably be protected in his 
 rights. This has frequently been done, and therefore the States are beginning to ask the permission of Congress 
 to levy duties of consumption. A short time since the State of Sinaloa petitioned for it, and it was granted by 
 the decree of December i6th, 1878. 
 
 5. EXPENSES IN MEXICO ON TRANSPORTATION OF NORTH AMERICAN GOODS TO PLACE OF CONSUMPTION. 
 
 659. For the purpose of demonstrating the great incumbrances that North American goods sent to Mexico 
 suffer, the Report sets forth two accounts, the first that of a barrel of sugar-cured hams with a gross weight of 
 325 lbs. EngUsh, and the second that of ten kegs of 4^ inch cut nails of 1,060 lbs. gross weight. These two art- 
 icles are among those bearing the heaviest duties in the Mexican tariff, compared with their value in the United 
 States, and this causes a considerable increase of their price in Mexico. If, instead of selecting articles rated 
 highest in the Mexican tariff, the account of an article, free of duty, like machinery, for example, had been pre- 
 sented, the showing would have been quite different. It appears that it would have been proper, at least, to have 
 set forth along with the account of an article bearing a high duty the account of one admitted free, that the result 
 might be seen in both cases, and a juster idea conveyed of the Mexican tariff therefrom. 
 
 660. As the aggregate expense of the importation of articles to Mexico appear, according to the Report, to 
 have been calculated on the basis of that of hams and cut nails, it results that United States merchants who 
 naturally desire to know what articles they can import to advantage, in view of the prices current they command 
 here, cannot see from this manner of presenting the tariff question anything but heavy expenses, that determine 
 them from attempting any operations in Mexico. 
 
 661. In the accounts set forth in the Report there are some errors; but even if they were exact, it could be 
 proved that in spite of the high figure of expense attached to the importation of hams and nails, the operation 
 involves no loss, but, on the contrary, brought a profit which amply repays the importer for his trouble. 
 
 A. Rectifications of the Calculatiotis inserted in the Report. 
 
 662. On the duties and expenses seth forth in the estimate the Report makes of the expenses of a barrel of 
 of sugar-cured hams and ten kegs of cut nails in Mexico, there are several errors which, though of httle impor- 
 tance, it is proper to rectify. 
 
 a. Rectification of Statement ott importation of Hams. 
 
 663. The expenses attaching to the sending of sugar-cured hams of 325 lbs. gross weight from New York 
 to Mexico would be as follows : 
 
 I barrel sugar-cured hams, gross w't 325 lbs. Enghsh, net w't 300 lbs. EngUsh, 
 
 cost in New York, 300 lbs. @ 1 1 cents _. $33 00 
 
 Cartage, Consular invoice, insurance, commission and brokerage, 5 per cent. i 65 34 65 
 
 Expense in Vera Cruz. 
 
 Freight from New York $3 25 
 
 Primage 5 per cent o 16 3 41 
 
 Import duty 136™ kilogrammes @ 24 cts 32 67 
 
 Muncipal duty in Vera Cruz as per Report o 84 
 
 Landing , o 22 
 
 Cartage and entry to public square 050 
 
 Maritime brokerage 2 per cent, on $3.25 freight o 07 
 
 Stamps for despatch and importation 050 
 
 Cartage to railway station 050 
 
 $39 2r 
 Commission, 2 per cent, on $73 86 i 47 40 68 
 
 658. The importer not wishing to pay sucli illegal impost must take the recourse of suit of relief. 
 
 659. Illogical manner of demonstrating that goods suffer excessive imposts on their importation to Mexico. 
 
 660. North American merchants perhaps deterred upon seeing the calculations of the Report. 
 
 661. Even if the account of cost on hams and nails were exact it does not prove that their importation is not lucrative, 
 
 662. It is proper to rectify the account of costs on hams and nails set forth in the Report. 
 
 663. Rectification of the account of cost of a barrel of ham imported from New York to Mexico. 
 
117 
 
 Expense in Mexico. 
 
 Apportionment : 
 
 i8 per cent, on $34 65 New York acc't 
 
 I " " " 40 68 Vera Cruz " 
 
 Railway freight to Mexico, 140 kilogrammes @ $54 32 per ton. 
 
 Duty on consumption, 2 per cent, on $32 67 
 
 Cartage, &c 
 
 6 24 
 
 
 41 
 
 
 7 60 
 
 
 66 
 
 
 75 
 
 15 66 
 
 Total. 
 
 .90 99 
 
 664. Between this statement and that of the Report there is the small difference of $2.20 of over calcula- 
 tion in the latter, it being borne in mind that the forgoing rectification includes the municipal duty which the 
 Report assures is collected in Vera Cruz at the same rate as stated therein, from not having been able to obtain 
 yet any exact and official data on this point. By this is to be seen the slight inaccuracy already indicated in the 
 calculations of the Report. 
 
 b. Rectification of Statement on importation of Cut Nails. 
 
 665. The expense on 10 kegs of cut nails, 1,060 lbs. gross weight, sent from New York to Mexico, would 
 be as follows : 
 
 10 kegs of 4^ inch cut nails, gross weight 1,060 lbs. English; nett weight, 1,000 lbs. 
 
 English, cost in New York 1,000 lbs. @ 2 J cts $2250 
 
 Expense in New York, cartage. Consular invoice, insurance, commission and broker- 
 age, 5 per cent i 13 
 
 $23 63 
 
 Expense in Vera Cruz. 
 
 Freight to Vera Cruz @ -^ct. per lb $5 30 
 
 Primage, 5 per cent , o 27 
 
 Import duty 481.*™ kilogrammes @i2 cts 
 
 Municipal duty in Vera Cruz, as per Report 
 
 Landing 
 
 Introduction from wharf 
 
 Carriage to house .• ... 
 
 Opening and closing 
 
 Maritime brokerage, 2 per cent, on $5 57 freight 
 
 Stamps for despatch and importation 
 
 Cartage to railway station 
 
 3 
 
 57 
 
 3/ 
 
 72 
 
 2 
 
 73 
 
 
 
 75 
 
 
 
 42 
 
 
 
 50 
 
 
 
 50 
 
 
 
 II 
 
 
 
 5° 
 
 
 
 75 
 
 69 55 
 
 Commission, 2 per cent, on $93 18 i 86 
 
 Expense in Mexico. 
 
 Apportionment : 
 
 18 per cent, on $23 63, New York expenses 4 25 
 
 T " " on 71 41, Vera Cruz expenses 071 
 
 Duty on consumption, 2 per cent, on $57 72 i 16 
 
 Railway freight 472'" kilogrammes @ $54 32 per ton 25 76 
 
 Cartage, etc 125 
 
 71 41 
 
 33 13 
 
 Total $128 17 
 
 666. Between this statement and that of the Report there is the small difference of $13 47 of our calcula- 
 
 664. Difference between the actual cost of importation and the calculation of the Report. 
 
 665. Rectification of the account of ten kegs of cut nails imported from New York to Mexico. 
 
 666. Difference between the actual cost of importing ten kegs of nails and the calculation in the Report. 
 
118 
 
 tion in the latter, notwithstanding that the municipal duty, which the Report assumes is collected in Vera Cruz, 
 is included. 
 
 B. Mexico could present statements to show that some of its goods suffer as heavy imposts in the United 
 
 States as those mentioned in the Report. 
 
 667. If it were desirable to follow the example given, undoubtedly by some merchant, of exaggerating the 
 cost of goods, for the purpose of selUng them as dear as possible, it could be shown what an enormous dispropor- 
 tion there is between two or three. Mexican articles exported, and the duties they have to pay on their importa- 
 tion into the United States, proving, besides, that their importation there is impossible for the present, because the 
 cost exceeds largely the price that can be obtained in seUing. But as this is not the object of this exposition, 
 but, on the contrary, to prove that Mexico has, without sufficient foundation, been represented as a nation with 
 whom it is not easy to enlarge, to any important degree, the commerce between the two countries, it appears 
 enough to manifest that any one who desires to sell merchandise in Mexico or any country must inform himself 
 beforehand upon the following points: 
 
 ist. What are the articles consumed. 
 2d. What quantity is consumed of each of these articles. 
 
 3d. What probabiUties are there, in the importation and sale of goods, of being able to compete with present 
 importers. 
 
 668. The imposts which goods suffer on arriving at their place of consumption does not as a general rule 
 determine whether they can or cannot be sold. If the article can be produced at a less price in the consuming 
 district no foreign nation can compete with it, even though there should be no duty to pay; and if, on the con- 
 rary, there is a demand, high duties do not affect the importers, because they fall upon the consumer. 
 
 6. DESPATCHING OF FOREIGN GOODS IN THE CITY OF MEXICO. 
 
 669. In reference to this subject the Report states that, notwithstanding that this city is the centre of the 
 principal wholesale trade of the central table lands of the country, and is in railway communication with its sea- 
 port, there is no provision whatever to bring the imported goods to be despatched in the custom-house of this 
 city and pay the duties here ; that since the inauguration of the railroad the Government has had the intention of 
 adopting measures to this end, and as a preUminary step it required the railway company to build a wharf that 
 should cost $300,000, for the purpose of being able to transfer directly from vessels to the train goods destined 
 for this city ; but in spite of the wharf being finished more than three years ago, it has not yet come to be used, 
 for the reason that the people of Vera Cruz (a town of 12,000 inhabitants) consider it prejudicial to their local 
 interests ; hence it is, that in order not to displease a few hundred commission merchants, stevedores and barge- 
 men who might make that a pretext to revolt, the old system is followed, and more than half the nation and the 
 foreign merchants have to pay them a heavy tribute ; that all foreign goods have to pass through the Vera Cruz 
 custom-house, for which only twenty-four hours is granted in which to prepare invoice and manifest, having to 
 employ therefor a commission merchant, paying double cartage on goods and for unpacking and packing the 
 same, and other expenses ; but that this is not all, for the goods, being finally free from the clutches of the Vera 
 Cruz custom-house and of the commission merchant, duties paid and the goods en route to Mexico, on arriving 
 at this city they have to go again into the custom-house here and undergo another examination, and they have, 
 besides, to pay the local imposts and make new expenditures for stamps, freightmen, &c. 
 
 670. The preceding estimations embrace the following questions of interest which it is proper to examine 
 separately, reserving that relating to the iron pier built in Vera Cruz by the Mexican Railway Company, limited, 
 to be spoken of specially afterwards. 
 
 A. Authorization of the city of Mexico as a port of entry for goods coming by the way of Vera Cruz. 
 
 B. Term granted importers for making the despatch at Vera Cruz. 
 
 C. Examination and despatch of goods in the city o£ Mexico. 
 
 D. Cost to the city of Mexico of the despatch made in Vera Cruz. 
 
 A. Authorization of the City of Mexico as a port of entry for Goods coming by way of Vera Cruz. 
 
 671. As soon as the work of the Mexico and Vera Cruz railway was finished the idea was had to qualify this 
 
 667. Information which every one must acquire who wishes to import merchandise into a country. 
 
 668. The imposts put upon goods do not, as a general rule, determine pro or con their salability. 
 
 669. Inconveniences, according to the report of despatching at Vera Cruz, effects imported for the capital. 
 
 670. The estimations of the Report embrace four questions of interest, which will be examined separately. 
 
 671. Memorial of February 8th, 1873, by the merchants of Mexico, soliciting the qualification of the capital for im- 
 port trade of entry. 
 
119 
 
 city for the import trade, and the native merchants and foreigners resident in this capital presented a memorial to 
 the President, dated February 28th, 1873, asking that those so soliciting might be permitted to make the despatch 
 of goods coming from Europe in this capital pay here the duties of importation, and at the same time that the 
 law of May 31st, 1878, which imposed 6 per cent, for consumption on those goods, might be abrogated, making 
 it to be included in the said import duties. 
 
 672. This petition was based on the representation that with the establishment of the railway the bales, 
 boxes, &c., unloaded could arrive quickly at this market, without the delay of going through the examination and 
 despatch at Vera Cruz ; that the paying of i and 2^ per cent, to the commission merchants of that place would 
 be saved ; that merchants from the interior of the country would not go to Vera Cruz to supply themselves with 
 goods, in the case they had the opportunity of finding these on store in this city for sale ; that in case of the 
 duties being paid in this capital, the necessity of sending funds to Vera Cruz for that purpose would be saved ; 
 that there would result to the Treasury the advantage of obtaining anticipated payments of duties without 
 prejudice, and that vigilance for the prevention of fraud could be exercised to better effect nearer the superior 
 authorities than at the port. 
 
 673. The merchants of Vera Cruz, knowing what was being proposed by the merchants of Mexico, sent the 
 President an exposition dated March ist, 1873, opposing the making of the grant sohcited in behalf of this 
 capital. The exposition of the trade of Vera Cruz was based on the representation that the mercantile houses of 
 Vera Cruz, which are sustained by commercial trade, would have to succumb ; that if the labor afforded to the 
 common people should be reduced to nothing more than the transfer of goods from the wharf to the railway it 
 would bring misery upon the town ; that the direct contact of Europe with Mexico, without the intervention of 
 Vera Cruz houses, would involve the paralyzation of all business and commercial transactions ; that the 
 emigration of merchants and common people to the capital in quest of business to subsist, would be the 
 destruction of Vera Cruz ; that the slight economy therefrom accruing to houses in Mexico would not compensate 
 for the general da mage resulting to the interests of Vera Cruz ; and that the Council of the said port would be 
 deprived of the income which they now enjoy, by reason of the despaching of goods in that city. 
 
 674. In regard to fiscal prejudice, the said exposition set forth that the goods, being exposed to the danger 
 of railway transit, and of accidents on the line, losses would result to the owners of goods in which the Treasury 
 would share ; that vigilance for the prevention of change or extraction of goods in transit could not be perfectly 
 exercised; that the dispatching of goods in Mexico would raise up grave difficulties, because neither the con- 
 signees, nor the captains of vessels, nor the crews, being a hundred leagues away, could make the declarations that 
 are frequently necessary ; that the insurers of cargo would perhaps meet with difficulty in determining whether 
 damages occurred to goods during transit by vessel or by rail ; that the Government would have to employ 
 watchmen at every station to prevent smugghng in transit ; that interest in defrauding the fiscal dues would 
 bring an element to operate even against the interests of the railway company, for very Hkely the throwing of 
 trains off the track would be repeated, obliging the Government to redouble its vigilance, from the fact that the 
 goods were representing also values of revenue, the duties being unpaid ; and, lastly, that the Government would 
 be forced later to make equal concessions to Orizaba and Jalapa for goods consigned to those places, in order not 
 to create a partial privilege only to the merchants of Mexico, and, further on, the interior markets would have an 
 equal right to receive their orders and pay in each locaUty the maritime imports. 
 
 675. On the 15th of May of the same year the Governor of Vera Cruz sent an exposition to the Council 
 of that port, in which, referring to the reasons set forth by the merchants, petitioned the Government not to ac- 
 cede to the soUcitations of the merchants of Mexico. The Vera Cruz State Governor took up this representa- 
 tion and recommended it to the General Government, almost doubting that the Executive had the faculty to 
 declare the capital a maritime centre, to the notable injury of a portion of the Confederation, like the State of 
 Vera Cruz, which would be ruined if it were deprived of its only element of wealth — the mercantile trade of its 
 port. 
 
 676. On the 30th of the same month of March reports on the subject were requested from the Administra- 
 tors of Vera Cruz and of the Federal District, and on the eighth of April that rendered by the Vera Cruz custom- 
 house was sent in, opposing the project in general, and alleging the same reasons set forth by the trade of that 
 place, although confining itself to the inquiry which the treasury and public service would suffer from an arrange 
 ment that could give no practical results, not even to the benefit of the petitioners themselves. 
 
 672. Reasons on wMch that solicitation is based. 
 
 673. Objections made by Vera Cruz merchants to the proposed qualifying of Mexico as a port of entry. 
 
 674. Damages which according to Vera Cruz merchants would result to the Federal Treasury. 
 
 675. The Vera Cruz State Government supported the representation made by the merchants of the port. 
 
 676. The Administrator of the Vera Cruz custom-house reported on the damagethe Revenue would suffer. 
 
120 
 
 677- The merchants of Mexico did not insist in their petition for the qualification of this capital as a port 
 of entry, and the past Administration took no action on the matter, which resulted that things continued as be- 
 fore, there being no quahfication of the capital for direct import trade. It is to be beUeved that the merchants 
 of Mexico did not find any good reasons for combating the showing of their Vera Cruz colleagues, inasmuch as 
 it was not done. 
 
 678. During the two years that the present Administration has directed the affairs of the Republic no one 
 has again moved for the qualification of this capital as a port of entry. Notwithstanding this, whenever any 
 merchant has asked that his goods be despatched to this capital instead of Vera Cruz, and sufficient reason has 
 been found for doing so, it has been decreed accordingly, there being a recent case of this in the despatching of 
 the baggage and samples which the Chicago Commission has just brought with them, which were not despatched 
 by the Vera Cruz custom-house, but by the General Revenue Department of this capital. 
 
 B. Term granted importers for despatching their Goods in Vera Cruz. 
 
 679. In the Mexican tariff there is no direct provision regarding the term within which the consignees of 
 foreign goods must present themselves for the despatching of them. 
 
 680. Article 67 of the tarifi" provides that all who receive consignments may, from the time the vessel be- 
 gins to discharge, present their requests for despatch, and before proceeding to such despatch each request must 
 be confronted with the general manifest of the vessel and the corresponding consular invoices. In Article 68 it 
 provides that if the documents agree the despatch may be made at the wharf, in the warehouse of the custom- 
 house, or in such place as may be .generally most convenient for commerce, provided that no damage result to 
 the pubUc revenue or to the goods. 
 
 681. To rectify or add to consular invoices, which is permitted under certain conditions, Article 66 and sub- 
 sequent decrees grant to consignees 24 hours, reckoned from the time the vessel anchors. This term, the only 
 one the importers have to make rectifications or additions, has been considered sufficient to avoid any loss that 
 they might suffer through unintentional errors committed by remitters ; and it has not been possible to ex- 
 tend the privilege, granting a longer time, because it would result in serious danger to the interests of the 
 revenue. 
 
 682. But although the tariff does not definitely determine the time within which consignees shall present 
 themselves for the despatch of their merchandise, the provision contained in Article 74 of the tariff and Article 
 47 of the custom-house regulations in force regarding that the liquidation of duties must be concluded, without 
 fail, by twenty-five days after the conducting vessel has finished dischar^ng; and lastly, the hmitation of time 
 which, according to th'e same Article 74 of the tariff, consignees have to let their goods remain in the warehouses 
 of the custom-house, all this indicates quite fully that only this term is granted for the despatching of mer- 
 chandise. 
 
 683. All the custom-houses of the RepubHc, except that of Vera Cruz, comply with the obligation to remit 
 the liquidations of duty in the term specified in the said article of the regulations. This is a proof that the im- 
 porting merchants experience no difficulty in not delaying the despatch of their goods. In the Vera Cruz 
 custom-house another practice has in fact become estabhshed, and notwithstanding that it is not expressly 
 authorized by law, it has been tacitly tolerated in view of the incomparably greater movement, which makes an 
 exact compHance with these obligations much more difficult; and the merchants improve this circumstance 
 not to hurry the despatching of their effects. 
 
 684. Abuses on the part of some importers has been the natural consequence of this privilege, which was 
 granted administratively on account of especial circumstance of the port of Vera Cruz, and it has become already 
 necessary to make some efficacious disposition that shall harmonize the fiscal and commercial interests. 
 
 685. Before the establishment of the Bureau of Adjustments of this Department, the Hquidation of duties due 
 
 677. The merchants of Mexico did not insist in their solicitation of February 28th, 1873. 
 
 678. Various solicitations for the despatch in this city of goods coming through Vera Cruz have been granted. 
 
 679. Our tariff contains no provision respecting the time within which consignees shall make their despatch. 
 
 680. Provisions of Articles 67 and 68 of the tariff in relation to the despatching of merchandise. 
 
 681. Terms granted Consignees, to rectify and add to their invoices. 
 
 683. Art. 74 of the tariff and 47 of the Regulations , indicate that the goods must be despatched within 25 days after 
 the discharge of the vessel. 
 
 683. Some Vera Cruz importers take advantage of the ditKcuIty of complying with this proTision, to delay their des- 
 patches. 
 
 684. The abuses that have been committed in consequence of this practice require the enactment of repressive meas- 
 measures. 
 
 685. The Bureau of Adjustments has succeeded in establishing greater regularity in the remission of Uquidations. 
 
121 
 
 the Vera Cruz custom-house were received at seven and eight months after the vessels bringing the goods had 
 finished discharging, and even then it was noted that there were some goods still remaining undespatched in the 
 warehouses of the custom-house of that port. That customhouse was repeatedly called to account for its slow- 
 ness in making its despatches, and forming adjustments of duties, and at last a better performance was attained. 
 
 686. At present the registries of importation are received at three or four months after each vessel has finished 
 discharging, and it is to be noticed that on many occasions all this period of time is improved by some importers 
 in going to dispatch their goods, and that in many of those registries the hquidation of some policies were left 
 pending, because the respective merchandise has not yet been despatched. Every time that the Bureau of Ad- 
 justments has asked for the liquidation lacking on certain custom-house sheets, it has been found that the effects 
 corresponding were still l)ang undespatched in the customs warehouses of Vera Cruz. 
 
 687. From what the Report sets forth it might be inferred that the term granted by law to consignees, to 
 rectify and add to their consular invoices, is the same as that allowed for despatching their goods ; for in relation 
 to this subject it says, that " all foreign goods have therefore to pass through the Vera Cruz custom-house, and 
 for that only 24 hours are granted in which to prepare invoice and manifest/' but, from what has just been stated, 
 it is to be seen that this interpretation would be the consequence only of the ambiguous manner it is expressed 
 in the Report, and that, on the contrary, importers of foreign goods avail themselves, when it suits their interests, 
 of the practice established in the Vera Cruz custom-house of not requiring within the precise term of 25 days 
 either the presentation of applications for despatch, or the despatch itself, which must precede the Uquidation of 
 the duties Uable. 
 
 688. It must be noted also that the liberality with which the said importers are treated, in not exacting the 
 payment of duties, but on the verification of the despatch of their goods, which is sometimes done a long time 
 after the conducting vessel has finished discharging, has been duly recognized, as well by the trade of Vera Cruz 
 as by that of the capital, who see in this consideration on the part of the government the desire it has of com- 
 bining the interests of the federal revenue with those of commerce. 
 
 689. The fact also is worthy of mention, that no recompense is exacted from the owners of goods for storage 
 during the time they remain deposited in the customs warehouses, while in every other colintry in the world goods 
 imported for consumption enjoy this privilege for only a very limited term. 
 
 690. On the other hand, it must be borne in mind that the despatching of foreign goods suffers no delay in 
 the Vera Cruz custom-house, but that as soon as application is made by consigners the despatch is immediately 
 proceeded with, being done with every, possible liberality, in order to save commerce the annoyance consequent 
 on an exaggerated scrupulousness in the examination of merchandise. 
 
 C. Despatching of foreign goods in the City of Mexico. 
 
 691. The Report caUs attention to the fact that goods, after having been recognized by the Vera Cruz 
 custom-house, and having there paid their import duties, are subject to a fresh examination on arrival at the 
 capital, having to pay local imposts and to suffer further expense. 
 
 692. It has aheady been before said that the Executive, being desirous of expediting commercial operations, 
 had studied the project of quaUfying Mexico for direct import trade, but that weighty considerations determined 
 it not to grant such quahfication. It has also been shown that an effort was made to suppress the levying of 
 duties of consumption on foreign goods by the custom-house of this city, and that it had to be left subsisting. 
 Experience has demonstrated that although the abolition of those duties resulted, that commerce had the benefit 
 of not having its goods subjected to a second examination, this benefit and the other advantages of saving 
 expense, etc., would not compensate for the damage that would result to it on the realization of the project; 
 for many are the cases in which frauds have been discovered in the manifesting of merchandise, which either 
 through the promptitude of despatch by the Vera Cruz custom-house, or because the law authorizing the exam- 
 ination of only a relatively small part of the cargo, when there are no suspicions of fraud, they had passed by 
 false manifests through the custom-house, causing a loss of part of the duties. 
 
 686. The adjustment of duties are now received from Vera Cruz within 3 or 4 months, some policies still remaining 
 pending. 
 
 687 Ambiguous manner in which the Report expresses itself respecting the term given importers for despatching 
 their goods. 
 
 688 Liberal treatment of Vera Cruz commerce in not exacting payment of duties until after they are despatched. 
 
 689 No storage is demanded for the time merchandise remains m the custom-house. 
 
 690 Foreign goods are despatched by the Vera Cruz custom-house as soon as asked for by the Consignees. 
 691. Estimations of the Report on the re-despatching of goods in the city of Mexico. 
 
 693. Experience had demonstrated the propriety of subjecting goods to a re-despatch in this city. 
 16 
 
122 
 
 693. Legitimate trade and the revenue cannot but be benefitted, therefore, in the preservation of this system, 
 and it ought not to be a serious obstacle for the importing houses of this city, the fact that they have to witness a 
 second despatch, and make the small expenditure of 2 per cent, on importation, called duty of consumption, and 
 of stamps that only amount to 25 cents for each common-sized sheet of paper containing the application for 
 despatch. 
 
 694. In regard to the duty of consumption levied in this city on foreign goods, it remains to say that this 
 duty amounted, according to the law of May 31st, 1872, to 6 per cent, on the rates of importation, and that by 
 the law of August nth, 1875, it was reduced to 2 per cent., divisible between the federation and the municipality 
 of the district. The same law authorized the deposit in the customs warehouse of this city, for 120 days, of 
 foreign goods in transit, mthout exacting any recompense for the first thirty days, and imposing a storage duty at 
 the rate of 10 cents for each second and third month, and 20 cents for the fourth and last month on each pack- 
 age of eight Mexican arrobas or 200 lbs. 
 
 695. In order to abbreviate the despatch of foreign goods coming to this capital by the Vera Cruz railway, and 
 to save the owners of merchandise the expense and useless annoyance of carriage to the district custom-house, 
 and acceding to a solicitation to that effect presented by tiie merchants of the Chamber of Commerce of this 
 capital, it was ordered by a circular of April 14th, 1878, and a regulation of the 8th of the same month, that the 
 examination of the cargo should be made in the Buena Vista station, whenever those interested should prefer, 
 and should so state by word of mouth to the customs officer stationed at said point. It is evident, then, that 
 the Mexican Executive leaves no means untried to save the commerce of the city all those expenses and troubles 
 which are not considered of utihty in guaranteeing the interests of the revenue. 
 
 D. Cost to the commerce of Mexico of the despatch made in Vera Cruz. 
 
 696. In the calculations the Report presents of the cost in the city of Mexico of one barrel of hams and ten 
 kegs of cut nails, proceeding from New York, are comprehended the expense attaching to all importation through 
 whatever port of the Republic, as well as that which has to be incurred especially at Vera Cruz. These latter are 
 so insignificant that they may be considered to be amply compensated by the great advantages which the com- 
 merce of this city enjoys by reason of communication by rail, and which have been a positive prejudice to the 
 other mercantile centres of the country ; for since the conclusion of the Vera Cruz Railway it has been noticed 
 that the trade of the same port has somewhat increased, while that of other regions of the country has suffered a 
 diminution. 
 
 697. The advantages enjoyed by the merchants of this capital over those of other points of the Republic, by 
 reason of a quicker and easier communication with the principal markets of the world, stand out more prominently 
 when we compare the topographical situation of this city with that of the States far away, principally those whose 
 commerce has to be suppUed through ports on the Pacific ; and it is not strange that some districts which formerly 
 received the greater portion of the foreign goods they consumed entirely by way of Mazatlan, Manzanillo and 
 San Bias, should now come to this city to provide themselves with a portion of the European articles they need. 
 
 698. It appearts proper to explain how it is that, suff'ering the cost of merchandise imported through Vera 
 Cruz by the heavy charges approximately shown in the before-mentioned calculations, Mexico can compete in the 
 sale of foreign goods for the interior of the Republic with other places situated nearer the coast. 
 
 699. In the first place, it must be observed that, notwithstanding the cost of transporting merchandise over 
 the Vera Cruz and Mexico railroad and over carriage roads from this city to other points of consumption, it is not 
 less expensive, but on the contrary, more so, in many cases, the freight paid on merchandise, if imported through 
 other ports and from there sent to equi-distant points. 
 
 700. In the second place, the maritime freight paid for the transportation of European goods to the ports of 
 the Gulf of Mexico is, as a general rule, more moderate than that charged for transportation to Pacific ports. 
 Although the freight on many articles from New York to Vera Cruz is higher than that from San Francisco to 
 
 693. 
 694. 
 
 The small expense of duties of consumption and stamps is repaid by advantage to legitimate commerce. 
 Amount of duty of consumption before and after tbe law of August lltb, 1875, and deposit in this capital. 
 
 695 Circular of AprU 14th, 1878, permitting the despatch of merchandise in the Station of Buena Vista. 
 
 696. 
 697. 
 coast. 
 698 
 699. 
 
 The despatch in Vera Cruz is an insignificant burden in comparison to the advantage of railway communication. 
 This advantage has extended the trade of the city of Mexico, to the prejudice of the commerce of the Pacific 
 
 Mexico competes with other places in the sale of foreign goods. 
 
 The railway freight is in many cases lower than that paid for transportation of goods to equidistant points. 
 
 700. Difference between maritime freights on the Gulf of Mexico and on the Pacific. 
 
123 
 
 Pacific ports, this difference is compensated by the cheaper price at which most American articles can be ob- 
 tained in the former market. 
 
 7 or. The expenses of cartage, shipping, consular certificates, manifests, brokerage and commission in the 
 places from whence goods proceed are the same for the whole trade of Mexico, and the same can be said, with 
 a few insignificant exception, of insurance on North American goods, letters of exchange in making remit- 
 tances abroad, and to Mexican ports where goods are discharged, import duties, municipal port dues, landing 
 and cartage in the port of destination. 
 
 702. The only additional expense accruing to the commerce of Mexico, by despatching merchandise at 
 Vera Cruz instead of at this capital, are : Commission on despatch, which varies between i|- and 2 per cent, on 
 the sum of the value of invoice, and the expenditures of the commission merchant in Vera Cruz ; the small 
 expenditure to freight men for opening and closing the few packages examined in each lot of merchandise, and 
 a 2 5 cent stamp for the importing passport. All the other expenses would be the same if despatch and payment 
 of import duties were made in this city ; and the levy of two or at the most 2 J per cent, on the expense of the 
 article in Vera Cruz is certainly too insignificant to be considered an impediment to commerce. It is, on the 
 other hand, very natural that the commission merchant should have the recompense pertaining to the service he 
 performs for another who does not live in the place where his goods arrive ; this happens not only in Mexico but 
 in every part of the world, and it can be averred that the charges made in the United States for commission on 
 despatch and expense are very much higher. 
 
 7. THE IRON PIER OF THE VERA CRUZ RAILWAY. 
 
 703. In reference to the iron pier built by the Mexican Railway Company, Limited, the Report states that 
 " the Mexican Government had the intention of authorizing despatch in this capital of goods coming from Vera 
 Cruz, and with this object it exacted of the Vera Cruz Railway Company the construction of an iron pier that 
 has cost more than $300,000, in order that foreign goods might be transferred directly from the vessels to the 
 cars; and although the pier was finished more than three years ago it has never yet been used, because the people 
 of Vera Cruz (a city of 12,000 inhabitants) considers it prejudicial to their local interests." 
 
 704. On the conclusion of the Vera Cruz railway an endeavor was made, as has been already stated, to 
 make a sort of port of this capital by arranging for this dispatching of goods here. The Administration of Senor 
 Lerdo de Fejada earnestly considered the matter, turned away from any such idea for the reasons heretofore 
 expressed, and during the present Administration no one has thought or proposed anything in relation to the 
 subject. 
 
 705. The construction of the iron pier in Vera Cruz by the Mexican Railway Company, Limited, did not 
 originate, as the Report states, to facilitate the transfer of foreign goods from the vessels to the cars on theif way 
 to this city ; but to facilitate the exportation of national productions, reducing considerably the cost of shipment 
 and warehouse dues in Vera Cruz. These expenses amounted, in fact, to a large sum, from the difficulty attend- 
 ing shipments in that port, and from the monopoly estabhshed by freight men and owners of launches. The pier 
 being finished, some difficulties in using it presented themselves, arising principally from the fact that it had not 
 been built according to contract, and that there were not the necessary offices for the employees of the custom- 
 house. This prevented its being opened for general trade, although in some exceptional cases, and concerning 
 bulky articles not needing special examination, such as rails, machinery, etc., their disembarkation has been 
 constantly permitted at the said pier. 
 
 J06. The company had scarcely, though only in part compUed with their obligation to provide an office for 
 the custom-house employees, when it was- authorized, by determination of the Department of Pubhc Works, 
 communicated through this Department, to use the said pier, although not yet unreservedly, but for the shipment 
 of national goods not liable to duty, and for the disembarkation of machinery, rails and very heavy effects coming 
 in bulk, without packing in crates, boxes or bands, and the examination of which can be made easily by the 
 respective employees. 
 
 707. Although any attitude that may have been taken by a portion of the people of Vera Cruz, manifesting 
 
 701. Expenses which are equal for all commercial points of the Mexican Republic. 
 
 702. The special expenses which bear upon the trade of the City of Mexico are commission in Vera Cruz and stamps. 
 
 703. The Report states the iron pier of Vera Cruz has not yet been used on account of the resistance of the people of 
 
 Vera Cruz. 
 
 704. The preceding administration did not judge it convenient to qualify the city of Mexico for direct import trade. 
 • 705. The iron pier was built to facilitate the exportation of national products. 
 
 706. Authorization of October 38th, 1878, for the discharge and shipment of certain effects at the said pier. 
 
 707. The late Administration did not authorize the use of tho pier at Vera Cruz, and the present one has permitted it. 
 
124 
 
 hostility to the use of the pier built by the Mexican Railway Co., limited, might have influenced the mind of the 
 preceding Administration not to require the speedy fulfillment of the contract respecting the said pier, that has 
 not been the principal cause of its not having been put to use, and the present Administration has author- 
 ized its employment in terms aheady expressed, and m conformity with the respective contract, without stopping 
 to consider the results of the attitude of the people of Vera Cruz, being persuaded that local interests should give 
 give way before the general interests of the country. 
 
 8. EXCHANGE. 
 
 708. The Report considers as one of the inconveniences presented to the increase of trade between Mexico 
 and the United States, the disadvantage of exchange occasioned by the kind of money in circulation in Mexico, 
 and by the depreciation which this money has recently undergone in foreign markets. On this point it says as 
 follows : " In the foregoing notes there will have been noticed another discouragement to foreign commerce in 
 the nature of the exchange. All business in this country is done exclusively with silver, which is depreciated and 
 is current money, so that, one has here to add to price and expenses the cost of exchange, which for some time has 
 been held at 18 per cent, for drafts on New York. This depends upon 10 per cent, discount on silver, 5 per 
 cent. Government export duty and three per cent, for carriage, insurance and other expenses required to place it 
 in New York." 
 
 709. Although it would, perhaps, be more opportune to speak of this matter in treating the subject of 
 mining in Mexico, which important question occupies a large part of the Report, it appears, however, proper to 
 make here some observations thereon, as well because the Report has especially occupied itself with it, consider- 
 ing it to be one of the existing difficulties in the way of increase of trade between the two countries, as that in 
 itself it possesses sufficient interest to be treated separately. 
 
 710. Here, then, the two questions relating to this subject will be examined, to wit : First, difficulties which 
 exchange offers to the increase of commerce between Mexico and the United States, and second, the way of get- 
 ing over those difficulties. 
 
 A. Difficulties offered by Exchange to the development of Commerce between Mexico and the United States. 
 
 711. It is generally known that until lately silver has been one of the articles of large consumption, princi- 
 pally in China. Besides that, all nations, almost, excepting England, which was the first to demonetize silver, used 
 that metal for their coin. The fact that the Chinese Empire, which alone has a population larger than all 
 Europe, used it for the same purpose, created a considerable demand for the metal, and kept it at a high 
 price. 
 
 712. The fact that the production of silver was relatively Umited, contributed to produce this result, for 
 Mexico, which for a long time furnished the larger part of this metal to the markets of the world, hardly produced 
 from twenty to twenty-five miUions of doUars annually in her best years, and the average of her annual produc- 
 tion scarcely exceeds eight miUions. After the acquisition of California and Nevada by the United States the 
 production of silver in those States increased considerably, to the degree of having some years exceeded a hundred 
 milHons of dollars. 
 
 713. On the other hand, most of the European nations thought proper to demonetize silver, and establish 
 gold as the only medium of exchange in large transactions, foreseeing the consequence if the money consisted of a 
 metal whose mercantile value was subject to frequent fluctuations. The production of silver increasing, and the 
 consumption diminishing, naturally the price of this metal went down, and such fall created a great discouragement 
 to Mexican commerce m sending abroad the funds necessary to pay the value of merchandise imported to this 
 country. 
 
 714. It is true, as the Report states, that it contributes greatly to increase against Mexico the difi'erence of 
 exchange, the circumstance that the Mexican Government levies export duty on silver, as also the duties of ex- 
 traction levied by some of the mining States, so that the banker, on fixing the price of exchange on London, 
 
 708. The depreciation of silver is a difficulty to the enlargement of commerce between Mexico and the United States. 
 
 709. Propriety of treating especially the question of exchange. 
 
 710. Difficulties of Exchange in their relation to increase of commerce between Mexico and the United States, and 
 the mode of getting over them. 
 
 711. High price of silver until a short time ago, in consequence, pilncipally, of its demand in China. 
 
 713. The high price ruled until the considerable increase of the silver production of California and Nevada. 
 
 713. The increase of production and diminution of consumption caused, in consequence, a fall in the price of silver. 
 
 714. The difference against Mexico in exchange is caused by Federal and State duties on silver. 
 
125 
 
 Paris, or New York, takes into account, in the first place, the value of silver in those markets ; from this he de- 
 ducts the duties on extraction and export which he has to pay the General and State Governments, and besides, 
 the expenses of freight, insurance, commission, etc., up to the sale of the metal in the market to which it is re- 
 mitted, and finally its utility, all of which renders exchange greatly disadvantageous to Mexico. 
 
 715. These circumstances have caused tliat for some time previous to the recent depreciation of silver ex- 
 change on New York was on an average about eight per cent, in prejudice of Mexico ; and since this deprecia- 
 tion commenced, that exchange has suffered various flunctuations, in some cases going as high as twenty per 
 cent. 
 
 716. The Mexican Government agrees with the ideas expressed in the Report in regard to the propriety for 
 the country and its commerce of suppressing completely the export duties on silver, and this subject will be 
 specially spoken of upon treating on mining in Mexico. 
 
 717. The natural consequence of the depreciation in foreign markets of silver, the principal article of Mexi- 
 can export, must be the increase in price of the foreign goods consumed in this country, so that, if formerly goods 
 imported from New York or elsewhere suffered, by reason of exchange, a burden of 8 per cent., it has now, in 
 calculating its cost, to be augmented by the difference which results from the depreciation of silver, which is 
 more than 12 per cent. 
 
 718. There is, therefore, greater difficulty in the sale of foreign goods in Mexico, from the movement that 
 the enormous difference in exchange has to be supported by the consumer ; but this difference in exchange can- 
 not be considered to be an especial inconvenience for the United States, as it exists equally for all foreign nations 
 that trade with Mexico. 
 
 719. It is true that so considerable a difference against the principal article of Mexican export cannot but 
 occasion fresh difficulty for the commerce of this country, for every circumstance that in any way contributes to 
 increase the price of merchandise, hinders its sale ; but as the Mexican Government is making the efforts, which 
 the Report acknowleges, to diminish in every way in its power the difference of exchange, we should not lose all 
 hope that this evil will be remedied. 
 
 b. Mode of getting over the difficulties of Exchange. 
 
 720. There is, on the other hand, a very simple way of obviating the inconveniences of exchange, to which 
 reference has just been made. This method consists in exporting from Mexico, in payment of foreign goods con- 
 sumed in this country, not silver, but some of the other articles produced here, such as coffee, sugar, cochineal, 
 vanilla, tobacco, dye woods, cabinet woods, hemp, honey, and various other articles. 
 
 721. It is true that those articles have not been produced in Mexico in quantity sufficient to pay the value 
 of the importations of foreign goods brought to this country, and that therefore it would not be possible with them^ 
 only to get round the difficulties of exchange to which the Report alludes. It is true also, that on account of the 
 heavy land freights which some of these articles of interior production are subject to, as, for example, sugar, they 
 have not attained any exportation to the United States, principally because Mexico is not yet in condition to 
 compete with the Island of Cuba, which, besides having heavy capital invested in sugar industry, has raihoads to 
 make transportation easy and cheap, and is situated, but a short distance from New York ; but if it is taken into 
 account, that there are an infinity of articles in Mexico the exportation of which presents no difficulty whatever, 
 and the slight cost of which compared to their value in other countries, is a strong incentive to speculation, it 
 will be comprehended that these articles can receive a vigorous impulse by only knowing how to take advantage 
 of the natural riches and special conditions of the country. 
 
 722. Moreover, among the articles which incur a loss in their remittance from Mexico to other countries, 
 there are many that do not result so unfavorably as silver, and ought therefore to be taken advantage of in pref- 
 
 715. Depreciation in silver has caused fluctuations in exchange, increasing it considerably. 
 
 716. The Mexican Government recognizes the propriety of freeing the production of silver from paying export 
 
 duties. 
 
 717. The difference in exchange resulting from the depreciation of silver causes increase in the price of imported 
 
 merchandise. 
 
 718. The higher cost of merchandise hinders its sale ; the inconvenience exists in all Mexican trade. 
 
 719. It is hoped to get round the inconvenience of exchange through the efforts the Mexican (Government is makino- 
 to diminish the difference. 
 
 730. To place funds abroad other products than silver can be exported. 
 
 731. Although the present exportation of other products is insufficient, it might in time suffice to satisfy the needs of 
 exterior exchange. 
 
 733. Comparison between remittances of silver and those of other products. 
 
126 
 
 erence for exterior exchange. In fact, if the exportation of sugar from the interior of Mexico to the New York 
 market involves a loss of six per cent, it is clear that that of silver, which now forms the basis of exchange, in- 
 volving a loss of 20 per cent., the exportation of sugar would amount to a relative utility of fourteen per cent; 
 and the same can be said in regard to various other articles of Mexican production. 
 
 723. It would seem that these facts will not remain hidden to the generally recognized intelligence of North 
 American merchants, whose enterprising spirit will find undoubtedly in this country incentives for speculation and 
 means of bettering considerably, to their own profit, the present disadvantages of this market. 
 
 9. CREDITS FOR PAYMENT OF FOREIGN MERCHANDISE. 
 
 724. The Report considers, also, as a grave inconvenience to the development of a large commerce between 
 Mexico and the United States, the credits on w.^ich foreign goods are generally sold in this country, and says on 
 this subject as follows: "Another grave impediment exists to the estabhshment of a vast American commerce 
 with Mexico, and that is the universally established system here of doing business on long credits. The merchants 
 of the interior, who come to make their purchases in this city, always make them on credits that are generally 
 eight months without interest, and which frequently run on, to ten months and a year. To the American mer- 
 chant, who has to conform to the high rate of interest that obtains in the United States, and short credit, this 
 presents grave difficulties, to which may be added that which arises from the want of free transmission of money 
 from the interior to the city of Mexico. The same does not happen to the German importer, who has good 
 relations and credit in Europe, whence he can ask large sums of money at a low interest aad on long credit. 
 Silver being heavy and bulky, and the circulating medium, it can only, owing to the insecurity of the roads, 
 be sent with safety in the ' conductas' or great trains, escorted by a numerous federal force. These 'conductas' 
 come, it can be said, every three or five months, only from Zacatecas or immediate cities, and the merchants have 
 to await their arrival to receive funds." 
 
 725. In the preceding statement there are two important considerations: the first referring to the credits 
 generally paid in Mexico for foreign goods, and the second to the difficulty of conducting silver from one part of 
 the country to another. Each one of these points will be especially spoken of 
 
 A. Difficulties presented to the development of commerce between Mexico and the United States, by the system 
 
 followed in Mexico of selli?tg foreign goods on Credit. 
 
 726. The Report has been very exact in stating that there is still another circumstance which prevents our 
 trade with the United States from being sufficiently revived to gain that height which commercial relations should 
 attain between two bordering friendly nations of identical political principles. This impediment lies in the fact 
 that manufacturers and merchants of the United States are not accustomed to give for the paying of their mer- 
 chandise as long credits as those obtained in Europe. 
 
 727. If an investigation be made into the origin of the great enterprises of the United States, the fact is 
 revealed that many of them have been established with European capital; but this capital, upon being invested 
 in American enterprises, has changed nationaUty, and it is really not understood why the capitahsts of the neigh- 
 boring RepubUc, having so acquired immense fortunes, have not heretofore tried to imitate the Europeans in 
 trade with Mexico, granting to our commerce the same facilities which have been granted to their own. 
 
 728. The reason of this backwardness consists, perhaps, in that few or no efforts have yet been made on the 
 part of statemen of both countries, and principally of that one, to estabhsh between them an understanding and 
 harmony which, combining the mutual conveniences of both sister repubUcs with the special interests of each, 
 would make not only possible, but effective, the increase of our common commerce. Mexico has proved on 
 many occasions the desire she has to enlarge her commercial relations with the United States, and she has always 
 seen with profound regret the attempts made to impede the realization of this idea, by persons who have either 
 judged of our situation from inexact data, or have allowed themselves to be influenced overmuch by events and 
 circumstances which are in no wise extraordinary, considering that the progress of a people that has had to eman- 
 cipate itself little by little cannot be instantaneous. 
 
 733. North American merchants will find in Mexico incentives to speculation. 
 
 724 Opinion on the inconvenience of long credits granted in Mexico, and of the lack of quick transmission of funds 
 
 735. These two inconveniences will be examined separately. 
 
 736. Manufacturers of the United States do not grant as long credits as those of Europe. 
 
 727. It is not understood why the capitalists of the United States have not up to this time imitated the Europeans in 
 granting long credits. 
 
 738. The holding back of United States capitalists proceeds from the fact that the efforts of Mexico have not been 
 seconded by men of that country. 
 
127 
 
 729. It is proper to bear in mind, among other things, that the difficulty to the extension of commerce with 
 the United States, from credits, does not spring from any act of Mexico or from any provision of its Legislature, 
 but from special circumstances of European nations, that permit them to sell their goods on credit and by this 
 means place themselves in a more advantageous position than the United States. 
 
 730. It is true that as a general rule foreign goods are sold in Mexico on credits of six and eight months 
 but the importing merchants, upon fixing the seUing price of his merchandise, includes the interest on its value for 
 the term of credit granted for its payment, and it does not appear that North American merchants ought to 
 encounter any difficulty in following this system, if they really wish to compete with Europeans in trading with 
 Mexico. 
 
 731. North American merchants who have given so many proofs of being able to compete victoriously with 
 those of European nations in old established industries, in spite of the difference in wages paid respectively to 
 operatives, ought not, it would seem, hesitate before the inconvenience presented them by the circumstance of long 
 credits. 
 
 B. Difficulties of Transporting Silver Coin in Mexico. 
 
 732. It is proper, also, to rectify the estimates of the Report touching the difficulties presented to the 
 transportation of sums of money from one port of the Repubhc to another. 
 
 733. For the object of preventing the possibility of a small number of persons being able to take possession 
 of a load of silver, in transit from one part of the country to another, the Government has for a long time 
 considered it to be its duty to provide such necessary escort that the transportation of silver could be made with- 
 out this danger. But not being easy to give the escort in every circumstance under which it was asked for by 
 those interested, various enactments have been passed, called " Reglamentos de conducta,'' the object of which is 
 to fix rules and dates upon which the Government will provide escort for the transportation of loads of silver. In 
 these regulations it is determined that generally the " conductas " (as these loads of silver passing from one point 
 to another of the country are called here), should start every three or four months from one to another of the 
 principal commercial centres of the Republic. 
 
 734. The transportation of silver coin from this capital, which is the principal commercial centre of Mexico, 
 to the port of Vera Cruz offers no difficulty whatever, for a passenger train leaves every day, which serves for the 
 transportation of metals destined for that port, and this train goes sufficiently guarded with federal forces for ihe 
 protection of passengers aad their interests. 
 
 735. Since the ist of Januaiy, 1873, at which date the Mexico and Vera Cruz railway was put in operation, 
 there has been no notice of any robbery of the train from Vera Cruz, except on two occasions, in one of which, 
 by ingenious means, the assailants stole relatively small sums, part of which was afterwards recovered by the 
 authorities. 
 
 736. With date of June 14th, 1850, was issued the first " Regulation of ' conductas.' " There were to befour 
 of these per year, setting out about the middle of January, April, July and October, from this capital to Vera 
 Cruz as weE as to this capital from Guanajuato, and from this point andZacatecas for San Luis Potosi, en route 
 for Tampico. From Monterey it was to depart three times per year, as well as from Guadalajara and Durango. 
 From Rosario and Ures, en route to Mazatlan and Guaymas, it was to start twice a year. From Chihuahua 
 twice and at most thrice. The said regulation provided for the method of protecting money on its way to the 
 ports, the offices that should issue the documents, and a competent escort to accompany the " conductas." 
 
 737. The regulation of June 14th, 1850, was amended by that of July nth, 1853, which provided, that in- 
 stead of four the ''conductas" should only depart three times per year; this was the only noticeable reform, for, 
 excepting some small differences relating to documentation, the rest is the same as the first one. 
 
 739 Advantageous position which payments on long credit have given European merchants. 
 
 730' The importing merchant, on fixing the price of his merchandise, calculates the interest on the credits given for 
 
 731 American manufacturers ought not to look upon long credit as an obstacle to realization on their merchandise. 
 
 732 Bectification of the statements of the Keport respecting the transportation of specie. 
 733' To assure the transportation of silver coin, divers regulations have been issued. 
 
 734 There is no difficulty in the transmission of silver from Mexico to Vera Cruz. 
 
 7S5 Since the inauguration of the Vera Cruz railway in January, 1873, there have only been two robberies, and of 
 
 small amounts. 
 
 736 Regulation of " coJM^wcto*/' June 14th, 1850. 
 
 737! Eegulation of " cmvooy " of July 11th, and December 10th, 1853. 
 
128 
 
 738. On the I ith of July of last year, the last regulation of " condtictas " was issued, which is the one now in 
 force. According to it, four ^' conductas" will depart, instead of three, from Guadalajara, Zacatecas, San Luis 
 Potosi, Guanajuato and Queretaro, en route for this capital. Three times a year they will depart from Guadala- 
 jara for Manzanillo, from San Luis Potosi for Tampico,from Durango for Mazatlan and Zacatecas, and monthly 
 for Matamoros. From Chihuahua they will depart when there are funds to transmit, but not exceeding four times 
 per year. The remaining articles of the regulation, amounting to eleven, are relative to the manner of guarding 
 the ^' conductas" except the 9th, which declares the right of individuals to send their capital outside of the " con- 
 ductas,'' and when they please. 
 
 to. FREE TRADE AND PROTECTIONISM IN MEXICO. 
 
 739. The Report states that the branches of industry for which the country offers particular advantages are 
 mining and the cultivation of tropical plants ; but it adds, " its fiscal legislation has had a direct tendency to op- 
 press mining ; and it has made great efforts to promote manufacturing, for which he considers neither the people 
 nor the country are specially adapted." 
 
 740. These few words appear to be an attempt at deci(iing the important question of protectionism and of 
 free trade, which has for a long time been debated in this country, without having been able to arrive at any 
 definite conclusion one way or the other. It cannot be denied that mining is the easiest element of wealth to 
 work in Mexico, because the products thereof are adapted for easier exportation than the others, and are the 
 only ones that can immediately satisfy the necessities of foreign exchange ; but, unfortunately, this branch of our 
 industry has not been able to attain the development of which it is susceptible ; neither can it be denied that this 
 country presents especial advantages for the production of tropical fruits ; but the cultivation of tropical fruits 
 has not begun yet on a scale on which they might be produced ; but they have had to limit themselves almost to 
 the demand of interior consumption. 
 
 741. When a comparison is drawn between the mineral wealth of the States of California and Nevada, with 
 that which exists in some districts of Mexico, one cannot but comprehend the great proportions which mineral 
 production would assume in this country, if it should come to be worked on the scale on which it is done in the 
 United States. It can be assured that without any great effort it would be easy to augument the annual produc- 
 tion of silver, from about 25 millions, about the average it has amounted to for some years past, to a hundred or 
 a hundred and fifty millions. It can also be assured, that with but little effort coffee could be produced in as large 
 quantity as in Brazil, and of better quality. It can immediately be understood how great an increase the com 
 merce of Mexico would acquire, if its export should be developed from a matter of thirty millions per year, its 
 present amount, to two hundred or two hundred and fifty millions. 
 
 742. However, to the misfortune of this country, it has not been possible up to this time to attain such de- 
 velopment of its elements of wealth. Through the overturnings and political convulsions it has suffered since 
 the Independence, and through the distrust that has prevailed in consequence of these overturnings, keeping back 
 the capital necessary for the development of the natural elements of wealth, as well as through the defects of the 
 fiscal legislation of the country, instead of foreign capital coming destined for its development, Mexican capital 
 has been emigrating abroad ; and the result is, that up to this time it has not been possible to increase produc- 
 tion, except on a very limited scale. 
 
 743. Public opinion has not come to any decision for some time in Mexico in regard to the best manner of 
 promoting the progress of the country. Some have believed that this could be best secured by encouraging 
 manufactures, establishing therefor a protective fiscal legislation, and burdening foreign goods with heavy 
 duties ; and others, on the contrary, have thought that the circumstances and needs of the nation required low 
 duties, which would operate to give an impulse to trade. The sustainers of one and the other of these theories 
 have occupied the attention of the pubhc for some time, without having succeeded in bringing about any practi- 
 cal solution of the question. 
 
 738. Regulation of "convoy" of July, IS'fS, now in force. 
 
 739 Opinion of the Report upon the natural advantages, and the system followed in the fiscal legislation of the country. 
 
 740. Mining and the cultivation of tropical plants in Mexico have not, up to the present time, attained the develop- 
 ment of which they are capable. 
 
 741. Considerations respecting the possible increase of production in Mexico and its influence on commerce. 
 
 742. Production in Mexico has not been able to attain a larger increase, through commotions which have impeded the 
 immigration of capital. 
 
 743. The question is not yet decided in Mexico, whether to protect manufactures, or to stimulate commerce by means 
 of low duties. 
 
129 
 
 744- It cannot be denied that the protective theory has generally prevailed in Mexico, and either because it 
 was thought proper to give the preference to pushing forward the development of manufacturing industry, or from 
 the necessity of providing resources for the revenue, it has obliged foreign governments to load foreign goods with 
 high import duties. Neither can the fact be denied that various former administrations have made great efforts 
 to establish and encourage manufactures in this country, principally of ordinary cotton fabrics, which industry, 
 from the decided protection it has counted upon, has been one of the most lucrative branches of business open 
 to enterprise here, and has acquired, in consequence, great importance. 
 
 745- In speaking of mining, questions bearing upon this important branch of public wealth come under 
 special consideration; whether regarding fiscal legislation in Mexico, or regarding the actual status of this indus- 
 try, or finally, in regard to the probability of obtaining a great mercantile movement by means of freedom granted 
 to mining productions. 
 
 746. If the population of this country, or at least a considerable portion of it, were estabUshed on the coast, 
 so they could have easy access to the sea, or if the hot districts which abound in Mexico had navigable rivers or 
 railroads by which to transport their products to the coast cheaply, then the production of tropical fruits, which 
 are in large demand in the world, would be able to acquire great proportions ; but the principal part of the popu- 
 lation resides, on the contrary, as stated, in the interior of the country, for the coasts properly so called are found 
 almost uninhabited, and those who reside in the hot districts, where the production of tropical fruits is easy, and 
 principally those of the temperate and cold climates, cannot transport their fruits to the coast on account of the 
 heavy rates of freight. The consequence of this is that the production of tropical fruits is relatively small, and 
 will remain so until there is easy and cheap means of communication. 
 
 747. From the preceding simple exposition it is evident that the problem of procuring the development of 
 the natural elements of Mexico is not so simple as it might be thought at first sight, because the circumstances 
 of this nation give to it certain peculiarities which cannot be properly understood by means of an abstract system, 
 nor on absolute principles. Undoubtedly what it most urgently needs is the investment of large capital, as well 
 for the construction of easy and cheap means of communication, to make possible the development of its immense 
 elements of wealth, as to assist directly in such development, both in mining and agriculture. For this motive 
 the Mexican Government has tried and is trying, by every means within its reach, to facihtate the investing of 
 foreign capital in the enterprises of this country, and also to facilitate the building of railroads, without which it 
 would be impossible to raise it out of the condition, stationary and full of difficulties, in which it now is. 
 
 II. PRESENT COMMERCE OF MEXICO WITH THE UNITED STATES. 
 
 748. This labor would not be complete if it were limited to examining and rectifying the statements of the 
 Report in respect to the commerce between Mexico and the United States, without entering into other and im- 
 portant considerations in reference to what that commerce is and has been, and to the mode of increasing it. ' 
 
 749. The following subjects, then, relating to the trade of Mexico with the United States will be examined : 
 
 A. Exterior trade of Mexico up to 1853. 
 
 £. Trade of Mexico with the United States up to 1858. 
 
 C. Present trade of Mexico with the United States. 
 
 D. Considerations respecting the present exportation of Mexico compared with that of the last two years of 
 
 Spanish rule. 
 
 A. Exterior trade of Mexico up to 1853. 
 
 750. The foreign commerce of Mexico imported in 1853, according to the calculations of Sr. Miguel Lerdo 
 de Tejada, a distinguished Mexican statistician, set forth in his work entitled " Exterior Commerce of Mexico 
 from the Conquest up to the Present Time',' (1853), $26,000,000 during the year, and this commerce was 
 distributed as follows (p. 57) : 
 
 " In, view of all these data, which inform us with some exactness of the exportations which all these countries 
 
 744 Protectionism and the state of the revenue have been the cause of the imposition of high duties, 
 
 745 The mining question comes under special consideration, from the relation it bears to several o\ 
 
 ■s to several other interesting 
 
 subjects. 
 
 746 Difficulty of taking advantage in Mexico of all the possible production of tropical fruits for exportation. 
 
 747. Need of facilitating production hy means of the investment of foreign capital, and the building of railroads. 
 
 748 Past and present condition of commerce between Mexico and the United States, and the best means of forward- 
 ing it. 
 
 749 Matter bearing upon commerce between Mexico and the United States considered. 
 
 750 Importation of foreign goods to Mexico in 1853, according to Sr. Miguel Lerdo de Tejada. 
 
 17 
 
130 
 
 have made to ours, and of the value in the principal ones of them of the merchandise at its departure according 
 to the custom-house declarations, it results that adding to that value 15 or 20 per cent, in the case of European 
 and American goods, and on goods from India 50 or 60 per cent., for alltheir expenses until their arrival at one of 
 our ports, the total value of foreign merchandise imported annually to the Republic is, to-day, not less than 
 $26,000,000, and this amount proceeds from the following nations: 
 
 From England $12,500,000 
 
 " France 4,50°.°oo 
 
 " Germany 1,850,000 
 
 " Spain 700,000 
 
 " Belgium 800,000 
 
 " Sardinia 90,000 
 
 " United States 4,5°°,°°° 
 
 " Guatemala 
 
 " Ecuador 
 
 " New Granada [ 250,000 
 
 " Venezuela 
 
 " Chile 
 
 " the Island of Cuba > 600,000 
 
 " India 710,000 
 
 Total $26,000,000 
 
 751. The total value of exportations from Mexico, Sr. Lerdo de Fejada calculates to be from $27,000,000 
 to $28,000,000, in these terms (p. 60) : 
 
 " Besides silver and gold, there are annually exported from Mexico other products of its soil and industry, 
 such as dye woods, cochineal, coffee, tobacco, sugar, sugar cane, vanilla, sarsaparilla, Jalapa root, cocoa, indigo, 
 anis. Tabasco pepper, salt, ceniquen fibre, woods, resins, tortoise-shell, pearl and shell nacre, dry hides and sheep 
 pelts, some cured hides, salt fish and meats, rice, beans, horses, horned cattle, sheep, hogs, hats, common woolen 
 fabrics, wax figures, biscuit, fruits, preserved sweetmeats and other articles ; and notwithstanding it is impossible 
 now to frame a complete statement of the sum which the annual exportation of these effects amounts to, it can be 
 very well estimated at three or four milhons of dollars, which estimate will not appear exaggerated, if it is remem- 
 bered that only the dyewood, cochineal, and tobacco now exported amounts to nearly two milUons of dollars per 
 year. 
 
 " Taking into consideration what is exported of these articles from the Repubhc, the present state of mining 
 and the value the importations amount to, it can be assured that the total value of the exportations amounts annually 
 to twenty-seven or twenty-eight miUions of dollars in this order; twenty-three or twenty-four millions in gold and 
 silver, and three or four millions in various other effects. 
 
 752. In spite of the grave and frequent overturnings and convulsions Mexico has suffered, from 1810 to 
 date, it is satisfactory to see that its exterior commerce has gone on progressively increasing, although not to that 
 proportion it would have acquired if it had enjoyed peace and tranquility. 
 
 753. Sr. Lerdo de Fejada says on this subject, in his work aheady quoted, ''Exterior Commerce of Mexico 
 from the Conquest to the Present Time" (1853), as follows (page 61): "Comparing now the results which the 
 
 exterior commerce of Mexico presents during each of these three periods in which we have divided it in forming 
 this httle work, it is very satisfactory to note, that although our country has not made the progress that might 
 have been expected of it since it ceased being a colony of Spain, the increase which has taken place in its mer- 
 cantile movement since that epoch is worthy of consideration; for, according to all the data to which I have 
 already referred, it is evident that while the number of vessels which arrived at New Spain from Europe and 
 America in 1819, did not exceed 141, those arrived in 1851 amounted to 839; that while the total value of im- 
 portations did not exceed $8,000,000 annually in the last 25 years of the colonial system, to-day it reaches 
 $26,000,000, the same increase being noted in exportations; and, lastly, that while in that epoch Mexico gave 
 annually nine or ten milhons of dollars to roll up the fortunes of a small number of monopohsts, and pay a part 
 of the expenses of the peninsular government, to-day, if we except the money that our Government has to send 
 for the payment of interest on foreign debt, and what some foreigners retiring to their own country with the 
 
 751. Annual exportation of Mexico, according to the same author. 
 
 753. Exterior commerce of Mexico has gone on increasing, notwithstanding the political overturnings Mexico has 
 suffered. 
 
 753. Estimates of Sr. Lerdo de Tejada respecting the increase of the interior trade of Mexico. 
 
131 
 
 little fortune they have succeeded in making here carry away with them, which seems, altogether, have not exceeded 
 a million and a-half or two miUions of dollars in the year, it can be said that not a single dollar goes out of the 
 country except in exchange for an equivalent value brought into it." 
 
 JB. Trade of Mexico with the United States up to 1858. 
 
 754. Mr. Charles Butterfield, in his book already quoted, entitled " United States and Mexico. Carrying 
 Trade and Postal Facilities between the Two Countries" inserted the following table of the annual amount of 
 commerce between Mexico and the United States, from 1826 to 1858, the data of which are taken, as he states, 
 from the official reports of the United States Treasury Department (page 27 of the Appendix). 
 
 The following Statement, taken from the United States Treasury Report, demonstrates the Commercial Transactions between 
 
 Mexico and the United States, from 1826 to 1858. 
 
 YEARS. 
 
 Exportation from 
 Mexico to ihe 
 United £Utcs. 
 
 Exportation from 
 ■ the United States 
 to Mexico. 
 
 Years. 
 
 Exportation fjom 
 Mexico to the 
 United States. 
 
 Exportation from 
 thi' LTnited States 
 to Mcx CO. 
 
 1836 
 
 $3,916,000 
 
 5,233 000 
 
 4,814 000 
 
 5,026,761 
 
 5,235,241 
 
 5,167,000 
 
 4,393,954 
 
 5,459,818 
 
 8,666,668 . 
 
 9,490,446 
 
 5,615,819 
 
 5,654,002 
 
 3 127.153 
 
 5,500,707 
 
 4,175.000 
 
 3,484,957 
 
 1,996,694 
 
 $6,281,000 
 4,173.000 
 2,886,000 
 2,331,151 
 4,837,458 
 6.178,000 
 3,467.541 
 5,408,091 
 5,265,053 
 9,029,231 
 6,040,635 
 3,880,333 
 3,787,363 
 3,164,097 
 3,515,341 
 3,036,620 
 1,534,493 
 
 Brought forward.. 
 1843 . .. . 
 
 $86,856,320 
 3,783,406 
 3,387.000 
 1,703.936 
 1,836,621 
 746,818 
 1,581,247 
 3,316,719 
 3,135,336 
 1,804,779 
 1,649,206 
 3,167.985 
 3,463.190 
 3,832,830 
 3,568.681 
 5,585,867 
 5,477,465 
 
 $70,815,386 
 1,471.937 
 1,794,833 
 1 153 331 
 
 1837 
 
 1828 
 
 1844 
 
 1839 
 
 1845 
 
 1830 , 
 
 1846 
 
 1,531,180 
 693,438 
 4,058,446 
 3,090,869 
 3,012,827 
 
 1831 
 
 1847 
 
 1833 
 
 1848 
 
 1849 
 
 1833 . 
 
 1834 
 
 1850 
 
 1851 
 
 1835 
 
 1,518,783 
 
 1836 
 
 1853 
 
 1853 
 
 3,284,939 
 
 1837 
 
 3 558 824 
 
 1838 
 
 1854 
 
 3.135.486 
 
 1839 
 
 1855 
 
 3 922 804 
 
 1840 
 
 1841 
 
 1856 
 
 1857 
 
 3,702,339 
 3,615,306 
 
 1843 
 
 1858 
 
 3,315,835 
 
 
 Total 
 
 Average per year. 
 
 
 Carried forward 
 
 $86,856,330 
 
 $70,815,386 
 
 $129,245,337 
 3,916,535 
 
 $109,737,333 
 3,335,377 
 
 755. From the preceding statement, it appears that during the first years of Mexican Independence, and 
 before the events of Texas took place, commerce with the United States was of some importance. In the year 
 1826 it reached $10,197,000, and in that of 1830, $10,072,699 ; it afterwards decreased considerably, and in the 
 year 1841 hardly amounted to $S,S2i,S77; in 1842, to $3,531,187 ; in 1843, to $4,254,343; in 1844, to $4,181,- 
 833; in 1845, to $2,855,267; and in 1846, to $3,367,801, all of which shows how much the political relations 
 between the two countries affect their commercial relations. It appears, also, that the average of exportation 
 from Mexico to the United States during the course of the 32 years from 1826 to 1858, was $3,916,525, and 
 that the average of exportation from the United States to Mexico during the period was $3,325,377, both entries 
 making a total of $7,241,902. 
 
 756. Mr. Butterfield prepared in his book, already quoted, "Mexico and the United States," the following 
 statement of the exterior commerce of Mexico : "In the year 1858, divided by nations, and comprehending im- 
 portations at $26,000,000, and exportations at $28,000,000, according to the calculations of Sr. Lerdo de Tejada 
 (page 20 of the Appendix). 
 
 Interchange with England ' $33>4oo,ooo 
 
 " " the United States 8,700,000 
 
 " " France 5iS0°)°°° 
 
 " " Germany 2,000,000 
 
 « " Spain 1,200,000 
 
 « " Belgium 400,000 
 
 " " Sardinia - ■ ■ 100,000 
 
 " Guatemala, Ecuador, New Granada, > coo 000 
 
 Venezuela and Chile j ^ ' 
 
 " " the Island of Cuba 1,200,000 
 
 " " India and China 1,000,000 
 
 Total • $54,000,000 
 
 y'ii Commerce between Mexico and the United States from 1826 to 1858, according to data of Mr. Charles Butter- 
 
 ^ 755. Deduction from the preceding statement published by Mr. Butterfield. 
 756. Statement of Mr. Butterfield on the exterior commerce of Mexico in 1858. 
 
132 
 
 757- Since then circumstances have somewhat changed, for France and Germany have augmented their 
 commerce in greater proportion than the United States. 
 
 C. Present Commerce of Mexico with the United States. 
 
 758. The most complete and detailed statement it has been possible to form of the importation there has 
 
 been in Mexico since the work of Sr. Lerdo de Tejada, is that belonging to the fiscal year of 1872 to 1873, 
 
 which specifies the classes of merchandise imported to Mexico during that year, and whence proceeding: 
 
 Statement of the Importation of the Mexican Sepwblic during the Mscal Year of 1872 and 1873, and ihowing whence 
 
 proceeding. 
 
 Gbbmaitt. 
 
 Gfoods free of dutji 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks 
 
 Mixed goods 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware 
 
 Drugs, medicines, Aa 
 
 Miscellaneous 
 
 Art. 21. Effects not quoted 
 
 Spain. 
 
 Goods free of duty 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks .♦. 
 
 Mixed goods 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware . . , 
 
 Drugs, medicines, &c 
 
 Miscellaneous 
 
 Alt. 21 
 
 France. 
 
 Goods free of duty 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks 
 
 Mixed goods 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware 
 
 Drugs, medicines, &c 
 
 Miscellaneous 
 
 Art. 21 
 
 England. 
 
 Goods free of duty 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks 
 
 Mixed goods 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware 
 
 Drugs, medicines, &c 
 
 Miscellaneous 
 
 Art. 21 
 
 Value of invoice. 
 
 Marlcet valne. 
 
 Cnstom-honse duties. 
 
 $46,122 63 
 
 $67,007 93 
 
 
 808.397 46 
 
 1,335,288 42 
 
 $469,322 71 
 
 184,850 78 
 
 292,195 34 
 
 90,432 50 
 
 117,715 40 
 
 185,076 82 
 
 66,957 06 
 
 15,884 31 
 
 27,590 16 
 
 6,710 05 
 
 99,180 71 
 
 164,594 89 
 
 45,574 70 
 
 » 532,870 73 
 
 840,954 51 
 
 299,830 26 
 
 122,037 83 
 
 194,060 45 
 
 71,459 89 
 
 244,648 71 
 
 384,360 54 
 
 143,131 52 
 
 18.043 51 
 
 32,451 87 
 
 14,946 66 
 
 179,839 65 
 
 274,741 17 
 
 99,546 63 
 
 25,504 57 
 
 36,137 31 
 
 17,716 84 
 
 $2,394,914 38 
 
 $3,834,459 41 
 
 $1,325^618 81 
 
 $3,363 00 
 
 $68,108 38 
 
 
 14,661 10 
 
 30,658 90 
 
 $12,283 14 
 
 9,842 86 
 
 21,601 20 
 
 5,846 15 
 
 589 17 
 
 1,049 23 
 
 431 55 
 
 844 15 
 
 1,304 86 
 
 538 81 
 
 1,516 57 
 
 3,887 49 
 
 1,063 16 
 
 744,682 64 
 
 1,097,596 94 
 
 51,891 13 
 
 1,821 00 
 
 3,813 34 
 
 918 09 
 
 4,095 30 
 
 7,835 03 
 
 2,556 74 
 
 3,932 93 
 
 4,347 58 
 
 2,389 81 
 
 151,590 57 
 
 212,894 59 
 
 98,746 67 
 
 414 00 
 
 554 34 
 
 367 09 
 
 $996,353 29 
 
 $1,453,641 88 
 
 $635,881 34 
 
 $194 361 09 
 
 $261,610 63 
 
 
 395,915 02 
 
 544,371 03 
 
 $269,591 78 
 
 59,533 92 
 
 83,691 83 
 
 43,160 03 
 
 406,173 49 
 
 548,448 01 
 
 270,923 53 
 
 238,157 01 
 
 319,394 97 
 
 158,213 31 
 
 301,250 33 
 
 270,505 17 
 
 133,703 83 
 
 1,044,618 10 
 
 1,577,688 73 
 
 588,877 87 
 
 y9,493 42 
 
 130.641 99 
 
 46,932 68 
 
 340,794 81 
 
 486,651 89 
 
 190,572 74 
 
 39,428 39 
 
 62,556 38 
 
 30,068 48 
 
 322,583 13 
 
 466,561 73 
 
 160,936 68 
 
 130,077 28 
 
 173,425 27 
 
 85,854 40 
 
 $3,462,274 99 
 
 $4,930,547 61 
 
 $1,973,825 31 
 
 $904,304 46 
 3,856,683 07 
 
 $1,238,186 62 
 5,664,081 05 
 
 
 $2,677,965 53 
 
 554,561 04 
 
 793,745 75 
 
 356,613 55 
 
 320.038 11 
 
 443,486 49 
 
 212,750 73 
 
 90,862 58 
 
 136,994 34 
 
 60.104 39 
 
 498,902 40 
 
 691,033 89 
 
 325,340 63 
 
 174,210 16 
 
 393,240 41 
 
 111,308 19 
 
 18,379 14 
 
 42,377 50 
 
 15,551 83 
 
 208,191 89 
 
 327,633 42 
 
 139,767 67 
 
 23 746 12 
 
 39,467 41 
 
 16,691 94 
 
 150,253 60 
 
 211,944 30 
 
 69,607 85 
 
 386.564 60 
 
 515,563 08 
 
 254,977 46 
 
 $7,185,687 17 
 
 $10,387,744 26 
 
 .$4,240,679 76 
 
 757. Since 1858 Germany and France have increased their commerce with Mexico in greater proportion than the 
 United States. 
 
 758. Balance of importation in Mexico during the fiscal year of 1872 and 1873. 
 
1S3 
 
 United States. 
 
 Goods free of duty 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks 
 
 Mixed goods 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware 
 
 Drugs, medicines, &c 
 
 Miscellaneous 
 
 Art. 31 
 
 South America. 
 
 Goods free of duty 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks 
 
 Mixed goods. 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware 
 
 Drugs, medicines, &c 
 
 Miscellaneous 
 
 Art. 31 
 
 Value of invoice. 
 
 $1,151,655 18 
 
 1,503,144 35 
 
 142,593 38 
 
 147,635 99 
 
 88,842 20 
 
 133,188 38 
 
 1,042,697 82 
 
 18.487 69 
 
 351,956 93 
 
 92,686 70 
 
 579,167 58 
 
 11,943 96 
 
 $5,313,999 06 
 
 $69,802 78 
 
 458,312 55 
 
 53,225 73 
 
 39,236 66 
 
 17.315 13 
 
 118,366 97 
 
 74,083 01 
 
 5,464 87 
 
 30,507 24 
 
 2,421 11 
 
 30,873 05 
 
 533 50 
 
 $889,032 58 
 
 Market value. 
 
 $1,615 
 
 3,144: 
 198, 
 200, 
 
 54, 
 
 160 
 
 1,527, 
 
 33, 
 617. 
 153, 
 803,' 
 
 18. 
 
 781 34 
 734 00 
 337 65 
 268 47 
 894 43 
 602 63 
 888 65 
 574 85 
 358 71 
 798 17 
 944 93 
 657 56 
 
 $7,538,836 37 
 
 $84,744 50 
 
 740,881 41 
 
 79 799 54 
 
 65,833 30 
 
 31,605 44 
 
 159,535 35 
 
 130,384 77 
 
 10,547 59 
 
 50,766 39 
 
 5,718 13 
 
 31,354 86 
 
 885 35 
 
 $1,393,040 43 
 
 Cnstom-house duties. 
 
 $1,323,090 70 
 86,120 40 
 
 103,659 50 
 25,406 76 
 83,059 65 
 
 658,366 68 
 11,489 96 
 
 199,005 76 
 75,091 58 
 
 688,446 51 
 7,850 72 
 
 $3,355,597 33 
 
 $240,740 67 
 31,387 84 
 31,637 03 
 
 9,031 31 
 35,386 01 
 25,013 72 
 
 1,916 11 
 12.258 55 
 
 2;092 83 
 
 7,858 05 
 380 14 
 
 $377,591 64 
 
 General Reea/pitvZaUon. 
 
 Germany 
 
 Spain 
 
 France. 
 
 England 
 
 United States. 
 South America 
 
 Proportion represented 
 on value of invoice. 
 
 11,890 per cent. 
 
 4.947 
 17.189 
 35,674 
 35,886 " 
 
 4,413 
 
 Value of invoice. 
 
 $3,394,914 38 
 
 996,353 39 
 
 3,462,274 99 
 
 7,185,687 17 
 
 5,213,999 06 
 
 889,032 58 
 
 $20,142,260 3? 
 
 Market value. 
 
 $3,834,459 41 
 1,452,641 88 
 4,930,547 61 
 
 10,387,744 26 
 7,528,836 37 
 1,393,040 43 
 
 $39,516,359 85 
 
 In all the custom-houses the whole amounts of duties appears in their balances, except in that of Vera 
 Cruz, which makes a reduction of 10 per cent., according to the decree of May 31st, 1873, by which 
 said 10 per cent, is deducted on $5,937,163 18, to which amount the duties of the rest of said 
 offices, making 
 
 Cuatom-houBe duties. 
 
 $1,325,618 81 
 
 635,821 34 
 
 1,973,835 31 
 
 4,240,679 76 
 
 8,355,597 33 
 
 877,591 64 
 
 $11,809,184 08 
 
 593,726 31 
 
 $11,216,407 77 
 
 Section 5. — Mexico, December 31st, 1878. 
 
 J. M. Gakmbndia. 
 
 759. From the preceding statement it appears that the importations from the United States during the fiscal 
 year of 1872 and 1873 reached an invoice value of $5,213,999 06, or a Uttle more than 25 per cent, of all the 
 importations to Mexico in the years indicated. 
 
 760. It must be borne in mind, however, as has already been shown, that a considerable part of these values 
 belong to merchandise, which, although coming in American vessels, is of European origin, which occurs princi- 
 pally with those which arrives on the Pacific, in the Panama and San Francisco mail steamers. As the Mexican 
 laws do not require that in the respective custom-house documents the origin of goods imported to Mexico 
 should be stated it is impossible to fix exactly what part of the arrivals in North American vessels are of European 
 origin. 
 
 759 The importations from the United States appear to be but little more than the quarter part of the total importa- 
 tion of 1872 and 1878. 
 
 760. Among the goods ostensibly imported from the United States, those coming from England and Germany ought to 
 
 be deducted. 
 
134 
 
 761. The recapitulation of the exportation of Mexico during the fiscal year of 1872 and 1873 is as follows, 
 prepared by section 5 of this Department : 
 
 Exipmt done through aU the Porta of the BepubUc dwring the Maeal Tear of 1873 a/nd 1873. 
 
 
 Germany. 
 
 Spain. 
 
 
 Value. 
 
 Duties, 
 
 Value. 
 
 Duties. 
 
 Various effects free of duty 
 
 Woods 
 
 Metals 
 
 $138,011 60 
 195,764 70 
 444,361 63 
 
 
 $575,813 57 
 
 50,065 00 
 
 113,043 00 
 
 
 $6,881 11 
 17,387 48 
 
 ?19 50 
 
 3,703 60 
 
 
 $778,137 93 
 
 $34,368 59 
 
 $737,430 57 
 
 $3,733 10 
 
 
 France. 
 
 ■# 
 
 England. 
 
 
 Value. 
 
 Duties. 
 
 Value. 
 
 Duties. 
 
 Various efEects free of duty 
 
 Woods 
 
 $588,834 55 
 
 171,837 00 
 
 8,833,761 98 
 
 
 $545,955 36 
 
 480,719 03 
 
 11,484,680 41 
 
 
 $1,780 50 
 
 183,568 80 
 
 $55,178 60 
 
 Metals 
 
 561,979 81 
 
 
 
 
 $4,593,431 53 
 
 $184,344 80 
 
 $13,511,354 70 
 
 $617,158 41 
 
 
 TJnitbd States. 
 
 South Amekioa. 
 
 
 Value. 
 
 Duties. 
 
 Value. 
 
 Duties. 
 
 Various effects free of duty 
 
 Woods 
 
 Metals 
 
 $3,334,531 31 
 
 104,330 83 
 
 8,039,117 10 
 
 
 $353,365 51 
 
 3,710 00 
 
 1,350,835 77 
 
 
 $6,631 46 
 
 884,786 38 
 
 $133 00 
 
 59,960 53 
 
 
 $11,367,859 13 
 
 $391,417 84 
 
 $1,605,811 38 
 
 $60,093 53 
 
 
 
 
 TOTALS. 
 
 
 Value. 
 
 Duties. 
 
 Various effects free of duty 
 
 Woods 
 
 $5,334,900 70 
 
 1,005,304 55 
 
 35,363,799 89 
 
 
 $70,633 17 
 1,309,380 60 
 
 Metals 
 
 
 
 
 
 $81,594,005 14 
 
 $1,380,003 77 
 
 Section 5. — Mexico, Deceml)er 30th, 1878. 
 
 J. M. Gakmendia. 
 
 761. Statement of exportation made in Mexico during the fiscal year of 1873 and 1873. 
 
185 
 
 762. Section 5 of this Department has just prepared a general balance of importation taken place in Mexico 
 during the fiscal year of 1874 and 1875, which is the last of which there is no exact data. This balance is as 
 follows : 
 
 Qeneral Importation of the JRepubUe during the Fiseal Tea/r of 1874 and 1875, giving its Origin and the References to the 
 
 Tariff in force. 
 
 NOMENOI^ATORE OF TAKIFF. 
 
 Art. 16. 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 21. 
 
 frae. I. 
 frac. II. 
 frac. III. 
 frac. IV. 
 frac. V. 
 frac. VI. 
 frac. VII. 
 frac. VIII. 
 frac. IX 
 frac. X. 
 
 Qbbmakt. 
 
 Goods free of duty 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks 
 
 Mixed goods 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware 
 
 Drugs, medicines, &c 
 
 Miscellaneous 
 
 Goods not specified in the tariff and taxed 
 at 55 per cent, on appraisement 
 
 Spain. 
 
 Art. 16. 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 21. 
 
 frac. I. 
 frac. II. 
 frae. III. 
 frac. rv. 
 frac. V. 
 frac. VI. 
 frac. VII. 
 frac. VIII. 
 frac. IX. 
 frac. X. 
 
 Goods free of duty 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks 
 
 Mixed goods 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware 
 
 Drugs, medicines, &c 
 
 Miscellaneous 
 
 Goods not specified in the tariff and taxed at 
 55 per cent, on appraisement 
 
 Art. 16. 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 21. 
 
 frac. I. 
 frae. II. 
 frac. III. 
 frac. IV. 
 frac. V. 
 frac VI. 
 frac. VIL 
 frac. VIII. 
 frac. IX. 
 frac. X. 
 
 Fkance. 
 
 Goods free of duty 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks 
 
 Mixed goods 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware 
 
 Drugs, medicines, &c 
 
 Miscellaneous 
 
 Goods not specified in the tariff and taxed at 
 55 per cent, on appraisement 
 
 Art. 16. 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 18, 
 Art. 31. 
 
 frac. I. 
 frac. II. 
 frac. III. 
 frac. IV 
 frac. V. 
 frac. VI. 
 frac. VII. 
 frae. VIII. 
 frac. XI. 
 frac. X. 
 
 England. 
 
 Goods free of duty 
 
 Cottons 
 
 Linen and hemp goods 
 
 Woolens 
 
 Silks 
 
 Mixed goods 
 
 Groceries and eatables 
 
 Glass, glassware and crockery 
 
 Fancy goods, iron and hardware 
 
 Drugs, medicines, &c 
 
 Miscellaneous 
 
 Goods not specified in the tariff and taxed at 
 55 per cent, on appraisement 
 
 Value of invoice. 
 
 Market value. 
 
 CuBtom-liouse duties. 
 
 $50,454 13 
 199,750 81 
 
 $67,246 00 
 
 390,595 76 
 
 
 $189,615 73 
 
 27,599 82 
 
 45,460 45 
 
 20,759 32 
 
 40,379 70 
 
 63,200 96 
 
 39,730 51 
 
 7,943 91 
 
 18,160 55 
 
 5,440 74 
 
 44,908 04 
 
 75,352 33 
 
 33,378 51 
 
 288,346 08 
 
 471,601 13 
 
 300,918 58 
 
 74,181 54 
 
 131,199 68 
 
 53,505 53 
 
 147,593 18 
 
 329,092 26 
 
 104,758 33 
 
 12,107 92 
 
 19,940 05 
 
 9,950 43 
 
 116,233 84 
 
 169,540 09 
 
 7,797 13 
 
 1,384 08 
 
 1,800 35 
 
 908 09 
 
 $1,010,776 05 
 
 $1,667,089 46 
 
 $735,663 79 
 
 $12,295 18 
 3,374 73 
 
 $18,403 81 
 4,582 65 
 
 
 $1,639 89 
 
 2,430 18 
 
 3,493 80 
 
 349 94 
 
 9 49 
 
 17 71 
 
 6 33 
 
 728 22 
 
 1,552 88 
 
 477 08 
 
 710,525 57 
 
 1,042,210 37 
 
 488,669 22 
 
 316 58 
 
 571 92 
 
 230 34 
 
 3,832 16 
 
 6,495 99 
 
 2,257 95 
 
 1,512' 26 
 
 2,444 61 
 
 1,353 00 
 
 179,500 20 
 
 247,860 39 
 
 114,953 94 
 
 1,384 01 
 
 1,892 99 
 
 900 73 
 
 $914,908 58 
 
 $1,329,537 03 
 
 $610,738 43 
 
 $320,611 26 
 338,709 84 
 
 $439,118 43 
 470,118 39 
 
 
 $233,890 74 
 
 99,494 42 
 
 135,619 53 
 
 67,721 67 
 
 441,148 41 
 
 595,718 41 
 
 397,603 31 
 
 299,434 72 
 
 404,633 69 
 
 199,931 04 
 
 215,953 69 
 
 291,263 67 
 
 143,864 51 
 
 733,793 04 
 
 1,177,346 98 
 
 523,393 32 
 
 61,970 55 
 
 105,313 64 
 
 45,644 78 
 
 288,314 85 
 
 421,494 61 
 
 195,860 60 
 
 36,370 49 
 
 58,373 51 
 
 29,215 60 
 
 864,849 73 
 
 519,808 54 
 
 151,638 45 
 
 18,988 65 
 
 35,386 51 
 
 13,605 74 
 
 $8,219,579 65 
 
 $4,629,094 76 
 
 $1,900,353 76 
 
 $1,331,377 47 
 
 $1,740,274 81 
 7,541,593 45 
 
 
 5,096,553 94 
 
 $3,660,163 65 
 
 453,456 75 
 
 656,718 34 
 
 310,463 61 
 
 843,179 17 
 
 476,002 24 
 
 330,887 13 
 
 177,643 54 
 
 249,444 01 
 
 126,370 10 
 
 456,040 16 
 
 649,643 50 
 
 308,718 15 
 
 347,068 38 
 
 522,396 13 
 
 243,600 09 
 
 46,496 67 
 
 89,980 54 
 
 38,558 34 
 
 310,328 39 
 
 456,206 96 
 
 210,557 19 
 
 30,916 34 
 
 32,742 35 
 
 15,909 61 
 
 150,061 66 
 
 208,967 41 
 
 68,535 63 
 
 10,438 33 
 
 14,396 57 
 
 5,538 94 
 
 $8,743,548 60 
 
 $12,638,316 31 
 
 $5,219,388 34 
 
 763. Statement of Importation made in Mexico during the fiscal year of 1874 and 1875. 
 
lae 
 
 NOMEKCLATHRE. 
 
 United States. 
 
 Art. 16. , Goods free of duty 
 
 Art. 18, f rac. I. Cottons 
 
 Art. 18, frac. II. Linen and hemp goods 
 
 Art. 18, f tac. III. Woolens 
 
 Art. 18, frac. IV. Silks 
 
 Art. 18, frac. V. Mixed goods 
 
 Art. 18, frac. VI. Groceries and eatables 
 
 Art 18, frac. VII. Glass, glassware and croctery 
 
 Art. 18, frac. VIII. Fancy goods, iron and hardware 
 
 Art. 18, frac. IX. Drugs, medicines, &c 
 
 Art. 18, frac. X. Miscellaneous 
 
 Art. 31. Goods not specified in the tariff and taxed at 
 
 55 per cent, on appraisement 
 
 South America. 
 
 Art. 16. Goods free of duty 
 
 Art. 18, frac I. Cottons 
 
 Art. 18, frac. II. Linen and hemp goods 
 
 Art. 18, frac. III. Woolens 
 
 Art. 18, frac. IV. Silks 
 
 Art 18, frac. V. Mixed goods 
 
 Art. 18, frac. VI. Groceries and eatables 
 
 Art. 18, frac. VII. Glass, glassware and crockery 
 
 Art. 18, frac VIII. Fancy goods, iron and hardware 
 
 Art. 18, frac. IX. Drugs, medicines, &c 
 
 Art. 18, frac. X. Miscellaneous 
 
 Art. 31. Goods not specified in the'tariff and taxed at 
 
 55 per cent, on appraisement 
 
 Value of invoice. 
 
 $1,033. 
 
 1,656. 
 
 117! 
 
 163 
 
 37 
 
 77, 
 
 853, 
 
 56, 
 
 394, 
 
 103, 
 
 506 
 
 765 36 
 334 03 
 339 08 
 590 15 
 871 13 
 547 06 
 338 40 
 ,659 73 
 890 16 
 915 14 
 015 81 
 
 36,336 93 
 
 $5,016,303 87 
 
 $434 43 
 49,065 43 
 
 3,841 96 
 
 711 13 
 
 463 47 
 
 590 00 
 
 33,741 08 
 
 1,310 03 
 
 5,940 31 
 795 87 
 
 4,475 70 
 
 33 19 
 
 $90,303 50 
 
 Market value. 
 
 $1,495 
 
 3,373, 
 
 155 
 
 335 
 
 5o: 
 
 106! 
 1,316 
 86: 
 588, 
 163, 
 713, 
 
 .339 56 
 365 84 
 ,348 30 
 ,907 57 
 ,868 84 
 833 84 
 ,600 13 
 ,396 80 
 ,466 15 
 680 95 
 363 01 
 
 34,611 88 
 
 $7,108,639 76 
 
 $700 86 
 
 139,019 65 
 
 7,916 88 
 
 1,738 33 
 
 1,341 43 
 
 1,511 43 
 
 88,311 10 
 
 3,013 73 
 
 9,343 35 
 
 1,847 04 
 
 10,316 88 
 
 51 00 
 
 $308,399 93 
 
 ■ Cnstom-house duties. 
 
 $1,661,479 87 
 94,393 78 
 
 136,050 80 
 81,440 04 
 54,797 71 
 
 571,377 77 
 48,183 03 
 
 353,638 65 
 86,540 69 
 
 480,450 34 
 
 18,304 56 
 
 $8,435,655 34 
 
 $53,679 39 
 
 3,309 98 
 
 663 56 
 
 496 44 
 
 609 30 
 
 10,886 18 
 
 371 38 
 
 1,894 60 
 
 700 87 
 
 3,313 99 
 
 38 08 
 
 $75,350 97 
 
 Oeneral JRecapitvlaUen. 
 
 NOMESCLATDHB OP TABIFP. 
 
 Value of invoice. 
 
 Market value. 
 
 Castom-lioUBe duties. 
 
 
 $1,010,776 05 
 
 914,908 58 
 
 3,319,579 65 
 
 8,743,548 60 
 
 5,016,303 87 
 
 90,303 50 
 
 $1,667,089 46 
 1,339,537 03 
 4,639,094 76 
 
 13,638,316 31 
 
 7,108,639 76 
 
 303,399 93 
 
 $735,668 79 
 
 Spain 
 
 610,788 43 
 
 
 1,900,358 76 
 
 
 5,319,388 43 
 
 
 3,485,655 34 
 
 Soath America 
 
 75,350 97 
 
 
 
 
 $18,994,418 35 
 
 $37,576,057 33 
 
 $11,966,949 60 
 
 Section 5. — Mexico, January 14th, 1879. 
 
 J. M. Gakmendia. 
 
 763. From the preceding statement it appears that the importations made in Mexico of foreign goods pro- 
 ceeding from the United States during the fiscal year of 1874 and 1875 bore an invoice value of $5,016,302 87, 
 or $197,696 19 less than in the year of 1872 to 1873, it being proper to bear in mind that this sum comprehends 
 merchandise of other nationalities brought to Mexico in United States vessels, as has already been stated. 
 
 763. The importation of Merchandise proceeding from the United States in the year from 1874 to 1875 was $5,016, 
 303 87. 
 
137 
 
 764- The general exportation made in Mexico during the fiscal year of 1874 and 1875 is as appears in the 
 following statement, prepared by section 5 of this Department : 
 
 £!xportation made ilirovgli all the Ports of the BepuhUc during Vie Fiscal Tear of 1874 and 1875. 
 
 Value. 
 
 Various effects free of duty 
 
 Metals 
 
 Woods 
 
 $305,650 86 
 
 36,239 58 
 
 203,463 56 
 
 $444,344 00 
 
 $763 03 
 5,339 95 
 
 $5,991 97 
 
 Pkaxoe. 
 
 Various effects free of duty , 
 
 Metals 
 
 Woods 
 
 $537,665 68 
 
 4,853,011 31 
 
 334,386 53 
 
 $5,734,063 53 
 
 $331,199 81 
 7,593 93 
 
 $328,793 74 
 
 Spain. 
 
 Value. 
 
 $396,350 66 
 
 317,303 50 
 
 50,537 00 
 
 $764,191 16 
 
 41,755 98 
 1,533 50 
 
 $3,378 48 
 
 $768,411 37 
 
 7,613,788 57 
 
 838,637 46 
 
 9,319,837 46 
 
 $366,838 81 
 83,451 36 
 
 $450,390 07 
 
 Various effects free of duty 
 
 Metals 
 
 Woods 
 
 Various effects free of duty 
 
 Metals 
 
 Woods 
 
 United 
 
 States. 
 
 SOUIU AJIEIIICA. 
 
 Value. 
 
 Duties. 
 
 Value. 
 
 DutieB. 
 
 $3,476,774 53 
 
 6,696,538 55 
 
 184,854 83 
 
 
 $38,734 21 
 779,449 91 
 
 
 $369,389 73 
 13,784 03 
 
 $46,633 83 
 
 
 
 $10,358,167 90 
 
 $383,073 75 
 
 $808,184 13 
 
 $46,633 83 
 
 
 
 Totals. 
 
 
 Value. 
 
 Duties. 
 
 
 $5,413,587 31 
 
 30,394,331 43 
 
 1,610,879 37 
 
 
 
 $906,470 17 
 
 
 111,581 67 
 
 
 
 
 
 $37,318,788 10 
 
 $1,018,051 84 
 
 Section 5. — Mexico, January 14th, 1879. 
 
 J. M. Gakmbndia. 
 
 765. Besides not having as yet all the data of the years subsequent to that of 1874 and 1875, in order to 
 form the general balances of importation, they could not serve as a basis, because they were exceptional years, 
 In that of 1875 and 1876 the revolution of Tuxtepec began and continued during that of 1876 and 1877, on 
 account of which the importations of both years were very limited. With the year of 1876 and 1877 the con- 
 trary happened, that is, peace having become re-established and public confidence revived, importations were 
 much larger than usual, for which reason neither could this year serve as a basis for proximate calculations. 
 
 766. The Bureau of Adjustments of this Department has already formed, with the notices of exportation re- 
 mitted from the custom-house, the following rd'jww^ of the exportation for the fiscal year of 1877 and 1878, 
 
 764. Statement of exporlation made in Mexico during the fiscal year of 1874 and 18 75. 
 
 765 As yet the necessary data to form the tables of the importation of later years is not had. 
 
 766 Notice of the exportation in the year 1877 to 1878, formed by the Department of Adjustments. 
 
 IS 
 
138 
 
 which is here appended to complete the notices, whidh are, on file in this Department, respecting the preseiit com- 
 merce of Mexico with the United States. 
 
 Depaktmknt op State for the Finances and Ptiblic. Credit. ) 
 
 Bdeeau of Adjustments and Commekcial statistics, j 
 
 GENERAL RESUME of the Exportation of National Prod'uetions throvgh Mexican Porta during the Fiscal Tear from 
 July l.s<, 1877. to June SOth, 1878, arranged alphabetically with detail of Mnda of goods ient abroad, their weight, i;ahie 
 and duties, drawn from twenty-six partial balances, formed by the Subscriber from the registers of exit remitted to the 
 Bureau of Adjustments by the Maritime and Frontier Ctistum-houses of the Republic, the partial balances of which, bf sides 
 the data named, contain the name of the vessel, its class- and nationality, dates of exit, points of destination, and a detailed 
 statement of effects. 
 
 XiKus 01? Articles Expoiited. 
 
 'It: 
 
 13. 
 13. 
 14. 
 15 
 16. 
 17. 
 18. 
 19. 
 30. 
 31. 
 33. 
 33. 
 34. 
 35. 
 36. 
 37. 
 38. 
 39. 
 30. 
 81. 
 83. 
 33. 
 84. 
 35. 
 36. 
 37. 
 88. 
 39. 
 40. 
 41. 
 43. 
 43. 
 44. 
 45. 
 46. 
 47. 
 48. 
 49. 
 50. 
 51. 
 53. 
 53. 
 54. 
 55. 
 56. 
 57. 
 58. 
 59. 
 60. 
 62. 
 63. 
 64. 
 A. 
 65. 
 66. 
 
 Kilograms. Grd. 
 
 Cocoanut oil 
 
 Oil of aloes 
 
 Lard oil 
 
 Brandy 
 
 Garlic 
 
 Wire, copper 
 
 Cotton 
 
 Starch 
 
 Almonds, sweet 
 
 Alfalfa (lucein) 
 
 Anacabuite 
 
 Anise 
 
 Antiquities 
 
 Indigo 
 
 manufactures of the country. . 
 
 Eice 
 
 Metallic coffins 
 
 Saffron (common) 
 
 Sugar, in loaf 
 
 Sugar, unpurified 
 
 SSugar, brown ; . 
 
 Barrels 
 
 Batteries, electric 
 
 Blacking, shoe 
 
 Horses and mares 
 
 Cocoa, Tobasoo 
 
 Coffee 
 
 Safes, iron 
 
 Cinnamon 
 
 Mahogany 
 
 Bell (one) 
 
 Caoutchouc 
 
 Beef dried 
 
 Earthen jars ;Mex., canjilones) 
 
 Shoes 
 
 Egg shells 
 
 Dividivi (Mex., cascolote) 
 
 Hydraulic lime 
 
 Ortridges, loaded 
 
 Shrimps 
 
 Canteens, sole leather 
 
 Tortoise shell 
 
 Bailey 
 
 Onions 
 
 Bristles 
 
 Cedar 
 
 Beer ' 
 
 I? ails, iron 
 
 Cocoa nuts 
 
 Shells 
 
 Cushions 
 
 Copper 
 
 Bags 
 
 Ear.ables 
 
 Elm bark 
 
 Cow hides, with hair on 
 
 Pig skins 
 
 Calf skins, with hair on 
 
 Halibut skins 
 
 Horns 
 
 Crudillos 
 
 Chapanerro 
 
 Asphaltum 
 
 Chitle (chewing gum) 
 
 Chili pepper 
 
 Chocolate 
 
 Carried forward 
 
 4^60 
 
 489 
 
 310 
 
 694 
 
 5,850 
 
 39 
 
 1,003 
 
 13,379 
 
 373 
 
 12 
 
 100 
 
 1,334 
 
 250 
 
 43,650 
 
 5,441 
 
 16,550 
 
 133 
 
 1,165 
 
 3,146,034 
 
 13,806 
 
 64,887 
 
 11,050 
 
 70 
 
 35 
 
 600 
 000 
 090 
 000 
 000 
 910 
 236 
 976 
 350 
 000 
 000 
 460 
 000 
 770 
 731 
 694 
 000 
 000 
 917 
 000 
 950 
 000 
 879 
 330 
 
 443 056 
 
 4,046,423 639 
 
 121 000 
 
 115 050 
 
 23,934,081 400 
 
 845 150 
 
 180 070 
 
 45,884 388 
 
 2,588 635 
 
 18 806 
 
 138 060 
 
 2,811 000 
 
 232 000 
 
 150 000 
 
 6,955 640 
 
 10 000 
 
 165 000 
 
 11,434 625 
 
 802 690 
 
 70,053 316 
 
 32,155,867 536 
 
 113 000 
 
 387 150 
 
 175,516 480 
 
 117,877 400 
 
 6 000 
 
 377,785 952 
 
 85,473 830 
 
 3,010 000 
 
 100 000 
 
 3,454,105 115 
 
 4,759 000 
 
 48,003 850 
 
 332 000 
 
 82,058 000 
 
 14,864 460 
 
 50 000 
 
 30,040 800 
 
 3,775 945 
 
 1,071 350 
 
 93 363 
 
 $734 
 
 240 
 
 88 
 
 94 
 
 600 
 
 73 
 
 218 
 
 1,950 
 
 45 
 
 7 
 
 9 
 
 330 
 
 300 
 
 64,533 
 
 9,900 
 
 1,519 
 
 130 
 
 75 
 
 349,785 
 
 9,000 
 
 17,694 
 
 1,445 
 
 830 
 
 13 
 
 3,378 
 
 505 
 
 1,375,058 
 
 95 
 
 300 
 
 379,365 
 
 80 
 
 104 
 
 9,703 
 
 113 
 
 116 
 
 43 
 
 555 
 
 15 
 
 80 
 
 618 
 
 15 
 
 165 
 
 3,400 
 
 48 
 
 33,239 
 
 357,840 
 
 50 
 
 28 
 
 7,848 
 
 15,425 
 
 4 
 
 • 36,333 
 
 4,889 
 
 2,470 
 
 2 
 
 567,976 
 
 '3,103 
 
 8,579 
 
 165 
 
 1,875 
 
 3,569 
 
 •60 
 
 1,124 
 
 916 
 
 187 
 
 94 
 
 25 
 00 
 00 
 50 
 00 
 00 
 00 
 13 
 00 
 00 
 00 
 00 
 00 
 60 
 12 
 50 
 00 
 00 
 73 
 00 
 53 
 00 
 00 
 00 
 00 
 00 
 11 
 00 
 00 
 94 
 00 
 00 
 98 
 50 
 50 
 00 
 40 
 75 
 00 
 30 
 00 
 00 
 00 
 75 
 15 
 13 
 00 
 00 
 00 
 35 
 00 
 31 
 00 
 38 
 00 
 53 
 00 
 57 
 00 
 00 
 00 
 00 
 00 
 38 
 35 
 00 
 
 56,896,193 619 
 
 $3,053,870 45 
 
 Duties. 
 
 40,085 78 
 
 53,406 80 
 
 $93,511 67 
 
139 
 
 Kinds of Ahticles Exported. 
 
 67. 
 68. 
 69. 
 
 70. 
 71. 
 73. 
 73. 
 74. 
 75. 
 76. 
 B. 
 77. 
 78. 
 79. 
 80. 
 81. 
 83. 
 83. 
 84. 
 85. 
 86. 
 87. 
 
 90. 
 
 91. 
 
 93. 
 
 93. 
 
 94. 
 
 95. 
 
 96. 
 
 97. 
 
 98. 
 
 99. 
 100. 
 101. 
 103. 
 103. 
 104 
 105. 
 106. 
 107. 
 108. 
 109. 
 110. 
 111. 
 113. 
 113. 
 114 
 115. 
 116. 
 117. 
 118. 
 119. 
 130. 
 131. 
 133. 
 138. 
 134. 
 135. 
 136. 
 137. 
 138. 
 139. 
 130. 
 131. 
 133. 
 133. 
 134. 
 136. 
 137. 
 138. 
 139. 
 140. 
 
 C. 
 141. 
 143. 
 143. 
 144. 
 
 Brouglit forward. 
 
 Chuza3 de palma . .* 
 
 Sweetmeats of the country 
 
 Ebony 
 
 Effects without nomenclature 
 
 Baggage 
 
 Spanish broom 
 
 Vermicelli. . . 
 
 Bridles 
 
 Fruits, fresh. 
 Beans 
 
 Hatches 
 
 Photographs. . . . 
 Fruits, dried . . . . 
 Sheep, pigs, &c . 
 Peas 
 
 &arra , 
 
 Biscuit 
 
 Chickens 
 
 Cochineal 
 
 Split pe»s 
 
 Hammocks, henequen 
 
 Flour 
 
 Henequen hemp 
 
 Ice 
 
 Henequen thread 
 
 Corn husks 
 
 Bone 
 
 Rubber in sheets 
 
 Rubber in bulk 
 
 Hulsache (pod for making ink) . . . . 
 
 Eggs .' 
 
 Insects 
 
 Musical instiuments 
 
 Ixtle (maguey fibre) 
 
 Soap 
 
 Rope 
 
 Ginger 
 
 Jonote 
 
 Jewelry 
 
 Wool 
 
 Brass in powder 
 
 liOntils 
 
 Printed books 
 
 Crockery ware of the country 
 
 Lemons 
 
 Building timber 
 
 Indian corn 
 
 Lard 
 
 Machinery 
 
 Brands for cigars and furniture . . . 
 
 Marble 
 
 Saddle cloth 
 
 Ivory 
 
 Mangoes 
 
 Mayates (kind of bug for jewelry). 
 
 IMetal, silver 
 
 Metal in powder 
 
 Metal, composition 
 
 Mezcal (brandy) 
 
 Medicines 
 
 Molasses 
 
 Syrup, purgative 
 
 Honey 
 
 Hatches 
 
 Saddle bags 
 
 Game bags 
 
 Mules 
 
 Samples 
 
 Oranges 
 
 Works of art for the Exposition. . . 
 
 Objects of natural history 
 
 Gold, Mexican coin 
 
 Gold, Mexican coin (free of duty) . 
 
 Gold, in paste 
 
 Gold, foreign coin ■ 
 
 Orchilla (dye) 
 
 Campeche wood 
 
 Carried forward .• ■ • 83,363,983 363 
 
 Kilograms. Grs. 
 
 Values. 
 
 Duties. 
 
 56,896,193 619 
 
 $3,053,870 45 
 
 $93,511 67 
 
 55 330 
 
 5 00 
 
 
 8,364 000 
 
 1,999 00 
 
 
 3,188 370 
 
 879 12 
 
 
 3,101 000 
 
 34 00 
 
 
 373 681 
 
 1,658 24 
 
 
 1,038 000 
 
 726 00 
 
 
 930 400 
 
 80 00 
 
 
 59 000 
 
 60 00 
 
 
 40 340 
 
 16 00 
 
 
 5 000 
 
 18 00 
 
 
 13,401 034 
 
 2,123 40 
 
 
 445,873 931 
 
 34,810 96 
 
 
 8 400 
 
 10 00 
 
 
 50 000 
 
 200 00 
 
 
 3,338 500 
 
 1,335 53 
 1,071 00 
 
 
 43,063 666 
 
 3,512 38 
 
 
 13,334 000 
 
 149 70 
 
 
 54 180 
 
 16 50 
 100 00 
 
 
 84,946 193 
 
 78,155 20 
 
 
 10,197 000 
 
 771 00 
 
 
 71,315 948 
 
 19,439 43 
 
 
 5,773 430 
 
 546 60 
 
 
 10,471,318 955 
 
 931,580 18 
 
 
 13,358 000 
 
 625 00 
 
 
 84,110 757 
 
 10,490 00 
 
 
 40 000 
 
 5 00 
 
 
 103,330 000 
 
 1,535 00 
 
 
 37,836 888 
 
 9,035 53 
 
 
 1,176 000 
 
 418 00 
 
 
 38 000 
 
 2 30 
 
 
 3,853 000 
 
 650 00 
 
 
 34 000 
 
 20 00 
 
 
 85 000 
 
 12 00 
 
 
 2,610,776 230 
 
 343,586 44 
 
 
 500 000 
 
 200 00 
 
 
 13,645 324 
 
 3,467 43 
 
 
 180 380 
 
 17 50 
 
 
 87 000 
 
 10 00 
 
 
 13 457- 
 
 13,864 00 
 
 
 100,659 700 
 
 18,187 68 
 
 
 808 000 
 
 150 00 
 
 
 3,546 160 
 
 266 00 
 
 
 766 903 
 
 545 00 
 
 
 5,376 351 
 
 1.317 50 
 
 
 307,507 560 
 
 23,667 00 
 
 
 1,434,789 160 
 
 20,513 50 
 
 2,888 83 
 
 9,299 800 
 
 282 48 
 
 
 46 030 
 
 20 00 
 
 
 1,173 000 
 
 730 00 
 
 
 357 712 
 
 175 00 
 
 
 208,892 000 
 
 15,043 75 
 
 
 1 000 
 
 4 00 
 
 
 56 000 
 
 75 00 
 
 
 1,034 000 
 
 71 50 
 
 
 2 300 
 
 5 00 
 
 
 413,618 570 
 
 73,251 34 
 
 
 13,752 000 
 
 4,530 00 
 
 
 1,104 710 
 
 130 00 
 
 
 844 340 
 
 211 00 
 
 
 32 000 
 
 16 00 
 
 
 14,289 210 
 
 828 00 
 
 
 30,058 783 
 
 2,233 65 
 
 
 657,755 877 
 
 66,078 45 
 
 
 756 108 
 
 130 00 
 
 
 13 000 
 
 20 00 
 
 
 100 000 
 
 150 00 
 1,440 00 
 
 
 215 993 
 
 95 00 
 
 
 16,386 960 
 
 1,170 75 
 
 
 3,300 000 
 
 4,000 00 
 
 
 675 000 
 
 95 00 
 
 
 1,703 804 
 
 991,760 50 
 
 4,958 79' 
 
 4 319 
 
 2,494 00 
 
 
 148 925 
 
 91,868 46 
 
 4,810' 50 
 
 305 584 
 
 180,060 75 
 
 
 3,135,778 751 
 
 284,312 98 
 
 16,767 65 
 
 6,183,937 500 
 
 119,744 50 
 
 
 $6,370,638 67 
 
 $131 386 93 
 
140 
 
 Kinds of Akticles Expoiited. 
 
 145. 
 146. 
 147. 
 148. 
 149. 
 150. 
 151. 
 153. 
 154. 
 155. 
 156. 
 157. 
 158. 
 159. 
 160. 
 161. 
 162. 
 163. 
 164. 
 165. 
 166 
 167. 
 168 
 169. 
 170. 
 171. 
 172. 
 
 D. 
 173. 
 
 E. 
 174. 
 175. 
 176. 
 177. 
 178. 
 180. 
 181. 
 182. 
 183 
 184. 
 185 
 186. 
 187. 
 188. 
 189. 
 190. 
 191. 
 192. 
 193. 
 194. 
 195. 
 196. 
 197. 
 198. 
 199. 
 200. 
 201. 
 202. 
 203. 
 204. 
 205. 
 206. 
 207. 
 208. 
 209. 
 210. 
 211. 
 212. 
 213. 
 214. 
 215. 
 216. 
 217. 
 218. 
 219. 
 220. 
 221. 
 222. 
 
 Brought forward 
 
 Wood, red 
 
 Wood, Brazil 
 
 Wood, mulberry 
 
 Potatoes 
 
 Straw 
 
 Fruit paste 
 
 Birds, different kinds 
 
 Pearls 
 
 Fish, pickled 
 
 Fish, salt 
 
 Mats 
 
 Hoofs 
 
 Skins, deer 
 
 Skirs, goat 
 
 Skins, kid 
 
 Skins, sheep 
 
 Skins, tiger 
 
 Skins and feathers of birds 
 
 Stone, onyx 
 
 Stone, tecali 
 
 Stone, mineral 
 
 Stones, mill 
 
 Stones, filter 
 
 Sugar crust 
 
 Pepper, domestic 
 
 Pineapples 
 
 Silver, Mexican coin 
 
 Silver, Mexican coin (free of duty) 
 
 Silver in paste 
 
 Silver in paste 
 
 Silver, foreign coin 
 
 Platina 
 
 Plantains 
 
 Plants, live 
 
 Lead 
 
 Pulque 
 
 Cigar cases 
 
 Cheese 
 
 Cheese. Indian fig 
 
 Root, jalapa 
 
 Rope 
 
 Cattlp, on the hoof 
 
 Watches 
 
 Sabucanas of henequen 
 
 Salt 
 
 Bran 
 
 Sacks, coarse brown linen 
 
 Salmon 
 
 Tallow 
 
 Seeds of plants 
 
 Saddles, riding 
 
 Rope, Sisal hemp 
 
 Hats, nap 
 
 Hats, straw , 
 
 Blowers 
 
 Soles 
 
 Tobacco, manufactured 
 
 Tobacco, in leaf 
 
 Boards 
 
 Tea 
 
 Shin bones 
 
 Type, printing 
 
 Dye, domestic 
 
 Mineral earth 
 
 Turtles 
 
 Old rags 
 
 Wheat 
 
 Turbine and accessories 
 
 Plaster of Paris 
 
 Herbs, medicinal 
 
 Vanilla 
 
 Sole leather 
 
 Vaquerillo 
 
 Candles, stearine 
 
 Glass, worked 
 
 Hay 
 
 Sarsaparilla 
 
 Zinc 
 
 Kilograms. Grs. 
 
 Totals 
 
 83,362,983 363 
 
 489,339 620 
 
 4,033,159 000 
 
 30,369,773 764 
 
 1,361 400 
 
 1,730 000 
 
 41 000 
 
 32 000 
 
 11,810 540 
 
 13 806 
 
 753 000 
 
 74,662 138 
 
 674,011 028 
 
 10,387 220 
 
 50 000 
 
 30 000 
 
 4,353 000 
 
 18,187 000 
 
 1,298 040 
 
 896,315 150 
 
 3,912 856 
 
 831 360 
 
 4,901 850 
 
 3,522 065 
 
 4,871 000 
 
 464,931 671 
 
 14,961 919 
 
 60,495 413 
 
 229 208 
 
 11,485 474 
 
 24 090 
 
 15,227 000 
 
 271 300 
 
 271,594 390 
 
 53 000 
 
 13.5 666 
 
 34 050 
 
 33,814 615 
 
 13 000 
 
 """i4 836 
 
 193 284 
 
 298,623 500 
 
 888 000 
 
 1,500 000 
 
 16 290 
 
 983 000 
 
 2,053 215 
 
 204 000 
 
 717,409 9S9 
 
 918 000 
 
 11,483 3.53 
 
 325 000 
 
 154,456 890 
 
 19,776 016 
 
 160,542 282 
 
 2,992 000 
 
 67 090 
 550 000 
 278 881 
 
 77 000 
 
 5,821 000 
 
 115 050 
 
 3,176 000 
 
 1,362 000 
 
 1,485 000 
 
 549,045 000 
 
 4,393 500 
 
 32,036 987 
 
 502 167 
 
 15 000 
 
 96 640 
 
 68 000 
 37.^73 000 
 
 435,057 686 
 10,081 464 
 
 Valucjs. 
 
 133,398,463 009 
 
 $6,270,628 67 
 
 5,560 00 
 
 49,549 00 
 
 549,654 89 
 
 120 00 
 
 75 00 
 
 14 25 
 
 25 00 
 
 15,200 10 
 
 15 00 
 
 768 55 
 
 2 00 
 
 50 00 
 
 39,276 02 
 
 416,630 97 
 
 5,250 40 
 
 14 00 
 
 22 00 
 
 718 00 
 
 1,792 00 
 
 1,120 00 
 
 194,060 33 
 
 138 00 
 
 36 00 
 
 423 00 
 
 140 13 
 
 799 50 
 
 17,169.563 97 
 
 ,552,651 00 
 
 2,338,401 39 
 
 8,967 00 
 
 423,547 93 
 
 2,505 88 
 
 1,807 50 
 
 1,045 50 
 
 29,997 00 
 
 5 00 
 
 15 00 
 
 40 00 
 
 10 00 
 
 6,753 40 
 
 8 00 
 
 28,727 00 
 
 69 00 
 
 46 00 
 
 2,555 50 
 
 44 40 
 
 555 08 
 
 30 00 
 
 225 00 
 
 160 00 
 
 236 00 
 
 84,577 02 
 
 410 00 
 
 5,207 66 
 
 30 00 
 
 49,375 00 
 
 31,2.59 99 
 
 58,882 62 
 
 65 00 
 
 120 00 
 
 2 20 
 
 54 35 
 
 96 00 
 
 1,200 00 
 
 10 00 
 
 70 00 
 
 44 32 
 
 550 00 
 
 2,000 00 
 
 245 17 
 
 346,133 12 
 
 390 00 
 
 17 50 
 
 30 00 
 
 5 00 
 
 7,020 00 
 
 71,213 77 
 
 449 00 
 
 Dutiefl. 
 
 $121,386 93 
 
 $28,777,509 07 
 
 858,478 15 
 199,474 52 
 
 *1,179,339 60 
 
 Mexico, September 1st, 1878. 
 
 Adrian Busto, Chief of Bureau of Adjustments. 
 
141 
 
 B. 
 
 Considerations Respecting the Present Exportation Compared with that of the Last Years of he Spanish Rule. 
 
 767. When the production of exportable articles during the Spanish domination is compared with that of 
 the present time, it cannot but be noticed with pain that while the production of the precious metals has increased 
 somewhat, that of other articles has diminished, at least in the proportion it showed during those years. In fact, 
 In the 25 years elapsed from 1796 to 1820, of which there are exact data, it appears that, regarding Vera Cruz, 
 which was the principal port of that time and almost the only one through which those operations were carried 
 on, and the data of which were pubUshed by Sr. Lerdo de Tejada in his " Exterior Commerce of Mexico," the 
 exportation to Spain of gold and silver during the said period was $144,894,190 00 
 
 And the exportation of other effects amounted to 52,959,395 0° 
 
 Both sums making a total of $197,853,585 00 
 
 The exportation of gold and silver to foreign countries amounted 
 
 during the same period to $28,328,511 00 
 
 And exportation of other articles to 3,963,946 00 
 
 Being a total of $32,292,457 00 
 
 The exportation of gold and silver to American countries was $35,554,523 00 
 
 And that of other articles 1 2,833,723 00 
 
 Making a total of $48,488,246 00 
 
 These three accounts of exportation during the said 25 years make 
 
 a total of $278,534,288 00 
 
 Of which sum there belongs to gold and silver $208,777,224 00 
 
 And to other articles 69,757,064 00 
 
 Making the total of $278,534,288 00 
 
 768. The average of the exportation of precious metals for the said 
 
 25 years was therefore $8,35 1,088 96 
 
 And that of the exportation of other articles 2,790,282 56 
 
 Making a general average export of $11,141,371 00 
 
 769. Comparing these sums with the amount of the present exportation of Mexico it will be seen that from 
 the year 1820 to date it has tripled, inasmuch as from $11,141,371 52, which it amounted to then, it now comes 
 up to about $30,000,000; that the exportation of precious metals has risen to almost twice as much again what 
 it then was, inasmuch as from $8,351,088 96, its average amount then, it is now from $20,000,000 to $25,000,- 
 000 per annum, and that the exportation of other articles other than gold and silver has lessened, in proportion, 
 as from a third part, which it represented then, it has decreased to a fifth, which is the proportion of the $5,000,- 
 000 to $6,000,000 representing the export of articles other than gold or silver. 
 
 770. It is also noticeable the difference there was between importation and exportation during those said 25 
 years, representing the sum of $19,428,342 as against Mexico, inasmuch as the exportation 
 
 rose to $278,534,288 00 
 
 And the importation only to 259,105,946 00 
 
 19,428,342 00 
 
 771. The average of importation during the said period was $10,364,237 84, which gives an annua 
 difference also against Mexico of an average $777,^33 68. 
 
 767 Exportation through Vera Cruz from 1796 to 1820 amounted to $378,354,288, of which $208,777,244 were of gold 
 
 and silver. 
 
 768 The average exportation of metals was $8,351,088 96, and that of other articles $2,790,282 56. 
 
 769 Comparison of these values with the amount of the present exportation of Mexico. 
 
 770 Diljerence against Mexico of $19,428,342 between importation and exportation of the said period. 
 771.' Average of anna alimportation during the period from 1796 to 1820. 
 
142 
 
 772- During the Spanish rule, " grana," or cochineal, figured as one of the principal articles of exportation 
 from New Spain, which was produced principally in the province of Oaxaca. From the balance, for the 25 yeass 
 from 1796 to 1820, which Sr. Lerdo de Tejada publishes in his "Exterior Commerce of Mexico" (Document 
 No. 14), formed from very exact data collected by the Consulate of Vera Cruz, it appears that the exportation of 
 cochineal to Spain through Vera Cruz was, during the said period, 330,415 arrobas, to the value of $32,096,268, 
 and that exported to other nations was 22,425 arrobas, to the value of $2,226,740, which makes a total of 
 352,840 arrobas, with a value of $34,317,008. It appears, likewise, that in the year 1802 the exportation of 
 cochineal through the port of Vera Cruz was $3,303,470, and that in each one of the years of 1799, 1803, iSog, 
 i8to, 1815 and 1819 the exportation exceeded $2,000,000. 
 
 773. In consequence of cochineal having been cultivated in some other places, and principally in Guate- 
 mala and the Canary islands, and of other cheaper substances havmg been discovered which give a similar color 
 to cochineal, the price of this article fell considerably, and its exportation is at the present reduced to a quantity 
 almost insignificant. 
 
 774. It must be borne in mind, also, that in the last years of those covered by the preceding statistics there 
 were great overturnings in Mexico, which occasioned a very important reduction iti its mineral production princi- 
 pally, and generally all mercantile operations, inasmuch as*during that period the war of Independence com- 
 menced, which so moved the country, and which soon caused great reverses, bringing about the paralyzation of 
 many mining enterprises and other branches of industry. 
 
 12. DEVELOPMENT MEXICAN COMMERCE HAS HAD WITH THE UNITED STATES. 
 
 775. The development Mexican commerce has had with the United States since 1867 is of some importance 
 if it is taken into consideration how little has been done by that neighboring nation to forward it. 
 
 776. The Mexican Government has taken various measures on its part to increase that commerce, either by 
 the establishment of lines of steamers between Mexican ports and the United States, or by lowering duties on 
 certain North American goods of some consumption in Mexico. 
 
 A. Increase of Commerce between Mexico and the United States in consequence of lines^ of steamers sustained by 
 
 the Mexican Government 
 
 777. The best demonstration of the increase there has been in the commerce between Mexico and the 
 United States in consequence of the establishment of lines of steamers sustained by the subsidy of the Mexican 
 Government is the following statement, which shows the number of packages of merchandise and the duties on 
 them, brought by the North American steamers, prepared' by the Bureau of Adjustments of this Department. 
 The statistics do not comprise more than six years, for the Bureau of Adjustments has only been established' that 
 length of time. 
 
 773. Value of exports in cochineal daring the same period. 
 
 773. Cause of the destruction of the industry of the cultivation of cochineal . 
 
 774. The war of independence contributed to reduce considerably the production of articles of export;. 
 
 775. Development of commerce between Mexico and the United States since 1867. 
 
 776. Trade between Mexico and the United States has become developed by lines of steamers and abatenvest of 
 duties. 
 
 777. Increase of commerce demonstrated by the number of packages brought to Mexico by the lines of steamers. 
 
14S 
 
 RECAPITULATION. 
 
 ^pertation at Vera Crue by New Terk Steamers. 
 
 Packages. 
 tPlseal year of — 
 
 1-878-8. 46,045 
 
 1B7S-4 61,535 
 
 1874-5 .„ 55,217 
 
 1875-6 48,540 
 
 1876-7 44,553 
 
 1877-8 73,140 
 
 Total in six years 
 
 .328,020 
 
 Amonnb of duties. 
 
 $283,231 '91 
 336,159 96 
 309,811 07 
 353,064 99 
 364,057 09 
 434,084 89 
 
 $1,979,409 91 
 
 lai^m^tatum by tlie Port of Prognieso. 
 
 Fiscal year of — 
 
 1872-3 13,456 
 
 1873-4 25,004 
 
 1874r-5 10,834 
 
 1875-6 20,864 
 
 1876-7 18,687 
 
 1877-8 17,896 
 
 Total in «ix years 106,741 
 
 $120,338 29 
 152,495 54 
 82,518 40 
 158,034 40 
 167,708 78 
 217,910 40 
 
 $899/)05 81 
 
 InupoHaUon by the P&rttof Can^eche. 
 
 Three months of the fiscal year of — 
 
 1873-t 1,010 $4,632 08 
 
 Fiscal year of — 
 
 1874-5 2,335 10,309 59 
 
 1875-6 7,812 55,857 45 
 
 1876-7 5,631 52,388 59 
 
 1877-8 13,262 60,416 62 
 
 Total in four years and 
 
 three months 30,050 
 
 $183,^04 33 
 
 Impmtation by tke Port of Tampico. 
 
 If ine .months of the fiscal year of— 
 1874-5 1,325 
 
 -Fiscal year of — 
 
 1875-6. ..., 946 
 
 1876-7 1,339 
 
 1877-8 3,994 
 
 Total in three years and 
 nine months 7,604 
 
 $9,111 05 
 
 11,960 99 
 20,337 85 
 26,387 14 
 
 $67,787 08 
 
 Iimportatim by the Port of Tuxpam. 
 
 Fisffal year of — 
 
 1874-5 688 $3,325 30 
 
 1875_6 1,176 5,008 31 
 
 1876-7 1,508 8,478 84 
 
 1877-8 1,835 4,93188 
 
 5,187 
 
 $21,734 13 
 
 Tmportation by the frontier Port (Tabasvo). 
 
 Packages. Amount of dutios. 
 
 Three months of the fiscal year of — 
 
 1877-8 1,034 $6,669 27 
 
 Importation by the New Orleans Steamers at Vera Cruz 
 Eight months of the fiBcal year of — 
 
 1874-5 5,941 
 
 Fiscal year of — 
 
 1875-6 33,085 
 
 1876-7 33,938 
 
 1877-8 18,040 
 
 Total in three years and 
 eight months 69,994 
 
 Importatdon by the Port of Progreso. 
 
 Six months of the fiscal year of — 
 
 1874-5 337 
 
 Fiscal year of — 
 
 1875-6 984 
 
 1876-7 341 
 
 1877-8 38 
 
 1,590 
 ImpottaMon by the Port of CampaShe. 
 Seven months of the fiscal year of — 
 
 1874^ 1,396 
 
 Fiscal year of — 
 
 1875-6 903 
 
 1876-7 166 
 
 1877-8 
 
 Total in three years and 
 
 seven months 3,365 
 
 Importation by the Port of Tamipico. 
 
 Seven months of the fiscal year of— 
 1874-5 1,004 
 
 Fiscal year of — 
 
 1875-6 1,462 
 
 1876-7 5,605 
 
 1877-8 5,331 
 
 $11,796 24 
 
 253,825 69 
 147,393 99 
 149,766 fl9 
 
 $583,782 01 
 
 ■$2.,428 74 
 
 4,680 13 
 
 2,174 B8 
 
 260 39 
 
 $9,543 -84 
 
 Total in three years and 
 *even months 13,402 
 
 hnporlation by ffte Port of T'lixpam. 
 
 Six months of the fiscal year of — 
 1874-5 450 
 
 Fiscal year of— 
 
 1875-6 1,343 
 
 1876-7 1,649 
 
 1877-8 2,472 
 
 Total in three years and 
 six months 5,813 
 
 $90-67 
 
 832 33 
 492 «4 
 
 $1,415 74 
 
 f3,145 58 
 
 2,480 59 
 
 42,968 29 
 
 6,372 84 
 
 $54,967 35 
 
 $3,038 36 
 
 B,357 64 
 30,660 S8 
 22,235 33 
 
 $53,291 51 
 
144 
 
 Importation 'by New York Steamers. 
 
 PackogeB. 
 
 Vera Cruz .-.328,030 
 
 Progreso 106,741 
 
 Campeche 30,050 
 
 Tampico 7,604 
 
 Tnxpam 5,187 
 
 Frontera (Tabasco) 1,034 
 
 GENERAL RECAPITULATION. 
 
 Importation by New Orleans Bteamiers. 
 
 Fockflgcs. 
 
 Vera Cruz 69,994 
 
 Progreso 1,590 
 
 Campeche 2,365 
 
 Tampico 13,403 
 
 Tuxpam 5,813 
 
 DuUcR. 
 
 $1,979,409 91 
 
 899,005 81 
 
 183,604 33 
 
 67,787 03 
 
 21,734 13 
 
 6,669 37 
 
 478,636 
 
 $3,158,310 48 
 
 93,164 
 
 Duties. 
 
 $563,783 01 
 
 9,543 84 
 
 1.415 74 
 
 54,967 35 
 
 53,391 51 
 
 683,000 35 
 
 RECAPITULATION BY 
 
 
 Importation by New York Steamers. 
 
 
 Number of 
 
 
 
 
 packages. 
 
 Totals. 
 
 Duties. 
 
 1873-3. 
 
 
 
 
 Vera Cruz. 
 
 ..46,045 
 
 
 $382,231 91 
 
 Progreso . . 
 
 ..13,456 
 
 59,501 
 
 130,338 39 
 
 1873-4. 
 
 
 
 
 Vera Cruz. 
 
 ..61,525 
 
 
 $336,159 96 
 
 Progreso . . 
 
 . .25,004 
 
 
 153,495 54 
 
 Campeche . 
 
 .. 1,010 
 
 87,539 
 
 4,633 08 
 
 1874-5. 
 
 
 
 
 Vera Cruz. 
 
 ..53,217 
 
 
 $309,811 07 
 
 Progreso . . 
 
 . .10,834 
 
 
 83,518 40 
 
 Campeche . 
 
 .. 2,335 
 
 
 10,309 59 
 
 Tuxpam . . 
 
 .. 668 
 
 
 3,335 30 
 
 Tampico . . 
 
 .. 1,335 
 
 70,379 
 
 9,111 05 
 
 1875-6. 
 
 
 
 
 Vera Cruz. 
 
 . .48,540 
 
 
 $353,064 99 
 
 Progreso . . 
 
 . .20,864 
 
 
 158,034 40 
 
 Campeche . 
 
 .. 7,813 
 
 
 55,857 45 
 
 Tampico . . 
 
 .. 946 
 
 
 11,960 99 
 
 Tuxpam ... 
 
 .. 1,176 
 
 79,338 
 
 5,008 31 
 
 1876-7. 
 
 
 
 
 $403,570 30 
 
 493,387 58 
 
 1874-75. 
 yera Cruz. 
 Progreso . . 
 Campeche . 
 Tampico . . 
 Tuxpam . . 
 
 415,075 31 
 
 483,936 04 
 
 Vera Cruz. . .44,553 
 
 Progreso 18,687 
 
 Campeche.... 5,631 
 
 Tampico 1,339 
 
 Tuxpam 1,508 
 
 1877-8. 
 Vera Cruz. . .73,140 
 
 Progreso 17,896 
 
 Campeche... 13,363 
 Tampico..... 3,994 
 
 Tuxpam 1,835 
 
 Tabasco 1,034 
 
 71,718 
 
 Total 
 
 110,161 
 "478,636 
 
 $364,057 09 
 
 167,708 78 
 
 53,388 59 
 
 30,337 85 
 
 8,478 84 
 
 $434,084 89 
 
 317,910 40 
 
 60,416 63 
 
 36,387 14 
 
 4,931 88 
 
 6,669 37 
 
 613,961 15 
 
 750,390 30 
 
 $3,158,210 48 
 
 FISCAL YEARS. 
 
 Importation by New Orleans Steamers. 
 
 Number of 
 packages. 
 
 Totals. 
 
 5,941 
 337 
 
 1,296 
 
 1,004 
 
 450 
 
 9,038 
 
 Duties. 
 
 $11,796 34 
 
 3,438 74 
 
 90 67 
 
 8,145 53 
 
 3,038 36 
 
 Totals. 
 
 $19,499 44 
 
 1875-6. 
 
 
 
 
 
 Vera Cruz. 
 
 .33,085 
 
 
 $353,835 69 
 
 
 Progreso . . 
 
 . 984 
 
 
 4,680 13 
 
 
 Campeche.. 
 
 . 903 
 
 
 832 23 
 
 
 Tampico . . 
 
 . 1,463 
 
 
 3,480 59 
 
 
 Tuxpam . . 
 1876-7. 
 
 . 1,242 
 
 27,676 
 
 8,357 64 
 
 270,176 28 
 
 
 
 
 Vera Cruz. 
 
 .22,938 
 
 
 $147,393 99 
 
 
 Progreso . . 
 
 . 241 
 
 
 2,174 58 
 
 
 Campeche.. 
 
 . 166 
 
 
 492 84 
 
 
 Tampico . . 
 
 . 5,605 
 
 
 42,968 39 
 
 
 Tuxpam. . . 
 
 1877-8. 
 
 . 1,649 
 
 30,588 
 
 30,660 38 
 
 313,689 98 
 
 
 
 
 Vera Cruz. 
 
 .18,040 
 
 
 $149,766 09 
 
 
 Progreso . . 
 
 . 28 
 
 
 360 89 
 
 
 Tampico . . 
 
 . 5,831 
 
 
 6,373 84 
 
 
 Tuxpam. .. 
 
 . 2,472 
 
 25.871 
 
 33,335 33 
 
 178,634 65 
 
 93,164 
 
 $683,000 35 
 Adrian Busto. 
 
 Total . . . 
 Mexico, January 13th, 1879. 
 
 778. From the preceding statement it appears that whereas the New York steamers brought to Vera Cruz 
 during the fiscal year of 1872-3 46,045 packages, which produced $282,231 91 in duties, the number of packages 
 in 1877-8 was 72,140, and the duties $432,084 89, making thus an increase of 100 per cent, in the amount of 
 duties. This increase is much greater in other ports. In the year 1874-5 the New York steamers brought to 
 Campeche 2,335 packages, which produced $10,309 59 in duties, and in the year of 1877-8 the number of 
 packages was 13,262, and the duties $60,416 62. While in the first fiscal year to which the preceding statistics 
 refer, which was 1872-3, the total number of packages imported by steamers from New York to Mexican ports 
 was 59,501, causing duties to the amount of $402,570 20 ; in the year 1877-8 there was an importation of iio,- 
 i6i packages, and the duties were $750,390 20. These important results have been obtained by virtue of the 
 subsidies granted by the Mexican Government to the lines of steamers from New York and New Orleans for the 
 purpose of increasing trade With the United States. 
 
 778. Increase of importation to Mexican ports hy means of the New York steamers since 1873. 
 
145 
 
 B. Abatement of the Duties by the Mexican Government on North American products. 
 
 779- The Mexican Government, considering tliat heavy duties on some goods may produce, among other re- 
 sults, the diminishing of their consumption, as has already been dwelt upon in this exposition, has always tried, 
 whenever possible, to reduce such duties as might be considered very high on some goods coming within this 
 category. 
 
 780. In order not to make a long Hst of all the goods on which important reductions of duty have been 
 made by the present Administration, only the two last cases that have occurred will be spoken of, to wit : 
 tobacco from the United States, and hnen and cotton pocket handkerchiefs. 
 
 a. Reduction of duty on tobacco from the United States. 
 
 781. Foreign tobacco pays an import duty, according to the tariff in force, of $1 25 per kilogramme net 
 which represents a rate more than the intrinsic value of the merchandise. The importation of tobacco was for 
 some time prohibited by the Mexican tariffs, for the object of stimulating the cultivation of that leaf in certain 
 districts of this country, for its culture and manufacture was monopolized by the Government. 
 
 782. All the Mexican States bordering on the territory of the United States are in the habit of using Ameri- 
 can tobacco almost exclusively, vulgarly called there " Virginia tobacco." The high rates of duty this tobacco 
 has paid determined the President of the RepubUe to issue the decree of June 12th, 1878, in which he lowered 
 the import duty in behalf exclusively of Virginia tobacco from the United States, from $1 25 to 16 cents per 
 kilogramme net. 
 
 783. The preamble and resolutions of this decree are of the following tenor: 
 
 " Department of State for the Finances and Pubhc Credit. — Section ist. — The President of the 
 Republic has sent me the following decree : 
 
 Porfirio Diaz, the constitutional President of the United States of Mexico, to their inhabitants be it known : 
 that 
 
 ist. Whereas, A considerable quantity of Virginia leaf tobacco is consumed in the States of Tamauhpas, 
 Nuevo-Leon and Coahuila, and that by reason of its bearing in the tariff of January ist, 1872, a quota of $1 25 
 per kilogramme net (which duty is much more than the value of the tobacco on the American side of the Rio 
 Bravo, it has been almost always smuggled into the country since the time the present tariff went into force ; and, 
 
 2d. Whereas, From the official data existing in the Treasurer's office, it appears that the tobacco imported 
 into the "Free Zone" during the three fiscal years from July ist, 1872, to June 30th, 1875, was 631,005.76 
 kilogrammes, which should have produced $788,288 17 to the revenues in duties, and that there has been no legal 
 introduction of said article; but that, on the contrary, its price outside of the "Free Zone " is less than the amount 
 of importation duty ; and 
 
 3d. Whereas, The profits which the smuggling of tobacco offers has occasioned many other articles of com- 
 merce to be introduced clandestinely from the United States, to the degree that illegal traffic has come to assume 
 alarming proportions ; and 
 
 4th. Whereas, The objection which heretofore has been made to abating the import duty on leaf tobacco, 
 which has been the protection of national tobacco, does not exist respecting the Virginia tobacco, inasmuch as 
 this kind is not produced in the country, and is only consumed in the States of Tamaulipas, Nuevo-Leon and 
 Coahuila; and 
 
 5th. Whereas, It is advisable to remove the incentives to smuggling by a reduction in the duties that make 
 it lucrative, whenever this can be realized, without wounding legitimate interests that have grown up under the 
 shadow of protective duties ; and 
 
 6th. Whereas, It is advisable to fonvard the develppment of commercial relations between Mexico and the 
 United States ; in exercise of the powers conferred upon the Executive by the law of December 12th, 1872, I 
 have thought it well to decree the following : 
 
 Art. ist. On and after the ist of November, 1878, the Virginia leaf tobacco imported into the Repubhc 
 shall pay an import duty of sixteen cents per kilogramme net. 
 
 778 Increase of importation to Mexican ports by means of the New York steamers since 1873. 
 
 779 The Mexican Government has endeavored to lower import duties whenever it has been possible. 
 
 780 Two recent cases of reduction of quotas made by the Mexican Government. 
 781. Quota of leaf tobacco according to the tariff in force. 
 
 782 Decree of June 13th, 1878, reduced the quota on Virginia leaf tobacco from $1 25 to 16 cents per kilogramme. 
 
 783. Text of the decree of June 12tli, 1878, on Virginia tobacco. 
 19 
 
146 
 
 Art. 2d. Respecting leaf tobacco, not the Virginia article, and other kinds of tobacco enumerated in fractions 
 761 to 767 of the i8th Article of the tariff of January ist, 1872, the quotas established in said tariff remain in 
 
 force. 
 
 Therefore, order it to be printed, circulated, and given its decree fulfillment. 
 
 Given at the Federal Palace of Mexico June 12th, 1878. 
 
 To the Secretary of State for the Finances and Pubhc Credit. 
 
 PoRiFiRio Diaz. 
 Matias Romero. 
 
 Romero. 
 
 I communicate it to you for the purposes thereto pertaining. 
 Mexico, June 12, 1878. 
 To 
 
 784. It is true that one of the motives borne in mine in issuing the preceding decree was a desire to put a 
 stop to the great smugghng that has been carried on at the frontier with tobacco from the United States, and 
 that it was so declared in the considerations set forth in the decree, but this circumstance does not alter the prac- 
 tical result of the said decree, which is to reduce considerably the export duty on an article coming from the 
 United States, for the purpose of increasing the legal trade and importation of it to Mexico. 
 
 b. Reduction of duty on Linen and Cotton Focket-handkerchiefs. 
 
 785. Cotton and linen cloth pay in Mexico a duty equal to their invoice value, and are rated according to 
 the material they are made of, and the number of threads in half a centimetre square, besides other circumstances 
 of color, class, texture, etc. Handkerchiefs were rated by dozens, with duties which were in some cases higher 
 than those on other goods of the same material, and these high duties tended, among other inconveniences, to 
 foster the secret importation of handkerchiefs. 
 
 786. For the purpose of regulating the quotas on handkerchiefs, abating them as much as possible, and also 
 to reduce the secret importation of those goods, the decree of June 30th, 1878, was issued, by virtue of which 
 linen and cotton pocket-handkerchiefs are rated at the same duty as the webs of the same material in the tariff in 
 force, that is to say, that they are made to pay by measure, as if they were common linen or cotton cloth, and 
 not in the form of handkerchiefs. 
 
 787. To the better understanding of this subject, it is thought proper to insert the text of the decree of June 
 30th, 1878, which is as follows: 
 
 " Department of State for the Finances and PubUc Credit. 
 " Section ist. The President of the Repubhc has sent me the following decree: 
 
 " PoRFiRio Diaz, Constitutional President of the United States of Mexico, to their inhabitants, be it known, 
 that: 
 
 " ist. Whereas, The manner in which linen and cotton pocket-handkerchiefs are rated in the maritime and 
 frontier custom-house tariff of January ist, 1872, is not equitable, because the relation estabhshed between the 
 import and the dimensions of the handkerchiefs is not proportionate ; and 
 
 "2d. Whereas, It is advisable to impose on them the same duty which other linens of the same material, not 
 handkerchiefs, pay, on their importation into the Repubhc; and 
 
 " 3d Whereas, In imposing on handkerchiefs the same rates paid on cotton and hnen cloths, a reduction is 
 made from the duties now paid on handkerchiefs, by which it is hoped to diminish the clandestine importation 
 which has been made of those articles up to the present time : 
 
 "In exercise of the powers conferred upon the Executive by the law of December 12th, 1872, I have thought 
 it well to decree the following : 
 
 "Art. ist. Fractions 52, 53, 54, 55, 56, 114, 115, of the maritime and frontier custom-house tariff are 
 amended as follows: 
 
 "I. Fractions 52 and 55 of the i8th Article of the tariff shall read as follows: 
 
 '"52 and 55. White and colored cotton handkerchiefs, bordered in the web or without border, and hemmed 
 or unhemmed, up to 30 threads of warp and woof in half a centimetre square, 14 cents per square metre. 
 
 784. Tlie principal object in the reduction was to enlarge the legal traffic in Mexico of tobacco of the United States. 
 
 785. Tlie imposition of excessive duties on cotton and linen hankerchiets caused its clandestine imporiation. 
 
 786. The decree of the 30lh of June, 1878, regularized the duties on cotton and linen handkerchiefs, reducing them 
 somewhat. 
 
 787. Text of the decree of the 30th of June, 1878, regarding duties on linen and cotton handkerchiefs. 
 
147 
 
 "II. Fractions 53 and 56 of Article 18 of the said tariff shall be amended in the following terms: 
 53 3-nd 56. White and colored cotton handkerchiefs bordered in the web or without border, and hemmed 
 or unhemmed, of more than 30 threads of warp and woof in half a metre square, 16 cents per square metre. 
 
 "III. Fraction 54 of Article 18 of tariff shall read thus: 
 
 " 54- Handerchiefs of cotton, embroidered or in open work, with lace fringe or without, up to fifty centime- 
 tres square, $2 00 per dozen. 
 
 " IV. Fraction 1 14 of the tariff in force shall be as follows : 
 
 "114. Plain white linen handerchiefs, stamped or with colors woven in, bordered in the web or without 
 border, and hemmed or unhemmed, up to 30 threads of warp and woof in half a centimetre square, 16 cents per 
 square metre. 
 
 "V. Fraction in; of Article 18 of said tariff shall be in the following terms: 
 
 "115. Plain white linen handkerchiefs, stamped or with colors woven in, and hemmed or unhemmed, of 
 more than 30 threads of ward and woof in half a centimetre square, 22 cents per square metre. 
 
 "Art. 2d. Mixed cotton and hnen handkerchiefs shall pay a rate midway between the quotas assigned in this 
 decree to handkerchiefs of each of those materials, according to the provisions of fraction 223 of Article 18 of 
 the tariff of January ist, 1872, and to the decree of the i8th instant. 
 
 "Art. 3d. The provisions of this decree shall take effect on and after the ist of November, 1878. 
 
 "I, therefore, order it to be printed, circulated and given its due fulfillment. 
 
 "Given at the Federal Palace of Mexico, July 30th, 1878. 
 
 " PoRFiRio Diaz. 
 
 " To the Secretary of State for the Finances and Public Credit. 
 
 " Matias Romero. — Present." 
 
 " I communicate it to you for the purposes thereto pertaining. Mexico, July 30th, 1878. 
 
 "Romero.— To " 
 
 788. It is true that up to this time but few ^handkerchiefs have been imported from the United States to 
 Mexico, but it should not be ignored that the importation of this article is one of those of larger future, and that, 
 therefore, the decree abating so considerably the quota on cotton and linen pocket-handkerchiefs cannot but be 
 highly favorable to the development of commerce between Mexico and the United States. 
 
 789. In order not to extend this labor too much, all the cases will not be quoted of exemption of duty or 
 abatement of duty, granted in favor of North American productions, for the purpose of increasing commerce 
 between the two countries. 
 
 C. Growth of Commerce according to Reports of United States Consuls in Mexico. 
 
 790. A slight examination of the last publications of the United States Department of State, under the title 
 of "Annual Report of Commercial Relations between the United States and Foreign Nations,'' in which are 
 given the Reports of their Consuls, will demonstrate the growth which commerce is taking between Mexico and 
 the United States. 
 
 a. Report on Commercial Relations between the United States and Foreign Nations for the year ending 
 
 September ^oth, 1873. 
 
 791. Mr. S. T. Trowbridge, United States Consul at Vera Cruz, said, in a communication directed to the 
 United States Department of State, dated at Vera Cruz, September 30th, 1873, no reference to the exportation 
 of Mexican articles to the neighboring nation, as follows (page 865 of the said Report): 
 
 . . . . " An indication of the increase of exportation is the larger production of coffee and vanilla. Four years 
 ago the total of coffee exported to the United States did not come to $1,000, while it now amounts to $299,942 02. 
 This is an example of energy, enterprise and development, worthy of the praise of greater and more forward 
 nations. Four years ago its products were comparatively insignificant, now it modestly merits a crown. In 
 regard to exportations to the United States, coffee is the chief article. 
 
 " Vanilla is being cultivated very extensively in the consular district of Tampico, inTuxpam and its envirous; 
 and in the latter port it is shipped abroad. Although the exportation for the United States amounted to $221,- 
 
 788 Relation of the reduction of duty on handkercliiefs to the commerce between Mexico and the United States. 
 
 789 Abatements and exemptions of duty on the importation of various North American articles. 
 
 790 Report on the increase of commerce between Mexico and the United States, according to the official publication 
 
 of that country. 
 
 791 Communication of the United States Consul at Vera Cruz on the exportation of Mexican articles in 1873. 
 
148 
 
 393 9^> it is almost certain that three times the quantity was shipped to Europe. I know of a cargo destined 
 for France amounting to $400,000." 
 
 792. Mr. Martin F. Hatch, United States Consul at Progreso, said in a communication directed to the 
 United States Department of State, dated November ist, 1873, .in reference to effects exported to the United 
 States, as follows, (Report on commercial relations between the United States and foreign nations for the year 
 ending September 30th, 1873, page 843): 
 
 "Exportation consists principally, as shown by Department B, in henequen (hemp) 4,872,850 ftis., $279,- 
 048 06; hides, 127,400 fcs., $41,405; rope, 767,708 fcs., $79,154 12; deer skins, 89,403 fts., $35,930 62, 
 and other products of the country amount to $507,401 30. It will be seen that in Yucatan the principal article 
 of exportation is henequen ; the United States being the only market in which it finds an easy sale. Various 
 shipments have this year been made to England, France and Germany, and in every case the exporters have 
 suffered loss. Probably the exportation to the United States will in a few years have increased considerably." 
 
 793. The United States Consul at San Bias, Manuel Garfias, said to the Department of State, in a com- 
 munication dated September 30, 1873, regarding the importation of articles from the United States into that 
 consular district as follows, (Annual Report of commercial relations between the United States and foreign 
 nations for the year ending September 30th, 1873, page 851) : 
 
 " It can be observed that respecting the commerce between San Bias and San Francisco and the western 
 ports of the United States, or directly to Upper California, that it has gradually increased for some months past on 
 this part of the coast during peace ; and the importations consist in — 
 
 ist. Fermented and spirituous Hquors, whale oil and petroleurn, amounting at cost price to $19,584 00 
 
 2d. Machinery and hard coal for the same, employed in the cotton factories established in 
 
 this district and in Guadalajara, being at cost price 6,000 00 
 
 3d. Looms for cotton, wool and silk, ready-made clothing and other effects of less import- 
 ance, to the value of 90,000 00 
 
 4th. Wheat flour and other provisions of this kind, to the amount of i7j23S 00 
 
 It results, consequently, that the importations of the above-mentioned articles, during the 
 
 time from the ist of May to the 30th of September of the present year, amount to $132,819 00 
 
 The cost of freight charged by American vessels is from $10 to $15 per ton." 
 
 794. In regard to the exportation of Mexican effects to the United States the Report referred to says as fol- 
 lows : 
 
 " The products of the country exported to the United States are, cedar wood in pieces, skins, metal in bars 
 and comed money. There are many other products that might be exported on a large scale, cultivated by indus- 
 trious hands like those of our citizens ; for there is no doubt that this part of Mexico promises, with the help of 
 immigration, to attain a higher degree of material progress, on account of its pure climate, the fertility of its 
 land, and its rich mines of silver and gold, which are not now worked for want of capital. The great probability 
 that the commerce of this port will grow, and perhaps the only probability, depends upon the beginning of Mr. 
 Plumb's railroad, which wiU begin in 1874. 
 
 l>. Report of the commercial relations between the United States ajid Foreign Nations, for the year ending Sep- 
 tember 2,0th, 1875. 
 
 795. The United States Consul-General in Mexico, Dr. Juhus A. Skilton, in his report addressed to the 
 United States Department of State, dated in this capital December i6th, 1875, says, respecting the exportation 
 of Mexican products to the United States, as follows, (Annual Report of Commercial Relations between the 
 United States and foreign nations, for the year ending September 30th, 1875, page 1117) : 
 
 " Coffee. — The crop this year in Cordoba, Michoacan and CoHma will reach 8,000,000 lbs.; its cultivation is 
 popular, requires but little labor, and is not exposed to accidents. In my report for the preceding year I gave 
 some details about coffee which it is impossible to repeat now for want of space. The Cordoba coffee is worth to- 
 day in this city 23 cents per pound. The exportation of coffee through Vera Cruz in 1874 was $543,352 7° J 
 in 1875, $678,517 73, the increase in 1875 being $235,165 03. The harvest of the Pacific coast is for the con- 
 sumption of the country." 
 
 792 Communication from tlie United States Consul at Progreso, November 1st, 1873, on tte same subject. 
 
 793, Communication from the United States Consul at San Bias on importation of North American articles. 
 
 794. Commnnication from the same Consul on the exportation of Mexican articles to the United States. 
 795 Report of the United States Consul-General in 1875 on the exportation of Mexican products. 
 
149 
 
 796- Mr. S. T. Trowbridge, United States Consul at Vera Cruz, in his report to the United States Depart- 
 ment of State, September 30th, 1875, said respecting the exportation of Mexican effects to the United States, as 
 follows, (Annual Report of Commercial Relations between the United States and Foreign Nations, for the year 
 ending September 30th, 1875, page 1146): 
 
 " The number and quantity of the invoices of articles sent to the United States has increased considerably. 
 In 1874 there were 364 invoices, amounting to $1,169,251 59, and in this year 477 invoices, amounting to 
 $1,427,947, an increase of 113 invoices, to a value of $258,695 86." 
 
 c. Report of Commercial Relations between the United States and Foreign Nations, for the year ending Septem- 
 
 ber 2,0th, 1876. 
 
 797. Dr. Julius A. Skilton, Consul-General of the United States in Mexico, in a communication addressed to 
 the United States Department of State, dated in this capital December 25th, 1876, said the following in reference 
 to the exportation of Mexican articles. Annual Report of the Commercial Relations of the United States with 
 Foreign Nations, for the year ending September 30th, 1876, page 743) : 
 
 " Sugar. — By the adjoined detailed statement it will be observed that in the last year there has been a great 
 increase in the exportation of this article through Vera Cruz, compared with preceding years, either for the United 
 States or for Europe, and especially for England, which appears to be the favorite market for this article, for the 
 duties are much less than in the United States." 
 
 "Mexican Madder. — The root which produces this coloring matter, and which until now has been almost 
 unknown in the Republic, is commencing to attract the attention of the chemists, botanists and physicians. The 
 until now limited consumption of this root in the preparation of medicines proves that it was little appreciated, 
 and the little use made of it by the Mexican in dyeing shows that they are behind hand in the arts. It produces 
 firm, rich, brilliant and varied dyes, combined with certain ingredients. This root, which has been imported 
 already from Asia to Europe, produced annually in France alone $4,000,000. It is found in the Cordillera of 
 mountains to the south of Morelia, and is known by the name of ' root for dying wool.' 
 
 " Tobacco. — This, product in later years has been improving gradually in quantity and quaUty, and the con- 
 sumption of segars and cigaretts has increased also, owing to the superior class of leaf employed in their 
 elaboration. The better classes are those from Vera Cruz, and some of them compete favarable with those of 
 Havana. 
 
 "Leaf-tobacco is sold in the capital at the rate of $3 50 to $7 per arroba (25 fts.), according to quality. 
 Segars made of choice tobacco are bought at the rate of $40 per thousand ; while those of an inferior class are 
 much cheaper. Large quantities of them are exported to the United States and Europe." 
 
 d. Report on Commercial Relations Between the United States and Foreign Nations, for the Year Ending 
 
 September T,oth, 1877. 
 
 798. Dr. JuUus A. Skilton, United States Consul-General in Mexico, in his report to the United States 
 Department of State, dated at this capital December 30th, 1877, says, respecting the commerce of Mexico with 
 the United States, as follows, (Annual Report of Commercial Relations of the United States with Foreign 
 Nations, for the year ending September 30th, 1877, pages 716 and 717) : 
 
 " To indicate the measures which might be taken to facihtate and develop trade in American goods and 
 manufactures, I give, in continuation, an extract from a report sent me lately by the representative of one of the 
 principal exporting houses of New York : ' The very high rates of freight charges by the Alexandre Steamship 
 Kne from New York to Mexico is a serious impediment in the way of establishing an export trade from the 
 United States to the Mexican Repubhc' I have met with this great obstacle personally, which not only affects 
 light articles but heavy articles as well. The rate of freight from Liverpool to Vera Cruz is so low that it is 
 impossible to pay that to which I refer. If the United States could or would subsidize this hne for one or two 
 years, until the nucleus of a great trade could become. established, but on the condition of reducing the cost of 
 freight to at least one-half its present rate, it would be a great advantage to exporters. It would also be a great 
 benefit to the commerce of the United States, that the Government should adopt a liberal policy toward vessels 
 that undertake the estabhshment of export trade from the port of New York to other Atlantic ports." 
 
 799. Mr, J. J. Thibault, United States Consul in Tuxpam, in a communication addressed to the United 
 
 796. Eeport of the United States Consul at Vera Cruz in 1875, on tlie exportation of Mexican effects to tlie United 
 
 Sta tes 
 
 797. Eeport of the United States Consul-General in Mexico, in 1876, on the importation of Mexican articles. 
 
 798. Opinion of Consul Skilton on the subsidizing of a line of steamers from New York to Vera Cruz. 
 
 799. Communication from the United States Consul at Tuxpam on the trade of Tuxpam with the United States and 
 with Europe. 
 
150 
 
 States Department of States, dated at Tuxpam, September 30th, 1877, says, in reference to the trade of Tuxpam 
 with the United States and with Europe, as follows, (Annual Report of Commercial Relations of the United 
 States with Foreign Nations, for the year ending September 30th, 1877, pages 748 and 749) : 
 
 " It is a great satisfaction to me to be able to inform you that there has been a great increase in the commerce 
 between the United States and the port of Tuxpam, and in consequence a diminution of the trade with Europe. 
 To prove this difference I copy part of my report of 1874, as follows : 
 
 "Exportation for Europe in 1874, $43,849; exportation to the U^iited States in 1874, $89,149 56; total, 
 $132,998 56. Importations from Europe in 1874, $65,815 45; importations from the United States in 1874, 
 $34,925 31'; total, $100,740 76. 
 
 "Exportation from Tuxpam for the year ending September 30th, 1877, $164,843 94 ; total exportation in 
 1874, $132,998 56 ; proving an increase in favor of 1877 of $31,845 38. 
 
 "Of the $132,998 56 exported in 1874, there were, as above stated, for Europe, $43,849; for the United 
 States, $89,149 56; total, $132,998 56. 
 
 "Of the $164,843 94 exported in 1877, there were for Europe, $15,470; for the United States, $149,373 
 94; total, $164,843 94. Demonstrating for Europe, in 1874, $43,849; in 1877, $15,470, a diminution in the 
 European trade of $28,379, and an increase in exportation, for the United States of $60,224 38. 
 
 " The import trade shows results equally favorable for the United States, although there is a slight diminu- 
 tion in the amount total of direct importations, owing to goods being brought from Vera Cruz, at which port they 
 are imported. Total importation from the UnitedStates and from Europe in 1874, $100,740 76 ; in 1877, $97,- 
 819 23; diminution in 1877, $2,921 53. From Europe in 1874, $65,815 45; in 1877, $11,680 99; being a 
 diminution in 1877 of $54,134 46, and an increase for the United States of $51,212 93." 
 
 800. It appears unnecessary to quote from further reports given by American consuls in Mexico to their 
 Government, and which demonstrate that there is a progressive increase in the commerce between the two 
 countries. 
 
 13. METHOD OF INCREASING COMMERCE BETWEEN MEXICO AND THE UNITED STATES. 
 
 801. After what has been shown, up to this point, with reference to trade between Mexico and the United 
 States and to the difficulties with which it has had to deal to its present condition and to its future, very little 
 remains to be said respecting the means which ought to be taken to promote its development, because the prin- 
 cipal of these have already been indicated in the preceding considerations. 
 
 802. It is clear that the importation of foreign goods to Mexico cannot increase to any considerable degree, 
 except in the increase of the production of exportable effects. If Mexico should go on exporting goods only to 
 the value of $30,000,000 per year, for example, it could import no larger quantity of foreign merchandise, for it 
 would not have the wherewith to pay the value of what might exceed that sum. 
 
 803. It would also be very difficult, without increasing the amount of exportations from Mexico for the 
 United States, to succeed in increasing considerably and quickly its commerce with us, raising it from about $7,- 
 000,000, its present amount, to $20,000,000, for example, and taking the place of European nations which have a 
 trade already established with Mexico, which dates many years back, and for which they have made special study 
 and effort. It appears, therefore, clear that the only efficacious and possible way of increasing this trade would 
 be to forward the increase of production in Mexico, and if this impulse were caused by North American capital 
 or enterprise, it is certain that the citizens of the United States would reap the benefit of the proportional increase 
 of importation which would result, and that in the course of a short time they would come to have a much more 
 important commerce with Mexico than that of European nations. 
 
 804. The production in Mexico ofexportable articles can be greatly forwarded in two ways : by developing 
 mining and by the cultivation of tropical plants. We will here, then, speak specially of each one of the following 
 points relating to the manner of enlarging the commerce between Mexico and the United States : 
 
 A. Development of mining in Mexico. 
 
 £. Development of the production of tropical fruits in Mexico. 
 
 C. Increase of tie exterior commerce of Mexico, its elements of wealth once being developed. 
 
 D. I'he United States Government has done very little to increase its commerce with Mexico. 
 
 E. Celebration of a reciprocity treaty between Mexico and the United States. 
 
 800. Other reports, equally demonstrate, that there is a progressive increase in the commerce of Mexico with the 
 United States. 
 
 801. Proper measures for increasing trade between Mexico and the United States. 
 
 802. Importation in Mexico cannot increase without the increase of exportation, 
 
 803. North American capital can be invested profitably in bringing out the natural wealth of Mexico. 
 
 804. Manner of forwarding the production of exportable articles in Mexico. 
 
151 
 
 A. Development of Mining in Mexico. 
 
 805. In respect to mining, it has already been shown, in another part of this exposition, that the annual pro- 
 duction in the declared condition in which this industry is, for various causes which it would not be opportune 
 to enumerate here, but which will be indicated on speaking especially of mining, is hardly from $20,000,000 to 
 $25,000,000 per annum, and that given the impulse of an increase of capital to work with, this industry could 
 reach annually as high as $100,000,000, and perhaps even to $150,000,000. 
 
 806. In fact, when it is borne in mind that the State of Nevada, with mining elements inferior to those of 
 Mexico, has been able to produce as high as $100,000,000 in one year, it will not appear in exaggeration to say 
 that the Mexican nation, so prodigiously endowed by nature with an infinitude of mines extraordinarily produc- 
 tive, and having elevated laws, might produce $100,000,000 to $150,000,000 per annun>. 
 
 807. The impulse import trade would receive, the mineral production of the country once increased to 
 $100,000,000 per year, will be easily understood, for it is certain that a considerable part of that large sum would 
 necessarily have to go out of Mexico to pay for the many effects which would be needed, as well for the working 
 of the mine and for the assay of the metals, such as machinery, instruments, quicksilver, etc., as for those em- 
 ployed in laboring in the mines, or for the use and convenience of the clerks and owners of the mines. It is 
 equally clear that if the capital were North American, which should impel this considerable increase in the 
 mineral production of the country, it would be a natural consequence that, in the mtrease of the importation of 
 foreign goods, occasioned by such increase of mineral production, manufacttires from the United States would 
 be preferred, for reasons so obvious that it is not considered necessary to indicate them here. 
 
 808. It is true that to attain the result of foreign capital coming to be invested in mining enterprises in Mex- 
 ico, it is indispensable to modify the legislation in force relating thereto; but this and other matters bearing upon 
 the important question of mining will be spoken of afterwards, upon treating in a special manner of the mining 
 industry of Mexico. 
 
 B. Developments of the production of Tropical Fruits in Mexico. 
 
 809. Another no less efficacious, and perhaps a more certain method of increasing the production of export- 
 able articles in Mexico, is to forward the cultivation of tropical fruits, among which coffee and sugar occupy the 
 most prominent place. The future of these two industries may, without any exaggeration, be considered equal to 
 that of mining. 
 
 a. Cultivatio?i of Coffee in Mexico. 
 
 810. The Honorable John W. Foster has made a special study of coffee cultivation in Mexico,- which was 
 pubUshed by the Department of Agriculture at Washington, with its monthly report for July, 1876, and which 
 shows that he has given to this branch of our agricultural industry the importance it holds, not only as regards the 
 facility of the production of coffee in Mexico, but also in respect to the manner in which the increase of this pro- 
 duction would develop commerce between the two countries. 
 
 8ti. In effect, according to the data comprised in the said work, the total production of the coffee crop in 
 1874 was estimated at 900,000,000 lbs., of which the United States consumed, in 1875, 317,970,665 lbs., or more 
 than a third part of the total crop. The consumption of coffee has risen very rapidly from $20,000,000, which it 
 amounted to in 1856, to $50,000,000, which it reached in 1875. 
 
 812. That important study, after showing the great facihties the RepubUc possesses for the production of 
 coffee, the low price of land suited to its culture, and the different places yielding a superior quahty of this fruit, 
 concludes with the following estimation of the future of coffee in Mexico : 
 
 " During the three last centuries Mexico has been famous for its great production and exportation of silver 
 and it possesses in coffee alone a fountain of greater production, wealth and prosperity. Its natural capacity for 
 the production of coffee is at least equal to that of Brazil, notwithstanding which the value of the coffee annually 
 exported from Brazil is more than three times greater than the value of the gold and silver produced in Mexico." 
 
 81^ In the speech deHvered by the Hon. John W. Foster, before the New Orleans Chamber of Commerce, 
 
 805. Possible increase of mjnitig production in Mexico. 
 
 806 Comparison of the mineral wealth of the State of Nevada, in the United Ssates, with that of Mexico. 
 
 807. Increase of importation a natural consequence of an enlarged production of exportable articles. 
 
 808. Necessity of reforming- Mexican legislation in that port relative to imports on mining. 
 
 809. The cultivation of coffee and sugar may give as favorable results as those of mining. 
 
 810 Study made by the Hon. John W. Foster on the cultivation of coffee in Mexico. 
 
 811 Data on the total production of coffee in 1874, and on tbe consumption of it in the United States in 1856 and 
 
 1875, 
 
 812 Estimations of Mr. Poster on the preference which ought in Mexico to be given to the cultivation of coffee. 
 813^ Reference to coffee by Mr. Foster in his speech in New Orleans, November 18, 1875. 
 
152 
 
 November i8th, 1875, which has already been spoken of in other parts of this exposition, he spoke also of coflfee; 
 but as his observations on this point are mixed up with those referring to the production and future of sugar in 
 Mexico, and most of them refer to this subject, they will be made use of on treating of sugar. 
 
 814. In reference to the important subject of the cultivation of coffee in Mexico, it is proper to reproduce 
 here what was said by the Secretary of the Treasury on the future of this industry, in a verbal report rendered 
 before the Chamber of Deputies of the 9th General Congress, upon discussing the proposed laiv on the exemption 
 of duty on foreign printing paper, because in the Report are set forth the principal facts relating to this subject. 
 
 815. The Report referred to says on this subject as follows: "The cultivation of coffee is one of the most 
 lucrative kinds of business that can be undertaken. Doing it with suitable land and cKmate, and under good 
 conditions, and where labor is not very high, it can be assured that it is equivalent to obtaining, five years after 
 the plantation has been made, which is the time necessary for the bush to develop itself and produce its fruit, a 
 profit every year equal to the capital invested in its cultivation during the five years; or, in other words, the 
 annual profit is a hundred per cent, on the capital invested in the plantation. This cultivation is within the reach 
 of persons of all degrees of intelligence and of fortune, for it does not need any special knowledge, or machinery, 
 or costly apparatus difficult to use, as happens respecting^he elaboration of sugar. 
 
 "On the other hand, the use of coffee has become so generalized in the world, that the demand is increasing 
 daily, while the production appears to have arrived at its greatest development, all of which assures beyond all 
 danger the good price of coffee in the future. 
 
 " In order to comprehend what coffee would be- able to do for Mexico, it is sufficient to consider what it has 
 done for Brazil. Brazil occupies a position in South America resembling that of Mexico in the northern hemis- 
 phere. The territorial extent of both nations differed but very little before the dismemberment Mexico suffered 
 on account of the treaty of Guadaloupe, Hidalgo, February 2d, 1848, which terminated our war with the United 
 States of 1846-7. The population of Brazil doss not exceed 10,000,000 inhabitants, the same that Mexico has 
 now. Brazil, which has also lands very favorable for coffee, although the quality of the coffee it now produces' is 
 not very good, commenced to cultivate this fruit at the beginning of this century. Its coffee exportation in 1821 
 was 105,385 sacks of 160 EagUsh pounds, which gives a weight total of 7,528 English tons. This product went 
 on progressively increasing; in the ten years from 1821 to 1830 it exported, on an average, 18,546 tons per year; 
 in the ten years following, from 1831 to r84o, the annual exportation was, on an average, 48,532 tons; in the 
 ten years from 1841 to 1850, Brazil exported 96,907 tons per annum; and in the ten years from r85i to i860, 
 the exportation was 143,671 tons per annum, on the average. The production, therefore, has been almost dupli- 
 cating itself in each decade. 
 
 " The following statement demonstrates the annual production of coffee in Brazil in sacks and English 
 pounds : 
 
 Eayportation of Coffee from Bio Janeiro. 
 In sacks of 160 lbs. 
 
 1831 
 1833 
 1833 
 1834 
 1835 
 1836 
 1837 
 1828 
 1839 
 1880 
 1831 
 1833 
 1838 
 1834 
 1835 
 1836 
 1837 
 1838 
 1839 
 1840 
 1841 
 1843 
 1843 
 1844 
 
 Sacks. 
 
 Tons. 
 
 105,386 
 
 7,528 1 
 
 153,048 
 
 10,861 
 
 185,000 
 
 13,314 
 
 334,000 
 
 16,000 
 
 183,136 
 
 13,081 
 
 360,000 
 
 18,571 > 
 
 350,900 
 
 35,064 
 
 369,147 
 
 36,368 
 
 375,107 
 
 36,793 
 
 391,785 
 
 37,985 
 
 448,349 
 
 33,018 1 
 
 478,950 
 
 84,311 
 
 561,693 
 
 40,131 
 
 561,759 
 
 40,054 
 
 647,438 
 
 46,345 
 
 715,898 
 
 51,135 f 
 
 657,005 
 
 46,939 
 
 766,696 
 
 54,764 
 
 889,334 
 
 63,538 
 
 1,068,418 
 
 76,316 
 
 1,038,368 
 
 78,455 1 
 
 1,174,689 
 
 83,906 
 
 1,183,641 
 
 84,546 
 
 1,369,386 
 
 90,670 J 
 
 In ten years, from 1831 to 1830, 
 3,596,509 sacks, or 185,465 
 tons. Average per year, 
 359,651 sacks, or 18,546 
 tons. 
 
 In ten years, from 1831 to 1840, 
 6,794,434 sacks, or 485,816 
 tons. Average per year, 
 679,443 sacks, or 48,533 
 tons. 
 
 In ten years, from 1841 to 1850, 
 13,567,039 sacks, or 969,074 
 
 1845 
 1846 
 1847 
 1848 
 1849 
 1850 
 1851 
 1853 
 1853 
 1854 
 1855 
 1856 
 1857 
 1858 
 1859 
 I860 
 1861 
 1863 
 1863 
 1864 
 1865 
 1866 
 1867 
 
 Sacks. 
 
 Tons. 
 
 1,187,591 
 
 84,828 1 
 
 1,533,434 
 
 108,745 
 
 1,650,300 
 
 117,879 
 
 1,706,544 
 
 121,896 
 
 1,451,715 
 
 108,694 
 
 1,393,361 
 
 99,455 
 
 1,993,355 
 
 143,875 ~1 
 
 1,899,861 
 
 135,704 
 
 1,640,179 
 
 117,155 
 
 1,986,334 
 
 ■141,873 
 
 3,409,265 
 
 173,090 
 
 3,100,313 
 
 150,033 f 
 
 3,097,449 
 
 149,818 
 
 1,833,416 
 
 180,958 
 
 3,031,413 
 
 145,101 
 
 3,132,625 
 
 151,616 J 
 
 3,084,494 
 
 145,321 1 
 
 1,486,307 
 
 106,158 
 
 1,313,903 
 
 93,779 
 
 1,495,697 
 
 106,835 
 
 1,793,504 
 
 138,036 
 
 1,867,313 
 
 133,879 
 
 3,584,493 
 
 184,607 
 
 tons. Average 
 1,358,703 sacks, 
 tons. 
 
 per year, 
 or 96,907 
 
 In ten years, from 1851 to 1860, 
 30,113,999 sacks, or 1,436,- 
 712 tons. Average per year, !' 
 2,011,400 sacks, -or 143,671 j j 
 
 tons. :.; ; 
 
 In 7 years, from 1861 to 1867, 
 18,573,609 sacks, or 898,115 
 tons Average per year, 
 1,796,230 sacks, or 138,300 
 tons. 
 
 814. Opinion of the Secretary respecting coffee, expressed in tlie Chamber of Deputies, October 31st, 1878. 
 
 815. Text of that part of the Report of the Secretary of the Treasury referring to the cultivation of coflee in 
 Mexico. 
 
153 
 
 "In the year 1867, which is the last comprehended in these data, taken from a folio published in Amsterdam 
 in the German language by Father Schoffner, entitled ' The Coffee Trade; the production'of Brazil, was 2,584,493 
 sacks of 160 lbs., making a total weight of 184,607 English tons, which, reduced to Mexican pounds, make a 
 total of 4,076,477 Mexican quintals, which, at the minimum pnce of $10 per quintal, which it commands in the 
 place of production, represent a value of $40,764,770 in one year only, that is to say, almost double the annual 
 average from our mines. 
 
 "I desire, gentlemen, for my country a like production, which in a short time would enrich it greatly, and soon 
 bring it up out of the state of prostration it is now in. 
 
 " But, would it be possible, as has been suggested by some of those who support the opinion, that all the 
 Mexicans, or at least those who are now employed in the production of paper, would devote themselves to the 
 cultivation of coffee ? Would to God this were practicable, but I believe this is only an illusion. 
 
 "The principal portion of the Mexican population live in the high lands, which are the most healthful because 
 cold ; our hot and temperate lands, which are best adapted for coffee and other fruits of good foreign demand, are 
 almost unpopulated. It is not easy, it is almost impossible, to transfer laborers from the cold lands, where they 
 already have their homes, their families and friends, whether they get their living in the paper industry or any 
 Qther way, to the hot lands, the climate of which they fear greatly, because they are there exposed to the diseases 
 of acclimation, and to all the inconveniences consequent to those climates, as is well known by those who have 
 lived in them, although by that change they should greatly better their present condition. The inevitable con- 
 sequence would then be, that, the paper factories being closed, there would probably not be a single one of those 
 now working in them who would go to the coast to cultivate coffee, but would remain in the place where they 
 now live, even though they had nothing to look forward to but poverty, misery and death. 
 
 " The circumstance that our population live in the cold lands is the principal obstacle in the way of an imme- 
 diate development, and on a great scale, of coffee cultivation in Mexico; and this very circumstance explains 
 also the cause of the great development it has reached in Brazil ; for, to the contrary of Mexico, the great mass 
 of the population there live on the coasts and the hot lands. The capital of Brazil is on the sea, and is one of 
 the best ports of the world, while our capital is more than seven thousand feet above the level of the sea, and 
 more than 400 kilometres from our principal port." 
 
 816. Coffee has been exported from Mexico since 1802, according to the data published in "The Exterior 
 Trade of Mexico," by Don Miguel Lerdo de Tejada, which is inserted in continuation, it being understood that in 
 the years not mentioned in the following statement there was no exportation of that fruit. 
 
 Years. Quintals of Coffee. 
 
 1802 272 
 
 1804 493 
 
 1809 il^i 
 
 1813 No data. 
 
 8 a 
 
 14 
 
 1815 " 
 
 8u 
 20 
 
 21 
 
 1825 33 
 
 1828 20 
 
 Value in Dollars. 
 $4,360 00 
 12,066 00 
 5,040 00 
 
 
 
 
 
 528 
 240 
 
 00 
 00 
 
 $22,234 
 
 00 
 
 Total 1,154 
 
 b. Cultivation of Sugar in Mexico. 
 
 817. As much more can be said respecting the production of sugar in Mexico; there are a multitude of 
 places ia this country which grow sugar cane at a small cost, and in which the plant lasts for several years with- 
 out the need of replanting, and others in which no irrigation even is necessary, in which the production of sugar 
 would be lucrative, as well for the extent of the territory as for the abundance of the population, if there were 
 cheap roads to transport the sugar to the coast. Mexico has elements for the production of sugar very superior 
 to those of the Island of Cuba, and it will be easily understood what an impulse would be given to its production, 
 and to the consequent increase of pubhc wealth and to importation in Mexico, if the building of roads and the 
 investment of capital should permit this important branch of wealth to be developed to its full extent. 
 
 816. Exportation of coffee since 1803, according to data published by Sr. Mi^el Lerdo de Tejada. 
 817 Facility for the cultivation of sugar in Mexico, and the influence it may exert in the future of the country. 
 20 
 
154 
 
 8 1 8. In reference to the cultivation of coffee and sugar in Mexico, and their future in the development of 
 the country, the Hon. John W. Foster, in his speech before the Chamber of Commerce of New Orleans, Novem- 
 ber iSth, 1875, made the following judicious observations : 
 
 "The coffee imported to the United States in 1874 amounted to $55,000,000, or in weight 288,000,000 lbs. 
 The value of coffee imported in 1863 amounted to only $10,000,000, its increase being constant up to this date, 
 which indicates the great importance which this trade must have within a few years. 
 
 "The importation of sugar and molasses during the same period amounted to $89,500,000 ; in quantity, 
 1,201,500 tons. It results, therefore, that in order to obtain these articles the United States send abroad annu- 
 ally $144,500,000, almost all in kind ; for our export commerce with Cuba and Brazil, from whence these pro- 
 ducts principally come, is comparatively insignificant. 
 
 "Our importations from Cuba for the past year reached $86,272,000. That island has a population of a 
 million and a-half of inhabitants, and an area of 47,000 square miles. Mexico has an area of 750,000 square 
 miles, and a population estimated at 9,000,000 inhabitants. 
 
 " In all the coast of the Gulf of Mexico, from the level of the sea up to an elevation of 4,000 feet, in the 
 sinuosities of the sierra and a great part of the Pacific coast, there is an abundance of the best quality of land for 
 the cultivation of sugar cane. 
 
 " In the States of Tamaulipas, Vera Cruz, Campeche, Tabasco and Yucatan these lands are plentiful and 
 cheap ; the cane is superior in saccharine matter, abundant in its growth and is unrivalled for rendering its pro- 
 duction in a short time, and for its duration without necessity of replanting. 
 
 " The consular agent in Tuxpam, State of Vera Cruz, in his Report given to the Department of State, tells 
 that, in that district, sugar cane lasts from fifteen to twenty years without replanting; that it grows from 18 to 20 
 feet in height, and that every acre, in spite of bad cultivation, gives from 2,000 to 5,000 pounds of sugar. 
 
 " In the greater part of the country where I have said sugar can be cultivated, coffee can also be cultivated 
 with the best success, especially in the sinuosities of the Cordillera of mountains that extend along the coast of 
 the Gulf, as well as in the slopes of the Sierra Madre, in a longitude of nearly 2,000, to which the Mexican 
 Cordillera extends ; and the coffee of Colima has been classed as superior in quality to any other in the world. 
 It is at present only cultivated on a small scale and sold at an exorbitant price. Although coffee has been 
 cultivated for a century in Mexico, this has only been done in small quantities, and exclusively for interior con- 
 sumption. 
 
 " During the last few years small remittances have been sent abroad, principally to New York, and have 
 been so lucrative that a great impulse has been given to this industry. The principal locahty in which it is 
 cultivated now is the State of Vera Cruz, having for a centre the Valley of Cordoba. 
 
 "Consul-General Skilton, in his commercial report of 1874, estimates the amount of the coffee crop for the 
 year at $1,000,000, and adds that 'it can be increased to $100,000,000 with a comparatively small amount of 
 capital and a larger spirit of enterprise.' 
 
 " In my opinion no Mexican enterprise offers larger inducements than the cultivation of coffee. In the 
 State of Vera Cruz, as well as in many other parts of the Republic, cheap fertile lands can be bought, specially 
 adapted for this cultivation, and as an additional attraction, the elevation above the sea, at which coffee meets 
 with the best success, assures in Mexico a cUmate always equal, an eternal spring, and vegetation that never 
 withers." 
 
 819. Regarding this subject it is thought proper, also, to insert what the Secretary of the Treasury stated to 
 the Chamber of Deputies October 31st, 1878, on rendering a verbal report respecting a proposed law, voted on 
 that day, which moved the exemption of duty on the importation of foreign printing paper, and in which report 
 the point was touched upon of the celebration of a reciprocity treaty with the United States. In said report he 
 said on this subject as follows : 
 
 " One of the articles produced in this country, and of larger future, is sugar ; but it cannot now be exported 
 because there are other places in which it is produced at a less cost than in Mexico. In the Island of Cuba, for 
 example, which is the nearest country to Mexico, where the production is the largest, we find that through the 
 enjoyment of low freights (for the island is crossed by railways, and the sugar estates are either near the sea or 
 on the railways), through large capital employed in the production of sugar, which always cheapens the cost of 
 production, and through the existence there of the odious institution of slavery, which makes labor so much 
 lower than when the laborer is free, sugar costs less, put in the market of Liverpool or New York, than the 
 
 818. Observations of Hon. John W. Foster on the cultivation of sugar and coffee in Mexico. 
 
 819. Fragment of the speech of the Secretary of the Treasury, October Slst, 1878, on the cultivation of sugar. 
 
155 
 
 Mexican sugar, which has to contend with many great inconveniences and heavier expenses. The production, for 
 example, of the sugar estates in the State of Morelos have to pay a relatively high freight to Chalco. There the 
 sugar is transferred to canoes, which bring it to the capital ; here it has the expense of commission and storage, 
 and afterward the heavy railroad freight from the capital to Vera Cruz, where, until the public are allowed the 
 use of the iron pier, it undergoes another commission, storage, and a very expensive shipment. 
 
 " These expenses make it so that sugar from the interior of Mexico cannot compete in foreign markets with 
 sugar produced in other countries. The estates situated on the coast or in places near the coast can ship their 
 goods, but it is not the same with those situated in the interior ; the essays that have been made up to this time 
 have not given good results. This unfavorable situation may change suddenly to the great advantage of the 
 nation, if we should come to celebrate a reciprocity with some one of the manufacturing powers, consumers of 
 sugar, hke the United States, for example, by virtue of which our sugar should be received free of duty in 
 exchange for our receiving free of duty, also, some of their manufactures, among which might be included paper ; 
 the difference of duties would cause our sugar to be sold to the great advantage of our husbandmen, and it would 
 augment greatly the productions of sugar in Mexico, to the positive benefit of the nation. This difference in 
 duties would permit us to compete with Cuban sugar in the United States, and even with beet sugar in some of 
 the European markets. 
 
 " Sugar pays heavy import duties in the United States and in various European nations, because, notwith- 
 standing that it is an article of prime necessity of hfe, those nations need a revenue to live, and this product forms 
 in various parts one of the principal sources of increase. Sugar of the grade of brown (moscabado), which has 
 been exported by our husbandmen, pays in the United States about five cents per pound duty, if I am not misin- 
 formed. If sugar, then, should succeed in being imported there free of duty, it would be equivalent to granting a 
 premium of five cents per pound on it, and this would not only permit it to contend advantageously with Cuban 
 sugar, but it would afford a rich profit to our husbandmen. By means of this system the production of sugar has 
 been developed in an extraordinary manner in the Sandwich Islands, as I have already stated. 
 
 " In order to calculate, also, what the development of sugar culture can do for Mexico, it is sufficient to bear 
 in mind that the Island of Cuba, with a population which does not come up to 2,000,000 of inhabitants, exports 
 to the value of nearly $80,000,000 annually, and among the products forming this large exportation, the product 
 of the cane figures in the first place, and almost for three-quarter parts." 
 
 820. In the data gathered by Sr. D. Miguel Lerdo de Tejada, in his work entitled " Exterior Trade of 
 Mexico" sugar appears as an article of exportation in the commerce of the colony with its metropoUs from the 
 year 1761 ; for the fleet which came in that year, under the command of Lieut. General D. Carlos Reggio, 
 carried to Spain on its return 3,986 arrobas of sugar, to the value of $7,972, shipped at Vera Cruz. 
 
 821. The necessary data are not existing to know the increase or diminition of the exportation of sugar in 
 aU the years since 1761, but the statement inserted in continuation show the data of the mercantile balances pub- 
 lished in the work quoted of Sr. Lerdo de Tejada : 
 
 Arrobas. Value. 
 
 Tears. 
 
 '. I9>274 28,912 
 
 1761 3,986 $7,972 
 
 1763 ■ 
 
 1766 -. 23,487 49,974 
 
 822. Since the year 1766 the balances do not express the quantities of sugar exported, probably on account 
 of the imperfectness with which these notes were formed. In the year 1796 it agains figures as an article of ex- 
 portation, not only in the commerce with Spain, but also with other foreign countries. 
 
 823. The following statement, taken also from the data set forth by Sr. Lerdo de Tejada in his work entitled 
 ''Exterior Trade of Mexico;' shows the quantities of sugar exported from 1796 to 1820, it being understood that 
 in the years omitted there appears to have been no exportation : 
 
 830 Exportation of sugar from Mexico, in 1761, according to date of Sr. Miguel Lerdo de Tejada. 
 
 83l! Exportation of sugar from 1763 to 1776, according to data of Sr. Miguel Lerdo de Tejada. 
 
 833! There are no data existing of the exportation of sugar from 1776 to 1796. 
 
 823! Notice of the exportation of sugar from 1796 to 1820. 
 
156 
 
 Trade with Spain. Foreign Trade. 
 
 Years. Arrobas. Value in Dollars. Arrobaa. Value in Dollars. 
 
 1796 346,361 $1,347,231 
 
 1797 60,835 159,834 
 
 1798 70,568 212,691 
 
 1799 i5°>88i 479,062 
 
 1800 87,570 287,277 
 
 1801 9,148 25,157 ...... 
 
 1802 431,867 1,454,240 
 
 1803 483,944 1,495,056 
 
 1804 381,509 1,097,505 
 
 1805 37,332 $93,347 
 
 1806 25,857 64,642 75,862 189,655 
 
 1,807 5,288 13,220 60,236 173,090 
 
 1808 19,917 39,834 39,280 78,560 
 
 1809 241,246 
 
 1810 119,726 
 
 1811 95, 016 
 
 1812 12,236 
 
 1813 7,657 
 
 1820 7,100 
 
 64,642 
 
 13,220 
 
 39,834 
 
 482,492 
 
 269,383 
 
 237,540 
 
 30,575 
 
 19,142 
 
 24,850 
 
 Total 2,565,726 $7,739,731 221,710 $534,652 
 
 824. Mexican sugar destined for exportation was that which was produced in places immediate to Vera 
 Cruz and principally in Cordoba, where this industry came to acquire large proportions during the last years of 
 the colonial regimen, for in 1803 its export came to $1,500,000. Slavery existed then in New Spain, and the 
 sugar estates were worked principally by African slaves. Slavery being abolished in Mexico by the decree of 
 January loth, 1822, the estates of Cordoba received a dea,th blow, and the production of sugar ended completely 
 in that fruitful district; notwithstanding this, the exportation of Mexican sugar still continued until the year 1828, 
 although decaying every day. 
 
 825. The exportation of sugar from 1824 to 1828, there appearing to be none in r823, appears in the fol- 
 lowing notice taken from the data of the quoted work of Sr. Lerdo de Tejada : 
 
 Years. Arrobas. Value in Dollars. 
 1823 
 
 1824 6,024 $18,072 00 
 
 1825 3,564 8,292 00 
 
 1826 256 615 00 
 
 1827 19,952 44,863 00 
 
 1828 , 7,620 17,835 00 
 
 Total : 37, 416 89,677 00 
 
 c. Production of other Fruits in Mexico. 
 
 826. Coffee and sugar are not the only articles the culture of which has a large future in Mexico. There 
 are a multitude of other productions that have a similar future. 
 
 827. The Hon. John W. Foster, in his speech dehvered before the Chamber of Commerce of New Orleans, 
 November i8th, 1875, said, in reference to the production of henequen and other tropical fruits, as follows: 
 
 " Next in importance to the two articles mentioned, are the tropical fruits, the consumption of which is al- 
 ready enormous in the United States, and the demand for which is increasing rapidly every year. Mexico pro- 
 duces them of almost an indefinite variety, of superior quality and in great abundance, near the coast and in all 
 its ports. If there were direct and rapid communication with Galveston and New Orieans, all the south and west 
 
 824. Development of sugar culture in. Mexico during the last years of the colonial regime. 
 
 835. Notice of the exportation of sugar from 1833 to 1838. 
 
 836. Besides coffee and sugar there are many other products which have a great future in Mexico. 
 827. Observations of Hon. John W. Poster on the wealth of Mexico in henequen and other articles. 
 
157 
 
 up to the great lakes, could, by means of the railways starting from these two cities, be provided with the tropical 
 fruits of Mexico, fresher, of better quality, and cheaper than those we now have. 
 
 " It would be difficult to exaggerate the development that might be given to this branch of commerce. To 
 give an idea of what an influence a frequent and direct communication with Mexican ports would have on its 
 vast and manifold elements, I will cite one sole example: Since the establishment of the present line of steamers 
 from New York to Mexican ports the importation made of henequen (sisal hemp) to that city, proceeding from 
 one port only; that of Progreso, Yucatan, has increased in five years from less than $100,000 to $1,049,202, ac- 
 cording as appears from the memorandum of the Treasury Department for 1873, which is the last that has been 
 pubhshed. 
 
 " We behold, then, that this one article of comparative little importance has come to be, owing to the estab- 
 lishment of this line of communication, after silver, the second in value of the exportations of that Republic. 
 
 "Besides these there are many other important articles adapted to commerce of which we are in great need in 
 the United States, and which Mexico can produce abundantly, such as precious woods, which it has in illimitable 
 quantities, cocoa, vanilla, various drugs and dyes, agave fibre, india rubber, rice, &c. 
 
 " I have only alluded now to the coasts of the Gulf and of the Pacific, aswelljas to the provinces of the sierra, 
 m which these articles, so much needed in the United States, are produced; but in the interior of the Republic 
 there are extensive valleys, which are depressions in the vast system of elevated plains of Mexico, fertile lands of 
 incomparable beauty, in which a delicious climate is enjoyed and which grow sugar, coffee and most of the other 
 articles with the same abundance and of the same good quaUty. 
 
 " Until now these regions have not contributed, nor are they contributing, to exterior commerce by reason of 
 the cost required for transportation to the ports j but the recent termination of the railroad from Mexico to Vera 
 Cruz, which has conquered the difficulty and facihtated the costly task of scaHng the mountain up'to the arrival 
 at the higher plains, which are situated at an elevation of more than 8,000 feet above the level of the sea, with a 
 four per cent, decline, that is to say, more than 200 feet to the mile, this road ought to give important results, 
 which will influence in the exportation of agricultural products." 
 
 828. Dr. W. Seager, a British subject, who resided for a long time in Mexico, and who came to be pro- 
 foundly acquainted with the circumstances of this country and its great facilities for the production of certain 
 fruits, wrote a short comprehensive treatise entitled, " The Wealth of Mexico besides the Precious Metals" 
 which was published in English in 1867, and in which he spoke principally of the advantages of the country for 
 the production and realization of cotton, salt and guano, respecting which he says as follows : 
 
 " Mexico, by reason of the limited number of its seaports and the few rivers it possess not being navigable, 
 cannot come to be a great maritime nation, whilst on account of its geopraphical configuration, which faciHtates 
 the exploration of its geological formations of the primary and secondary epochs, it can be considered as a 
 country of great mineral wealth. 
 
 "The Cordillera of the Andes divides here into two great chains of mountains, one of which follows the ori- 
 ginal line on the Pacific coast, traversing Sonora, the auriferous region of California, the rich silver district of 
 .Washoe, and from there to the north, whilst the other has its ramifications towards the Gulf of Mexico, where the 
 principal deposits of silver known to the world have been discovered, as Guanajuato, Real del Monte, Zacatecas, 
 San Luis Potosi, Catorce, Bolanos and many other places, which, according to statistical data, have produced 
 many millions of dollars. 
 
 " However great this quantity may appear, altogether, silver is an article the production of which is very ex- 
 pensive, because it involves great risks and is excessively inconstant and capricious in its veins and croppings. 
 The flattering aspect of rich stone has caused the investment of enormous sums in the draining of mines and in 
 the extraction, reduction and refining of metals, to suffer only a bitter disappointment in the complete disappear- 
 ance of every vestige of silver. It is not the same with other kinds of business which up to this time are remain- 
 ing undeveloped in Mexico, and which are similar to those which in Eurooe form the basis of a great and per- 
 manent wealth, the principal revenue of some crowned heads and the origin of the colossal fortunes which, hav- 
 ing peace and war in their power, rule them. These great fortunes do not proceed from silver and gold, but 
 from humbler articles, as well as infinitely more useful and consequently more necessary, such as coal, iron, salt 
 and others, because of the great abundance, rapid consumption and complete destruction and disappearance of 
 these articles, which after many ages again appear for the benefit of other races, which in the course of miUions of 
 years are born to find the same substances, perhaps in more imperfect forms, but adequate, notwithstanding, to the 
 state of their intelligence and civiKzation. I maintain that Mexico possesses resources infinitely greater than silver, 
 its almost exclusive article of present exportation, resources which can be improved with greater ease, which are en- 
 
 828. Extract from a treatise of Dr. Seager, of 1867, entitled "The Wealth of Mexico besides the Precious Metals." 
 
158 
 
 tirely certain, pay sooner the expenses suffered in their development, distinguished for their greater constancy in 
 giving returns, and for their incomparably superior commercial and political importance. 
 
 " Creative production — Reservoirs of water. — This is one of the secrets of creative production, and Mexico 
 presents thousands of advantageous sites in the defiles of the numerous cordiUera where the desert-burned and 
 arid plains which Hes at their feet can be converted into a paradise by the magic touch of the engineer. * 
 
 * * * That which is unfortunately observed at first sight is confirmed on closer exam- 
 
 ination: the true principles of financial science are here inverted. Instead of stimulating production and im- 
 posing taxes afterwards on the capitalized product, the first germs and toils of the production of capital are suffo- 
 cated by a refinement of ingenuity which impedes its expansion and increase. 
 
 " Mexico is, by reason of its geographical situation, its topographical configuration, the diversity of climates, 
 the fertihty of its soil, its wealth in precious stones and vegetable products, and its great and inexhaustible de- 
 posits of special materials of value, more adapted than any other country to liberate its people from heavy burdens 
 and to enjoy a larger revenue relatively to the number of its inhabitants. «»*»*» 
 
 " Cotton. — This article presents a curious contrast to the risky and costly production of silver, the profit on 
 which altogether amounts, according to Humboldt, to six«per cent., it being difficult to prove the exactitude of 
 this assertion, because for one mine that produces a profit, there are certainly a hundred that involve a loss. 
 
 "■Salt. — Salt is sold as high as $12 00 per load, its cost of production being one or two dollars; and an en- 
 terprise of this kind once estabhshed is not exjxwed to come to a termination like a vein of metal 
 
 "Salt of Lake Tecoco. — It is to Mexico what guano is to Peru. 
 
 "It is evident that the railroad will cause a radical revolution in this class of enterprises in Mexico — hemp, 
 wax caoutchouc, copper." 
 * ************* 
 
 829. The treatise of Dr. Seager terminates with the following important summary : 
 
 "Summary. — A fixed revenue being one established, by means of the improvement of the diverse fountains 
 to which I have aUuded, the annual production of which can rise to a hundred millions of dollars, the Govern- 
 ment of the country will be in a position to effect physical reforms, and to initiate economic measures which 
 would make it powerful and respected Its army, to be efficacious, could be numerous and be well and punctually 
 paid ; then confidence would be had in protection against thieves and acts of violence, and then there would 
 commence for the country with aU certainty a propitious era to all the peaceful occupations of its inhabitants. 
 
 "There ought ta follow the complete abolition of every kind of interior impost, and freedom from every 
 obstacle that impedes interior trade. Liberal subsidies could be granted to raihoads, canals, lines of steamers and 
 other enterprises of pubUc utiUty ; contracts be made to maintain public roads in perfect order, exacting in the con- 
 tracts sufficient security; liberal contracts be made for all kinds of pubUc works, but securing their prompt and 
 efficacious construction and conclusion by the respective parties; large premiums be granted to stimulate culti- 
 vation and inprovement of many precious natural products of the country, which both in quahty and quantity can 
 advantageously compete with those of more favored nations. Then the country would attain to the realization 
 of a large exportation, without which it can never be rich or prosperous. 
 
 "Its exterior commerce ought to be facihtated by means of the circulation of bank biUs and other valuable 
 paper ; otherwise, it will always be behind other countries that enjoy this evident advantage. The signature of 
 twenty-five of the principal capitalists of the country on a bank-bill would guarantee its value, and these capitalists 
 cannot but recognize the advantages resulting to them in thus duplicating their capital, while they afford to the 
 country the benefit of a circulation which at the same time favors themselves. 
 
 "In view of the small amount of the present revenues of Mexico, and of the irregular and difficult manner in 
 which the revenues are collected, my calculations may appear to be exorbitant ; but if it is considered that the 
 natural resources of the country and the fertility of its soil are not developed, it wiU be seen that these calcula- 
 hons are really moderate, and even low, in comparison with what other countries produce. 
 
 "The cotton crop of the north was, in 1861, 2,089,000,000 lbs., which at the price this article now com- 
 mands (1867) would amount to $600,000,000; and Mexico, which has a superior fertility, can imdoubtedly 
 produce a tenth part of this quantity. I cannot refrain from making one more comparison. The project of the 
 construction of a tunnel under the Enghsh Channel is approaching its realization, for all the difficulties are being 
 overcome ; it will cost, however, $35,000,000, and its utility is problematical Peace will not last forever, and 
 the tunnel can be destroyed in an instant with a few barreb of powder. 
 
 " The investment of capital in cotton planting in Mexico, in the building of reservoirs for the important 
 
 839. Summary of the treatise of Dr. Seager respecting the elements of wealth of Mexico. 
 
159 
 
 purposes of irrigation, in the preservation of its cereals, in the development of its truly great natural deposits of 
 valuable substances, and in the proper stimulation of its agriculture, which is not yet developed, would yield a 
 quick, considerable and secure profit, and which would go on increasing ; all of which would be a motive that, in 
 the great monetary markets of the world the preference should be given to such secure investments of capital. 
 
 " By each of the details of the preceding sketch, which have been lightly traced, or rather simply alluded to by 
 me, it will be seen that Mexico is a beautiful white page, on which science and industry, with their modern 
 resources, ought to write with immense advantage and profit." 
 
 830. In reference to the elements of wealth of Mexico, in an important treatise published in Brussels in 1864 
 by Mr. J. B. Legrain, entitled " The Agricultural Situation and Future of Mexico" there is said as follows : 
 
 " Probably there exists no other country in the world the configuration of which is so extraordinarily 
 advantageous for agriculture. Mexico possesses every kind of vegetable and fruit tree of Europe. The central 
 table lands produce, in the greatest abundance, cherries, plumbs, peaches, apricots, figs, grapes, melons, apples 
 and pears ; and in the hotter districts they produce pine apples, mameyes, cassavas, anonas and chirimoyas. The 
 orange and lemon are cultivated equally on the central table lands. The mageuy, a species of the agave 
 Americana, which grows well in the elevated regions, gives pulque, a drink which the inhabitants prefer to wine. 
 Almost all the vanilla consumed in Europe comes from the forests in the States of Vera Cruz and Oaxaca ; 
 there the zarzaparrilla, which is exported in considerable quantities, Jalapa root is found especially near the city 
 of this name ; also superior kinds of tobacco, sugar-cane and indigo are cultivated there ; and it should not be 
 left unmentioned that rice is cultivated in the wet bottoms of the valleys. Lastly, and to conclude this long 
 enumeration, we wiU add, that the forests are full of oak, pine, cypress, ash, walnut, cedar, ebony, campeche 
 wood, mahogany, palms, tamarinds, acacias and Indian cane. 
 
 " The domestic animals of Europe have prospered in Mexico and have multiphed enormously." 
 
 831. Various other authorities could be quoted to show the multitude of the elements of wealth, and of easy 
 development which exist in Mexico, and which are only awaiting capital and the spirit of enterprise, to be 
 developed ; but these are so well known that it is not believed necessary to mention them especially, which, 
 besides, would greatly augment the dimensions of this exposition. 
 
 C. Increase of the Exterior Trade of Mexico, its Elements of Wealth being once Developed. 
 
 832. To obtain a great increase in the production of the articles heretofore spoken of, the investment of 
 foreign capital is indispensably necessary. For the development of mining there is indispensably necessary 
 besides this, the modification of the laws in force, which, burden with such heavy imposts the mining industry of 
 the country ; for the increase of sugar production there is an indispensable need, also, of the construction of rail- 
 roads that will enable products to be carried to the coasts at a low freight ; but for the increase of the production 
 of coffee nothing more is needed than the investment of capital, for the high value of this product permits its 
 exportation, even from the interior, and with all the burdens of the high freights, which are paid in Mexico. 
 
 833. If, by the increase of the mineral production of this country, the exportation of the precious metals 
 should be increased to $100,000,000 per year, and if, by the increase of agricultural production, there should be 
 exported of coffee alone $50,000,000, and as much more of sugar, the importation of foreign merchandise, instead 
 of being nearly $30,000,000, as it is now, would rise to the sum of $200,000,000 per year, assuming proportions 
 which, although they may appear fabulous now, are, in reality, in no wise exaggerated. 
 
 834. If this increase, as large as it is easy, in the production of Mexico, should be owing to North American 
 capital and spirit of enterprise, it is certain that they would reap the benefit in the increase of importation, and 
 that the commerce of the United States with Mexico, instead of representing $7,000,000 per annum, as it does 
 now, would rise to $150,000,000 or $180,000,0000. 
 
 8^=; To attain this important result, the capitalists and business men of the United States have only to 
 invest their capital in Mexico, as well in the production of the fruits indicated, as in the building of railroads. It 
 is to be desired for the good of both nations, that the brilUant future sketched in these lines, and which must 
 
 8S0 The resources of Mexico, by Mr. J. B. Legrain, in his treatise entitled " Tlie agricultural situation and future of 
 
 Mexico.'' 
 
 831 It is not thought necessary to insert the testimony of other authorities on this subject. 
 
 833 The investment of foreign capital is indispensable to increase the production of exportable articles. 
 
 833 The growth of the production of metals will cause an increased importation of foreign goods. 
 
 SS4 The interests of the United States in the investment of North American capital in the development of the 
 
 elements of Mexico. 
 
 8<?'i Hone that the' extension of commercial relations between Mexico and the United States will not be long deferred. 
 
160 
 
 I 
 come at some time, should not be long deferred, so that the present generation may behold and enjoy the 
 advantages of that great productive and commercial development. 
 
 836. It is proper to record what the Hon. Thomas H. Nelson, former Envoy Extraordinary and Minister 
 Plenipotentiary of the United States to Mexico, said in a communication dated at Terre Haute, Indiana, 
 December 13th, 1872, and addressed to Mr. J. H. Oglesby, president of the New Orleans Chamber of Com- 
 merce, respecting the future of commerce between Mexico and the United States, which communication was 
 transmitted to the United States Department of State, with a note dated at this capital, February loth, 1873, and 
 published in the diplomatic documents annexed to the Message of the President of the United States to the 
 Congress of December ist, 1873, (pp. 650 and 651). The part in point of this communication says as follows : 
 
 " Considered from the point of view of national and individual interests, the policy which I recommended 
 would be especially favorable to the people of the South-western States, particularly Louisiana and Texas. Their 
 commercial future is so directly and intimately connected with the growth and development of commercial rela- 
 tions with Mexico, that it appears unnecess'Bry to dwell upon this point. Every legislative measure which tends 
 to forward the said commerce, is a step taken in favor of the South-western States. 
 
 "Not only will the four articles above-mentioned serve to give an impulse to, our commerce,, through a pru- 
 dent development of our commercial relations with Mexico,*but there are still other articles of large consumption 
 which are not produced on our soil, and with which Mexico is able to provide the world. It is enough to men- 
 tion coffee, chocolate, indigo, mahogany and dye-woods. In exchange for these valuable articles, Mexico would 
 naturally receive from us the manufactures which she is now buying in England, France and Germany; our 
 American manufacturers would thus be able to make use of our great maritime power, to trace out a lasting com- 
 merce in the Gulf States, and elevate them to a degree of prosperity unknown, even in their most flourisliing 
 epoch. The adoption of the legislative measures I have indicated would, without doubt, contribute in an extra- 
 ordinary manner to obtain this result. 
 
 " The conclusion of the projected lines of railway between both countries will certainly have a vital influence 
 on the realization of these expectations, whether the stimulus of such favorable legislative measures should be 
 counted upon or not. But to the end of inaugurating a vast and profitable commerce between Mexico and the 
 South-western States, it is not necessary to wait for the slow appearance of the locomotive in the Central States of 
 Mexico, nor to follow the uncertain course of legislation, for the road to the treasures of Mexico is open to the 
 merchants of New Orleans, and I cannot but wonder that that road has remained, up to the present time, com- 
 pletely deserted." 
 
 837. The Hon. John W. Foster set forth this same thing in his speech, delivered before the New Orleans 
 Chamber of Commerce, November i8th, 1875, in the following terms: 
 
 * * * " It is a fact, notwithstanding that Mexico can produce, in unlimited quantities, and of the best 
 quahty, three articles for which the United States annually sends abroad more than $150,000,000 ; those articles 
 are sugar, coflfee, and tropical fruits. 
 
 " I have paused a little to speak of the agricultural products of Mexico, for two reasons. The first is that 
 the said articles are those we most need in the United States in exchange for our products and manufactures ; 
 the second is, that in my judgment the first necessity of Mexico is to develop her unlimited agricultural elements, 
 which are the principal source of wealth, prosperity and peace. But however extensive my observations might 
 be on the material elements of Mexico, they would appear incomplete if I should say nothing about her mining 
 ent-erprises. 
 
 " What Mexico needs to obtain from abroad to-day is capital and enterprise. With the guarantees it gives 
 of peace, and with the protection it assures to property, it is offering opportunities which capitahsts and men of 
 industry ought not to lose. But I will say, in parenthesis, it does not need miserable adventurers seeking 
 their fortunes, and at this moment it offers few attractions for workingmen, that is to say, for those who are 
 simply laborers, and for men who have no money." 
 
 838. It is thought proper to set forth, lastly, the conceptions of Dr. Seager, as contained in the preface to his 
 treatise already quoted, " The Wealth of Mexico besides the Precious Metals," because in them he points out 
 that ^ it belongs to the North Americans to co-operate in the development of the elements of wealth of 
 Mexico. 
 
 836. 
 
 Note of Mr. Nelson to Mr. Oglesby on the interest of promoting the commerce of the United States with Mexico. 
 
 ■ I-f CirTilViTn OTirl Q+i r»n r\r\ 'rVxa oamrx cri-i\\A n n-t- "V^-,^ 4-1 TT T_t -x-r-r -wrt • ■■ . - _ _ 
 
 ^ « f.^^.^^^^^^^ ^,^^ ^yjmi±x-oi.yjTz, Kji uuo u iiiucu aiittiua Willi jyj 
 
 837, -Recommendation on the same subject by the Hon. John W. Poster in his lecture delivered at New Orleans 
 
 838. 
 
 J J — „„„. „„iiu ■■ . iuoici 111 iiiB leuuure ueiiverea at i>iew urieans. 
 
 Preface of Dr. Seager's pamphlet that the United States ought to co-operate for the development of our wealth. 
 
161 
 
 " Preface. — Railways will change the commercial and financial condition of Mexico, By facilitating the 
 transportation and export of its products a great impulse will be given to the development of its true wealth. The 
 day is drawing nigh when the gold and the immense agricultural capacity of California will be considered, in com- 
 parison, like a zero to the left. Into this path would I put Mexico. I acquired, at the side of one of the most 
 successful financiers of modern times, some notions regarding the laws that rule the secret springs of production, 
 and I cannot resist the desire to impart them in behalf of a country in which I have passed many happy years. 
 From some Europeans to whom I have communicated this thought I have heard objections on ephemeral and 
 local difficulties of the country. 
 
 " I admit them all. But to a race which finds a pleasure in danger and a stimulus in difficulty, which place a 
 dozen men in the wilds and after half a century they are converted into a mighty and flourishing empire, these 
 difficulties are mere straws in its pathway. If there is a country in the world in which the applications of modern 
 economic science can be successfully put in practice, and in which, by the fertility of its soil, by the excellence of 
 its climate, arvd its pecuhar geographical situation, the great and prohfic measures I propose can be quickly car- 
 ried forward, that country is undoubtedly Mexico.'' 
 
 D. The Government of the United States has done exceedingly little to increase the Commerce with Mexico. 
 
 839. As if what has been said thus far were not enough to demonstrate that the Government of the United 
 States has done exceedingly little to increase the commerce with Mexico, and that the slight increase which this 
 commerce has recently shown is due to the isolated efforts of the Mexican Government, there are irrefutable 
 testimonies which put these facts beyond all doubt. • 
 
 a. Testimony of Hon. Thomas H. Nelson. 
 
 840. With reference to this subject, the Hon. Thomas H. Nelson said, in his communication addressed from 
 Terre Haute, Indiana, December 31st, '1872, to Mr. J. H. Oglesby, already mentioned, as follows: 
 
 " Mexico has done all she can on her part. In the years elapsed since the fall of her ephemeral empire she 
 has increased the production of her Gulf States. * * « And, above all, she has finished the con- 
 struction of the railroad most important for the interests of her maritime commerce. Before the first of January 
 next trains will have passed from the capital of Mexico to its most important seaport. Besides, Mexico is dis- 
 posed to grant, if she has not already done it, a liberal subsidy to a hne of steamers from New Orleans to Vera 
 Cruz. She has contributed already to the estabHshment of a line of coasting steamers, the owners of which 
 reside in New York, and which will commence its voyages to all the Mexican ports of the Gulf in November or 
 December of the present year. The importance of this line as an auxiliary to that of New Orleans cannot but be 
 recognized. 
 
 b. Testimony of Hon. John W. Foster. 
 
 841. The Hon. John W. Foster, Envoy Extraordinary and Minister Plenipotentiary of the United States to 
 Mexico, expressed himself on this subject, in the speech he delivered before the Chamber of Commerce of New 
 Orleans, November i8th, 1875, in the following terms: 
 
 " What I have said is, perhaps, enough on this point, and sufficient to convince you that our Government 
 has done little or nothing to the end of securing us the trade of Mexico; I have also shown that the Government 
 of that country, although its treasury is exhausted by a revolution that has lasted more than half a century; 
 although striving with difficulties that poverty entails, and although borne down with a considerable debt, national 
 as well as foreign, is the only one which positively upholds commerce between the two countries. 
 
 " Third. The third reason why our trade with Mexico is so insignificant is, that very few efforts have 
 
 been made by mercantile societies and by individuals to estabhsh it. 
 
 "It should be borne in mind that the favorable action of the Government can only facihtate the success of 
 individual efforts. It does not belong to the Government to undertake mercantile business. This must be done 
 by American merchants and capitalists ; they it is who must take possession of the commerce of the neighboring 
 nation if we are ever to enjoy its benefits; but very Uttle has been undertaken towards such an end, and on this 
 point Hamburg gives lessons in Mexico and South America, to New Orleans and New York, which these cities 
 might take advantage of. 
 
 "I think I have said enough on this want of enterprise and of effort to- convince you that we can do more 
 
 839 Mexico exclusively has made efforts to increase the traffic between both nations. 
 
 840 Testimony of Hon. Thomas H. Nelson, that Mexico has made efforts to augment rhe commerce with the United 
 
 States. 
 
 841. Testimony of the Hon. John W. Foster, that the United States has not corresponded to those efforts. 
 
 ill. 
 
162 
 
 than we have done to the end of securing for ourselves the commerce of Spanish America, and enough to confirm 
 the recent assertion of one of our principal industrial dailies, that the Americans are surprisingly negligent in cul- 
 tivating foreign commerce, while the European nations are active and enterprising." 
 
 c. Message of the President of the United States, R. B. Hayes, of December iTth, 1878. 
 
 842. As if the formal and explicit declarations of the two last Representatives of the United States in 
 Mexico, to which we have ahready alluded, were not enough to demonstrate that the United States Government 
 has done very little to promote trade between the two nations, we have yet the more decisive testimony of the 
 present United States Secretary of State, which demonstrates that the Government of the neighboring nation has 
 not up to the present time taken the necessary measures to enlarge its commerce with the nations of this conti- 
 nent, and recognizes that the European commercial powers have used, with great sagacity, the means necessary 
 to attain this result, which they have done very successfully. 
 
 843. It is proper here to set forth that important document, because it comes to prove conclusively the truth 
 of the preceding observations, and to indicate at .the same time some of the measures that should be adopted to 
 secure the growth of commerce between the two countries. 
 
 844. In consequence of a proposition approved by the United States Senate, December 5th, 1878, in which 
 the President was asked for information received by any of the Departments of the Executive, respecting com- 
 mercial relations between the United States and South American nations, as well as for any suggestions he might 
 think proper to submit, for the purpose of facilitating and enlarging said relations, the President remitted to the 
 Senate, December 17th of the same year, a message accompanying a report from the Secretary of State, of the 
 same date, of which documents mention has already been made in another part of this exposition (paragraph 71) 
 (4Sth Congress, Third Term of Sessions of the Senate, Executive Document number 17). 
 
 845. The Message of the President of the United States says, translated, as follows : 
 " To the Senate of the United States : 
 
 "In reply to the proposition of the Senate, dated the 5th instant, in which it asks ' that the reports may be 
 transmitted to it which have been received in the departments on the postal and commercial relations between 
 the United States and the countries of South America, as well as the recommendation touching measures that 
 may be judged opportune to adopt to facilitate and improve said relations,' I transmit, in continuation, the report 
 of the Secretary of State and of the Postmaster-General, with the documents annexed. 
 
 "The exterior commerce ofthe United States has been for many years an object of disquietude on account 
 of the exportation it has caused of precious metals. During the twenty years anterior to 1877 the remittance of 
 gold abroad was constant and heavy — so heavy during the suspension of specie payments that it was calculated 
 sufficient to destroy the hope of resuming them while it continued. Vigorous efforts, however, were made in 1876, 
 and have continued to be made since, by enterprising citizens of this country, to develop our general trade with 
 foreign countries, especially in manufactures, and these efforts have been crowned with the best success. The 
 importation of manufactured goods has been reduced, at the same time, in equal proportion ; and the result has 
 been that the present situation forms a veritable contrast to that which prevailed for so long a time, and that the 
 exportation of gold has ceased completely. The official notices of the amount of foreign commerce demonstrates 
 the unexampled magnitude the movement has reached, and the protection it affords to public interests in 
 moments when commercial security has become indispensable. The means which have produced this change 
 must be sustained and invigorated, if it is desired to assure the future. If excessive importations should occur, 
 or there should be a considerable reduction in export trade, it would be possible that the old situation of adverse 
 commercial differences might also return, with the inevitable exportation of gold as a necessary consequence 
 Every element should be taken advantage of that will impel the introduction of our products and manufactures 
 into new markets. Many of the products of the United States are now so well appreciated that they obtain a 
 lucrative distribution, in spite of the positive differences of cost resulting from our defective system of shipment, 
 and of the complete imperfection' of our arrangements for directing trade with foreign markets, compared to those 
 of our competitors. 
 
 " We ought to have no competition anywhere when we have equal commercial facilities. The laws are 
 directed now to recovering financial equality with other nations, and the basis of value in coined money has been 
 
 843. The United States Secretary of State shows tiiat liis Government has done little to promote trade. 
 
 843. Reasons for setting forth the Report of the United States Secretary of State. 
 
 844. Message of the President of the United States to the Senate, on commercial relations with South America. 
 
 845. Text of the United States President's message addressed to the Senate the 17th of December, 1878. 
 
163 
 
 ordered to be resumed. It is of the greatest importance that the commercial condition which we have happily 
 reached should be permanent, and that our rapidly increasing export trade should not suffer any falling off from 
 the lack of means of communication with other countries. The adjoined reports contain an instructive and 
 important summary of data on our commercial relations in South America, where a propitious field is presented 
 for the enterprising character of our people. They are transmitted with the assurance that whatever measures 
 may be dictated for the promotion of these important interests will meet with my cordial approbation. 
 
 "Executive Mansion, December 17th, 1878. R. B. Hayes." 
 
 846. Although there is nothing in the preceding Message directly relating to the commerce of the United 
 States with Mexico, for, as was indicated in another place in this exposition (paragraph 71), there is no mention 
 even made of this country, it contains important considerations respecting the exterior trade of the United States, 
 which, from being of a general character, apply also to Mexico. Besides it shows in a succinct manner the course 
 that has been pursued for twenty years back in the exterior commerce of the United States, and what are its 
 present tendencies, wherefore it has appeared proper to set it forth in this exposition, upon treating of trade be- 
 tween Mexico and the United States, and also for the better appreciation of the conceptions on the same subject 
 contained in the Report of the Secretary of State, William M. Evarts, which will be spoken of in continuation. 
 
 d. Testimony of the Hon. William M. Evarts, United States Secretary of State. 
 
 847. The Report of the Hon. William M. Evarts, United States Secretary of State, addressed to the Presi- 
 dent, December 17th, 1878, says, translated, as follows: 
 
 '■'^ To the President : 
 
 " The Secretary of State, to whom was sent the proposition of the Senate of the sth instant, asking the 
 President to transmit to the Senate ' the reports which have been received in the Departments regarding the 
 commercial and postal relations between the United States and the South American countries, as well as the 
 recommendation which might be esteemed adapted to improve the trade,' has the honor to present to the Presi- 
 dent copies of communications from the diplomatic agents of the United States, accredited to the South Ameri- 
 can Governments, and which refer to the subject mentioned in the proposition; he presents also, as bearing upon 
 the subject indicated, copies of a Report and its accompanying documents presented to this Department by Mr. 
 J. W. Fralick, on his return from a long journey through the principal States of South America; all of which 
 documents are specified in the subjoined list. 
 
 " Respecting the petition of the Senate, that measures might be recommended to it that might be judged 
 adapted to facilitate and improve the postal and commercial relations, the Secretary of State, without entering 
 into an extensive examination of the most important and interesting points suggested by the documents trans- 
 mitted, would respectfully call attention to certain manifest conclusions, which all these reports tend to establish. 
 
 " I. It appears altogether evident that having provided, with the help of Government, the establishment of a 
 regulated system of postal communication by steamer, has been the precursor of the commercial ascendancy of 
 Great Britain in the great markets of Central and South America, as well on the coasts of the Pacific as on those 
 of the Atlantic. It is no less potent that the efforts of other European nations, as Germany, France and Italy, 
 to participate in this lucrative trade, have been successful in proportion as they have adopted a regular system of 
 postal communication by steamer with the divers markets whose trade they are seeking. 
 
 " II. These documents demonstrate also that the spirit of enterprise and sagacity which the European nations 
 have shown in this, have practically changed to their favor the advantage which our geographical situation gives 
 us respecting the extensive commerce of the American hemisphere. Our commercial correspondence with the 
 points of trade on the coasts of the east and of the west, crosses the Atlantic twice to estabUsh a postal tie in a 
 circuit of trade, whose beginning and whose end is forced on our own continent. The statistics of our limited 
 trade because of this extraordinary disadvantage, demonstrates that the growing preference which our products 
 have in those markets of South America has to be satisfied, even supporting the costs of a circuit of importation 
 which carries our goods to Europe, and incorporates them as a contingent in sweUing the volume and profits of 
 Europen commerce with South America. A more energetic demonstration cannot be conceived of the tendency 
 of commerce to follow the route of postal communication than this vast and expensive circuit of importation to 
 which it recurs for the want of direct communication between the consuming and supplying countries. 
 
 " III. It would appear to be deduced from these reports that the merchants, the people in general, no less 
 than the governments of those countries, ardently desire the enlargement of direct trade with the United States. 
 Notwithstanding all the advantages which the European arrangements now sustaining it afford to foreign com- 
 
 846 Eeasons for which it was considered opportune to copy the precedent message. 
 
 847 Text of the report of the Secretary of the United States, addressed to the President the 17th of December, 1878. 
 
164 
 
 merce, it is understood in those markets that this forced round-about, which, with the resources of the United 
 States, could very well be substituted by a direct trade, has to be paid for by the part subject to this system and 
 to the benefit of the part directing and administrating it. There is everywhere shown a great desire to increase 
 trade with the United States, and even the treasures of the poorest of these governments are disposed to contrib- 
 ute to the expenses of a system of postal communication by steamer, of whose importance to promote the develop- 
 ment of foreign commerce their own experience furnishes them incontestable proofs. 
 
 " IV. While many measures less immediate and less simple, about which it may not be easy to obtam a 
 conformity of opinion, ought to be examined with more attention by our people— anxious now for a restoration 
 and increase of foreign commerce— it does not appear that there is any reason to doubt the propriety of this 
 simple and first step relative to a system of postal communication by steamer direct, frequent and regular, 
 between.the United States and the principal commercial ports of Central and South America. 
 
 " If this is so, interest and duty call upon our Government to promote, by all just and proper means, the 
 attainment of this first and primal agent for the desired growth of our foreign commerce. It is difficult to com- 
 prehend to what degree this beginning and development of an oceanic postal system, the precursor of a hoped- 
 for traffic, may be confided entirely to the sole interests of commercial combinations. 
 
 "The Governments of the foreign countries with whom this commerce ought to be opened are disposed to 
 take their part with us in the expense of such postal communication; and the participation or non-participation 
 of the United States in this expense appears to be the objective point in accepting or not the reciprocal trade 
 which is now being proposed to us. 
 
 "Department of State, Washington, December 17th, 1878. " W. M. Evarts." 
 
 848. In the preceding report the United States Secretary of State recognizes that the estabhshment of a 
 regulated system of postal communication by steamer between Great Britain and the markets of Central and 
 South America has been the precursor of the commercial ascendency of that nation ; that this course has been 
 followed with equal success by Germany, France and Italy ; that the sagacity and spirit of enterprise of the 
 European commercial nations have diverted to their favor the advantages held by the United States from their 
 geographical position in the American hemisphere ; and, finally, that it is indispensable that the United States 
 should adopt similar measures in order to obtain an increase of their trade with Central and South Amenca. 
 This demonstrates clearly that the United States Secretary of State recognizes that the United States has not 
 done even what the European nations have, to establish their trade with the American continent. Although 
 neither does the report of the Secretary of State speak of Mexico, its observations are applicable to it even more 
 than to other nations because of its vicinity to the United States. 
 
 D. Reciprocity Treaty Between Mexico and the United States. 
 
 849. It appears beyond all doubt that one of the most efficacious methods of giving a great impulse to 
 commerce between Mexico and the United States would be the celebration of a reciprocity treaty upon bases 
 equitable and equally favorable to the interests of the two Repubhcs. 
 
 850. The importance of this subject demands that it should be considered in all its phases ; therefore, the 
 following points relating to it will be spoken of here : 
 
 a. The Ocampo-MacLane proposed treaty, signed at Vera Cruz December 14th, 1859. 
 
 b. Suggestions on a reciprocity treaty made by the Hon. Thomas H. Nelson in December, 1872. 
 
 c. Conduct of the Mexican Government in respect to a reciprocity treaty between the United States and the 
 Sandwich Islands of January 13th, 1875. 
 
 d. Opinion of the Executive on the reciprocity treaty expressed before the Chamber of Deputies in session 
 October 31st, 1878. 
 
 e. Advantages of the reciprocity treaty. 
 
 f Difficulties to the celebration of a reciprocity treaty with the United States. 
 
 g. Basis for the celebration of a reciprocity treaty between Mexico and the United States. 
 
 h. Contraband trade carried on in Mexico. 
 
 a. The Ocampo-MacLane Proposed Treaty, Signed at Vera Cruz, December 14M, 1859. 
 
 851. The first essay towards a reciprocity treaty between Mexico and the United States was the Ocampo- 
 
 848. Relation between the observations of the United States Secretary of State and the commerce of that country 
 with Mexico. 
 
 849. Propriety of a reciprocity treaty to give an impnlse to trade between Mexico and the United States. 
 
 850. Points considered in this exposition relating to a reciprocity treaty. 
 
 851. The Ocampo-Mac Lane treaty of December 14th, 1859, and its disadvantageous conditions for Hexico. 
 
165 
 
 MacLane treaty, signed at Vera Cruz, December 14th, 1859. It cannot be denied that one of the reasons why 
 there has been created in Mexico a certain prejudice against a reciprocity treaty with the United States has 
 been the highly disadvantageous conditions for Mexico contained in that projected treaty. 
 
 852. The object of tliat treaty was to grant to the United States and their citizens and properties, in perpe- 
 tuity, the right of way through the Isthmus of Tehuantepec, accepting the guarantee of the United States for the 
 neutrality of the way, and authorizing the passage by the same way of United States troops and munitions. The 
 same right of way and passage of United States troops and munitions was granted from the city of Guaymas, on 
 the Gulf of California, to the ranch of Nogales or other convenient point on the boundary line between Mexico 
 and the United States, near the iiith degree of longitude West from Greenwich, and also the right of transit 
 across Mexican territory from the cities of Camargo and Matamoros, or from some other convenient point on the 
 Rio Grande, in the State of Tamaulipas, by the way of Monterey to the port of Mazatlan, at the entrance to the 
 Gulf of Cahfornia, in the State of Sinaloa, and from the ranch of Nogales or other convenient point on the fron- 
 tier between the two countries, near the iiith parallel of longitude west from Greenwich, by the way of Magda- 
 lena and Hermosillo to the city of Guaymas, on the Gulf of Cahfornia, in the State of Sonora. 
 
 853. Article 8th of the treaty stipulated that the Mexican Government was disposed to receive, free of duty, 
 or at low duties, goods that were enumerated in the continuation of said Article, and that on this basis it was 
 agreed that the Congress of the United States should designate, among them, the natural, industrial or manufac- 
 tured products of each of the two Republics which should be admitted for sale and consumption in each of the 
 two countries, under the conditions of a perfect reciprocity, either free of duty or else paying the quotas affixed 
 to them by the Congress of the United States. 
 
 854. The goods referred to in Article 8th were 41, of which some were of Mexican production, such as rice, 
 raw hides, horns, chile, bridle-bits, rough lumber and firewood, dyewood, marble in therough, riding saddles, palm- 
 leaf hats and raw-sheep pelts ; all the rest were products of the United States, and some of them of great con- 
 sumption in Mexico, such as Unens and all kinds of cotton textures, with the exception only of unbleached cotton 
 cloth. 
 
 855- III exchange for these most advantageous concessions made to the United States, their Government 
 compromised itself to pay Mexico the sum of $4,000,000 immediately after the ratification of the treaty, of which 
 $2,000,000 the United States Government would retain to pay the claims of their citizens against Mexico, for 
 damages suffered, and which should prove just according to the law of nations and the principles of equity. 
 
 856. The disadvantageous nature of these conditions of commercial reciprocity for Mexico will be under- 
 stood at once, to say nothing of the other points of agreement in that project, inasmuch as, besides that the larger 
 part of the merchandise comprised in the list annexed to Article 8th are of North American production, and 
 those of Mexican production are of very Httle importance, it was left to the Congress of the United States, with- 
 out any intervention of the Mexican Government, to determine which of those goods should be received by 
 each of the contracting parties free of duty, or with a considerable abatement of import duties. 
 
 857. The celebration of the Ocampo-MacLane treaty, which threatened to give a death blow to English 
 commerce in Mexico, caused, as was natural, great alarm in England, as was shown accordingly by the British 
 press in the course of the year i860, and perhaps this was one of the motives that gave rise to the sad European 
 intervention, in which England took a part which occasioned so many evils to Mexico, and one of the objects of 
 which was, without doubt, to prevent the commercial preponderance which the said treaty gave to the United 
 States in Mexico. 
 
 858. Fortunately for the two contracting nations, this treaty was not approved by the United States Senate, 
 and did not come to take the character of an international covenant ; but its stipulations were considered to be 
 so onerous and prejudicial for Mexico, that they have always been looked upon ia this country with the most 
 complete repugnance, and this has given ground for a general behef here that the United States will not celebrate 
 reciprocity treaties with us, except upon bases similar to those of the Ocampo-MacLane treaty. 
 
 859. The difference must not be lost sight of in the circumstances which now exist in Mexico, compared to 
 
 852. Concessions made by Mexico to the United States by the Ocampo-Mac Lane treaty. 
 
 853. Commercial stipulations contained in Article 8th of the Ocampo-Mac Lane tieaty. 
 
 854. List of the articles of commerce referred to in Article 8th of the Ocampo-Mac Lane treaty. 
 
 855. Retribution of $4,000,000 ofiered Mexico by the United States Government in the same treaty. 
 
 856. Disadvantages to Mexico of the reciprocity established in Article 8th of the treaty. 
 
 857. The Ocampo-Mac Lane treaty contributed to the European intervention in Mexico in 1861. 
 
 858. The Ocampo-Mac Lane treaty was not approved by the Senate of the United States. 
 
 859. Difference of present circumstances in Mexico from those which existed on celebrating the Ooampo-Mac Lane 
 treaty. 
 
166 
 
 those which existed when the constitutional government was in Vera Cruz in 1859, in order to comprehend that 
 the covenants which Mexico would now enter into with the United States would contain stipulations very differ- 
 ent from those comprised in the Ocampo-MacLane treaty. 
 
 b. Suggestions af Hon. Thomas H. Nelson, in December, 1872. 
 
 860. Since 1869 there has been no recurrence to propose or to initiate the celebration of any reciprocal 
 treaty, excepting the suggestion of the Hon. Thomas H. Nelson, former Envoy Extraordinary and Minister Pleni- 
 potentiary of the United States in Mexico, contained in his communication addressed to Mr. J. H. Oglesby, dated 
 at Terre Haute, Indiana, December 13th, 1872, which was shortly spoken of (paragraph 836) and which was in- 
 serted among the diplomatic documents annexed to the Message of the President of the United States, of Decem- 
 ber ist, 1873 (P^gc 65°)- 
 
 861. The importance of that communication makes it proper to insert here a translation of that part of it 
 whichrelates to this subject : 
 
 " When these ties of union have been established, the mercantile relations between the United States and 
 Mexico will rapidly attain enormous proportions. It appears that every country has been created to be the 
 natural provider and the natural market for the other. Each one abounds, by reason of its difference of soil and 
 of climate, precisely in those products which are most necessary to the other. Whilst in the United States the 
 surface that can be devoted successfully to articles of universal consumption, such as cotton, sugar, rice and to- 
 bacco, is necessarily limited, and, regarding the three last, is hardly sufficient to satisfy a small part of the con- 
 sumption of the country, the capacity of Mexico for the production of these four important articles is practically 
 unUmited. Respecting the fountains from which we supply ourselves with these articles, one consideration pre- 
 sents itself, which, in my judgment, ought to have great weight with our Government, in conceding to Mexico the 
 preference over Cuba, Puerto Rico, or Brazil, which at present enjoy the lucrative monopoly of these great 
 articles of commerce. Since the moral sentiment of our country, aided by the irresistible logic of events, pro- 
 nounced its fiat of reprobation upon the slavery of man, the United States ought to be considered, as a nation, 
 essentially anti-slavery, and in spite of former prejudices, no section of the country has now any interest in 
 defending the memory of this extinguished abuse. It is now time, that, having washed our hands of such a stain, 
 by the events of a period to the details of which I do not need to refer, we should use now the right of openly 
 expressing our opinion about slavery in other countries where it exists under forms so repugnant that they would 
 almost justify by contrast the more benignant system which we succeeded in extirpating at the cost of so much 
 blood and money. We, to-day, have the right, and many would perhaps contend that it is a national duty, to 
 distinguish, in our tariff legislation, between the products of the freeman and the slave, and so just a difference 
 would undoubtedly redound in an especial manner to the advantage of Mexico. But such legislation is not justi- 
 fied and recommended solely from a philanthropical point of view, it is equally to be desired in view of the 
 
 Monroe doctrine. 
 
 ******* ** 
 
 " I doubt not, in case of the friendly legislation to which I have before referred being adopted by the United 
 States, that Mexico would have sufficient gratitude towards her best friend and nearest neighbor, to do m return, 
 in fact if not in name, somewhat that would have the appearance of a treaty of reciprocity, and which would 
 redound to the benefit of both countries." 
 
 862. It is clear that if the suggestion of Mr. Nelson had been accepted by the neighboring nation the fruits 
 produced in Mexico would be able to compete with those of Cuba and Brazil. But it does not appear that these 
 ideas have been well received in the United States, or, at least, it is a fact that up to the present time no effort 
 has been made to put them in practice. 
 
 c. Conduct of the Mexican Government respecting the reciprocity treaty between the United States and the 
 
 Sandwich Islands, of January i-^th, 1875. 
 
 863. The Government of Mexico has, on the contrary, been studying, on its part, some way of celebrating a 
 treaty with the United States which should be mutually advantageous to the two countries and give as a result 
 the growth of commerce between them both. Whenit learned of the reciprocity treaty entered into by the 
 
 860. Suggestions of Hon. Thomas H. Nelson on the principles of a reciprocity treaty with Mexico. 
 
 861. Text translated of the said suggestions of the Hon. Thomas H. Nelson. 
 
 862. The suggestions of Hon. Thomas H. Nelson have had no result up to now. 
 
 863. The Mexican Government has studied the manner in which a commercial treaty might be celebrated with the 
 United States. 
 
167 
 
 United States Government with the King of the Sandwich Islands, it endeavored to study the propriety of getting 
 the stipulations of the said treaty extended to Mexico. 
 
 864. It is in place to relate here briefly what passed in regard to the said treaty, because of the importance 
 which attaches to that incident in reference to the celebration of a reciprocity treaty between Mexico and the 
 United States. 
 
 865. On January 13th, 1875, there was signed at Washington a commercial reciprocity between the Govern- 
 ment of the United States and the King of the Sandwich Islands, by virtue of which each one of the contracting 
 parties agreed to receive free of all duty certain articles of the other's production. As may easily be supposed, that 
 treaty, celebrated by the United States with a nation that hardly counts 60,000 inhabitants, was highly to the ad- 
 vantage of the Government at Washington, inasmuch as the only effective concession made to the Hawaian Gov- 
 ernment was the importation, free of duty, of their sugars, in exchange for which that Government was obliged to 
 receive also, free of duty, various commercial articles of North American production and some consumption in the 
 Hawaian Islands. 
 
 866. In spite of the fact that this treaty can hardly be called one of reciprocity, because it granted to the 
 United States much larger advantages than to the Hawaian Islands, it has contributed greatly to develop the 
 sugar production of those islands. 
 
 867. In January, 1877, it appeared to the Secretary of Foreign Affairs that the stipulations of that treaty 
 might be extended to Mexico by virtue of the provisions of Art. 2d of the " Treaty of Friendship, Commerce 
 and Navigation," of April 5th, 183 1, celebrated between Mexico and the United States, which mutually obliges 
 the contracting parties not to grant any special favor to any other nation respecting commerce and navigation 
 without its coming immediately common to the other party, which it should enjoy freely if the concession was 
 made freely, or under the same conditions if the concession was made conditional. 
 
 868. On the 1 8th of January, 1877, the Secretary of Foreign Relations addressed a communication to the 
 Secretary of the Treasury calling his attention to this subject, and proposing to him to decide with the chief of the 
 Executive power, if it was convenient to the interests of Mexico, to require of the United States that the advan- 
 tages granted to the Sandwich Islands by the agreement of January 13th, 1875, should be under the conditions 
 therein expressed extended to this Republic. Through the Secretary of the Treasury a commission was named 
 the 9th of February following, composed of seventeen of the most prominent persons of this capital, both Mexi- 
 cans and foreigners, there being among them agriculturists, bankers, importers, etc., for the purpose of examining 
 if it was convenient to the interests to solicit of the United States the extension to Mexico of the provisions of 
 the said agreement. 
 
 869. In a lucid and weU founded report, dated March loth, 1877, the said Commission demonstrated that 
 the reciprocity treaty celebrated with the Sandwich Islands, being highly advantageous to the United States, 
 
 •it would be very inconvenient to the interests of Mexico to require its stipulations to be extended to this 
 country. 
 
 870. The report of the Commission was published in the Diario Oficial ol April 21st, 1877, and its foun- 
 dations were so conclusive that, far from any doubt being raised against the deliberated resolution, public opinion 
 received it as favorable to the interests of the country, and it was even wondered that there had been any delib- 
 eration on a subject that appeared so clear. 
 
 871. It cannot be doubted that this incident has also caused a certain prejudice against a reciprocity treaty 
 with the United States, because it has induced the beUef that the neighboring nation will not celebrate treaties of 
 commercial reciprocity, save only on bases as advantageous for it as are those of the treaty of January 13th, r875, 
 celebrated \vith the Government of the Sandwich Islands. 
 
 864. Opportunity of relating what occurred in Mexico respecting the treaty of the United States with the Sandwich 
 Islands. 
 
 865. Mutual advantages of the treaty celebrated between the United States and the Sandwich Islands, January 13th. 
 
 1875. 
 
 866. Considerable development of the sugar production of the Sandwich Islands by virtue of that treaty. 
 
 867. The Mexican Secretary of Foreign Relations judged that the treaty with the Sandwich Islands might be extended 
 
 to Mexico. 
 
 868. Communication from the Secretary of Foreign Relations to the Secretary of the Treasury, and nomination of a 
 commission to study this matter. 
 
 869. Tl)e commission demonstrated _that it was not convenient that the treaty with the Sandwich Islands should be 
 
 extended to Mexico. 
 
 870. Eublication of the Report of the mentioned commission, and the impression it caused in Mexico 
 
 871. Prejudice in Mexico respecting the difficulty of a treaty with the United States of genuine reciprocity. 
 
168 
 
 d. Opinions of the Executive upon a Reciprocity Treaty, expressed before the Chambr of Deputies in the session 
 
 of October 31^^, 1878. 
 
 872. On a recent occasion, upon discussing in the Chamber of Deputies of the present General Congress, 
 the proposed law on the exemption of foreign printing paper from all duty, the Secretary of the Treasury, in his 
 verbal report, already cited, rendered October 31st, 1878, expressed the ideas of the Executive on the celebration 
 of a reciprocity treaty with the United States in the following terms : 
 
 " But, gentlemen, there is still another consideration against the opinion, which appears to me of more 
 weight than all those set forth up to this time, and which I believe some one of the speakers opposing' the opinion 
 has already touched upon, although, from not having had the pleasure of hearing it, I do not know precisely in 
 what terms he presented it ; I believe I can set it forth under another aspect as less important. 
 
 " One of the Deputies, and author of the idea comprised in the opinion, and who has defended it most 
 warmly, related to us the prodigious progress the system of free trade, as he called it, has occasioned in France, 
 in being carried on with Great Britain. These results are truly wonderful, for they have increased in an incredi- 
 ble way the exportation of French articles to the United Kingdom of Great Britain; but they are due to a re- 
 ciprocity treaty celebrated between both powers, by virtue of which each one agreed to receive into his territory, 
 free of duty, or with a quota relatively low, articles produced or manufactured by the other, on condition that the 
 other should receive on the same terms articles produced by it. 
 
 " The United States had formerly celebrated with England a similar treaty regarding their commerce with 
 Canada, and since they have concluded another with the Sandwich Islands, and both have produced a very con- 
 siderable increase of mercantile operations, increasing the respective exportations in a fabulous manner. This 
 second treaty has given a great impulse to production in the Sandwich Islands. 
 
 "But in these cases the increase of trade and of exportation has not been due to freedom from duty on a 
 single article, granted unconditionally as the opinion now proposes ; but to concessions made in favor of certain 
 foreign articles, in virtue of other equivalent concessions obtained in exchange, and which come to be an effec- 
 tive and important premium in favor of those articles themselves. 
 
 " I am of the opinion that one of the most certain methods of re-animating production in our country, and of 
 increasing its commerce and wealth, would be to celebrate reciprocity treaties with foreign nations with whom 
 we have mercantile relations, upon the basis of the treaty between France and England. It would not be possible 
 to clebrate these treaties with France and Great Britain, the Republic having now no official relations with those 
 powers; but they could be concluded with Germany, for example, and with the United States, which, besides 
 being an important mercantile nation, has the circumstance of being our neighbor." 
 
 873. The complement of the ideas of the Executive on the reciprocity treaty with the United States is set 
 forth in that part of the report of the Secretary of the Treasury referring to the production and exportation of 
 sugar in Mexico, which fragment has already been inserted in its proper place, (paragraph 819). 
 
 e. Advantage of a Reciprocity Treaty. 
 
 874. The results which, up to the present time, treaties of commercial reciprocity have produced, celebrated 
 between foreign nations, are truly notable. Even though the commerce of Mexico mth the United States may not 
 be in the same conditions in which the commerce of the United States has been with Canada, or the commerce 
 of England and France, to hope that a treaty of reciprocity would produce amongst us the same results which it 
 has produced in those nations, the truly prodigious results should not be lost sight of which have been obtained 
 by virtue of those treaties. 
 
 875. By virtue of the Cobden-Chevalier treaty, signed in i860 betweei) England and France, there was 
 established by each one of the contracting parties a special tariff for certain articles of the other's production. 
 Where the importation of any articles was being prohibited it was permitted with the payment of duties, and 
 where the importation was being permitted, the amount of duty was reduced, without granting absolute freedom 
 for anything but books. 
 
 876. By virtue of that treaty the commerce between France and Great Britain, which, in the year 1859, the 
 
 873. Observations of the Secretary of the Treasury on the convenience of a reciprocity treaty with the United 
 States. 
 
 873. Allusion to that treaty on speaking in the Report of the production and exportation of sugar in Mexico. 
 
 874. Importance of the results produced to nations by treatise of commercial reciprocity. 
 
 875. Conditions of the reciprocity treaty celebrated in 1860 between Great Britain and France. 
 
 876. Increase of trade between France and Great Britain in consequence of the treaty, and the celebration of other 
 treaties. 
 
169 
 
 last before the treaty, was $163,000,000, rose in that from 1877 to 1878 to $320,000,000, of which nearly $200,- 
 000,000 represented articles of EngUsh manufacture, while similar articles, exported from the United States to 
 France in the same year, hardly came to $2,000,000. Such a prodigious result, without depriving the contracting 
 nations of the duties of importation on the articles comprised in the treaty, inasmuch, as has already been 
 expressed, a reduction only was made on those duties, has decided almost all the commercial nations in Europe 
 to celebrate similar treaties, and among them negotiations have been made with France, Belgmm, Italy, Sweden 
 and Norway, the Netherlands, Turkey and Germany. 
 
 877. These astonishing results have greatly called the attention of the United States, and the North American 
 Commission, at the last Universal Exposition in Paris, made a special study of this subject, concluding by propos- 
 ing to their government the celebration of a reciprocity treaty with France. On the 30th of November, 1878, 
 one of the members of that Commission, Mr. James Hodges, delivered a discourse in Baltimore, which contains 
 many very important data on this subject, and in which he proposed the basis of a reciprocity treaty which, in 
 his opinion, would be proper for the United States to celebrate with the French Government. 
 
 f. Difficulties to the Celebration of a Reciprocity Treaty with the United States. 
 
 878. The idea of a reciprocity treaty between Mexico and the United States has been received with marked 
 caution by some persons in Mexico. The principal reasons there have be^n for this have been already expressed : 
 that is, the sad recollections left by the Ocampo-MacLane treaty, and even by the agreement celebrated by the 
 United States with the Government of the Sandwich Islands, January 13th, 1875. 
 
 879. There are, besides, other motives on the part of other persons, to look with jealousy upon the celebra- 
 tion of a reciprocity treaty with the United States. These motives are principally two : First, the fear that the 
 increase of commerce with the United States might diminish somewhat the commerce that Mexico now has with 
 European nations, for this commerce has already great interests created in this country, and they cannot but look 
 with jealousy on any measure which appears in any way to reduce it; and, second, the fear that the United States, 
 availing themselves of their power, might try to extort great mercantile advantages in their favor, without conced- 
 ing to Mexico the corresponding compensation in benefit of her interests. 
 
 880. These fears are, in the conception of the Mexican Government, unfounded, for, on the one hand, it 
 believes that the development cf commerce with the United States, by virtue of a proper reciprocal treaty between 
 both countries, would not diminish the commerce Mexico now has with European nations, and, on the other hand, 
 it does not consider there would be in this country an administration that would sacrifice the interests of the 
 nation by celebrating with the United States a treaty that should have no more reciprocity than the name, even 
 in the case that the Government at Washington might try to obtain such a result. 
 
 g. Basis for the Celebration of a Reciprocity Treaty between Mexico and the United States. 
 
 881. In the judgment of the Executive there are certain bases the Republic might a^opt to celebrate a 
 reciprocity treaty with the United States, that might be truly advantageous to the interests of both countries, and 
 which would not encounter any well founded objection, even on the part of persons most prejudiced on this 
 subject. 
 
 882. One of these bases, which are mentioned here in the beHef that in so doing the study of this grave 
 subject can be facilitated, would be to select a certain limited number of articles produced in each one of the 
 contracting countries, which have some consumption in the other, and free them from duty, or reduce consider- 
 ably that which they now pay, whenever, taking into account the amount of duty paid on the said effects, for the 
 five years previous it should appear that what the United States would cease to pay to Mexico in duties of impor- 
 tation, by virtue of said treaty, would be a sum equivalent to what Mexico would cease to pay to the United 
 States for the importation of such of her products as were comprised in the treaty. It does not seem that this 
 basis could be seriously objected to, because it would start at the outset upon the strictest reciprocity. 
 
 883. Certain it is that a treaty of this nature, once celebrated, the importation of articles declared free of 
 duty or the duties on which were reduced considerably, would increase extraordinarily, so that the proceeds from 
 
 877 Pioposition made to the United States by their commission at the Paris Exposition for a treaty with France. 
 
 878 Reasons for which some in Mexico look with suspicion on the celebration of a reciprocity treaty with the United 
 
 States. 
 
 • 879. Other motives in Mexico for looking askance at a reciprocity. 
 
 880. Reasons for which the Mexican Government judges those fears unfounded. 
 
 881. Bases for the celebration of a convenient reciprocity treaty with the Uhited States. 
 
 882. Basis which the Mexican Executive believes ought to be accepted for the celebration of a reciprocity treaty. 
 
 883 With such a treaty the production of articles of exportation, and the importation of foreign goods would in- 
 
 crease. 
 
 22 
 
170 
 
 them that would have accrued for the preceding five years, at the same rates of duty, would come to be insignifi- 
 cant compared with what they would produce under such a reciprocity treaty. But one of the results of reci- 
 procity being precisely the large increase in the importation of certain articles, and the consequent proportionate 
 exportation of certain national products, that result, far from being looked upon with distrust, ought to be for- 
 warded, for the consequence would be the considerable increase of the importation to Mexico of certain manu- 
 factures of the United States, which are neither manufactured here nor produce much revenue to the Treasury, 
 and the consequent increase in the production of certain national articles, needed to pay the value of the North 
 American goods imported, all of which increase of importation and exportation would grow up under the shade 
 of a reciprocity treaty. 
 
 884. In this case the reciprocity would come to be equivalent to a premium granted by the Mexican Gov- 
 ernment, in favor of the exportation of certain national products, equal to the amount of the import duties Mexico 
 should cease to receive in consequence of the same treaty. The question being examined under this aspect, it 
 would always result in a positive benefit to Mexico in the increase of its exportation, even at the cost of the 
 premium ; and the importance of this benefit increases very considerably if there is taken into account, that the 
 treaty being once made, the sum represented by the impojrt duties, which, by virtue of the reciprocity, Mexico 
 ceased to realize, equivalent to a premium on the export of its products, would be larger, as was larger the 
 increase of the importation of North American goods paying no duty, by which the impulse given to our export- 
 ation would be much greater than that which would be^ received under the establishment of a system of pre- 
 miums, and all this without Mexico's sacrificing more than the amount of duties being received on celebrating 
 the treaty. 
 
 885. On the other hand, as treaties of reciprocity are entered into for a relatively hmited time, there would 
 be, at the expiration of the treaty, already some other article of importation that would jdeld a duty to the federal 
 revenue, unless the goods results produced by the treaty should determine both contracting parties to prolong its 
 term or extend its stipulations to other kinds of merchandise. 
 
 886. It would be notoriously indefensible, and would be open to great danger for Mexico, to include in the 
 Ust of articles free of duty those which form the basis of its import duty, such as ordinary cotton goods and the 
 texture of linen and of wool, for it is certain that if these articles could come from the United States free of duty, 
 European importation could not compete with that from the United States, and the practical result would be that 
 the United States would come to substitute the European nations in Mexico in the sale of the said articles ; that 
 the import duties of Mexico would be reduced one-half their total amount, and that the national industry would 
 be ruined, not being able to compete with the United States in the production of ordinary cotton fabrics. The 
 advantage which might result to Mexico under the treaty, by the exportation, free of duty, of some of its products 
 would not compensate for that heavy loss, which, besides completely unbalancing its public revenue, would destroy 
 its national industry. But there are, however, many other articles that are not in this case, the consumption of 
 which is relatively limited at present, and which, considerably increased by virtue of a reciprocity treaty, would 
 neither injure national industry nor the federal revenue. Among these are, for example, petroleum and some 
 other North American products which neither national or European production comes in competition with. 
 
 887. There are cases, besides, in which the convenience of a reciprocity treaty is so clear that no doubt even 
 can be thrown upon it. One of these cases, which has been alluded to already, is that which was presented on 
 discussion in the General Congress, the proposed law on the freedom of duty on importation of foreign printing 
 paper. It is clear that if it had been suitable to the interests of the country to exempt from aU duty, or to reduce 
 considerably the duty on foreign printing paper, it would have been preferable to grant the exemption or reduction 
 of duties in favor of a determined commercial nation producing paper in exchange for some advantage obtained 
 in favor of Mexico, than to make an absolute concession, from which Mexico would reap no advantage in its 
 exterior commerce. 
 
 i. Contraband Trade Carried on in Mexico. 
 
 888. It has been intentionally omitted to speak of the commerce between Mexico and the United States 
 which is carried on clandestinely, as well through the frontier of the neighboring nation as through the ports of 
 
 884. The import duties which Mexico would cease to receive would be compensated for by the increase of its expor- 
 tation. 
 
 885. At the expiration of the term of the treaty this could be coaHnned or modified. 
 
 886. In forming the list of free articles the interests of the revenue and of national industry will be borne in mind. 
 
 887. The exemption of import duties ought to be granted by Mexico, without a due reciprocity. 
 
 888. During a recent epoch illegal traffic in Mexico proceeding from the United States has increhied extraordinarily. 
 
171 
 
 the Gulf and of the Pacific, because it has not been intended to give to this exposition the character of a complaint, 
 nor cause to appear in it any accusation ; but it is a fact which, unfortunately, is beyond any doubt, and the 
 consequences of which have been greatly felt by the Mexican Government, that the illegal traffic in goods 
 proceeding from the United States has increased extraordinarily in these last few years. 
 
 889. The contraband trade proceeding from the United States has been, since the beginning of this century, 
 a motive of disagreements between both countries. In the year 1800 a North American, named Phillip NoUand, 
 at the head of various others, entered into the interior provinces of the east with prohibited goods ; being attacked 
 by the troops of the Viceroy, he was killed in the affray. The result of this expedition did not prevent various 
 other individuals from attempting, with more or less success, the introduction of contraband goods. New Orleans 
 came to be the centre from whence sallied expeditions for Tampico and Boquilla de Piedras ; afterwards the 
 town of Independence was the starting point of caravans, which traversed the plains and carried goods to Santa 
 Fe, and sometimes to Chihuahua, defrauding generally the custom-house duties. But the greatest development 
 of contraband dates only from 1848, and traces its origin to Article XIX. of the treaty of peace of Guadalupe 
 Hidalgo, of February 2d of that year, which gave certain advantageous conditions of goods introduced during flie 
 war with the United States. Brownsville and the villages on the left of the Bravo were turned into centres of 
 contrabandists, who have been since then exercising a fatal influence on the frontier. 
 
 890. Perhaps it would be possible, in making a commercial arrangement with the neighboring nation, to de- 
 cide upon certain bases, to the object that each one of the contracting parties should be protected from any 
 illegal traffic attempted to be carried on on the part of the territory or citizens of the other, by means of issuing 
 of certain documents by the custom-house employees of both countries or by other convenient preventive. This 
 would be another of the results which might be obtained from the celebration of a commercial treaty between 
 Mexico and the United States. 
 
 13. SUMMARY OF FACTS RELATING TO MEXICAN LAWS IN REFERENCE TO FOREIGN COMMERCE. 
 
 891. From the preceding account the following facts appear to be demonstrated in reference to the exterior 
 commerce of Mexico, and principally to that part of it connected with the United Statesof America : 
 
 ist. That although the tariff in force in Mexico of February ist, 1872, imposes generally high quotas on 
 foreign goods imported into the Republic, it contains at the same time favorable provisions for exterior commerce, 
 and which include liberal reforms over previous Mexican tariffs. 
 
 2d. That the tariff in force, of February 2d, 1872, does not prohibit the exportation of any foreign merchan- 
 dise into Mexico in contradistinction to the determinations of preceding tariffs. 
 
 3d. That the tariff in force has a list which contains 75 kinds of merchandise the importation of which into 
 Mexico in free of all duty, even municipal. 
 
 4th. That in the list of merchandise free of duty, there is included all kinds of machinery for mining and for 
 agriculture, and other effects of North American production, the consumption of which in Mexico can increase to 
 a considerable degree, and is, therefore, of large future. 
 
 Sth. That in view of clearness, simplicity and simplifying of quotas and of custom-house restrictions, 
 the tariff in force of February 2d, 1872, comprehends, also, notable advantages over preceding Mexican 
 tariffs. 
 
 sth That for the object of avoiding disturbances and consequent damages to the revenue and legitimate 
 commerce the system was followed in the tariff in force of imposing import duties by fixed quotas, not recur- 
 ring to apppraisement or invoice value, except in a few cases, when it was not easy to impose a determined 
 quota. 
 
 7th That the unifying of all the duties which were formerly collected in the Mexican custom-houses at 
 different rates for the importation of foreign goods .is another advantage of the tariff in force over preceding 
 ones. 
 
 889 Contraband proceeding from the United States commenced since 1800, and became regular in 1848. 
 
 890 Probability and mode of avoiding contraband by establishing certain bases in a commercial treaty. 
 
 891 Summary of facts relating to Mexican laws in reference to commerce between Mexico and the United States. 
 
172 
 
 8th. That in the tariff in force and subsequent provisions authorization has been given in the most liberal 
 manner to port any transient trade by foreign vessels in Mexican ports, which was equally prohibited in preced- 
 ing tariffs. 
 
 9th. That the tariff in force authorized also transient trade through Mexican territory, which was also abso- 
 lutely prohibited in preceding tariffs. 
 
 loth. That the tariff in force and subsequent dispositions have authorized, with very few exceptions, the 
 coastwise trade carried on in Mexican ports by foreign vessels, which was also imperatively forbidden in former 
 tariffs. 
 
 I ith. That the tariff in force opened with the greatest liberality the Mexican coast to export commerce 
 by foreign vessels, which can load at any point of its shores, even when it is not constituted for exterior com- 
 merce. 
 
 12 th. That the Report fell into various mistakes in the list which it inserted of articles produced in the 
 United States, with the quotas of importation imposed upon them by the Mexican tariff. 
 
 13th. That in all these mistakes the special circumstance is noticeable that the quotas of the tariff in force 
 have been raised in every case, without the appearance of a single one in which the mistake has been on the 
 side of making the quota less. 
 
 14th. That the reason why the import duties established by the Mexican tariff are relatively high, is the 
 necessity of obtaining resources for the Federal revenue, and the propriety of favoring the development. of some 
 industries established in Mexico. 
 
 15th. That the tariff of the United States in force imposes also very high duties on certain foreign goods, 
 for reasons similar to those which Mexico has had for doing the same thing. 
 
 1 6th. That in spite of the high duties imposed by the Mexican tariff, there are many articles of commerce 
 burdened with higher import duties in the United States tariff than in the Mexican tariff. 
 
 17 th. That the tariff of the United States burdens with duties so high that they may be considered prohib- 
 itive, certain articles of Mexican production, such as sugar, brandy and tobacco, which, without this restriction, 
 could be imported to the United States with some profit to Mexico. 
 
 1 8th. That the importation of machinery to Mexico, free of duty, for agriculture and mining, is of much 
 more importance than is given to it in the Report, and has a future than can increase considerably the commerce 
 between the two countries. 
 
 19th. That although there is not at the present time imported to Mexico all the machinery needed for the 
 development of its elements of wealth, the use of machinery is much greater than what the Report recognizes, for 
 there are many enterprises using the most modem, complicated and costly machines. 
 
 20th. That there is inexactitude, therefore, in the Report in asserting that the instrument of agriculture 
 that was used on the plains of Asia three thousand years ago is that which predominates in the coimtry 
 now. 
 
 2 1 St. That although there are no ports of deposit in Mexico, the lack of them is not among the causes that 
 have contributed to impede the development of its exterior commerce. 
 
 2 2d. That ports of deposit have been established in Mexico at other times, and they have not given the re- 
 sult of increasing considerably exterior commerce. 
 
 23d. That the pecuUar circumstances of Mexico do not permit the possibility of immediately establishing 
 ports of deposit, and that it is therefore necessary to defer their establishment till a later period. 
 
 24th. That in the former tariffs, up to the present one, terms more or less long were granted for the pay- 
 ment of import duties, which is one of the principal advantages of ports of deposit, and that this systemgave such 
 bad results that it was necessary to modify it entirelysince the year i860. 
 
173 
 
 2Sth. That although some States should collect municipal and local duties on foreign goods, the collection of 
 these duties would be illegal, if they have not been imposed with the previous consent of the General Congress, 
 according to Fraction ist of Article 112 of the Feberal Constitution of Mexico. 
 
 26th. That only in two cases, respecting the Federal District and the State of Sinaloa, has the General Con- 
 gress given its consent to impose those duties. 
 
 27 th. That for the collection of municipal and local duties made by the States and municipalities, without the 
 consent of the General Congress, the importer can have recourse to the "judgment of relief" established by Articles 
 10 1 and 102 of the Mexican Constitution. 
 
 28th. That almost in every case where the importers have applied to the Supreme Court of Justice of Mex- 
 ico, instituting a suit of relief, this has been granted by that tribunal. 
 
 29th. That the notices of expenses caused by the transportation of North American goods to the City of 
 Mexico, set forth in the Report, contain various inaccuracies, which increase somewhat the expenses in fact. 
 
 30th. That the two notices expressed, referring to the importation of ham and cut nails, happen to refer to 
 articles of commerce that are greatly burdened by the Mexican tariff, and they cannot therefore serve as a basis 
 to judge of the cost of other kinds of merchandise which do not bear such high duties. 
 
 31st. That the basis on which to judge whether or not it is lucrative to import certain articles into a coun- 
 try is, rather than to confine one's self to the expense which such importation occasions, to examme into the price 
 which that merchandise commands in the country in which it is intended to increase the demand there may be 
 for it. 
 
 3 2d. That Mexico could also present a list of articles of Mexican production which it is impossible to im- 
 port to the United States, by reason of the heavy duties they pay according to the tariffs in force in that coun- 
 try. 
 
 33d. That at the conclusion of the railroad from Mexico to Vera Cruz it was thought to qualify this capital 
 for direct import trade, for the despatching of goods arriving in that port ; but that idea was obliged to be given 
 up, not for fear of the resistance it met with in Vera Cruz, but for grave and weighty considerations that militated 
 against it. 
 
 34th. That it is not accurate that the invoice and manifest of foreign goods has to be prepared in twenty- 
 four hours. 
 
 3Sth. That the tariff in force grants twenty-four hours, recounded from the time the vessel arrives for the 
 consignees to present to the custom-house the rectification of their invoices, with the object of removing the errors 
 which these may contain. 
 
 36th. That for the despatch of goods and payment of duties merchants in general are granted twenty-five days, 
 and those of the port of Vera Cruz have much longer grace, extending sometimes to several months. 
 
 37th. That the duty on consumption that foreign goods pay in the City of Mexico comprehends only such 
 effects as come to be consumed at this capital, and represents now 2 per cent, on the import duty, which sum is 
 a reduction to a minimum quota, inasmuch as up to August 12th, 1875, it had been 6 per cent. 
 
 38th. That the collection of this duty amounts to a guarantee against fraud, which is as favorable to the in- 
 terests of the revenue as to those of legitimate commerce. 
 
 3Qth. That in consequence of the railway from the capital to Vera Cruz the merchants of both places have 
 such great advantages over rnerchants estabhshed in other ports of Mexico, that they have in fact monopolized 
 in a great part the commerce that was formerly done in the other ports. 
 
 40th. That the slight expenses which the merchants of Mexico and Vera Cruz have to sustain in railroad 
 freights etc. for the transportation of their goods from the port to this capital, are insignificant in comparison to 
 those the merchants of other ports have to disburse, and they are more than compensated by the advantages which 
 the use of the railroad gives them. 
 
174 
 
 4ist. That the iron pier constructed in Vera Cruz by the Mexican Railway Company, Limited, was not 
 made, as the Report asserts, in order that the despatch of foreign goods might be verified in this capital, but in 
 order to reduce the cost of exporting national products. 
 
 42 d. That the reason of the said wharf not having been opened to commerce was, that it did not have the 
 necessary conditions to facilitate the intervention of the fiscal agents in the operations of exportation and im- 
 portation. 
 
 43 d. That even though there may have existed hostility on the part of some inhabitants of Vera Cruz against 
 the use of the iron pier, that has not been the determining cause for its disuse up to the present time. 
 
 44th. That even though the high rate of exchange in Mexico respecting foteign goods may really constitute 
 a difficulty to the growth of exterior commerce, this difficulty can easily be gotteti over by promoting the produc- 
 tion of other exportable articles, and the price of which has not suffered the depreciation that has lately attached 
 to silver. 
 
 4Sth. That it is also a difficulty to the development of commerce between Mexico and the United States, 
 the circumstance that European merchants grant long terms for the payment of goods, while North American 
 merchants require their pay in cash. 
 
 46th. That this difficulty does not spring in any way from Mexican legislation, nor from any determination 
 of the Mexican Government, and that it ought to be overcome by the spirit of enterprise of United States mer- 
 chants. 
 
 47 th. That the difficulties of transferring coin from one point to another of the Mexican nation are not as 
 grave as the Report presents them, and that the regulations which have been issued from time to time for this 
 object has satisfied this necessity and the exigencies of commerce. 
 
 48th. That even though at first sight the opinion of the Report may seem to be well founded, that Mexico 
 ought to protect the exportation of silver and tropical productions, and not try to estabhsh manufacturing indus- 
 try by protective duties, this industry exists already, and represents values of consideration which would be lost 
 if protection should be withdrawn. 
 
 49th. That the average of commerce between Mexico and the United States, from 1826 to 1858, has been 
 $7,241,902 per annum, of which $3,916,625 represents the value of Mexican effects exported to the United States, 
 and $3,325,377 that of United States merchandise imported to Mexico. 
 
 50th. That the commerce between Mexico and the United States has suffered in a great degree from the 
 political relations between the two countries, having fallen off very considerably in consequence of the war be- 
 tween the two RepubHcs of 1846 and 1847. 
 
 51st. That since 1858 the commerce of Mexico with France and Germany has grown in greater proportion 
 than with the United States. 
 
 5 2d. That the amount of the commerce of Mexico with the United States hardly represents now 25 per 
 cent, of the total exterior commerce of the RepubHc. 
 
 53d. That the amount of the exterior commerce of Mexico is at present about $28,000,000 of importation, 
 and as much more of exportation. 
 
 54th. That the little development there has been in the commerce between Mexico and the United States 
 since 1867, is owing principally to the efforts of the Mexican Government, the government of the United States 
 having done very little to increase that commerce. 
 
 55th. That one of the most efficacious measures to increase the commerce between Mexico and the United 
 States has been the establishment of lines of steamers between ports of the two RepubUcs, subsidized by the 
 Mexican Government. 
 
 56th. That the New York steamers brought to Vera Cruz, in the fiscal year of 1872-3, 46,045 packages of 
 
175 
 
 North American goods, and the number of packages in the year of 1877-8 was 72,140; that in the year of 1874-5 
 the same steamers brought to Campeche 2,305 packages, and in the year of 1877-8 the number of packages was 
 13,262; and that in the year of 1872-3 the total number of packages imported from New York to Mexican ports 
 was 59,501, and in that of 1877-8, no, 161 packages. 
 
 57th. That with the object of promoting commerce with the United States, the Mexican Government has 
 abated considerably the import duties on some North American goods, such as tobacco, called " Virginia,'' which 
 was paying $1 25 per kilogramme net, and the quota on which was lowered by the decree of June 12th, 1878, to 
 16 cents per kilogramme net, and such as cotton and linen pocket-handkerchiefs, the duties on which was regu- 
 lated and lowered by the decree of June 30th, 1878. 
 
 58th. That from the annual reports on the state of commerce remitted by United States Consuls in Mexico 
 to the Department of State at Washington, and which are pujlished with the Annual Report which the United 
 States Government presents to Congress, it appears that commerce between the two Republics is growing pro- 
 gressively, although not in the proportions to be desired. 
 
 59th. That there are various ways to give an impulse to commerce between Mexico and the United States, 
 to the end that it may acquire a great development, and that the basis of this ought to be the exportation of 
 Mexican products. 
 
 60th. That in order to considerably increase the exportation of Mexican products it is necessary to increase 
 the production "of exportable articles, such as coffee, sugar and other tropical fruits. 
 
 6ist. That the mineral production can be increased without great effort from about $25,000,000, its present 
 amount, to $100,000,000 or $150,000,000 per annum, for in the United States the State of Nevada alone has 
 produced some years more than $100,000,000. 
 
 62d. That coffee can easily yield $50,000,000 per annum, and sugar as much more, which articles will find 
 a good market in the United States. 
 
 63d. That the exportation of Mexico, being increased from about $28,000,000, its present amount, to $200,- 
 000,000, the consumption of foreign goods would increase in the same proportion, and if United States capital 
 and spirit of enterprise should contribute to such increase of production, American manufactures would be 
 favored with an increase of consumption in Mexico, and commerce between Mexico and the United States, would 
 be increased from about $7,000,000, its present amount, to $150,000,000 or $180,000,000 per annum. 
 
 64th. That the United States Government has formally recognized, in official documents presented to the 
 Senate on December 17th, 1878, that the United States has done extremely little to increase their commerce 
 with the nations of the American Continent, and that the European commercial nations have succeeded, through 
 their foresight and the means they have availed themselves of to establish their commerce in America, in 
 depriving the United States of the advantages which their geographical situation on this Continent give them. 
 
 65th. That one of the most efficacious modes of giving a great impulse to commerce between Mexico and 
 the United States is the celebration of a reciprocity treaty between the two nations, upon bases equitable and 
 equally advantageous for both Republics. 
 
 66th. That even though a reciprocity treaty may be looked upon in Mexico on the part of many with 
 marked suspicion, springing from the fear that the United States, taking advantage of their power, might pretend 
 to obtain from Mexico a treaty similar to that signed at Vera Cruz December 14th, 1859, there is no fear that 
 this will operate to impede the celebration of a treaty, because the reasons militating in favor of it are so 
 clear and of such notorious public convenience that they cannot be objected to on any good foundation. 
 
 67th. That the Mexican Government has been studying for some time the idea of celebrating a treaty of 
 reciprocity with the United States, wherefore, on receiving notice of the treaty celebrated between the 
 United States aud the Sandwich Islands, January 13th, 1875, it examined whether it would be convenient to 
 accept its stipulations; and in a verbal report rendered by the Secretary of the Treasury to the House of Depu- 
 ties in the session of October 31st, 1878, before having any notice of the conceptions of the Report, the ideas of 
 the Executive were manifested favorable to the treaty of reciprocity with the United States. 
 
176 
 
 68th. That it is equally to be hoped that on the celebration of a commercial treaty between Mexico and the 
 United States some provisions might be agreed upon which should have for their object to prevent, inas- 
 much as depends upon both governments, the contraband which is being carried on from one to the other 
 RepubUc. 
 
 II. MINING IN MEXICO. 
 
 892. After speaking of the tariff and Mexican laws in reference to exterior commerce, the Report occupies 
 itself with the question of mining, and the duties and expenses that weigh upon it, and emits some concep- 
 tions very fitting, and therefore worthy to be repeated ; but unfortunately it falls into some mistakes which it is 
 necessary to rectify, and which assuredly proceed from the fact that in making the study of this subject data were 
 not to be had as complete and accurate as those existing in this Department, and which have served in -writing this 
 exposition and other previous labors in reference also to mining. 
 
 893. The mining question is, in fact, one of the most arduous and important that can be presented for the 
 consideration of Mexican statesmen. The extraordinary <mineral wealth of this country causes it to be consid- 
 ered as essentially a mining country, and all its great advantages for agriculture and even for the carrying trade 
 to be echpsed and even forgotten in the consideration of its great mining resources. When the extraordinary, 
 prosperity is taken into account which the State of California and some others in the western part of the North 
 American Union have acquired in drawing out of the bowels of the earth a small portion of its precious metals, it 
 will be comprehended to what point it might rise in Mexico, so favored by nature with rich and abundant mines, 
 if for the opening up of this wealth the necessary capital could be disposed of here, and how great would be the 
 prosperity of this country if the opening up here were possible in the same proportions that it has been done in 
 California, in Nevada and in some other States of the American Union. Baron Von Humboldt announced that 
 when the American mines should be worked on a large scale there would be a considerable depreciation in the 
 value of silver, and this indicates the great idea he had of thejvealth in the mines of Mexico. 
 
 894. Neither the provisions of the Mexican laws on mining would, however, be understood, nor the difficul- 
 ties there are to modifying them in a radical and suitable manner, if a slight exposition on this subject were not 
 made. In order to speak methodically on this important matter, the following points relating to minmg in Mex- 
 ico will be considered separately : 
 
 1. Conceptions of the Report on mining in Mexico. 
 
 2. Slight sketch of mining industry in Mexico. 
 
 3. Necessity of granting privileges to mining. 
 
 4. Efforts of the Executive to liberate mining from the burdens it now bears. 
 
 5. Rectification of some inaccuracies contained in the Report concerning mining in Mexico. 
 
 6. Summary of facts relating to the development of mining in Mexico. 
 
 I. CONCEPTIONS OF THE REPORT ON MINING IN MEXICO. 
 
 895. The Report states that according to the testimony of practical and exjperienced North American min- 
 ing engineers it can be assured that this country would afford to American capitalists a rich and fruitful field for 
 the employment of their capital in gold and silver mines, if the two essential conditions 'of expense and protection 
 could be found favorable ; it declares that the subject of protection will be considered in another part of the 
 Report, and that the mining business of Mexico, in which American capital might be invested, and the imposts 
 to which it is subject, was considered at length in a speech delivered by the Hon. John W. Foster before the New 
 Orleans Chamber of Commerce in 1875, and that the conditions of business in regard to mining not having 
 changed since then, it prefers to mention what was said on that occasion. 
 
 896. It states, in continuation, with reference to the speech named, that the principal spring of Mexican 
 wealth hes in its mines, above all in those apparently inexhaustible ones of silver ; that these are found across the 
 whole extent of the Republic, and that their richness has been known by the whole world for more than three 
 centuries. 
 
 892. The mining question in Mexico. Conceptions of the Report on mining which it is proper to rectify. 
 
 893. 
 
 894 
 
 Mexico is considered as essentially a mining couniry by reason of the great abundance of its precious metals. 
 Points in reference to provisions on mining, and the difficulties to a radical modification of them. 
 Opinion of the Report respecting the difficulties to the investment of capital in mining enterprises In Mexico. 
 Silver mines considered as the principal source of the wealth of Mexico. 
 
177 
 
 897- It calls to notice that in the year from 1876 to 1877 exportation decreased to $28,700,000, that that 
 of gold and silver was about $23,000,000, and that the total exportation of all kinds of articles during the year 
 last past was $3 1,600,000, of which sum $25,052,909 were of gold and silver. It declares, also, that the condition 
 of mining does not now present a flourishing aspect, although the results of the labor in some localities are very 
 satisfactory and productive ; it states that the modern methods and advancements made in mining have not, in 
 Mexico, generally been put in practice as in the United States, and that, in consequence, disadvantages have to 
 be contended against here respecting the amount of the metals taken out, and the profits obtained in the working 
 of the mines. It opines that the principal impediment to the development of this industry are the heavy imposts 
 on its products that have been established both by the federal and the State Governments, and the consequent 
 expense of exporting silver coin or bars. It states that in 1868 the duties and expenses disbursed in the trans- 
 portation of silver sent from the City of Mexico, or rather from Real del Monte, to the Bank of England, amounted 
 to 25 per cent., of which sum more than 20 per cent, belonged to federal and local duties; that this was so 
 manifestly oppressive that a commission was named by the Government for the purpose of investigating this 
 subject, and that the commission proposed, as the only method of raising this industry to the degree of prosperity 
 it is susceptible of, the absolute exemption of all duty on gold and silver ; but that, unfortunately, this recom- 
 mendation has been only in part put in practice. 
 
 898. It adds that after a close examination of the conditions of mining industry, and of the restrictions and 
 taxes that weigh upon the exportation of silver, it finds that the placing of silver in the Bank of England or in 
 New York costs, 3^ per cent, when it proceeds from Real del Monte, and when it is remitted from Guanajuato, 
 or other places of the interior, from 14 to 15 J per cent.; that of this sum about 10^ to 12 per cent, belongs to 
 local and federal duties. It declares, also, that the necessities of the national Treasury have been the motive for 
 the imposition of these heavy duties, inasmuch as its funds have been reduced to a deplorable condition during 
 so many years of civil discords, and that mining being one of the principal springs of wealth, and the branch most 
 apropos for the imposition of duties, it has been made to contribute considerably to public expenses, to sustain 
 the constitutional governments as well as the revolutionary ones ; but that, with the re-establishment of peace and 
 of a stable government, intelligent public men recognize the errors that has been committed in imposing taxes on 
 the existence of this important branch of the industry of the country, and that as prosperity develops the abiUty 
 to facilitate resources by other means, it is more than probable that these burdens upon mining will be consider- 
 ably diminished. 
 
 899. The relative part of the speech delivered in New Orleans being thus concluded, the Report expresses 
 that it is to be regretted that the hopes then expressed in respect to the relief of this important industry have not 
 been realized up to the present time; that the revolution of 1876 dissipated the hopes of an era of peace, over- 
 turned the government, and it has not been possible, on account of the condition of the Mexican funds, to modify 
 or abolish the export duties on silver. 
 
 900. The Report presents afterwards a specified notice of the expense attaching to the sending of silver from 
 Real del Monte to the Bank of England, which expense amounts to 13 J per cent., in the following form : 
 
 "I insert m continuation the tariff of imposts on silver (formed in 1875), which imposts have not experienced 
 
 any change. 
 
 " Statement of expenses whfch have to be disbursed in the exportation of silver extracted from mines near the 
 
 Citv of Mexico (we will suppose Real del Monte), from the mine to the Bank of England : 
 
 Per Cent. 
 
 Freight from the mine to the mint in Mexico, including escort o 75 
 
 Expenses of coinage of bars in dollars, etc., which must be paid whether the bars are coined 
 
 or not, (4.41 per cent.) 4 5° 
 
 Tax on assay, municipal duties, loss on silver in miscoinage, etc i 00 
 
 Expenses of commission in Mexico o 25 
 
 Boxes, packing and minor expenses, including stamps o 12^ 
 
 Freight from Mexico to aboard the steamer o 50 
 
 Export duties 5 °° 
 
 Carried forward 12 i2| 
 
 897 Exportation according to the Report in the year from 1876 to 1877. Present state of mining and partial suppres- 
 
 ^'°°898^**Pr^^t cost of placing silver in England, and probability that these burdens will be diminished. 
 
 899! The modification or abolition of daty on silver was impeded by the revolution of 1876. 
 
 900 Statement of expenses occasioned by the remittance of silver from the mines of Mexico to the Bank of Eng- 
 land. 
 
 23 
 
178 
 
 Brought forward 12 12^ 
 
 Freight by steamer to London ■ ■ ■ • ° 5° 
 
 Insurance from Mexico to London ° ^^i 
 
 Expenses of commission in London, ^ to i per cent o 25 
 
 Minimum expense of bars exported from this district 13 5° 
 
 To this should be added other expenses on bars brought from the interior, to wit : Duty on 
 circulation imposed in certain States, being in some ij per cent., and in others i^ per 
 cent., but J to i per cent, on the average freight expenses 2 00 
 
 Average of expenses disbursed in conveying bars from the interior 15 50 
 
 " The preceding showing does not include the local imposts on the mines and smelting 
 houses." 
 
 901. The Report closes that part of it in reference to mining, by bringing to mmd the losses the Mexican 
 miner suffers in extracting the percentage of gold in their silver, in these terms : 
 
 " The separation of the silver and gold from the bars \!ifiich contain both metals is subject to enormous im- 
 posts if the said separation is made in the Mexican mints. As this expense varies according to the percentage 
 of the gold, it is impossible to calculate the exact loss the Mexican miner has to suffer, but the loss is great. If 
 the separation is made abroad the miner loses the expenses of remittance, insurance, etc., and at least three 
 months' interest. 
 
 " In the Mexican mints they only separate the gold when the marks (8 ounces) of silver contain sixteen 
 grains of that metal. In England it is separated from four grains upwards. 
 
 " Some Mexican mints have none of the means necessary to separate the gold from the silver. Consequently 
 they coin dollars which contain gold. The dollars of Guadalajara and Durango have about 2 per cent, more than 
 those of Mexico and Guanajuata, and for this cause they are better for exporting. Those of Oaxaca have 4 per 
 cent, above value.'' 
 
 Expenses on silver $15 5° 
 
 As the greater part of Mexican silver contains gold, for the reasons above stated, the loss on 
 
 the total production of precious metals ought to be estimated at least at 3 00 
 
 Loss on production calculated between duties collected and heavy expenses of coinage, etc., 
 
 without taking into account local imposts 18 50 
 
 902. To conclude the part referring to mining, the Report makes allusion to the imposts which the State of 
 Hidalgo collects on mining, which will be spoken of in its proper place. 
 
 903. It is noticeable, the great difference there is between the conceptions expressed by the United States 
 Representative in 1875 and in 1878. It is true, that in the course of those three years there have occurred disagree- 
 able events and incidents which may cause the firmest spirit to hesitate ; it is true, also, that this difference of opinion 
 is explained in the first part of this Report, in which he sets forth that the ideas formed by its author, during the 
 first years of his residence in Mexico, have suffered an unfavorable change, by reason of the experience he has 
 acquired in this country; this change appears very palpable in comparing what was expressed in 1875 with what 
 is said in the Report ; but it is to be supposed that the very desire to see his flattering hopes promptly realized, 
 and the disappointment occasioned by seeing the realization of those hopes deferred, may have produced that 
 change, which, Hke all extraordinary excitement, is subject to a reaction. 
 
 2. SLIGHT SKETCH OF MINING INDUSTRY IN MEXICO. 
 
 904. In order to give, in a hasty manner, a slight idea of the course mining has followed in Mexico, it is 
 proper to consider with due separateness the following points : 
 
 A. Production of mines in Mexico, and incumbrances -to mining during the colonial regimen. 
 
 B. Privileges granted to mining at the consummation of independence. 
 
 C. Growth of mining by virtue of privileges granted at the consummatio.i of independence. 
 
 D. State of mining during the years from 1821 to 1830, according to the Records of Foreign Relations. 
 
 E. New incumbrances imposed on mining by the Mexican Governments. 
 
 F. Privileges proposed and granted to mining since 1868. 
 
 901. Loss sufEered by the Mexican miner in duties, expenses and bad assaying. 
 
 U02. The Report concludes the part relative to mining in spealcing of the imposts it pays in the State of Hidalgo. 
 
 903. Difference noticeable between the conceptions expressed by the Hon. John W. Foster in 1875 and in 1878. 
 
 904 Subject which will be considered in order to give an idea of the course mining has pursued. 
 
179 
 
 A. Production of Mines in Mexico and Incumbrances suffered by Mining during the Colonial Regimen. 
 
 905. There are no exact data of the total production of precious metals in Mexico during the Colonial 
 regime, nor even of the amount of those metals that was carried out of New Spain while it remained a Spanish 
 colony. 
 
 906. The only datum that may serve to estimate the total production of silver in Mexico is the coinage 
 made in the various mints estabhshed in New Spain. Gathering together all the data that have been obtainable 
 on this point, and principally those inserted in the Records of Pubhc Works of Sr. Siliceo of September i6th, 
 1857, there was set forth in the Records of the Treasury of September i6th, 1870, (paragraph 3594, page 968,) a 
 notice of the coinage done in the mint of Mexico from 1537 to 1870. 
 
 907. In that notice is comprised the total product of each mint, from the time of its estabhshment up to 
 1857, and the coinage done in subsequent years up to 1870 is added. It cannot be deduced, then^ from the 
 mentioned notice, what the coinage was in Mexico up to the year 1821, in which independence was consum- 
 mated; and, although this datum might be obtained by making a study of the details of the notice which served 
 to form that set forth in the Records of the Treasury of September i6th, 1870, it is not considered necessary at 
 present to undertake that labor, which, besides requiring some time, would enlarge the dimensions of this exposi- 
 tion. 
 
 908. Taking, then, only the data of the notice of coinage set forth in the Records of the Treasury of Sep- 
 tember i6th, 1870, it appears that the total coinage of silver, made from 1537 to 1857, in all the mints there 
 have been in Mexico, was $2,534,115,682 31J 
 
 The comage of gold during the same period was 96,892,542 56J 
 
 That of copper was 5,737j73° A^-k 
 
 And the total coinage during the expressed period $2)636,745,955 34^ 
 
 The average of the coinage during the 321 years elapsed between 1537 and 1857, comes to be, then, $8,214,- 
 161 85, respecting the three metals, and respecting silver alone, $7,894,441 38. 
 
 909. The production of silver in Mexico undoubtedly exceeds the amount of that metal coined in the mints, 
 because no insignificant part of the silver was exported in bars, or in objects of art, such as plate and others, and 
 another part, also considerable, was devoted to the manufacturing of adornments for churches and for use in the 
 houses of the well-to-do families. It can be considered, without the least exaggeration, that the total amount of 
 silver produced represents 15 or 20 per cent, more than was coined. 
 
 910. Acccording to the data set forth in his writings on mining in New Spain, by Sr. Elhuyar, a practical 
 and judicious man, the usual production of silver at the middle of the seventeenth century was estimated at half a 
 million of "marks," or $4,000,000, calculating the "marks" at $8, for in the year 1630 the "marks'' of silver 
 coined amounted to 601,065. From that year the extraction of silver commenced to decline, and in 1700 the 
 coinage did not exceed 397,543 "marks." The duties then collected on mining were 20 per cent, government 
 tax, i4 per cent, for assaying, casting and marking, and those of the Crown and coinage, in making into money, 
 without mentioning others of less importance; these three imposts together amounted to 26 per cent., and the 
 high rate of these duties caused the products of mining to go on progressively diminishing, and to the degree that 
 the mines became more difficult to work, from their extent and depth. This fact being recognized by the Spanish 
 Government, it abated partially and temporarily those duties in some localities; but, further, in 1 671, the one- 
 fifth duty was lowered to one-tenth throughout the Viceroyalty of New Spain. 
 
 911. The royal edict of December 30th, 1715, granted that grace for six or eight years to the silver merchants 
 of Real de Zacatecas, and the effect of this reduction made itself felt immediately, for in comparing the two de- 
 cades before and subsequent to the year 17 11, there was an increase in the amount of the Government tax of 
 $852,031 in the secjond over the first. 
 
 912. This eloquent result induced the Spanish Government to generalize in New Spain the same concession 
 made to Real de Zacatecas, which was verified by edict June 19th, 1723, extending it, at the same time, to gold. 
 
 905. Want of exact data on the production of the precious metals during the colonial regimen. 
 
 906. The data on coinage from 1537 to 1870 may serve to estimate the total production of silver in Mexico. 
 907 Reason why separate estimates are not made of amounts coined hefore and after Spanish domination. 
 908. Coinage made by the mints of Mexico from 1537 to 1857. 
 
 909 The production or' silver can be estimated at 15 or 20 per cent, more than the quantity coined. 
 
 910 Data of Sr. Elhuyar on the production of silver in the seventeenth century and the duties it paid. 
 
 911 Reduction from a fifth to a tenth in 1715 for Zacatecas, and increase of the receipt of duties. 
 913 Extension of this measure for all New Spain and Peru and the considerable increase of coinage. 
 
180 
 
 Twelve years afterward Peru was made a participant in this grace. The good result of this liberal measure made 
 itself felt immediately for the average of annual coinage had risen from $5,500,000, which it was towards the year 
 1820, to nearly $12,000,000 at the middle of the last century, according to the data set forth by Humboldt in his 
 essay on New Spain, (volume 3d, page 194). 
 
 913. The progress mining attained with this impulse had again dechned, because of the greater expense of 
 the mines from their greater depth and other reasons, and it was necessary to come to their help by lowering the 
 price of quicksilver, which had been solicited since the year 1727, without having been obtained until the edict 
 of November 24th, 1767, reduced the price from $82 72, which up to that time it had been worth per quintal, to 
 $62 03. The consequence of this grace was an increase of 806,309 " marks " of silver in the coinage of the five 
 years subsequent to the reduction on quicksilver over the five years before, and a profit to the Royal Treasury of 
 $1,434,641 in the larger treasury of taxes and duties of monetization. The consumption of quicksilver rose from 
 35,755 to 42,618 quintals, in consequence of its reduction in price. 
 
 914. So clear a demonstration could leave no doubt respecting the propriety of a reduction in the price of 
 quicksilver, and by order of October 4th, 1776, it was ordered to again reduce its price per quintal to $41 36, at 
 which price it was sold afterwards without any alteration. The growth which the extraction of silver took on 
 with this new grace was great, for, from the comparison made by the qaicksilver office, between the two lustrums 
 from 1772 to 1776, and from 1777 to 1781, there resulted an increase of 2,331,423 "marks" of silver coin in the 
 second over the first lustrum, and a gain for the royal coffers of $1,459,358, the consumption of quicksilver hav- 
 ing risen to 59,221 quintals in the second lustrum. 
 
 915. That which it might be considered the Spanish Government lost by the reduction of the price of quick- 
 silver, it recovered with usury in the increase of government and coinage duties, so that, even as a financial 
 measure, intended to increase the income of the royal chests, the reduction in the price of quicksilver was favor- 
 able to the Spanish Government, and more especially to the development of mining in Mexico. 
 
 916. These notable results determined the Spanish Government to decidedly protect mining, putting it on 
 its feet and relieving it of the crown tax, which was collected on silver since 1730, and reducing in 1777 the one- 
 tenth and the i per cent, which gold paid to only 3 per cent., and exempting in 1783 the excise duty on effects 
 consumed in mining. In 1801, mining powder was reduced from six " reales" per lb. to four, and in 1802, min- 
 ing was relieved of one-half of the government duty on silver. 
 
 917. By virtue of these liberal measures adopted in favor of mining, this industry came to acquire great de- 
 velopment and prosperity, and the statistics of coinage of the first years of this century, manifest that in one of 
 them, it came up to the figure of $27,000,000, which it has not reached again since then. The progressive in- 
 crease, which characterized the public rents of the Vice-Royalty during the period of which we have just spoken, 
 permits an estimate to be made of the general increase which resulted to the royal coffers from the development 
 of mining. Sr. Elhuyar, taking his data from the Royal treasury statistics of New Spain, by D. Joaquin Maniau, 
 demonstrates that the total product of the rents in the year 1712, aihounted to $3,062,410, in that of 1764 to 
 $6,000,000, in that of 1777 to $12,000,000, and in that of 1792 to $19,000,000. 
 
 918. The practical demonstration of the results which privileges granted to mining have given in different 
 periods, will be found set forth in the following comparative statement of silver coinage and public rents of Mexico in 
 various periods of the Colonial Government, which was formed by the Committee on Imposts of the Mining 
 Bureau, convened in this capital in May, 1868, and which was inserted in the Records of the Treasury for 1870, 
 p. 976, paragraph 3,611. 
 
 913. Reduction in the price of Quicksilver in 1767, and the increase of coinage and royal rents. 
 
 914. Further reduction in the price of qaicksilver in 1776 and the favorable result for coinage and the royal cofEera. 
 
 915. Pecuniary advantages obtained by the Spanish Government by the reduction in the price of quicksilver. 
 
 916. New liberal measures in favor of mining enacted from 1777 to 1802. 
 
 917. Favorable result to spain and its colony of the liberal measures in favor of mining. 
 
 918. Comparative statement of the coinage of silver,. and of the public rents in Mexico in different periods. 
 
181 
 
 compakj4tive statement 
 
 Of the Productions of Silver Coinages and Public Rents of Mexico in the periods as et 
 formed from the data presented by Baron von Humboldt, in his 'Political Essay on Neu> 
 and tol. 4th, p. 219. 
 
 of its Colonial Ooverrvment, 
 vol. Sd, pp. 187 and 188, 
 
 Periods. 
 
 1700. 
 
 1711 to 1720. 
 
 1763 to 1767, 
 
 1766 to 1769. 
 
 1773 to 1776. 
 
 1777 to 1779. 
 
 1780 to 1784. 
 
 17S5 to 1802. 
 
 1805 to 1806. 
 
 Concessions made 
 
 
 Reduc'n of 
 tax from 
 a fifth to 
 a tenth 
 in 1716. 
 
 
 1st reduc- 
 tion on 
 the price 
 of quick- 
 silver in 
 1767. 
 
 
 2d reduc- 
 tion on 
 quicksil- 
 ver in 
 1776. 
 
 Very ample protection. 
 
 
 
 
 
 Production of sil- 
 ver marks 
 
 Average per year. 
 
 397,543 
 897,543 
 
 7,881,433 
 788,148 
 
 6,446,776 
 1,289,855 
 
 5,393,384 
 1,348,821 
 
 7,356,980 
 1,839,232 
 
 6,962,938 
 2,320,976 
 
 11,431,814 
 2,286,863 
 
 43,788,597 
 3,514,035 
 
 5,465,527 
 3,733,763 
 
 Coinages of silver 
 and gold 
 
 Annual averages. . 
 
 3,879,132 
 3,879,122 
 
 66,910,763 
 6,691,076 
 
 54,797,627 
 10,959,533 
 
 45,843,907 
 11,460,727 
 
 63,588,408 
 15,683,352 
 
 57,946,989 
 19,315,646 
 
 100,185,636 
 30,037,135 
 
 878,451,416 
 32,361,848 
 
 51,901,908 
 25,950,958 
 
 Public rents, year- 
 ly average 
 
 We have 
 no data. 
 
 3,068,400 
 
 6,169,964 
 
 8,000,000 
 
 13,000,000 
 
 14,500,000 
 
 18,176,479 
 
 1785.18,770,000 
 1789.19,044,000 
 1792 19,521,000 
 1803.20,200,000 
 
 We have 
 no data. 
 
 Mexico, May 35th, 1868. 
 
 MiGXJEL Velasquez de Leon. 
 Antonio dei, Castillu. 
 Ignacio Rule. 
 
 919. The imposts with which mining was burdened at the time of the consummation of independence were, 
 besides the duty on the exportation of money, as follows (Records of the Treasury of September i6th, 1870, 
 paragraph 3,482, page 942) : 
 
 One per cent. 
 Tithing (10 per cent.). 
 
 Real de senoreage (i 2^ per cent, to the crown). 
 Eight "maravedi" for refining each "mark" of silver paste. 
 
 Twenty-six "maravedi" for "mark" of mixed paste, because of waste in separation. 
 
 Four ochavos (8 maravedi) on each piece of silver and half an ochavo on each piece of gold in tax to the 
 mint. 
 
 920. These imposts represented a quota much less than the duties collected in preceding periods by the 
 Spanish Government, for they were considerably reduced from the sums they had amounted to before. 
 
 B. Privileges granted to Mining at the Consummation of Independence. 
 
 921. At the consummation of independence, and having fresh in the mind the recollection of the great 
 impulse which mining had received with the privileges granted to that industry in the last years of the Spanish 
 domination, one of the principal acts of the first Mexican independent government was to grant new privileges 
 to the mining industry of the country. 
 
 922. The law of November 22d, 182 1, suppressed all imposts estabUshed on mining by the Spanish Govern- 
 ment at the last hour, and of which we have just spoken (paragraph 919), and others which, during the war of , 
 independence, had been collected on money, and on gold and silver pastes, estabUshing the sole duty of three 
 per cent, on the value of the gold and the silver. The protection granted to mining by the law referred to was 
 not Umited to freeing it from the imposts indicated, which was already a great step given in the wise policy of 
 granting privileges to the branch of industry called to make the prosperity of the nation, but it fixed with the 
 
 919. Imposts on mining on the consummation of independence, besides the duties of exportation. 
 
 930. The total of these imposts was much less than that of those collected during former epochs. 
 
 931. System of immunities to mining followed by the first independent Mexican Government. 
 
 933. The law of November 33d, 1831, reduced imposts, and granted free exportation of prime materials. 
 
182 
 
 same object the maximum of the sums that should be paid for separating and monetizing; it declared gold and 
 silver free in their exportation, being once affixed the seals accrediting the payment of the duties ; it determined 
 that the prime materials of larger consumption in the working of mines, such as quicksilver, should be free of 
 import duty, and that mining powder, which was then monopolized by Government, should be supplied to 
 miners at cost. 
 
 923. The tariff of December 15th, 182 1, burdened the exportation of precious metals with the following 
 duties, which are less than those which have been collected since : 
 
 Gold, coined • 2 per cent. 
 
 Idem, worked in silverware, etc i 
 
 Idem, in paste 3 
 
 Silver, coined 3i 
 
 Idem, worked in goldware, etc 3 
 
 Idem, in paste , Si 
 
 924. The policy of immunities to mining being hardly initiated by the law of November 22d, 1821, and the 
 tariff of December isth of the same year, it suffered the f rst blow by the law of January 14th, 1822, which in its 
 20th article, on declaring said tariff in force, prohibited the extraction of gold and silver in paste. 
 
 925. The law of March 2 2d, 1822, ratified the system of freeing mining industry, determining that money 
 could travel freely, and that upon extraction it should pay no more duty than that fixed in the tariff of December 
 
 iSth, 182 1, which should be satisfied precisely at the ports. 
 
 926. The law of June nth, 1822, imposed on moyey the duty of 2 per cent, on circulation, which it suffered 
 after many modifications, and was the beginning of a new impediment to mining. 
 
 927. The law of October 29th, 1823, exempted, capital going to the mineral districts, from the duty on cir- 
 culation imposed on money. 
 
 928. The law of February 13th, 1824, determined that all quicksilver should be admitted that were presented 
 at the ports without investigating their origin. 
 
 929. The law of May loth, 1826, declared free of all duty, even of those collected by the States on textile 
 goods, national products and effects destined for exportation, excepting gold coin, which should pay 2 per cent., 
 and silver coined or worked, which should pay 3^ per cent. 
 
 930. The law of May 20th, 1826, which extinguished the Tribunal of Mining, decreed that the real (12 J 
 cents) import on mining should cease as soon as the obligations and debts of the supposed tribunal were 
 satisfied. 
 
 931. The tariff of November i6th, 1827, expressly prohibited, under penalty of confiscation, the exportation 
 of gold or silver in paste, stone or dust. 
 
 932. The law of July 19th 1828, derogated the prohibition established by the tariff of November i6th, 1827, 
 for the exportation of gold and silver, and decreed the coEection of seven per cent, export on the value of said 
 metals. 
 
 933. This cursory statement of the lawsissued for the mining business in the first eight years of the political life 
 of Mexico as an independent nation, demonstrate that the legislators of that period comprehended the propriety 
 of freeing that business from every incumbrance that might impede its development. The pressing circumstances 
 of the French, however, on one hand, and the retrograde ideas infiltrated into the masses, impeded the realization 
 of freeing mining from the trammels standing in the way of its development. For a long time the vulgar belief 
 was held, that the wealth of a nation consisted only in the amount of its precious metals coined, and that its ex- 
 
 923. Export duties on precious metals according to tlie tariff of December 15th, 1831. 
 
 924. The law of January 14th. 1822, prohibited the exportation of gold and silver in paste. 
 
 935. The law of March 33d, 1833, on free transit of money and payment of export dxities in the ports. 
 
 936. Duty on circulation imposed by the law of June 11th, 1832. 
 
 937. The law of October 39th. 1833, excepted the duty on circulation on money destined for the mining districts. 
 928. The law of February 13th, 1834, admitted all quicksilver into the ports of the Republic. 
 
 939. The law of May 1st, 1836, authorized the free exportation of national products except gold and silver. 
 
 930. The law of May 30th, 1836, extinguished the mining tribunal and abolished the " real " impost on mining. 
 
 931. Prohibition to export gold and silver in paste, stone, or dust, by the tariff of November 16th, 1827. 
 933. Derogation of the prohibition to fexport gold and silver in paste, &c., by the law of July 19th, 1838. 
 
 933. Causes which, in the first years of independence, impeded the realization of the project to disencumber mining. 
 
183 
 
 portation ought to be limited by restrictions in order that the nation should not be deprived of its wealth. It was 
 not comprehended by many that this manner of proceeding stopped up the principal source of wealth, and that 
 exportation was not impeded, but, on the contrary, capital went out of the country which otherwise would have 
 been invested in the opening up of new sources of wealth. 
 
 C. Growth of Mifiing by virtue of privileges granted it at the consummation of Independence. 
 
 934. Thanks to the system of immunities to mining, although followed by halves, it succeded in giving an 
 impulse to this industry, which came to take it out of the prostration in which it had been left by the war of Inde- 
 pendence, by obtaining the investment in the same of large foreign capital. 
 
 935. It is to be regretted that the bad management of that capital and other causes, among which figures 
 the want of foresight of the capitalists and of their managers, caused the enterprises in which they had invested 
 to break to pieces, contributing to discredit greatly this important branch of wealth in Mexico. 
 
 936. The best way of informing on what then passed in Mexico respecting the investing of foreign capital in 
 mining enterprises is to set forth the following fragment, taken from " Mexico and its Revolutions," by Sr. U. 
 Lorenzo de Zavala. 
 
 " The reader will recollect the ardor with which the EngUsh embraced mining negotiations from the begin- 
 ning of 1824 to the end of 1827, when they began to receive very costly disappointments. Cunning speculators 
 had succeeded in getting large sums out of the purses of the Enghsh people by offering the shareholders inex- 
 haustable treasures in the immense riches inclosed in the mountains of Guanajuato, Sombrerete and Mineral del 
 Monte ; and the English people, essentially enterprising and commercial, believed to have found a new spring of 
 wealth in those brilliant speculations. From the year 1826 to May, r829, the English shareholders had spent in 
 the mines of Oro, Guanajuato, Zacatecas and Sombrerete, $5,129,157. Machines, agents, commissions, food, 
 were sufficient to consume not only this sum, but all the wealth of England. I have seen a large quantity of 
 pieces of bronze, iron and steel, scattered on the road from between Mexico and Vera Cruz belonging to machines 
 destined for the mines ; and it cannot be denied that although there have been among the agents many persons 
 recommendable for their application, intelligence and economy, others have managed the enterprises with culpa- 
 ble abandonment and negligence. 
 
 " The products of the mining referred to during the same years were $2,603,447, resulting consequently in a 
 deficit of $2,794,400. From this sum there must be deducted $6r, 871 for the excess in the value of the gold ; 
 an increase of profit above expenses in 1829 of $149,004, and the value of the heaps of mineral earth on hand 
 which was calculated to amount to $479,667; and these three snms being deducted from the $2,794,400 of the 
 deficit, results in the loss up to May 30th, r829, of $1,913,305, a very small sum, if the obstacles are considered 
 which had to be overcome to put those mines in working order, most of which were delapidated and filled with 
 water. On Mineral del Oro it is noted that nothing was produced in the year 1826, having caused an expendi- 
 ture of $161,984; that in 1827 it yielded only $359, having disbursed in expenses $102,771, and that in 1828, 
 costing $13,498, it produced $74,505. The mines of Sombrerete and Zacatecas have made the same progress. 
 
 " In spite of these visible advancements, mining shares have experienced a progressive decrease in the London 
 market, contrary to the hopes offered by the increased products of this daring speculation ; but the English, as 
 sohd in their calculations as positive in all their transactions, political as well as commercial, have* abandoned an 
 enterprise as exposed to the unforseen disasters of a country subject to continued dissentions, as to the mysteri, 
 ous caprices of nature, whose profundity has hidden from the exquisite investigations of the wise the means of 
 knowing by fixed rules where the places are in which she hides these kinds of riches. Trouble enough has it 
 brought to mortals on the face of the globe. 
 
 " Commerce commenced, as has been already observed, to go intoadecHne after the events of the " Acordada," 
 and more than all for fear of the Spanish expedition which was prepared, took place and ended during the course 
 of the first eight months of this memorable year. Mercantile transactions were paralyzed, and it is certain that 
 an uneasiness was noticeable which gave no room to those negotiations which require tranquility and confidence 
 in the protection of the authorities and the observance of law." 
 
 937. Unfortunately the Governments of Mexico have not, since the Independence, followed a uniform con- 
 duct in regard to mining, for while one of the first acts of the first Administration was to repeal the imposts of 
 
 934. Investment of foreign capital, and relief of mining in consequence of the adoption of the system of immun- 
 ities. 
 
 935. Damages caused to mining by want of foresight and bad management of mining enterprises. 
 
 936. Statement made by Sr. D. Lorenzo de Zavala of the causes for the. breaking up of the foreign mining com- 
 panies. 
 
 937. System of vacillation generally followed respecting mining by the administrations of Mexico. 
 
184 
 
 the colonial regime which incumbered mining, as has been already manifested (paragraph 921), some subsequent 
 provisions again imposed, and came to leave this industry under even more incumbrances than it was suflFering 
 during the last years of the colonial regime. 
 
 D. State of Mining during the years from 1821 to 1830, according to the Records of Foreign Affairs. 
 
 938. The best method of informing of the progress made by mining during the first years of Mexican Indepen- 
 dence, by virtue of the immunities then granted to it, is to set forth the reports respecting this industry, which 
 were given by the Executive to Congress in its annual Records. The Secretaries of Foreign and of Domestic 
 Affairs, who had under their charge during the first years of our Independence, the branches which have since 
 passed to the Secretary of Pubhc Works, made in their annual Records some observations regarding mining, in 
 which is noticeable the interest with which this industry was then viewed, of which those considered most impor- 
 tant are set forth in continuation. 
 
 939. In the Records of Foreign Affairs which Sr. Lucas Alamaso presented to the Constituting Congress on 
 the I St of November, 1823, the following estimations are found : 
 
 " It is a settled principle among economists, that the most direct encouragement that can be given to agri- 
 culture and industry, is to facilitate the consumption of its products and the sale of its manufactures. If the 
 mines among us are considered from this point of view, it will be found that nothing contributes as much as they 
 to the prosperity of those essential branches of pubUc wealth. The great number of hands they give employment 
 to, the beasts used to run the machines, and for the transportation of minerals, the consumption, therefore, made 
 of the cereals as well as of tallow, paper, iron, etc., give a powerful impulse to agriculture, arts, and trade. If solid 
 proofs were needed to convince of these truths, which are contested only by some spirits preoccupied with the 
 paradoxes of systematic economy, they can be obtained by comparing the state of our mining provinces like 
 Guanajuato and Zacatecas, before the year 18 10, with that of the present time. Abundance and prosperity then 
 reigned in one and in the other ; the husbandman found in those rich districts a quick and certain market for his 
 products; the blacksmith, the carpenter and the mason, a constant demand for their industry; the merchant a 
 large consumption of the goods he bought, and the treasures taken out of the bosom of the earth were diffused to 
 the most distant provinces, vivifying them all, in payment for tallow, lumber, salt, magistral, horses and mules, 
 which came in from all parts. 
 
 " The nature of our minerals is also another powerful cause for these happy results ; generally poor in the 
 pure metals but rich in quantity, they require for their extraction a multitude of machines and ingredients, and, 
 consequently, it can be said that the miner only digs out funds to distribute profusely among laborers, merchants 
 and artisans ; it being conclusive that the prosperity of these depends principally on the impulse given them by 
 mining, the principal motive power in our nation of all the other branches of industry. Hence it is inferred, the 
 encouragement given it redounds indirectly to the benefit of these ; and if one wishes to animate the latter, he 
 must commence by stimulating the former. These were the basis motives for granting a reduction of duty con- 
 ceded by the Spanish Cortes, and confirmed by the provisional council ; a reduction which perhaps preserved 
 mining in this epoch, and which ought to contribute much to re-establish it. 
 
 " We ought to flatter ourselves that we may soon attain to seeing it flourish ; various foreign capitalists are 
 preparing to invest large sums in draining and providing certain of the principal mines, which by the sad effect of 
 the war, are now incapacitated and unworked ; the steam engines it is proposed to bring, and of which two are 
 now being estabhshed, one in Temascaltepec and the other in Real de Catorce, will contribute powerfully to so 
 important a result. The former sovereign Congress, for the purpose of facihtating supply-contracts with wealthy 
 foreigners, with whom some have already been celebrated, repealed the laws and articles of the Ordinance pro- 
 hibiting them to acquire property in the mines, although wisely circumscribing the power given them to do so, 
 to only the mines they furnished, without the power of " denouncing " others, nor discovering new ones ; this 
 providence will be a new stimulus to attract hitherward funds that are needed, and which cannot be obtained by 
 any other means." 
 
 940. The hopes manifested by Sr. Alaman respecting the progress of mining were not illusory. In the 
 Record which, as Secretary of Foreign Affairs, he presented January i ith, 1825, to the first Constituting Congress, 
 he said on the important subject : 
 
 " The mines are the- source of the real wealth of this nation, and all that some speculative economists have 
 
 938 Progress of mining in the first years of independence by reason of the interest with which it was looked upon. 
 
 939. Fragment of the records of Foreign relations of November 1st, 1823, in reference to mining. 
 
 940. Fragment of the memorial of Foreign Affairs of January 11th, 1835, in reference to the investment of foreign 
 capital in mines. 
 
185 
 
 said against this principle has been victorously rebutted by experience. So we have constantly seen agriculture 
 commerce and industry follow the progress of the mines, advancing with these, and decaying in the same propor 
 tion. The reason for this connection between these different branches, essential to the prosperity of the nation, 
 is the nature of the greater part of our minerals, poor in pure metal and exceeding abundant in quantity. Hence 
 follows the necessity of employing a multitude of hands, of machines and of horses, as well for their extraction as 
 for their realization, which gives place to an immense consumption, which is equivalent to a consideration of 
 products, and which at the same time gives an impulse to all the arts, and in particular to agriculture. So it is 
 that the encouragement given to mining is given also to these and the re-establishment and prosperity of them 
 all, and consequently of the nation, is simultaneous. 
 
 " In the Record which I presented to the sovereign constituting Congress, I enlarged more on these ideas, 
 and I announced that we ought to flatter ourselves of being able to soon see this important business flourishing 
 because foreign capitalists were preparing to invest in its encouragement, the large sums that were being needed, 
 and in vain expected from national sources. Events have confirmed my announcement ; these companies have 
 been formed in England for the working of the mines, with very considerable capital, and another in Germany 
 for the same object. They are working in furnishing the rich mines of Mineral del Monte, Guanajuato, 
 Valenciana, Rayas, Cata, Sirena and other smaller ones, some more being contracted. 
 
 " In Catorce work has been undertaken on the mine of ' Guadalupe,' and the drainage is accomplished on 
 that of ' Concepcion ' by means of a steam pump. Another machine of this kind has also been established at 
 Temascaltepec, and the success it has had in this district, as well as in Catorce, has evidently proved how pref- 
 erable it is for mines, over aU others, in all places where sufficient fuel permits its estabhshment, although for 
 general use it may be difficult to decide on its convenience. A great impulse, then, has been given in mining ; 
 there is a general hopefulness, and after so many years of paralyzation and decay, we see a new epoch again 
 drawing nigh, of prosperity and wealth. Heaven grant it may be so ! And to the general satisfaction which these 
 hopes inspire, it may be permitted to me to write the particular one which must come to me from the part that 
 I have had in bringing them into being. 
 
 " If the investment of foreign capital in the encouragement of our industry be considered in a political aspect, 
 it will certainly appear as an important advantage, this connection of interests, by virtue of which our destiny 
 cannot be indifferent to the commercial people of Europe, who have declared so loudly for the recognition of our 
 independence, and who have made it, so to say, their own cause." 
 
 941. Since 1825 the question of re-estabUshing the imposts on mining, which existed during the colonial 
 regimen, and were suppressed by the law of November i6th, 1821, has been debated with great earnestness. So 
 intelligent a man as Sr. Jose Ignacio Esteva, Secretary of the Treasury at that time, was the one that sustained 
 the said system most earnestly, and which was opposed by the Committee of Finance of the Senate, under the 
 direction of Sr. D. Francisco Garcia, a notable statistician, who had a practical knowledge of mining. In fact, 
 Sr. Esteva, in his Record of the Treasury of January 1st, 1825, proposed, in order to increase the income of the 
 Treasury, and so make them equal the expenditures, the re-establishment of the duties that were collected on 
 mining products at the consummation, although he recognized, at the same time, that the formation of wealthy 
 foreign companies to work these mines in Mexico was due to the diminution of these duties. 
 
 942. In an opinion which the Senate Committee of Finance of the First Constitutional Congress formed on 
 the Record referred to, the ideas of Sr. Esteva on this subject were victoriously refuted, demonstrating with all 
 clearness, not only the inconvenience of re-establishing the suppressed duties, but the complete ruin which this 
 measure would cause to this important branch of industry of the nation. The opinion, dated April loth, 1825, 
 says thus : 
 
 "Although this question is already resolved by the Chamber of Deputies, and, besides, all the hght possible 
 has been thrown upon it in so many writings, which have discussed it profoundly, we will, however, make some 
 observations, trying to confine them to the points that have been least touched upon. Silver and gold are the 
 motive power of all our industry ; the encouragement of agriculture, of the arts and of commerce, depends, 
 directly and immediately on the progress of mining, and all, or nearly all, of exterior commerce is carried on in 
 exchange for the precious metals; it is, then, of the greatest interest to encourage a branch of business on which 
 depend all the rest, and, consequently, the prosperity of the nation. The most efficacious means of encouraging 
 anything is to diminish the expenses of production ; the duties increase these expenses ; they are then opposed 
 to production ; they then, in our case, attack the foundations of national prosperity. There is- no reason why the 
 principles established and admitted without contradiction for other branches of business should not operate in 
 
 941. Proposition of Sr. Jose J. Esteva in 1835, to re-establish the imposts on mining. 
 
 942. Refutation of Sr. Esteva by the Committee on Finance of the first constituting Congress. 
 
 24 
 
186 
 
 regard to the production of metals ; the circumstance of its being money can only influence to increase its 
 demand, by reason of the universal use to which it is applied; but it cannot change the laws of production, for 
 they are immutable. 
 
 " It is a notoriously false calculation to measure the present production of this branch of business by what 
 it was before the revolution. If, in fact, it is reduced to a half, and the re-establishment of the duties works 
 immediately against the increase it might have, how can calculations be drawn on products that neither exist nor 
 can exist? It is said in the memorial that the considerations which have obliged the Ministry to propose the re- 
 establishment of duties are, that it is as necessary to collect them now as it is easy to diminish them by and by. 
 If we have, then, to find ourselves in this latter case, and it is now impossible for the amount of the duty to be 
 any larger than it was in the lustrum from 1795 to 1799, for the production of those metals is reduced one-half, 
 of what use is it to propose the re-establishment of the duty as the only means of covering the deficiency of the 
 present year? It is strange, truly, that the income from a given duty should be supposed equal, when the pro- 
 ducts on which it is to fall are so notoriously unequal between themselves. 
 
 " It is said that the proposed measure will weigh upon foreigners, who made a reduction of duty a part of 
 their calculations, and if those of the nation tolerated before the duties, so much the more reason now, when the 
 nation imperatively requires them. " 
 
 " In regard to the first, there are mistakes which involve a certain odiousness of grave consequences. It is 
 not true that the measure falls upon foreigners, but upon a branch of national industry on which depends the 
 prosperity of all the rest. On the other hand,'if the foreigners based their calculations on the reduction of duty, 
 why was there such bad faith as to made them fail in them ? Is not this saying that the nation cannot re-estab- 
 lish this or that duty, but that to make foreigners fail in their calculations is one reason for doing so ? 
 
 " In regard to those of the nation, what they can now sufifer ought certamly not to be computed by what 
 they suffered formerly ; for this species of calculation would lead us to very advanced consequences. Besides 
 this, it is necessary to bear in mind that there is not the capital devoted to mining in existence now that there 
 was formerly, and that even if it did exist it would not be sufficient to re-establish it; because there is an immense 
 difference between the capital sufficient to keep agoing a business already in operation, and that necessary to re- 
 instate it after it is ruined. 
 
 "It is a truth very well known to all, that in proportion as mines increase in depth their expenses increase; 
 it was, therefore, the Spanish Government was under the necessity to keep lowering the duties on them as 
 their depth increased, and so, even before the revolution, notwithstanding they had not experienced the drawbacks 
 caused by the abandonment of the larger part of the mineral lands, the necessity was felt of reducing the duties 
 which are to-day conceded — measures to which that Government would have acceded (only that in this it may 
 well know its own interest) under penalty of having ruined its most important branch of wealth. These consid- 
 erations prove that those of the nation cannot now support the impositions on this branch of businesss which 
 suffered in time previous. 
 
 "It is also laid down in the memorial that no, or very few, effects in favor of mining have been produced by 
 the reduction in duties. Leaving aside a thousand replies which reason and experience have given to this false 
 assertion, we will confine ourselves to inquiring if it is not true that for want of capital we have been under the 
 necessity of contracting with foreign capital for the opening up of our mines ? And if it is not equally true, ac- 
 cording to the memorial itself, that the foreigners have based their calculations on a reduction of duty ? Min- 
 ing, therefore, has already realized the beneficial result of that reduction, for it has at least contributed to provide 
 it with the capital that was lacking in the nation. 
 
 " Mining not now producing the amount of metals necessary to fill the calculation made in the memorial, 
 and being impossible for it to produce them in the future, on account of the very re-estabUshment of duties which 
 is soUcited, it follows that the public funds will be depressed, if not only the duties erroneously calculated, but 
 those which would flow to it from the increase mining ought to attain in consequence of a reduction of duties. 
 In order to make the truth of this assertion more visible, and the error and transcendency of the calculations 
 combated, a fact will be related which any one can examine. The mines of Veta Grande have been for some 
 years the principal support of the city and State of Zacatecas ; without them both would be reduced to complete 
 destitution, and notwithstanding that they render an annual product of $600,000, more less, they have not for 
 many years given a dollar profit to their owners. According to the calculation of the memorial, and supposing 
 that the duties in question amount tq 15 per cent., $90,000 would go to the pubUc treasury, of the $600,000 
 produced by the mines; but as in such case the $90,000 would be a real and effective loss to the shareholders, it 
 would result that they could not sustain them ; and then, besides having ruined a State, we would have in place 
 of the income of $90,000 miscalculated, the loss to the public funds of the duties now realized, and to be realized 
 in the future. 
 
187 
 
 "These duties in relation to the present production of $600,000 are $18,000 in the 3 per cent, on metals, 
 $48,000 the amount at least on the Government tax on effects now bought with the $600,000, and which, in the 
 hypothesis would cease to be consumed, for there would be nothing to buy them with; $12,000 the amount at 
 least of the 2 per cent, circulation tax on each ; and as after divers mercantile transactions in the interior, the 
 cash arrives at our ports to be taken out in exchange for foreign goods, and pays 3 J per cent.; and besides the 
 equivalent amount of the said effects that enter into exchange, and which would not enter if the $600,000 pro- 
 duced by Veta Grande were not exported, it pays in the present state 45 per cent., there is to add to those en- 
 tries $21,000 for the first of these and $270,000 for the second, which altogether make $369,000 loss in cash to 
 the treasury, without calculating other losses, which are not the less effective by being less direct, such as the 
 product of the tax on consumption brought about by the extraction from Veta Grande, the elimination at the 
 mint, etc., etc. 
 
 "It results from what has been set forth, that through the effect of a miscalculation, instead of $90,000, with 
 which it was expected to increase the income of the Pubhc Fund, a cash loss is suffered of $369,000, and there 
 is caused the ruin of a State. Many mines are in the case of Veta Grande ; in less favorable situation those 
 which do not meet their expenses, which now and always are many; and the same principles are appUcable to all 
 those which by their short returns cannot pay expenses in case of the re-establishment of duties. 
 
 " The objection is made also that all branches of industry are equally commendable with mining, and there- 
 fore the burdens should weigh equally on all of them. The first part of the proposition is easily conceded, if it is 
 limited to those products of industry that can be taken out of the country, or which can prevent the importation 
 of a foreign product ; and in regard to the second, we will say, that the establishment of the old duties destroys 
 that equaUty which it is desired to be a branch of; in respect to the rest, because in that case it would be much 
 more incumbent than they. There are, besides this, other reasons that operate especially in favor of mining : 
 first, no branch of industry opens such a vast market to the productions of the country, and consequently none 
 encourages interior prosperity in the proportion that this does ; second, none encourages nor can encourage so 
 much our exterior commerce, for it furnishes the principal product, and at present almost the only one we give 
 in exchange for what we need; third, none needs in proportion such large amounts of capital; fourth, none 
 exposes capital to the risks that this does, because in others the expenses and profits can be calculated sufficiently 
 near ; but in mining it is impossible to form a like calculation, and not seldom considerable sums of money are 
 lost ; fifth, in no other branch is labor dearer, as the fatigues, risks and infirmities attaching to mining makes it 
 higher, and with reason, and this high labor makes the industry less productive, diminishing the gain of the cap- 
 itaUst ; sixth, none other is sustained by the managers, though they get no profit from it. In agriculture, arts 
 and trade, a business is abandoned when it produces no profit, but in mining it is not so ; a miner who gets no 
 profit, and even sometimes losing, never abandons his business, because he is always expecting to meet with a 
 " bonanza" either in a greater abundance of the metal or more of the pure metal, so that in one way or another 
 it may render him the desired profit. These are real and effective differences, which ought to caU the attention 
 of the ecgpomist who is trying to furnish the proper encouragement to the different branches of industry in a 
 mining country. 
 
 " Fmally, the government ought not to propose, nor Congress decree, the establishment of duties which, be- 
 sides weighing only on the mining States, cannot even in them operate in proportion to their total wealth, for 
 this may very well be equal and very unequal the production of metals, or vice versa, circumstances under which 
 it would be to attack in a double respect the proportional equaUty of rights and obligations which the States have 
 ■ before the law, and which Congress is obliged to preserve by part 4th of the 49th Article of the Constitution. If 
 it is imagined that the mining States are richer because they are masters of a production which encourages all 
 other productions, this would be a reason not to estabUsh a tax to weigh only on the former, but to assign them 
 a contingent, proportioned also to this branch of wealth. All those considerations the Constituting Congress 
 bore in mind, by leaving out of the account of the States, the duty of 3 per cent, which the metals now pay, and 
 in the assignment of the contingent, by placing Zacatecas, San Luis Potosi and Durango in the rank of the rich- 
 est States. Take away from these States the consideration which mining gives them, and in a moment they 
 would come to be the last of the federation ; for it is potent to every one that the scarcity of water in those coun- 
 tries is not only oppose d to the progress of agriculture, but that quite frequently it causes a complete loss of the 
 crops, and destroys the breeding of cattle, circumstances that will prevent agriculture, and the arts which depend 
 immediately upon it, to arrive in those States at the same prosperity as in the others. It being proved that there 
 is no necessity for the measures which the ministry proposes, and which even though there were, they are contrary 
 to the interests of the nation, and opposed to the established system of the government, it follows that they ought 
 not to be admitted." 
 
 043. This system of vacillation was continued through the subsequent administrations, and with rather a 
 
 943 The ilexican Governments followed a system of vacillation respecting mining, which greatly increased the taxes 
 on it. 
 
188 
 
 tendency to increase the taxes on mining, by which this industry came to be, as has already been said, encumbered 
 under-the national government even more heavily than it was during the colonial government. 
 
 E. New incumbrances imposed on Mining by the Mexican Government. 
 
 944. Unfortunately, as has already been shown, the policy regarding mining, followed by the Mexican Gov- 
 ernment, has not been uniform of guided by fixed principles; for it has inclined as quickly to the liberal system 
 as to the restrictive. It would be too long to relate all that occurred from the year 1830, in relation to the de- 
 partment of mining, to demonstrate the efforts constantly made by Sr. Alaman, as well as by other public men, to 
 free that industry from the taxes opposing it ; it suffices to say that the good results obtained by the system of 
 immunities inaugurated at the consummation of the Independence of Mexico, were lost for many causes, among 
 which may be considered as the principal, the frequent changes the Republic suffered in the pohcy of its govern- 
 ment, which was sometimes liberal, but more frequently restrictive ; for as soon as a measure favorable to mining 
 was taken, then another was taken which nullified or took away the virtue from the first ; and unfortunately, the 
 estrictive system so prejudical to the interests of the nation is the one that has prevailed. 
 
 945. It would be very long to relate all the incumbrailfces imposed on mining in Mexico by the national 
 governments from 1830 to 1868, in which the system of immunities was again adopted; therefore, only the princi- 
 pal of these incumbrances will be considered here, and, besides, the following points : 
 
 a. Prohibition to export silver paste from Mexico. 
 
 b. Other measures respecting mining adopted from 1835 to 1846. 
 
 c. State of mining in January, 1868. 
 
 a. Prohibition to Export Silver Paste froin Mexico. 
 
 946. Mining being the principal industry of Mexico, it is really very strange, and hardly conceivable, that 
 the exportation of its products is not permitted in the form most suitable to the miners, and it is opportune, 
 therefore, to explain what has been the principal cause, and perhaps the only one of importance, that in the dif- 
 ferent tariffs, from 1821 to 1856, they have not been able to provide the exemption of all duty on mining pro- 
 ducts, and the free exportation of mining products in whatever form. 
 
 947. The only tariff of those just mentioned which permitted the exportation of gold and silver in paste 
 throughout the Republic was that of Dec. isth, 182 1 ; that is to say, that which was issued immediately after the 
 consummation of independence, for according to it there were collected on the exportation of the precious metals, 
 as was said already in paragraph 923 : 
 
 'Gold in paste 3 per cent. 
 
 do. coined 2 " " • 
 
 do. worked i " " 
 
 Silver in paste ^\ " " 
 
 do. coined i\ " " 
 
 do. worked 3 " " 
 
 948. The differences which were established for the payment of duties between pastes, money and manu- 
 factures of silver, came from the erroneous idea that was then generally held, and which still prevails, respecting 
 the protection which ought to be given to national industry. The cost or monetization was calculated at 2 per 
 cent, for silver and i per cent, for gold, and it was believed, notwithstanding the advanced ideas set forth by Sr. 
 Alaman and other statesmen, respecting the propriety of removing all the obstacles that might impede or make 
 difficult the avaihng of the articles which serve for exterior exchange, that the exemption of all duty on the pastes 
 
 * of precious metals could not be decreed while the mints existed, for these mints were considered from the first 
 as a necessary means of being able to realize silver abroad, where Mexican money was in demand, for commerce 
 with China, obtaining in its sale a price somewhat greater than silver in paste. 
 
 944. Kestrictive system adopted in Mexico by diverse administrations. 
 
 945. Incumbrances and taxes imposed on mining from 1830 to 1868. 
 
 946. Principal cause why it lias not been possible to provide in tie tariffs for the free exportation of mineral pro- 
 ducts. 
 
 947. The tariff of December 15th, 1821, was the only one of those issued up to 1856, which permitted the export of 
 pastes of silver and gold. 
 
 948. Errors which prevented mining production from being freed of all encumbrance. 
 
189 
 
 949- This circumstance contributed, in a great measure, to giving to the mints of the Republic a greater 
 inriportance than they really ought to have; for the interests of mining and of other branches of business related to 
 with It, required that the monetization or coinage should not be obligatory, but should be limited to satisfying 
 the needs of exterior exchange and the circulation of the country. It is to notice, also, that the imperfect method 
 adopted to make the separation of the gold contained in the silver has caused heavy losses to those introducing 
 pastes into the mints. 
 
 950. The consequence of these errors was that the tariff of November i6th, 1827, expressly prohibited the 
 exportation of precious metals throughout the Republic. In this tariff, as well as in the following one of March 
 nth, 1837, which equally prohibited the exportation of pastes, the same rates were jireserved for gold and silver 
 money, and only those wei^ increased which were paid on worked gold and silver, from 2 to 2^ per cent, for gold, 
 and from 3^ to 4^ per cent, for silver, certainly in order to prevent the exportation of those metals in all kinds of 
 manufactures, instead of their introduction into the mints. It is seen, then, that coinage, superfluous in many 
 cases, was considered of much greater importance than the silversmith industry, which occupied many hands. 
 Notwithstanding this, and that subsequent tariffs have generally sustained high duties on worked metals, silver- 
 smithing continued producing, for a long time, all kinds of articles, principally for domestic use, for it is known 
 that a great part of the inhabitants of this country possessed services of silver and of gold. 
 
 951. The inconvei^iences of this system of prohibiting or restricting too much the exportation of national 
 articles ought to have appeared very palpable, inasmuch as by the law of Congress of June 20th, 1837, the ports 
 of Guaymas, Mazatlan, were excepted from the prohibition, imposing on the pastes the same duties on exporta- 
 tion that the laws in force had established for the exports of coined metals. This authorization granted to the 
 said ports was declared in force by the law of June 4th, 1838, unti'l mints should be estabUshed in the respective 
 States. For the purpose of remedying the evil of the prohibition of the export of silver in paste, recourse was 
 had to the system of private dispositions, and these were consequently odious. 
 
 952. The laws of November loth, 1841, and February i6th, 1842, ratified the privilege granted to the ports 
 of Guaymas, Mazatlan, and La Paz, reducing the export duty on silver in paste to seven per cent, for the first 
 and five per cent, for the second. 
 
 953- JBy the law of October i8th, 1853, exportation was permitted through the port of Guaymas of gold 
 and silver in paste produced in the State of Sonora, while they were building the mint of Hermosillo, ordered es- 
 tablished by a former decree, and the export duty was fixed at eleven per cent, for gold in paste, and for silver 
 nine and one-half per cent. 
 
 954. The law of February 12th, 1854, prohibited the exportation of silver in paste in all the departments 
 where there was a mint, and determined the places in which the mineral products of the States of Sinaloa and 
 Jalisco should be coined. 
 
 955. The law of July 29th, 1856, declared subsistent that of October i8th, 1853, for the exportation of 
 pastes through Guaymas, while the mint at Hermosillo was being estabhshed. 
 
 956. The Mexican Government had recourse, for the purpose of providing itself with resources during the 
 war of Reform, as well as during that of the Foreign Intervention, to the means of granting permits for the ex- 
 portation of gold and silver in paste. These permits were granted as well by the military chiefs of the National 
 
 _ forces, and in this manner a considerable quantity of silver paste was exported, which has given rise to claims on 
 the part of the contractors of the mint against the Federal Treasury. 
 
 957. The anti-economic system of prohibiting the exportation of pastes of gold and silver prevailed during 
 a long series of years, until December 24th, 187 1, at which date the exportation of said pastes coming from some 
 States was authorized, although with the obligation to pay the duties of importation, coining and assay; and this 
 
 949. Damages caused by obligatory coinage, and the imperfect mode of separating the metals. 
 
 950. Prohibitive dispositions of the tariffs of 1827-37 for the exportation of the pastes of precious metals. 
 
 951. Privileges for the exportation of pastes for certain- ports, while mints were being established in the respective 
 districts. 
 
 952. The laws of November 10th, 1841, and February 16th, 1842, ratified the privileges reducing the export duty on 
 silver. 
 
 953. Law of October 18th, 1853, on other export duties on pastes through the port of Guaymas. 
 
 954. The law of February 13th, 1854, prohibited the export of silver paste in the department where there were 
 
 mints. 
 
 955. The law of July 39th, 1856, ratified the temporary permit to export pastes through Guaymas. 
 956 Permits to export gold and silver pastes, and the claims on the part of mint contractors. 
 
 957. The law of December 24th, 1871, authorized the exportation of pastes. Difficulty of extinguishing the prohibi- 
 tive system. 
 
190 
 
 authorization was made general afterwards by the tariff of January ist, 1872. This system has become so deeply 
 rooted as to make its extinction very difficult ; for the practice adopted by former administrations, of leasing the 
 mints in order to get resources, has established a monopoly for a few capitalists against the interests of the na- 
 tion, and every time the Government has tried to liberate mining from the imposts that oppress it, this foreign 
 element has intervened to impede the realization of the principle of free production, either by influencing public 
 opinion or by taking advantage of moments of complete want of funds for the most pressing expenses of the 
 administration to get their leases extended. 
 
 b. Other measures adopted respecting mining from 1835 /<? 1846. Duty on circulation. 
 
 958. In different epochs the scarcity of the materials employed in eliminarii%. the metals has caused a 
 diminution of profits, and in consequence the working of the mines. In the year 1835 Sr. Gutierrez de Estrada 
 said, in his memorial or Record of Foreign Affairs, presented to Congress, " The disappointments experienced 
 have been many, and it is to be feared that speculators will abstain more every day from a class of enterprises 
 which offers so many dangers. To this evil is added the exceedingly high price taken by the quicksilvers neces- 
 sary for the elimination of silver. The quintal which, in the time of the Spanish government, was sold in Guana- 
 juato at $44, is worth to-day $130 to $150. So it is impossible that the mines will continue to be worked for 
 very long, particularly those which are not yielding much return, and when large sums are necessary for their 
 working. 
 
 " This branch of industry merits all the attention of both Houses in order to remove the obstacles that are 
 opposing themselves to its prosperity ; in it lies the principal wealth of the Republic, and its decline will bring 
 grave difficulties upon the country." 
 
 959. The law of May 24th, 1843, considering that quicksilver is one of the most indispensible elements for 
 mining, bore in mind the fulfillment of the royal orders of January 13th, 1783, November 12th, 1791, December 
 6th, 1776, and August 8th, 1814, on immunities from Government duties; it provided that no impost should 
 weigh upon this article, that it should be carried freely, and granted a premium of $25,000 to any one who 
 should take two thousand quintals in one year out of the national mines. 
 
 960. The law of July sth, 1843, empowered the Mining Council to seek for, to work, provide for and pro- 
 tect cinnabar mines; and to the end of facilitating and increasing the production of quicksilver, which article 
 continued free of duty, new provisions were decreed for fraction 3d of the tariff of September 26th of the same 
 year. 
 
 961. The law of March loth, 1843, increased the duty on the circulation of silver from 2 per cent., which 
 was collected according to the law of June nth, 1822, to 4 per cent., establishing at the same time the duty of 
 one per cent, for taking it out of one department into another. Comprehending the inconvenience of leaving 
 the States the liberty to burden the production of exportable articles with imposts, the duty on circulation of 
 money was declared, by the law of classification of rents of May 29th, 1853, to be the property of the Federa- 
 tion, and all the other impost on gold and silver, excepting only that of one "real" (12^ cents) per "mark" 
 (one-half ounce.) 
 
 962. In the Memorial which Sr. J. M. Lafragua presented in 1846, as Secretary of Foreign Affairs, he says 
 as follows : 
 
 " Up to the present time the principal wealth of the country has consisted in the working of its mines, and 
 although from this circumstance it has called the attention of all our governments, it has not yet arrived at the 
 degree of prosperity of what it is susceptible, claiming, therefore, the most earnest interest of the legislator. 
 
 " The influence of mining on pubhc rents is so marked that it is sufficient to cast a rapid glance at the pro- 
 portion which the latter have always kept to the former to convince of its importance, and of the urgent and im- 
 perative necessity there is to liberate this production from the obstacles it has to contend with, and to elevate it 
 to its highest degree, so as profitably to avail ourselves of the marvellous fountain of wealth with which it has 
 pleased God to endow our privileged soil." 
 
 958. Observations of Sr. Gutierrez de Estrada on damage caused to mining by the scarcity of materials. 
 
 959. Law of May 34th, 1843, on the exemption of duty on quicksilver, and premium on the production of 2,000 quin- 
 tals per year. 
 
 960. The law of June 5th, 1843, granted privileges for the encouragement of the working of quicksilver mines. 
 
 961. Laws on the increase of the duty on circulation and prohibiting the States from collecting imposts on gold and 
 . silver. 
 
 963. Observations of Sr. J. M. Lafragua in 1846, respecting the influence exercised by mining on public rents. 
 
191 
 
 c. State of Mining in January, 1868. 
 
 963. In consequence of the rather restiictive system followed by the Mexican Government respecting mining, 
 from 1830 to 1868, the state of that industry at the termination of the foreign intervention was still worse, in the 
 way of immunities granted by law, than it was at the consummation of independence in 182 1. 
 
 964. In consequence of the heavy incumbrances and restrictive measures decreed against mining from 1830 
 to 1868, the situation of this important industry was, at the termination of the French intervention in Mexico, 
 truly lamentable. With the object of raising mining from the prostration it was then in, by studying its causes 
 and seeking some efficacious remedy, the Administration ruling the destinies of l^exico in 1868, named on May 
 1 6th of that year, a Council, presided over by Sr. Mariano Yanez, and composed of six other persons notable for 
 their intelligence and practffial knowledge of mining, and invited all the mining States of the RepubHc to send 
 their representatives to the Council. This was in session for several days, and their labors were notable, particu- 
 larly the opinion of the Committee on Imposts, dated May 2Sth, 1868, subscribed by Srs. Miguel Velazquez de 
 Leon, Antonio del Castillo and Ignacio Rule, in which, founded on reasons most worthy of consideration, the 
 absolute freedom of imposts on mining was recommended. 
 
 965. From the data of this lucid Report, it appears that the incumbrances which were weighing on mining 
 on May 25th, 1868, before the issuing of the law of the same month, were equivalent to the value of the metals 
 extracted from the mines, being an impost which fell not on the profits of the mines, but on the capital invested 
 in mining, and this without taking into account the amount of Government duty paid by the miners on the 
 articles they consumed necessary for the working of the mines and the elimination of the metals. As the imposts 
 with which the Spanish Government encumbered mining in Mexico, at the time they were the heaviest, amounted 
 to 26 per cent, of the value of the metals, as has already been said, it resulted, that in May, 1878, mining was 
 paying, counting the Government duty on national effects, it consumed still higher duties than those collected 
 during the time of the greatest obscuration and taxing of mining under the Colonial regimen. 
 
 966. It would make this exposition too extended to insert the principal fragments of the opinion of the 
 Committee on Imposts, of the Mining Council, dated May 25th, 1868, just referred to. The entire text of this 
 opinion, and of other documents pertaining to the Mining Council, convened in this capital in May, 1868, can 
 be seen in No. 30 of the documents annexed to the Record of the Treasury of September 28th, 1868. 
 
 967. The force of the reasons set forth by the Committee on Imposts of the Mining Council was such that 
 the fourth General Congress, in its law on estimates of income for the fiscal year of 1S68-9, derogated, as has 
 been already said, various of the imposts which mining bore at that time, although, unfortunately, these immuni- 
 ties were not carried into effect, for the reasons already explained. 
 
 f. Immunities Proposed atid Granted to Mining since 1868. 
 
 968. To speak of this subject in an ordinary manner, the following points will be considered: 
 
 a. Ideas which have prevailed in Mexico respecting mining, and which render the needed concession of 
 immunities difficult. 
 
 b. Difficulties in the way of the freedom of mining springing from the leasing of the mints. 
 
 c. Privileges granted to mining in 1868 and 1869. 
 
 d. Privileges granted to mining in 1871 and 1872. 
 
 a. Ideas which have Prevailed in Mexico respecting Mining, and which render the needed Concession of 
 
 Immunities Difficult. 
 
 969. The Spanish Government did not permit the precious metals to be extracted from Mexico, except prin- 
 cipally to the metropolis, and with onerous restrictions; and through the doctrines which prevailed in Spain 
 during the Government of the Viceroyalty as well as through the ignorance that prevailed in Mexico on matters 
 of economy, it was almost considered in this country that gold and silver were not merchandise, although they 
 served in exportation and in exterior exchange hke any other, but that it constituted the only real and effective 
 wealth. 
 
 963. State of mining at the termination of the intervention, and consequence of the restrictive system observed from 
 1830 to 1868. 
 
 964. Nomination of a council on May 16th, 1868, and the recommendation of absolute liberty of imposts on mining. 
 
 965. Mining suffered in 1868 heavier incumbrances than those of the Colonial regimen, 
 
 966. Doings of the Mining Council of 1868, published in the records of the Treasury for September 28th, 1868. 
 
 967. Suppression of various imposts in the law on estimates of income of 1868-9 from the opinion of the Mining 
 Council. 
 
 968. Points to be considered on treating of the immunities proposed and conceded to mining since 1868. 
 
 969. Ignorance which reigned respecting the true character of the precious metals. 
 
192 
 
 970. For a long time a proprietor of large landed estates, a merchant with large capital, were not considered 
 to be rich unless they had money in cash in their coffers. From this erroneous idea sprung the beUef that the 
 exchange of gold and silver for other articles of commerce was disadvantageous for the nation producing the said 
 metal, because it was equivalent to substracting its effective wealth, and substituting in place objects which it 
 was not beheved had no intrinsic value, and the importation of foreign articles was considered as a strategem of 
 European nations to extract Mexican silver. 
 
 971. From these astray ideas has sprung the great resistance which has been made in this country to the 
 efforts and attempts to favor t^ exportation of its precious metals. For this reason, then, rather than for the 
 necessity of contriving resources for the Public Treasury, were the duties imposed on the exportation of the 
 precious metals, which sometimes went as high as 10 per cent. It is true that the necessity of obtaining resources 
 contributed to this somewhat, as Jso the facility of collecting this impost at the exportation of the money, the 
 coinage of which was obligatory; but it can be assured that one of the principal reasons for this measure has 
 been the desire to make the exportation of silver difficult. 
 
 972. The States of the Mexican confederatio.i, in which mining wealth is found the most developed, and 
 forms the basis of their industrial and mercantile movemqjjt, have thought it proper to also impose different in 
 cumbrances on this branch of industry, for they have participated largely in the erroneous ideas already expressed, 
 and which have been so long generalized in this country. 
 
 973. If it is taken into account that there never have been in Mexico establishments for the exportation or 
 sale of agricultural products on a large scale ; that the few assays that have been made to estabhsh a circulating 
 medium, not metaUc, have given a deplorable result, and that the only signs of exchange used up to this time 
 and still existing in the country, are gold and silver money, it will not appear strange, but natural, the repugnance 
 there has been towards facilitating the exportation of silver, for it is in fact felt everywhere the lack occasioned by 
 its extraction, and principally where this metal is produced, which extraction diminishes many times the quantity 
 in circulation, to the degree of making mercantile transactions difficult, and even the most necessary domestic 
 operations. 
 
 974. Unfortunately these erroneous ideas still prevail in many of the men who take part in pubUc affairs, 
 both federal and local, and it has contributed greatly to the non-relief up to this time, of mining from all or many 
 of the burdens which are now weighing it down. It cannot be denied, notwithstanding, that for the last ten years 
 past, some advance has been made in the way of diminishing the burdens and incumbrances borne by this in- 
 dustry, as will be shown further- on. 
 
 975. It is also to be lamented, that either from the facility offered to the gathering of the local imposts on 
 mining, or from other motives, some of the principal mining States of the country, far from favoring the system of 
 immunities to mining proposed and sustained by the Executive, have been its most constant and decided oppos- 
 ers. It can be assured that the provision of Art. 78th, of the tariff of January ist, 1872, which permitted the 
 exportation of the precious metals free of duty, coined or in paste, was derogated by the 5 th Constitutional Con- 
 gress in the law of May 30th, 1872, through the influence of the principal mining States of Mexico. It is to be 
 hoped that when Congress takes up this important subject again, the mining States comprehending their true 
 interests, will put themselves in pro of a measure in which, although they may not have understood it before, 
 they are the most principally and directly interested. 
 
 b. Difficulties offered to the Freedom of Mining by the Renting of the Mints. 
 
 976. Another of the difficulties which the question of the absolute freedom of duties on mining products pre- 
 sents, is the relation which it has to the renting to individuals of the mints existing in the RepubUc ; for, ac- 
 cording to law, there is paid for the coining of silver, 4.4r per cent, and for that of gold, 4.618 per cent of the 
 value of those metals, of which duties more than half reverts to the profit of the lessees; and this business being 
 one of the most lucrative there are in 3.Iexico, it has happened frequently, and principally when the country has 
 
 UTO. Erroneous belief which sprung from that ignorance, and which has trammeled the exportation of the precious 
 metals. 
 
 971. Causes which moved the resistance made to efforts to favor the exportation of precious metals. 
 
 972. Imposition of duties by mining States in consequence of the erroneous opinions generalized throughout the 
 country. 
 
 973 Circumstances which contributed to cause resistance to the efforts made to facilitate exportation. 
 
 974. Advances mads in the last ten years regarding the diminishing of the burdens borne by mining. 
 
 975. The mining States have opposed the syslem of immunities to minino-. 
 
 976. The leasing of the mints is an impediment to the absolute freedom of duty on silver. 
 
193 
 
 beeh in afflicting circumstance from some overturning of public tranquility, that some capitalists have offered con- 
 siderable sums of money, on condition that certain mints should be leased to them. Unfortunately, also, some 
 time ago, the governments which have succeeded each other in this country, have been under the necessity of 
 leasing the principal mints. 
 
 977. The contractors, to insure themselves against any contingency that might impair their interests, have 
 exacted and obtained in their respective contracts, a clause by virtue of which the exportation of metals in paste 
 was prohibited in the districts in which said mints were situated. 
 
 So then the interests created in favor of the mint contractors, on the one hand, as also the sacred duty 
 of the Government to respect its contracts, and the impossibihty there has been found up to this time to rescind 
 those contracts, have been the principal causes why the Mexican Nation could not enjoy the benefits which 
 the Uberty of the mining industry would have afforded ; and it can be said that the difficult situation in which 
 various Administrations have found themselves, and the constant political disturbances, whould have been in a 
 large measure avoided, if it had been possible to decree that liberty, causing the mints to return to the power of 
 the Government, the renting of which is the principal hindrance to the liberation of mining from the burdens it 
 bears. 
 
 978. The prohibition to export precious metals in paste constituted one of the principal incumbrances on 
 mining, inasmuch us the productors of gold and silver were obliged to export their products in a designated and 
 very costly form ; for, besides the duties of coinage, they had to bear the expenses consequent upon conveyance 
 to the mint, and many others, which it would be lengthy to enumerate. 
 
 979. Mining was freed from this most onerous trammel in 1871 by that Administration obtaining the consent 
 of the lessees of the mints to the exportation of the precious metals in paste, on condition, however, that they 
 should pay the same coinage duties as if they were monetized. 
 
 980. Unfortunately, the two past Administrations had to lease the mints also, and these leases will probably 
 have to subsist still for some years, unless the Government should be able to dispose, before the termination of 
 those contracts, of considerable sums of money to recover the said mints, a necessary condition to be able to 
 decree the exportation of gold and silver free of duty. 
 
 981. The difficulties presented in the leasing of the mints are so great for the system of granting immunities 
 to mining, that the Mexican Government found it proper to prohibit imperatively and solemnly any renting of 
 them whatever. 
 
 c. Immunities Granted to Mining in 1868-9. 
 
 982. Notable and numerous have been the efforts made by various Administrations since 1868 to raise 
 mining to the height it ought to attain, of which the most important are set forth in continuation. 
 
 983. The law of May 30th, 1868, suppressed the federal duties of one "real" per "mark" on silver, 3 per 
 cent, on mining, and the duty on circulation. It was omitted, however, to set forth in each law the prohibition 
 of the power the States have, according to fraction ist of Article 112 of the Constiturion, to encumber importa- 
 tions and exportations, without the previous consent of the General Congress, and this omission caused that some 
 States, accustomed to encumber their mining products, re-established for their own treasures the duties suppressed 
 to the'pederation, making illusory in this way the immunity accorded by the general Government in favor of 
 mining. 
 
 984. Among the measures dictated in favor of this industry, the law of January 7th, 1869, which authorized 
 the exportation, free of all duty, of mineral stone, merits a special mention. Although it would appear that this 
 privilege only could be availed of in the mining districts near the coasts, because in the rest the conveyance to 
 the port of the silver stone costs more than the elimination of the metals, it has been seen, however, that some 
 companies working silver mines in places distant from the coast, and therefore suffering a heavy burden from 
 high freight, have preferred the exportation of stone to- that of the pastes, which is an evident proof that the 
 
 977 Causes why Mexico has not enjoyed the benefits which liberty of mining would have afforded. 
 
 978 The prohibition to export pastes constituted one of the principal incumbrances to mining. 
 
 979 Pennission granted by the law of December 24th, 1871, to export pastes, paying the duties of coinage. 
 980' Difficulties of the past and present administrations to decree the complete liberty of exportation. 
 
 981 Prohibition to lease the mints decreed by the law ol December 24th, 1871. 
 
 983 Efforts made at different periods to raise mining out of the prostration m which it lies. 
 
 983' Immunities granted mining in 1868, and re-es1ablishme'-,t in the States of the suppressed imposts. 
 
 984.' Privilege to export mineral stone free of all duty, granted by the law of January 7th, 1869. 
 25 
 
194 
 
 duties imposed on eliminated metal, together with other consequent expenses, amount to more than the freight 
 by land and sea of the mineral stone. 
 
 985. This privilege, however, has served somewhat to encourage miners, who have seen in it the intention of 
 the Legislature to free mining from the burdens that oppress it, and as a natural .consequence of this first step 
 on the road to liberty, they have hoped for the exemption of all imposts on the raw products of their mines ; and 
 it can be assured that this hope has contributed to sustain the mining industry during the recent epoch, for, as 
 the Report truly states, with the exception of some special localities, the result of mining labor in Mexico is not 
 satisfactory, still less lucrative. 
 
 d. Immunities Granted to Mining in 187 1-2. 
 
 986. Among the most efficacious measures m favor of mining, decreed in 187 1, must be enumerated the law 
 of December 24th of that year, which permitted, as has already been said (paragraph 979), the exportation of gold 
 and silver in paste. So as not to fail in the faith of the nation pledged in the leasing of the mints, it was neces- 
 sary to burden the pastes with the same duties of coinage as if they were monetized, as long as the leases were in 
 force; but even so, this privilege was a great relief to mining, which has been since then exporting legally its 
 pastes, principally when these contain a residuum of gold. 
 
 987. The Admmistration of 1871, being convinced of the absolute necessity of permitting the export of silver 
 duty free, which product is the chief of those which serve the nation in exchange for others, decreed in the tariff 
 of January ist 1872, the suppressing of those duties. This liberal measure could not, however, be sustained, 
 principally because of the ignorance which has prevailed respecting this subject, and of the resistance opposed by 
 mining States, whose principal rents consists in duties on products of the mines, and who believe to see a danger 
 for their interests in the decreeing of absolute Uberty from all class of duty on the exportation of national pro- 
 ducts. The consequence of this was that the General Congress derogated by means of the law of May 30th, 
 1872, the provisions of the tariff of January 1st, of the same year, establishing free exportation of national pro- 
 ducts, before these could be put in practice. That Congress, however, did not wish to re-estabhsh the old system, 
 without lessening somewhat the encumbrances that weighed on mining, and it was determined, in the same law, to 
 reduce the export duty on silver from the 8 per cent, it was then paying to 5 per cent., its present rate, and on 
 gold from i^ to \ per cent. 
 
 988. The tariff of January I St, 1872, not only proposed to grant privileges to mining. Agriculture was 
 equally an object of their design, for the Government of Mexico has always considered mining not as the princi- 
 pal wealth of the Republic, but as the most efficacious means to make the prosperity of the nation, because its 
 products which serve for exchange with other nations represent the larger part of those which can be exported, 
 while the building of cheap communication does not facilitate the development on a large scale of other 
 branches, whose products serve equally for exterior exchange. 
 
 Agriculture merited certainly the attention of the legislator in preference, for it provides the inhabitants with 
 that most indispensable to the support of hfe ; for this reason import duty was exempted in the said tariff on the 
 following articles • 
 
 Plows and coulters for agriculture, 
 
 Cows, 
 
 Cutlasses, ordinary, without sheath, 
 
 Scythes, 
 
 Sickles, 
 
 Harrows and rakes. 
 
 Shovels, 
 
 Picks, 
 
 Hoes, 
 
 Spades, 
 
 Pumps for water. 
 Tubing for do. 
 Wheelbarrows, 
 Guano, 
 
 Machines and apparati, 
 
 Plants and seeds for the improvement of agricul- 
 ture, up to 250 lbs. 
 
 989. The exemption of duty on the articles of the preceding list is a proof patent that the Mexican Govern- 
 ment has comprehended the propriety of giving an impulse to agricultural labors by faciUtating the acquisition of 
 tools and instruments indispensable to cultivation, as also that of seeds which may serve to improve our different 
 kinds of plants. 
 
 985. 
 
 987. 
 
 Mining sustained by the hope that free exportation may he extended to all mining products. 
 Relief of mining by tbe legal exportation of its pastes by virtue of the law of December 34th, 1871. 
 Provision of the tariff of Januavy 1st. 1873, on free exportation modified by the law of May SOth, 1872. 
 Reasons for which the Mexican Government considers agriculture worthy of preferential attention. 
 Exemption of duties granted by the tariff in force for importation of instruments and seeds for agriculture. 
 
195 
 
 990. But all the efforts made by the Administrations of Mexio in favor of mining have been frustrated, not 
 only by the erroneous ideas which have prevailed respecting what the mining industry really is, and by the work- 
 ing of the monopolists who directly or indirectly brought to naught the attempts made by the Executive to re- 
 duce the work of the mints to the coinage of the money necessary to the interior trade, but other causes, which 
 it would be lengthy to enumerate here, have also prevented the fulfillment of the law of January ist, 1872. 
 
 3. NECESSITY OF GRANTING PRIVILEGES TO MINING. 
 
 991. In what has been said up to this point respecting mining industry in Mexico, enough has been expressed 
 to demonstrate, not only the great necessity, but the veritable urgency, there is for granting privileges to mining, 
 in order to encourage its growth in this country ; for a part of this exposition in reference to mining is for the 
 purpose of manifesting the necessity there is for granting these privileges. There remains, therefore, very 
 Uttle to say on this subject in this place, and only a few considerations will be brought to mind, in order not to 
 let this opportunity pass without again manifesting the convenience and the pubHc necessity of conceding im- 
 munities to the mining industry of the nation. 
 
 992. Mexico in general is susceptible of producing every kind of agricultural product, by the great variety 
 of its climates and the proverbial fertility of its soil. Unfortunately, the lack of cheap and easy communication 
 impede for the present the development on a great scale of agricultural industry, which, not being able to reaUze 
 its products in foreign markets, has to limit itself to interior consumption. Thus is explained why many of the 
 articles of prime necessity, such as Indian corn and wheat, are not produced in larger quantities, and that the 
 machines and appliances so necessary in the United States to facilitate the production of agricultural products 
 for exportation are not so indispensable in Mexico as in that country. 
 
 993. But, therefore, as agricultural products cannot yet satisfy the needs of exchange with the countries with 
 whom Mexico has commercial relations, efforts have been made from a period long before the present, on the 
 part of the successive governments of this Republic, since the independence, to liberate the mining industry from 
 every encumbrance that weighs on its production; as the only one capable for the present of satisfying those ne- 
 cessities. In the exports of Me.xico silver represents the principal part ; its complete liberty would have conse- 
 quently served to invigorate the productive forces of the nation. From increase of production would have 
 resulted the growth of exportation, and as this and the importation of foreign goods are in direct relation to each 
 other, it is beyond doubt that our principal revenues, the duties those goods bring on their introduction into the 
 Republic, would have sufificed not only to cover the necessary expenses of the Administration, but also to invest 
 large sums in the material improvements we so much need, and to be able to gradually reduce those duties with- 
 out fear, which, by being generally now very high, injures industry itself, constituting at the same time a heavy 
 burden upon the poor classes of our people. 
 
 994. All these considerations have always been within the reach of our statesmen, notwithstanding that the 
 ignorance of the masses, made use of by the defenders of monopoly, has impeded constantly the freedom of the 
 industry that with reason has been called Xh^ principal fountain of the wealth of the country. It was understood 
 in Mexico that although during the Spanish domination the burdens that weighed upon mining were not a real 
 obstacle to their advancement, for the imposts were equal in all the colonies, and Spain was almost exclusively 
 the only nation that provided the world with the silver necessary for consumption. It was not the same afterwards, 
 when, becoming emancipated from the metropolis, the colonies came to form separate entities, with their own 
 legislations, and entered consequently into competition one with another respecting the production of articles serv- 
 ing for interior exchange. 
 
 995. Thanks to the immunities conceded to this important branch of industry, it was possible not only to 
 snatch it out of the state of ruin in which the war of independence had left it, but also to realize the organiza- 
 tion of foreign companies, which, with plenteous capital, dedicated themselves to the development of mines on a 
 large scale; but unfortunately, the ideas of the statesmen who advocated the complete Uberty of mining as regards 
 its production had, by the force of circumstances, to yield to those of tlie minority, and hence it came that 
 mining kept, after the independence, the same situation as during the colonial regimen, and that in some periods 
 it has been seen even more oppressed. 
 
 990 The realization of free production was impeded by other causes besides those mentioned. 
 
 991! Convenience and public necessity of granting privileges to mining in Mexico. 
 
 992'. Cause which nciw impedes the development of mining in Mexico. 
 
 993 Reasons for considering mining as the most efficatious means for improving the financial situation of Mexico 
 
 994 Competition of Mexico with other nations in mineral production since the independence. 
 
 995. Investment of foreign capital through the privileges granted to mining. Opposition to its complete liberty 
 
196 
 
 4. EFFORTS OF THE EXECUTIVE TO FREE MINING FROM THE BURDENS IT BEARS. 
 
 996. In various epochs efforts have been made to reHeve mining of the encumbrances it suffers ; the first 
 embraces the period from May, 1868, in which the Mining Council was nominated, to January ist, 1872, in which 
 the tariff in force was issued ; the second, the period of the Administration of Sr. Lerdo de Tejada, and the third 
 the period of the present Administration. 
 
 997. There will be considered, then, in this place, w'th due separation, the following subjects connected with 
 the proposed immunities in favor of mming : 
 
 A. Administration of Sr. Benito Juarez. 
 
 B. Administration of Sr. Sebastian Lerdo de Tejada. 
 
 C. Administration of General Porfirio Diaz. 
 
 D. Considerations respecting the conduct of the Executive in the question of mifting. 
 
 A. Administration of Sr. Benito Juarez. 
 
 998. Since the work of the Mining Council, convened in Mexico in May, 1868, made plain the necessity of 
 reUeving mining of the burdens it is suffering, the Executii^e has been trying to obtain the diminution of them, with 
 the object of procuring the development of this industry. Therefore, in almost all the memorials and reports 
 which it has addressed to Congress this important subject has been considered. 
 
 999. With the Records of the Treasury for September 28th, 1868, there was submitted again to Congress, as 
 an annexed document, under the number 30, and with the opportune recommendations, the paper from the Mining 
 Council already spoken of (paragraph 966), recommending to the Legislature the examination of that important 
 affair. 
 
 1000. On April ist, 1869, the Executive proposed an initiative to Congress, in which was recommended the 
 suppression of all imposts then weighing on mining, and the estabUshment of a tax of 5 per cent, on all the profits 
 of the mining enterprises. 
 
 looi. In the Records of the Treasury for September i6th, 1869, the Executive insisted in its ideas upon 
 mining, and in an especial manner in those set forth in its initiative of April ist preceding, in these terms : 
 
 "The Executive judges that it would fail in its duty if it omitted to reiterate its opinion that it will be im- 
 possible to find a way out of the ill conditions which hamper the RepubUc, until we obtain on our codes the 
 expression of the principles of free exportation for our natural products, a free circulation in the Republic, and the 
 protection of mining, Uberating it from all the trammels, burdens and embarrassments which make of it a risky 
 speculation instead of an industry." 
 
 1002. In the exposition which the Executive addressed to Congress through the Treasury Department, on the 
 ist of April, 1870, it said on this important subject, and on the pressing necessity of again placing the mints 
 within the power of the government, as follows : 
 
 " 43. The interests of the mining industry, in which lies the future of our country, are imperiously claiming 
 the preferential attention of Congress. On the basis of the legislation now in force, mining has so many tram- 
 mels and so many incumbrances that only the mines in ^^ bonanza'' can be worked with profit to the miners. All 
 the others, which render scarcer returns, cannot produce sufficient to meet their expenses, pay all the impost that 
 encumber mining, and submit to all the trammels which it at present bears. The most grinding of all these is 
 undoubtedly that which prohibits the exportation of silver in paste. The evils of this prohibition can hardly be 
 practically calculated, and it can be considered that to it is principally owing the decline of mining in Mexico. 
 The necessity the miners are under of carrying their products to the mints, which, many times, are at long dis- 
 tances from the mines, exposing them to all thedangers of the roads and all the inconveniences of delay, to suffer 
 a reduction in the mints of at least 5 per cent, and then to seek the port for the exportation of their monetized 
 metals, are encumbrances so considerable, that while they subsist it is not possible for mining industry to take the 
 development to which it is called. It'is true, that besides the legal prohibition to export silver in paste, the stipu- 
 lation exists in all the contracts and leases of mints not to permit the exportation of precious metals in paste; but 
 
 996. Efforts made by various administrations to free mining from all incumbrance. 
 
 997. Recent epochs in which these efforts have been made. 
 
 998. Recommendations made to Congress by the Executive since 1868 to diminish the burdens which mining bears. 
 999 Remission to Congress by the action of the Mining Council, convened May, 1868. 
 
 1000. The Executive proposed on April 1st, 1869, to suppress the duties on mining, and to establish a tax on profits. 
 
 1001. Insistence of the Executive in its ideas on mining in the records of the Treasury, of September 16th, : 
 
 1002. Observations of the Executive April 1st, 1870, on the necessity of recovering the mints. 
 
197 
 
 the public interests which militate against the said prohibition are so great that Congress would proceed with 
 entire justice if, on authorizing the exportation of silver in paste, it should accord the corresponding indemnity in 
 favor of the mint contractors, whose contracts are in force. Besides, it ought to be borne in mind, that of the 
 ten mints there are in the Republic, some have abeady returned to the power of the Government, and others will 
 return before long. 
 
 1003. The Executive devoted an important part of the Records of the Treasury of September loth, 1870, to 
 speaking of mining, the state in which this industry then was, and of the imperative necessity there was to pro- 
 mote its development. Experience having demonstrated that in proportion as the burdens imposed on miners 
 were diminished, the public rents increased, and that it was necessary to attend to the creation of more abun- 
 dant resources to satisfy the administrative necessities, the following measures were proposed in the Record 
 referred to: 
 
 a. Reduction of all duties weighing on mining to one only which shall be moderate, and fall on the profits 
 each mining enterprise may have. 
 
 b. Liberty to export gold and silver in paste, free of all duty. 
 
 c. Reduction of coinage duty to the cost of that operation. 
 
 d. Liberty for individuals to separate the metals. 
 
 e. To cause the mints to return to the power of the Government, and to prohibit them from again being 
 leased. 
 
 1004. To cover the deficit there might be in the Federal Treasury, in consequence of the abolition of the 
 imposts recommended, it was proposed that recourse should be had to others which were not of an anti- 
 economic character, and it was indicated that even if mining should be exempted from all duty on the profits, it 
 was certain that the increase of the industry would cause such a stimulus and activity in the development of all 
 branches of public wealth, that the funds would be in a short time amply compensated for the imposts it might 
 cease to receive by reason of this exemption. 
 
 1005. It was said, also, that in order to carry out this reform, and that it should not be nullified by the 
 duties the States might impose, it would be necessary to prohibit these from decreeing imposts on mining pro- 
 ducts, by means either of a secondary law or of constitutional amendment, which would make clear the sense of 
 the precept contained in the already quoted fraction ist of Article 112 of the Federal Constitution. 
 
 1006. In spite of all these recommendations, the States, and principally those which, by being mining ones, 
 were more interested in the abolition of all duty falling directly on production, continued collecting imposts on 
 the silver metals under various titles, instead of reforming their incomes, which, without much labor, would have 
 brought about the increase of their rents. 
 
 1 007. As soon as the Executive was invested with extraordinary powers in the Department of the Treasury, by 
 the law of December 2d, 1871, it hastened to put in practice the immunities to mining which had been recom- 
 mended to Congress in the law of December 24th, 1871; it set forth the principle of the exportation of silver in 
 paste, and in the tariff of January ist, 1872, it suppressed the export duty on precious metals, as has already been 
 
 said. 
 
 B. Administration of Sr. Lerdo de Tejada. 
 
 1008. During the past Administration this question was not mooted by the Executive. It was suggested, 
 however, to suppress all export duty on national productions, including, of course, the precious metals, and 
 a favorable opinion was presented by the two committees of the Treasury, on the 8th of May, 1876; the little 
 interest of the Executive on the one hand, and on the other the same causes which, in 1872, impeded the carrying 
 out of the privileges decreed in favor of mining, occasioned that that initiative did not result in any formal 
 action. 
 
 1009. It is to be regretted that nothing was able to be advanced respecting this matter during the late Ad- 
 ministration, because the circumstances of the country were ,hen propitious for the reaUzation of the measures. 
 
 1003. Measures proposed in the records of the Treasury of September 16th, 1870, for promoting the development of 
 mining. 
 
 1004. Opinion of the Executive on the result of freedom of mining to the branches of public wealth. 
 
 1005. Proposition to prohibit the States from decreeing imposts on mining products. 
 
 1006. Bad system followed by some States respecting mining, in spite of the recommendations of the Executive. 
 
 1007. Immunities conceded to mining by the Executive in the exercise of the powers extraordinary of 1871-3. 
 1008 Causes which, during the late administration, prevented the suppression of export duties. 
 
 1009. The favorable circumstances during the late administration for decreeing the free production of precious 
 metals. 
 
198 
 
 C. Administration of General Porfirio Diaz. 
 
 loio. The present Administration was hardly established when it was again moved by the Executive to sup- 
 press an export duty on gold and silver. Congress was not able to take up this subject during its period of April 
 and May of that year. 
 
 loii. On the 30th of October of the same year, 1877, another initiative was presented by the Executive, 
 proposing the suppression of export duties on national productions, and at the same time the manner of making 
 good to the Treasury the income it would cease to receive at the suppression of export duties on precious 
 metals. 
 
 1012. The Executive has insisted in its motion at the opening of every period of sessions, both in the speeches 
 of the President of the RepubUc and in the Records and Expositions of the Treasury Department. The united 
 Financial Committees of the House of Deputies presented, October 17th, 1878, a favorable opinion on this pro- 
 position ; but, unfortunately, weighty matters prevented its discussion during that period, with the expectation, 
 however, that- it would pass to some definite resolution in the next. 
 
 1013. It is seen, then, that notwithstanding the prejudices many men in this country are under respecting 
 this question, and notwithstanding the interests created by the imposts on mining, and the imminent necessities 
 of the. Mexican Treasury, which, far from permitting the reduction of existing taxes, imperatively require their in- 
 crease, the present Executive is of the profound conviction that all these considerations ought to give way to the 
 pressing need of liberating the production of our exportable articles from every encumbrance. 
 
 1014. It is to be hoped that the projects favorable to mining, initiated by the present Administration of 
 Mexico, may be soon accepted by the Legislature, and that so this important branch of national industry may 
 come to see itself free of every encumbrance. If the approbation of those proposals should result in the invest- 
 ment of large foreign capital in the working of Mexican mines, and particularly by Americans, who have the 
 advantage of possessing practical knowledge of this branch of business, for they have occupied themselves with 
 great success in the working of mines in their country, the hopes and desires of the Mexican Government would 
 be fulfilled; a great service, would have been done to the natioii, and all the inconveniences and difficulties which 
 might arise from the suppression of export duty would become amply recompensed with the progress and growth 
 of mining industry in Mexico. 
 
 D. Considerations Respecting the Conduct of the Executive in the Question of Mining. 
 
 1015. It is nowhere an easy task to radically change the financial system of a people. The difficulties in 
 the way of this increase very considerably when it treats of suppressing an impost on rich productions, forming a 
 ready source of revenue for a treasury which is unbalanced and can make no use of the resources of credit. 
 
 1016. It is easier to estabUsh and preserve an impost, however unjust and anti-economic it may be, than to 
 abolish it completely when it has been collected for a long time ; and the reason is, that from the moment it is 
 established interests are created which later become an opposition to its suppression. This has happened with 
 the duty on coinage, which, through being excessive, has come to be a fat revenue for the Treasury, and then for 
 the mint contractors, and the same thing happens regarding the duties imposed on silver in some of the mining 
 States, for though their respective governments are persuaded that the duties imposed by them on silver can be 
 substituted easily, and with notable advantage to their treasuries, with others more just and convenient, they 
 resist, however, to follow the example of other States, which do not encumber in any way the production of their 
 exportable articles. 
 
 1017. A more evident proof cannot be presented that the Governments of Mexico have comprehended the 
 imperative necessity there is to free mining from every encumbrance, than the fact that the national Executive, 
 when it has been invested with powers extraordinary, has come to decree favorable laws for this branch of 
 industry, although unfortunately they have not come to be put in execution, by having been derogated afterwards 
 by Congress; but it has been again insisted that the same immunities should be decreed, although it should cause 
 
 1010. Initiative of the Executive April 16th, 1877, on the suppression of export duty on gold and silver. 
 
 1011. Another initiative of the Executive October SOth, 1877, on the suppression of export duties 
 
 1012. Opinion oC October 17tli, 1878, favorable to the project of free exportation. 
 
 1018. The convenience of the liberty of mining is superior to all the considerations opposed to it. 
 
 1014. Hope that the liberty of mining may soon be decreed, and results such liberty would produce. 
 
 1015. DiiBculty of suppressing an impost of easy collection. 
 
 1016. Resistance made by some States to the suppression of local imposts on mining production. 
 
 1017. Derogation by Congress of laws favorable to mining decree in the exercise of powers extraordinary 
 
199 
 
 immediately a deficit of more than a million of dollars in the income of the Treasury, in itself little and insufficient 
 for its most urgent requirements. 
 
 1018. Although, in compensation for what would cease to be received in export duties,,it was proposed to 
 increase the importation quotas of the tariff, it is probable, however, that this increase would result in diminishing 
 the importations, and, consequently, the object proposed would not be attained. 
 
 1019. When the Government of a country like Mexico, whose treasury is in a habitual state of deficit^ and 
 with great difficulty covers its most urgent necessities, is under the duty to look after the conservation of public 
 peace, and for this end sees itself obliged, in place of consenting to the reduction of imposts, to sustain, on the 
 contrary, the subsistence of those being collected, and even to procure the increase of the rents of the revenue, 
 it must have a very firm conviction of the urgency and the necessity of relieving mining from the burdens which 
 weigh upon it, to propose and insist on the suppression of one of the most easy and cheaply-collected imposts, 
 and which represents a considerable parts of the pubHc rents. 
 
 5. RECTIFICATION OF SOME INACCURACIES CONTAINED IN THE REPORT. 
 
 1020. The Report, in speaking of mining, falls into inaccuracies of two kinds ; the first refer to the present 
 state of mining industry in Mexico, and the second to the imposts on mining decreed in the State of Hidalgo. 
 Each one of these mistakes will be spoken of separately. 
 
 A. Inaccuracies in Reference to the state of Mining i7i Mexico. 
 
 102 1. Although the Report states that the mining wealth of Mexico, inexhaustible to all appearance, and 
 known for more than three centuries, has not been able to reach the development of which it is susceptible, and 
 attributei with much reason, the backwardness in which it relatively is to the system followed by the successive 
 Administrations of the Republic, as-well as by some of the State governments of the Federation, it falls, not- 
 withstanding, into various errors, which it is proper to rectify. 
 
 1022. The Report asserts, referring to the terms of the speech delivered by the Hon. John W. Foster, in New 
 Orleans, November i8th, 1875, that the total exportation of Mexico duringa year, which it does not precisely fix, 
 for it designates it only as " the last on which there were data," had amounted to $31,600,000, of which sum 
 $25,052,959 were gold and silver. The fiscal year to which the Report refers appears to have been that of 1872-3, 
 for the notice of the amount of the exportation of that year was inserted at the end of the speech of Hon. John W. 
 Foster, delivered before the New Orleans Chamber of Commerce, in the New Orleans Republican, of November 
 19th, 1875, had not been obtained in the Department before writing the preceding part of this exposition, and all 
 the quotations and allusions to the said speech are taken from a translation of it published in numbers of the 
 '^Diario Oficial" of December ist, 2d, 4th and 8th, 1875, and this being so, these data are substantially correct, 
 as can be seen by comparing them with the notice of the exportation of said year, which was inserted in another 
 place in this exposition, (paragraph 761). The Report asseverates, in continuation, that the exportation for the 
 year 1876-7 was $28,700,000, and estimates that of gold and silver at $23,000,000, deducing, from the compari- 
 son of these figures with those it had mentioned in reference to the exportation of a former year, (1872-3), that 
 exportation had fallen in the year 1876-7. In regard to the exportation of the year 1876-7, which the Report 
 fixes at $28,700,000, it must be noted that according to the data of the Records of the Treasury of December 
 loth, 1877, it amounted to $28,772,184 24. 
 
 1023. Moreover, the increase which occurred in the said year of 1872-3, in the production and exportation 
 of silver assuredly proceeds from a great dilligence having been shown by the Administration which ruled the 
 affairs of the country up to the middle of 1872, in liberating mining production from all encumbrance. This 
 method of proceeding has served as a stimulus to mining enterprises, for it caused hopes to be entertained re • 
 spectingthe relief of that important branch of business, but tke same conduct not having been followed by the 
 succeeding Administration, and the increasing production of silver in the United States having continued, and 
 there being a lesser consumption in consequence of the demonetization adopted by some European governments, 
 the production and exportation of that metal in Mexico had naturally to decrease. 
 
 1018 Inconvenience of substituting for export duties the increase of those of importation. 
 
 1019 Firm conviction of the Mexican Government respecting the necessity of liberating mining from every incum- 
 
 brance. 
 1030. 
 
 Inaccuracies of the Report in relation to the state of mining in Mexico, and to the imposts in the State of 
 
 Hidalgo. 
 
 1031 Errors contained in the Report in the past relative to the mineral production of Mexico. 
 
 1033 Observations on the assertion of the Report that the exportation diminished in the year of 1876-7. 
 
 1033' Inaccuracy of the deductions of the ReporLon the proportion of products exported in previous years. 
 
200 
 
 1024. Notwithstanding that the same Report states that the general opinion respecting the present state of 
 mining is, that it does not present a flourishing aspect, and that the results of work are not satisfactory, except in 
 some particular localities, and it considers, quite accurately, the onerous imposts created by the Federal Govern- 
 ment and those of some States as the principal obstacle to the success of mining enterprises, it does not explain 
 with proper clearness what the causes are that have impeded until now the adoption of a system of complete lib- 
 erty for that important branch of business, and it has therefore been necessary to enumerate those causes in 
 another part of this exposition. 
 
 B. Inaccuracies in reference to Imposts on Mining decreed by the State of Hidalgo. 
 
 1025. In reference to the local imposts established pn mining by the State of Hidalgo, the Report says as 
 follows : 
 
 " Example : — The State of Hidalgo, by virtue of a decree, has taken possession of a 24th part of sach mine 
 that may begin to be worked from the date of the law, that is, that it will take -a 24th part of 
 
 the profits 4 25 
 
 The local imposts of the State of Hidalgo (district of Real del Monte) has lately suffered some changes. One 
 of the thirteen railway contracts to which I have referred was celebrated with the State of Hidalgo and its Legis- 
 lature. For the purpose of providing itself with money for the enterprise, it imposed an additional tax so oner- 
 ous to mining companies that they resolved to suspend their labors and abandon their mines. As this would 
 have resulted in a revolution, and as it was so manifestly oppressing, the government caused a modification to be 
 introduced into the impost, and compounded this matter with the principal companies, through the payment by 
 these of a round sum. So that I cannot say what is the true state of local imposts in that State. This incident 
 gives an idea of the calamities mining is subject to in Mexico. 
 
 " Confident that the foregoing facts and figures relative to the importation of goods and to mining will be 
 of some interest to those of my countrymen who are seeking information respecting this country, considering it 
 as a field in which to operate enterprises, I pass to take into consideration the third and last, part of this docu- 
 ment." 
 
 1026. The government of the State of Hidalgo having been asked for information regarding the facts men- 
 tioned in that part of the Report just quoted, it replied, setting forth that the State decree No. 129, issued in 
 Pachuca, September 30th, 1871, determined that in all legal considerations, and in the issuing of their shares, the 
 mines that should be discovered and taken up in the State from the publication of the said decree should be 
 esteemed divided into 25 parts instead of 24, which was the anterior legal division according to the mining ordi- 
 nances, and that the new part created should be considered forever " in lien," and remain as the property of the 
 State. By virtue of this decree, the State of Hidalgo holds in .propriety, in all the mines taken up from the date 
 of the decree, not a twenty-fourth, but a twenty-fifth part, or what is the same, 4 per cent, of the net profits, and 
 not 4.25 per cent, as the Report says for, the 5th fraction of Art. ist of the decree of the State of Hidalgo, No. 
 322, dated December loth, 1878, enumerates among the rents of the State, 4 per cent, on the profits of the 
 mines, whose entry and possession have taken place before the publication of law 129, of September 30th, 1871. 
 
 1027. In the report referred to, of the Government of the State of Hidalgo to this Department, it says 
 as follows : 
 
 " It is very satisfactory also to express, that in this federal division mining is to-day in a really better situa- 
 ation than for the last six years, and that many mines entirely new, or that were before paralyzed, are in active 
 operation, and that several among them promise large profits and an extended business." 
 
 1028. In regard to the impost decreed by the State of Hidalgo, to aid the construction of a railroad from 
 Pachuca to Ometasco, to put it in connection with tfte fine from Vera Cruz to Mexico, it is to be noted that this 
 impost is of an entirely transitory character, and that it consisted, according to the decree of May ist, 1878, as 
 far as regards mining, in $2.00 per kilogramme of silver produced, and as the value of this, from the gold it con- 
 tains, exceeds $40.00 per kilogramme, the impost does not come up to five per cent, on the value of silver, 
 vi^hich impost was to substitute the three per cent, and the " real " per " mark '' with the federal tax which, before 
 the law of May 30th, 1868, the Federal Government collected on silver. 
 
 1024. Failure to explain the causes that have impeded the liberty of mining. 
 
 1025. Account given by the Report of the facts occurring in Hidalgo in regard to a tax on mining. 
 
 1026. Decrees of September 30th, 1871, and December 10th, 1878, burdening the profits on mining with 4 per cent. 
 
 1027. Condition of mining in the State of Hidalgo, according to the report of tbe Governor to the Department of 
 Finance. 
 
 1038. Amount of the duty imposed on silver by the State of Hidalgo and the transitory character of the impost. 
 
201 
 
 1029. It must be noted also that this impost was decreed in the character of a devolution, inasmuch as the 
 sums paid by the contributors were to be returned to them m railway shares, which railway, besides being a work 
 advantageous for the State and for inining, has a non-reimbursible subsidy of $10,000 per kilometre given by 
 the Federation and the State, and a loan of $2,000 per kilometre made by the State, with conditions advanta- 
 geous for the railroad. 
 
 i03'o. Notwithstanding this, the State Legislature determined by decree 308, of July 2Sth, 1878, that the 
 impost referred to should be reduced to sixty cents per kilogramme of silver, which is equivalent to one and one- 
 half per cent, on the value of that metal, giving it a reimbursable character in shares, only for the third part of 
 the sum paid. 
 
 1 03 1. Respecting this matter, the report of the State of Hidalgo says as follows: 
 
 " In use of the powers conferred upon it by the State Legislature, this government has excused many of its 
 constituents from the payment of the impost, by condition that they should subsidize the railway company, con- 
 sisting of the shareholders who have made payment in sums not coming to one per cent, on the value of the pro- 
 ducts, and which are applied directly to a work which, as before said, will bring great facihties and advantages to 
 the development of the public wealth of the State, and very signally to mining and to agricultural interests, which 
 by these means will be ultimately bound together, and put in communication with the capital and the port of 
 Vera Cruz." 
 
 1032. Moreover, the report from the Governor of the State of Hidalgo states that there has not been, nor is 
 there any danger, either of suspension of work on the mines, nor of disturbances of public peace in the State of 
 Hidalgo, by reason of the imposts on mining, to which the Report of the United States Representative refers. 
 
 6. SUMMARY OF FACTS RELATING TO THE DEVELOPMENT OF MINING IN MEXICO. 
 
 1033. From the foregoing explanations, the following facts appear to be demonstrated in relation to the 
 present state and development of mining industry in Mexico : 
 
 I St. That while the Report contains well-founded appreciations of mining in Mexico, it has fallen into inaccur- 
 acies, owing, probably, to the want of sufficient data to estimate this compUcated and important question. 
 
 2d. That the change is to be regretted, which the ideas of the Hon. John W. Foster have suffered respect- 
 ing mining in Mexico from 1875 to 1878, which change is brought to notice by taking into account his New 
 Orleans speech of November i8th, 1878, and his report to the Manufacturers' Associations of Chicago of October 
 9th, 1878. 
 
 3d. That experience has demonstrated that the most efficacious means to promote the development of 
 mining is to free it from the encumbrances and imposts, and that, thanks to this system, the Spanish Government 
 succeeded in developing mining industry considerably during the last years of its domination in Mexico, inasmuch 
 as from $4 000 000, in which the production of the middle of the seventeenth century is calculated, it rose in the 
 first years of this century to as high as $27,000,000. 
 
 4th. That, persuaded of these ideas, the first independent Government of Mexico again reduced the imposts 
 which weighed on mining, in the law of November 22d, 1821. 
 
 Sth. That although the tendency of the first independent Governments, up to the year 1828, was to reduce 
 the burdens of mining, laws were enacted since then, notwithstanding, which prevented the hberty of that branch 
 of business. 
 
 6th That in consequence of the liberal system respecting mining, followed by the first independent Govern- 
 ments of Mexico a considerable impulse was given to this branch of wealth, procuring the investment in it of 
 foreign capital of some consideration. 
 
 7 th That in consequence of the inexperience of the capitalists who speculated in the mines, and principally 
 
 1039 The revolutionary character of the impost referred to, and its advantages for the railroad. 
 
 1030 Reduction of the impost from |2 to 60 cents per kilogramme on silver, and the reimbursement of the third part 
 
 in sli9i]*6S 
 
 1031.' Advantages which result from the impost, acccording to the report of the Governor of Hidalgo. 
 
 loss! The impost has not produced the evU results which the Report states. 
 
 1033* Summary of facts related to the development of mining in Mexico. 
 2(5 
 
202 
 
 of the imprevision of their managers in Mexico, the results did not correspond to the hopes entertained, and 
 finally the mines in Mexico were abandoned, to the great damage of the country. 
 
 8th. That since the year 1825 it has been thought to re-establish the imposts on mining suppressed by the 
 law of November 22d, 1821, for the purpose of making the income equal to the expenditures, which was not 
 procured then by virtue of the generous considerations set forth against that project by the financial committee of 
 the Senate. 
 
 9th. That from 1830 to 1838 the tendency of the Mexican Governments was, as a general rule, to reimpose 
 the taxes and burdens that weighed on mining, although sometimes liberal measures were decreed in favor of 
 that industry. 
 
 loth. That one of the encumbrances that has contributed most to stupefy mining industry in Mexico has 
 been the prohibition to export gold and silver metals in paste, and the obligation imposed upon them of going 
 out only in coin, the cost of their coinage being very considerable. 
 
 ♦ 
 nth. That what contributed also to impede the development of mining in Mexico was the high price of 
 quicksilver, which rose as high as $150 per quintal, when in the last years of the Spanish Government it was 
 sold at $44 per quintal. 
 
 1 2th. That another of the measures that have contributed most to create trammels to mining was the duty 
 on circulation imposed on money which circulated from one part of the Republic to the other. 
 
 13th. That at the commencement of the year t868 mining was, as regards the burdens and imposts that 
 weighed upon it, in a still worse condition than it was at the consummation of Mexican independence, on Septem- 
 ber 2ist, 1821. 
 
 14th. That for the purpose of raising mining out of the prostration it was in, and of promoting its develop)- 
 mentand aggrandizement, the Administration named a Mining Council, that they might propose suitable measures, 
 which Council advised the suppression of every impost and burden on mining. 
 
 15th. That the adoption of the system of privileges to mining has stumbled against many difficulties for a 
 long time in Mexico, among which figured pre-eminently the vulgar belief that the riches of a country are its 
 mines, and that the exportation of mineral products ought not to be favored, because it would bring with it the 
 poverty and ruin of the nation. 
 
 1 6th. That another of the principal difficulties that are presented to the adoption of the system of privileges 
 to mining, Ues in the renting of the mints, which have grown into monopoUes that are very wealthy and exercise 
 a large influence in the country. 
 
 17 th. That the mining States, which are the most concerned in the system of privileges to mining, for it 
 results in the aggrandizement of that industry, are unfortunately and generally those that have manifested the 
 most resistance to the system of immunities proposed and decreed since May, 1868. 
 
 1 8th. That the Fourth Constitutional Congress suppressed, by the law of May 30th, 1868, various of the 
 duties that weighed on mining ; but that, unfortunately, all these duties were immediately re-estabHshed by the 
 States for their own particular treasuries. 
 
 19th. That Congress itself authorized, by means of the law of January 7th, 1869, the exportation of mineral 
 stone free of all duty, which constitutes an important privilege in favor of mining, and which has given good results 
 up to the present time. 
 
 20th. That the law of December 24th, 187 1, authorized the exportation of precious metals in paste, although 
 obliging them to pay the high duties on coinage, in order not to fail in the faith of the nation pledged in the 
 contracts celebrated with the lessees of the mints. 
 
 2ist. That the tariff of January ist, 1872, suppressed the export duty on precious metals, which was then 8 
 per cent., although unfortunately this measure could not be carried into effect by Congress having derogated, the 
 provision of the tariff on this point, reducing at the same time the export duty from 8 to 5 per cent. 
 
203 
 
 2 2d. That the Administration of Sr. Juarez and the present one have been persuaded of the necessity of 
 granting privileges to mining, and have done all that has depended upon them to obtain this result ; that the Ad- 
 mmistration of Sr. Juarez recommended to Congress, in all the financial memorials and expositions, the adoption 
 of a system of immunities to mining, and when it had powers extraordinary in this direction it authorized the ex- 
 portation of precious metals in paste, and suppressed the export duty on the same metals. 
 
 23d. That the present Administration has followed the same system, recommending diKgently, on all suitable 
 occasions, the suppression of export duty and the system of privileges to mining, in order to obtain the development 
 of that important industry. 
 
 24th. That this conduct observed by the Administration of Mexico, to concede immunities to mining, is the 
 more meritorious, as in so doing it treats of the suppression of a rent on rich products, under circumstances in 
 which the unbalanced condition of the public revenue and the financial situation of the country appear rather 
 to counsel the increase of the public imports. 
 
 25th. That on speaking of the question of mining, the Report falls into some mistakes respecting the pro- 
 duction of the precious metals in certain years, as well as the causes that have impeded the progress of that in- 
 dustry, although at the same time it contains considerations that are well founded and accurate. 
 
 26th. That it also fell into some inaccuracies in speaking of the imposts suffered by mining in the State of 
 Hidalgo, and of the situation that industry is in in that State. 
 
 27th. That in spite of the difficulties that have been experienced up to this time to promote the development 
 of mining industry in Mexico, it is to be hoped they may be got over, and that this industry may soon obtain the 
 prosperity to which it is called. 
 
PART THIRD. 
 
 SECURITY AND PROTECTION OF LIFE AND PROPERTY IN MEXICO. 
 
 > 1034. The third and last part of the Report refers to the security and protection enjoyed in Mexico to life 
 and property, commencing by stating that commerce flourishes only under the guarantees of that peace and 
 order which give a staple government and the impartial reign of law, which gives security to the individual and 
 produces the recognition of the sacred rights of property; that it does not need to stop to make this clear to the 
 comprehension of the business men of Chicago, who know that these conditions are the first and essential requisites 
 for commerce and industry ; that, therefore, any replies he may have given to the two first questions, relative to 
 the means of communication and to the regulations of trade, if no favorable and satisfactory, information can be 
 given about this third point, that as it is the most important subject there is to treat, it is, at the same time, the 
 most delicate ; but as practical men of business desire to be in possession of facts and realities, not theories and 
 generalities, he ought to manifest to them frankly the state affairs are in, according as he has been able to esti- 
 mate it during his residence in Mexico, in all that concerts the ends which they propose in their projected enter- 
 prise of starting trade with this country. 
 
 1035. In continuation, the Report refers to the frequent revolutions the country has suffered, saying that 
 " the point of protection to life and property, especially in relation to trade and commerce, obhges necessarily to 
 refer to the revolutionary state of this country; that he will not try to make any sketch of the many changes of 
 government since the independence; that its revolutionary state its well known to the entire world, and it is lamented 
 by all the friends of Republican institutions; that its own people recognize it as their greatest evil, and the prin- 
 cipal cause of their many disasters and embarrassments ; that he only desires to refer to the revolutionary state of 
 the country under its commercial aspect; that this will lead to the examination, ist, of the effect which the revo- 
 lutions have had respecting the resources of the country, and its possibihtyto sustain a great commerce with other 
 countries ; 2d, pubUc security and the fulfillment of law and preservation of order ; and 3d, the stupif)dng of 
 business, and the incentive and facihties for smuggling that originate from revolutions." 
 
 1036. By the preceding reference to the terms of the Report, on the security and protection granted in 
 Mexico to life and property, it will be seen that this subject relates itself directly with the state of revolution 
 which the Repubhc has suffered for a long time, and is divided into the following points, which will be examined 
 in this exposition : 
 
 I. Causes, origin, object, result and future of the revolutions in Mexico. 
 II. Effects produced by the revolutions, respecting the resources of the country, and the possibiUty of its 
 maintaining a great commerce. 
 
 III. PubUc security, fulfillment of law and preservation of order in Mexico. 
 
 IV. Benumbing of business and incentive to carry on contraband by reason of the revolutions. 
 
 1037. Following the order of the Report, each one of the above indicated subjects will be examined sepa- 
 rately and especially entering with all possible brevity on the expUcations and details which should be necessary 
 for the rectification of the conceptions and facts mentioned in the Report. 
 
 1034. Question of security, and protection of life and property in Mexico. 
 
 1035. The revolutionary state in Mexi( o considered under its commercial aspect. 
 
 1086. Points relative to the influence of revolutions in Mexico on public security and production. 
 1037. Special examination of each one of these points in order to rectify the conceptions and facts stated in the Ke- 
 port. 
 
205 
 
 I. CAUSE, ORIGIN, OBJECT, RESULT AND FUTURE OF REVOLUTIONS IN MEXICO. 
 
 1038. Although the Report does not occupy itself with the revolutions in Mexico, but from the point of 
 view in which they have affected the growth of exterior commerce, yet, as to them he attributes the cause of all 
 the evils this nation suffers, and especially its poverty, its reduced commerce and the insecurity he beUeves to 
 prevail in this country, it is esteemed indispensable to dwell on some considerations on this important subject. 
 
 1039. Perhaps justice would have been done to Mexico if, on speaking of its revolutions, it had been indi- 
 cated what have been the causes and object of them, and what the poUtical and social results which, by virtue of 
 the same, have been obtained. Thus, their bad results would stand compensated by the good they have brought 
 to the country; but to speak only of the revolutions in Mexico, and attribute to them the evils of the country, 
 with some exaggeration, cannot but contribute to confirm the vulgar idea which, unfortunately, prevails in some 
 circles outside of Mexico, that this country is in a chronic state of revolution, and that there is no other remedy 
 than the extermination of the race which inhabits it. 
 
 1040. Much has been said about the revolutions in Mexico, representing them as a chronic and especial evil 
 of this country, and very difficult, if not impossible, to remedy. Unfortunately, this is the belief that generally 
 predominates respecting Mexico in the civilized world, and the fact cannot be denied that it has greatly contrib- 
 uted to impede the material development of this nation. If the pubUc opinion of the civiUzed nations took into 
 account the causes and the origin of the revolutionary movements there have been in Mexico, the object which 
 these proposed, and the results they have procured, it would comprehend that the political disturbances there have 
 been in the country have not been occasioned by personal ambition to get possession of power, without any poUt- 
 ical object and design — although, unfortunately, there may have been some lamentable exceptions — but move- 
 ments necessary to change radically the pohtical and social state of being of this nation, to the end of bettering 
 its social condition and promoting its progress. 
 
 141. To fill, then, the vacancy left in the Report on this point, the following subjects will be considered here, 
 with the proper separation and brevity: 
 
 1. Causes and origin of revolutions in Mexico. 
 
 2. Result of revolutions in Mexico. 
 
 3. Future of revolutions in Mexico. 
 
 4. Opinion of United States Representatives and other distinguished North Americans respecting revolutions 
 in Mexico. 
 
 5. Summary of facts in reference to the causes, origin, object, result and future of revolutions in Mexico. 
 
 I. CAUSES AND ORIGIN OF REVOLUTIONS IN MEXICO. 
 
 1042. Nations, like individuals, need certain changes in their life, which are indispensable to their progress 
 and welfare. Unfortunately, these changes cannot always be realized in a pacific manner, and frequently 
 recourse has to be had to arms in order to carry them out. The strife once commenced, it may be prolonged a 
 longer or shorter time, and piesent interests more or less distinctly related to the principal object of the move- 
 ment initiated, which may lead the superficial observer astray, causing him to believe that the object of the move- 
 ment is different from what is really had in design. 
 
 1043. It does not appear that revolutions are undertaken without some important political object, and when 
 this is not understood there is immediately no clearness of vision, it is easy to go astray in the judgment formed 
 of the revolutionary movement, disnaturalizing completely its object and its tendencies. 
 
 1044. The United States were, at the middle of the XVIIth century, an English colony; they attained with 
 great rapidity to the virility of their poUtical life, and proclaimed their independence in the last third of the past cen- 
 tury, coming to conquer this with relatively Uttle effort and in a short time, to which contributed greatly the 
 
 1038. Necessity to consider what the Report says on the evils the revolutions have caused to Mexico 
 
 1039. Omission in the Report to explain the causes and the objects of the revolutions in Mexico. 
 
 1040. Erroneous belief respecting the motives there have generally been for revolutions in Mexico. 
 
 1041. Subiects which will be considered relative to the causes and effects of revolutions. 
 1043. Necessity of effecting changes in the political life of a nation by means of revolutions. 
 
 1043. Facility of being mistaken respecting the tendencies of a revolution. 
 
 1044. Independence of the United States in the eighteenth century and its influence in the emancipation of the Span- 
 ish Colonies. 
 
206 
 
 circumstance that their population was homogeneous, and that it was not divided on the question of independence. 
 This important example given by thirteen English colonies established in North America, which contributed also 
 to the French revolution, could not but produce its effect on the Spanish colonies of the rest of the American 
 Continent, and from the first years of this century symptoms of emancipation were noted, which had been pro- 
 posed from before the time of Charles III. of Spain by the Count of Aranda. 
 
 1045. In 1 8 10 the movement of Independence broke out in almost all Spanish America. The principal classes 
 of these nations were of Spaniards or of sons of Spaniards, whose fortune and whose interests were identified with 
 the government of the metropoUs. The clergy, who were in America a great power during the Spanish Govern- 
 ment, as well for their intelligence as for their wealth, and for the influence they exercised on the popular masses, 
 were also on the side of the metropolis. 
 
 1046. The Spanish colonies, and particularly Mexico, in which the clergy had more wealth and greater 
 influence than in other parts, were found, therefore, to be profoundly divided on the question of Independence; the 
 clergy, and what might be called the privileged classes of society, being on the one side of the Spanish Govern- 
 ment, and the popular masses, led by some men of intelligence and patriotism, on the side of Independence. 
 
 1047. The Spanish Government, then, had elements ^ough in its colonies to prolong the strife, almost with- 
 out any direct effort on its part. This was precisely what took place in Mexico ; the war of Independence 
 commenced in 1810, spreading rapidly amongst the masses by the proclaiming of an idea greatly popular; the 
 clergy and the privileged classes opposed a decided resistance to it, and having the army on their side, and the 
 organization and influence of the estabhshed government, they succeeded, in 1814 ,in restraining the conflagration 
 and even in reducing it to very limited proportions. 
 
 1048. For this reason the war was prolonged for to years, and Independence did not come to be consum- 
 mated until the clergy and the privileged classes saw their interests threatened by their dependence on Spain, on 
 account of the liberal measures decreed by the Spanish Cortes,, both for the peninisular and for its colonies. 
 Those who had before rejected and combated Independence, because they considered the success of that cause 
 to threaten their interests, then changed their opinion, because they believed that danger lay in continuing to de- 
 pend on Spain, and that in view of their influence in the country, they might estabUsh a government that should 
 be entirely their own. In fact, those classes having once decided for Independence, this was consummated in 
 182 1, in a short time, and almost without effort. 
 
 1049. Independence being consummated, and that great principle now conquered, the difficulty did not ter. 
 minate there, but the strife came between the clergy, together with the privileged classes, who desired to establish 
 a conservative monarchical government, and the first leading the cause of Independence, who, representing the 
 popular ideas, desired the establishment of a liberal government. This strife was prolonged with various alterna- 
 tions in favor of one or the other party from 182 1 till 1867. 
 
 1050. The clergy and the privileged classes succeeded-in establishing, in 1822, the Empire of Iturbide; this 
 was overturned the year following; in 1824 the Federal Republic was established, accepting, in several of the 
 provisions of the Constitution of October 4th, 1824, the political system established m the United States. Within 
 this republican federal system established by that Constitution, the strife broke out between the two principal 
 parties, to conquer the preponderance in the Administration. In 1836 the form of government was changed, 
 suppressing the federation and estabHshing a central government. In 1842 a dictatorship was estabhshed, the 
 system of which had already been -adopted, though only in a temporary manner, on former occasions. In 1845 
 the federation was re-established. In 1853 a miUtary dictatorship was again established, which tried to com- 
 pletely centrahze the power, which dictatorship was overturned in 1855, resulting from the movement against that 
 dictatorship, the constitution of February 5th, 1857, and some laws which estabhshed the absolute Independence 
 between the Church and State, suppressing the charters and privileges which until then the clergy had enjoyed 
 in Mexico. 
 
 1 05 1. These measures of the liberal government, which tended to emancipate the country from the conserva- 
 tive party, whose system of government and political ideas constituted a great obstacle to the progress of the na- 
 
 1045. Movement of insurrection in 1810 in Spanish America, and the attitude of the Clergy and privileged classes. 
 
 1046. Division in Mexico between the privileged classes, together with the clergy and popular masses. 
 
 1047. Interruption of the revolutionary movement by the elements favorable to Spain. 
 
 1048. In 1831 the independence of Mexico was consummated 'bj the change of ideas of the clergy and the privileged 
 classes. 
 
 1049. Strife between the conservative and liberal parties from 1821 to 1867. 
 
 1050. Political changes effected in Mexico from 1823 to 1857. 
 
 1051. Object of the constitution of 18o~, and triumph of liberal ideas in December, 1860. 
 
207 
 
 tion, occasioned a re-action on the part of that party, which united all its forces and threw itself, in 1857, into a 
 desperate strife to recover the ground it had lost. The war of three years, from 1857 to 1860, was the conse- 
 quence of this effort, and it terminated in the triumphs of liberal ideas in December, i860. 
 
 1052. The conservative party being conquered, and now without any elements in the country to provoke 
 another war, they had recourse to the means which on other occasions they had indicated of seeking foreign help 
 to recover the power they had lost, and which they could recover in no other way. The acquisition of this help 
 was greatly facilitated in consequence of the civil war that had broken out in the United States, for some Euro- 
 pean nations, and principally France, thought, that by establishing themselves militarily in Mexico they would be 
 able to contribute more efficaciously to the success of the secessionists of the United States, and hence came the 
 war of intervention, which lasted seven years, from 1 86 1 to 1867. In spite of the fact that the conservative 
 parties helped the French intervention with all their energy, and in spite of the fact that France was able to dis- 
 pose of all her elements as one of the first military powers of the world, it had at last to go out humiliated from 
 Mexico, without having procured any of the objects which it proposed in its expedition against this Republic, and 
 leaving abandoned to his fate the principal foreigner whom it had compromised to come and establish an 
 ephemeral Empire in this Republic. 
 
 1053. The downfall of the foreign intervention persuaded the conservative party and the entire nation that 
 the triumph of the liberal party was decisive, and gave such a preponderance to this party that it precludes, at 
 least for a long time, that the conservative power can dispute with it for the power, which party is now very reduced 
 in number, and whose influence has been greatly impaired by having associated itself with the anti-patriotic enter- 
 prise of wishing to convert Mexico into a dependency of the Emperor of the French. 
 
 1054. By this brief account it will be seen that, with very slight exceptions, Mexico has been at war, either 
 civil or exterior, from the year 1810 till the year 1867. The object of this war cannot be more noble or more 
 patriotic or grander, for it has been to attain independence and sovereignty, and to conquer the social and politi- 
 cal regeneration of this country. 
 
 2. RESULT OF REVOLUTIONS IN MEXICO. 
 
 1055. The results which have been obtained from the wars and revolutions there have been in Mexico must 
 be taken into account, in order to estimate their character and tendencies. The first was to procure emancipa- 
 tion from Spain and the establishment of Mexico as an independent nation in the civihzed world, which object 
 was attained after an incarnate and devasting strife, which prolonged for ten years. 
 
 1056. This strife being terminated, there came the necessity of political and social regeneration, with the 
 object of attaining material progress and the aggrandizement of the nation. This strife, in which there were 
 various important incidents, among which figures, in the first place, the foreiga intervention, terminated in the 
 year 1867 with the most complete triumph of the course of the progress and hberty of this country. 
 
 1057. The clergy remained decisively conquered; their properties were nationalized; the separation between 
 Church and State was decisively consummated; the monopoly of education it held was destroyed; the civil acts 
 of life, such as birth, marriage and death, were taken out of its hands; religious liberty, an indispensable requisite 
 to obtain foreign immigration, practically estaWished; the hberty of the press attained with such guarantees as 
 are not even enjoyed in the United States, and conquered and decisively established all the other principles indis- 
 pensable in promoting and attaining the progress of the nation. 
 
 1058. When all these circumstances are taken into account, when the great conquests are considered which 
 the nation has allowed after war, long and bloody, it is true, but which ended in the most complete triumph of the 
 ideas proclaimed in favor of liberty and of progress, what is really wonderful is that the nation has not been anni- 
 hilated after so prolonged and devastating a war; that the ties of society have not been entirely destroyed; that 
 immoraHty has not completely filled the masses, and that social and political dissolution has not been the conse- 
 quence of a strife so prolonged. Wars of much less duration and of a less bloody character than ours have com- 
 pletely ruined other nations that have suffered them. The United States sustained a war with England of a few 
 
 1052. War of interventiou promoted by the conservative party of Mexico during the civil war of the United States. 
 
 1053. Decisive triumph of the liberal party in consequence of the disesteem of the conservative party. 
 
 1054. Object of the strifes sustained in Mexico from 1810 to 1867. 
 
 1055. Emancipation of Mexico from the Spanish domination after a war of ten years. 
 
 1056. Strife in Mexico from 1823 to 1857 to procure its political and social regeneraiion. 
 
 1057. Conquests made by the revolutions of the conditions necessary for the progress of the nation. 
 
 1058. Satisfactory state of Mexico, notwithstanding its prolonged revolutions. 
 
208 
 
 years, and afterwards a civil war, which only lasted four years, and in spite of the fact that in the interval from 
 one to the other they had enjoyed complete peace, and reached an unexampled prosperity, the second war occa- 
 sioned them grave disturbances, both of a political as well as of a financial and commercial character. To 
 properly appreciate what has occurred in Mexico, it is only necessary to take into account what took place in the 
 United States by reason of the war provoked with the States of the South. 
 
 3. FUTURE OF REVOLUTIONS IN MEXICO. 
 
 1059. When the Mexican nation has succeeded, first, in making itself independent, and afterwards in 
 conquering and estabHshing its liberty and the social and political reforms necessary to promote its aggrandize- 
 ment ; and when the conservative party is decisively conquered, it does not appear that there are any elements 
 of dissolution or of discord which can provoke a new war. It is true that all war brings with it aspirations and 
 spurious elements which may put public peace in danger ; but those aspirations and those elements will riot be 
 able to overcome the good sense of the nation and the social interests which are in favor of the preservation of 
 the peace, of the institutions, and of the progress of the country. 
 
 1060. The preceding brief explication expresses the truth respecting the origin and results of the civil and 
 foreign wars which Mexico has sustained, and demonstrates that it is not probable that those wars will again 
 spring up, or that pubUc peace will be m any way gravely disturbed, and that, therefore, the situation of Mexico 
 is like that of other nations, which are exposed undoubtedly to commotions and reverses, but that there is no 
 especial motive to fear at present any serious disturbance of peace. 
 
 1 06 1. It is true that, in general, public opinion is prejudiced respecting Mexico, because it has not well 
 understood the object of the wars that have taken place here, and in consequence, cannot either appreciate 
 impartially the past, the present situation and the future of this country. This causes a certain distrust to sub- 
 sist, which impedes the investment of foreign capital, and the establishment of useful enterprises, that would 
 contribute greatly to the prosperity of this nation; but in the judgment of the Mexican Government, the way to 
 serve the general interests of the civiUzed world, in what concerns the Mexican question, is not in exaggerating 
 the dangers of a fresh reverse and the consequent insecurity, but in explaining the causes of the past reverses, 
 because this sole explication is sufficient to demonstrate that it is not probable they will be reproduced. 
 
 4. OPINION OF UNITED STATES REPRESENTATIVES AND OTHER DISTINGUISHED NORTH AMERICANS RESPECTING THE 
 
 REVOLUTIONS OF MEXICO. 
 
 1062. It is believed proper to consider the opinions expressed by Representatives of the United States to 
 Mexico, and by other distinguished citizens of the neighboring nation, respecting the revolutions that have taken 
 place in this country, for they contribute greatly to illustrate this important question. 
 
 a. Opinion of the Hon. Thomas H.Nelson. 
 
 1063. The Hon. Thomas H. Nelson, predecessor of Hon. John W. Foster, in the office of United" States 
 Representative to Mexico, comprehended the cause, object and result of the revolutions in Mexico, and had 
 great hopes for the future of this country. Respecting the questions of security and protection of life and prop- 
 erty, he expressed himself in these terms in the communication which he addressed to Mr. J. S. Oglesby from 
 Terre Haute, State of Indiana, December 13th, 1872, and which has been already quoted from several times in 
 this exposition : 
 
 " Nothing is more common among persons possessing only a superficial knowledge of affairs in Mexico 
 than the belief that its present situation is infinitely less prosperous than that of the time before its eman- 
 cipation from the yoke under which it was held by Spain. This assertion, which first circulated in the United 
 States in the period of- the war against Mexico, and which then was founded on plausible though not accurate 
 reasons, has acquired so much force in consequence of its constant repetition, that it has come to be one of the 
 commonplaces in the North American press, and one of the firmly rooted convictions of the people of the United 
 States. To those, however, who know in what consists the true vital force and prosperity of a people ; who know 
 how to distinguish between the interests of a determinate class and those of a whole nation ; who comprehend 
 that the false brilliancy of a few aristocrats, and the fallacious ostentation of a church, enriched with the 
 
 1059. Improbability that the elements of discord will overcome the good sense and the interests of the nation 
 
 1060. No motive to fear at the present time any serious purturbation of public peace. ■ 
 
 1061 . Propriety of manifesting to the civilized world the causes and object of the revolutions that have taken place. 
 
 1062. Opinions of North American citizens respecting the revolutions that have taken place in Mexico. 
 
 1063. Opinion of Hon. T. H. Nelson, expressed in his communication of December 13th, 1872, to Mr. J. S. Oglesby. 
 
209 
 
 spoils of several centuries, do not constitute the prosperity of a nation ; and lastly, who have made an intelligent 
 comparison between the Mexico of the present period, that of the preceding generation, and new Spain under 
 its last Viceroys, it is evident that Mexico has not only rapidly advanced on the road of progress, but, that it has 
 also passed through the crucible of pohtical regeneration, secured the great conquests of civil and religious 
 liberty, and opened a vast field to the regenerating influences which will " shortly cause it to participate in the 
 admirable blessings which Providence has so prodigally bestowed upon our own favored soil. 
 
 " At the beginning of this century, and during manyyears after, Mexico was the most populous country of the 
 New World, and its capital the largest city in America. Since then Mexico has almost doubled its population, 
 notwithstanding having lost two-thirds of her territory; but the surprising rapidity with which the United 
 States have progressed, leaving Mexico very far behind, causes us to look upon its slower progress as a retro- 
 cession. 
 
 " The long series of revolutions of which Mexico has been the prey has been the natural cause that it 
 should be believed in other countries that the Mexican people are essentially turbulent and ungovernable. 
 Those who think such a thing are not acquainted with the causes which have given rise to the political commotions 
 of Mexico, and, consequently, are ignorant of the reasons which can be adduced to demonstrate that the revolu- 
 tionary epoch of Mexico has really come to an end. 
 
 " At the consummation of its independence, Mexico was absolutely not educated to govern itself The 
 movement of insurrection initiated in iSio by the priest Hidalgo was quenched in blood after eight years of 
 disorderly war, during which the insurgents never succeeded in estabUshing a regular government. The move- 
 ment of Iguala, which, in 1820, produced the separation from Spain, under the direction of Augustin Iturbide, 
 had for its object simply independence from Spanish domination, but without any intention of effecting a change 
 in the form of government. 
 
 " The fact of Mexico now being a repubhc is owing, in the first place, to the royal family of Spain refusing 
 to send one of their princes to the throne of Mexico, and in the second place, to the reaction effected by the 
 Spanish party in Mexico, who did not wish to see a native of the country seated on the throne which was in- 
 tended for a Spanish prince. The Republic was founded in 1824, after the fall of the ephemeral Empire of Itur- 
 bide, which had been established, not because there was not in Mexico a Republican party, but because this was 
 the only government possible in the absence of a chief of the nation. The first presidents of Mexico and their 
 ministers were almost exclusively persons of monarchist principles, and it will be easily understood the confusion 
 which this fact introduced into all branches of the Administration. Personal ambition took the place of admin- 
 istrative capacity, and as the armed forces were the only means by which to satisfy that ambition, mihtary chiefs 
 only, during almost forty years, occupied the Presidency of Mexico. The first Constitution, a hastily traced imi- 
 tation of our own, could not flourish in such a soil. The North American Constitution was the end of military 
 colonies, which were formerly separated ; the Mexican Constitution set up semi-independent States in a country 
 which had heretofore been governed by a centraKzing system. It was natural that the first period of the inde- 
 pendent existence of Mexico should suffer the plague of strife between despotic and liberal institutions, between 
 centralism and federalism, and that the contention should be the more bloody, the more it was moved by the 
 interests of personal ambition. The most notable man that Mexico has produced, General Santa Anna, symbo- 
 lizes exactly, in his varied career, the war of ideas to which Mexico has been subjected to until but a short time 
 ago. Having commenced his pubUc hfe as a subaltern in the Spanish army, in making war upon the first insur- 
 gents, he is seen in 182 1 to obtain the rank of General for his co-operation in the monarchical revolution of Itur- 
 bide, and to be the first to " pronounce " against that unfortunate Emperor in 182 2. During the period of almost 
 fifty governments which since then have ruled the aff'airs of Mexico, Santa Anna has made war, either openly or 
 secretly, in favor or against each Administration except his own. Elected as a FederaUst at the first period of 
 his Presidency, he put aside the Federal Constitution. In his second period he again overturned existing insti- 
 tutions, to favor another plan of government. In the third period of his Presidency he restored the Constitu- 
 tion of 1824, and his last Administration made him Dictator, with the title of "Alteza Serenisima." What Santa 
 Anna has done on a large scale, many other mihtary chiefs have done in the less vast theatre of the State gov- 
 ernments. The question of the forjji of government could never be considered or definitely settled for Mexico 
 until the adoption, in 1857, of the present Constitution ; and this event, as is very well known, came to be the 
 signal for the essentially religious contention known by the name of the War of Reform, which, in its turn, had 
 for a consequence the foreign intervention and the transient Empire of MaximiUian. 
 
 " The facts on which the preceding summary is founded fills the sad history of Mexico for half a century, 
 and, it must be confessed, that they are sufficient to justify the vulgar belief that Mexico is a country essentially 
 turbulent. Notwithstanding, if the facts mentioned are considered, can it be wondered at that it has cost half a 
 century of blood and suffering to conquer the security of a prosperous future, under the auspices of a pure 
 republican system of government ? 
 
 27 
 
210 
 
 " The history of the fifteen years elapsed since the adoption of the Constitution of 1857 is a sufficient 
 guarantee that Mexico really has the expectation of a similar future. The great questions, which for so long a 
 time have agitated the country, have been, in ray conception, definitely settled. It is certain that Mexico will 
 continue on, without interruption, under its present republican and federal regimen ; it is equally certain that the 
 power and influence of the clergy, which, during three centuries and a half has been like a vampire sucking its 
 life-blood, has passed, never to return ; and, lastly, that the people have now acquired that education to govern 
 themselves, which will make them capable of easily solving the administrative problems of the future. Above all, 
 there is no longer any question pending for the future, which, like that which we had, by reason of slavery, would 
 be a constEint menace to the perpetuity of its institutions. Strong though the magnificent acquisition of its 
 liberty and independence, as also by the secure friendship of her powerful neighbor, rich in the innumerable 
 treasuries of its soil and cHmate, immensely favored by its geographical position, respecting the commerce of the 
 world, resolved to adopt and naturahze the great inventions of the age for abbreviating time and shortening 
 distances, Mexico is now entering on an era of internal improvements which may be considered commenced, 
 frorn the conclusion of the railroad between the City of Mexico and the port of Vera Cruz, at the end of the 
 present year." 
 
 1064. It is noticeable, the conformity there is between the opinions of the Hon. Thomas H. Nelson and the 
 ideas which have just been enunciated in this exposition. 
 
 B. Opinion of Hon. John W. Foster. 
 
 1065. The Hon. John W. Foster, although in a very passing allusion, referred in a few words to the resuhs 
 of the revolutions in Mexico, in the speech he delivered in New Orleans before the Chamber of Commerce, 
 November i8th, 1875, in these terms : 
 
 " It has been impossible to conceal the fact from the sincere friends of Mexico, that the civilized world 
 appeared to be on the point of losing all hope respecting its pacification, and that it almost came to the behef 
 that its people were unworthy to inhabit that beautiful country, so prodigally endowed by nature, but these last 
 years of peace, and the reconstruction which the republican leaders have effectuated, and continue effectuating, 
 are a proof, certainly very pleasing, that its public men are capable of carrying out its regeneration." 
 
 C. Opinions of Mr. George Bancroft. 
 
 1066. It is proper to set forth here the opinions, on this same subject, of some of the most distinguished 
 citizens of the United States, taking those which are nearest to hand, for it would be very lengthy to insert all 
 that has been said on this subject by North American writers and statisticians. 
 
 1067. The eminent North American historian, George Bancroft, said, in a speech he delivered at a demon- 
 stration made in New York in favor of the repubUcan cause in Mexico, March 29th, 1864, as follows : 
 
 " I beheve, gentlemen, that the cause of civil wars, not only in Mexico, but in all Spanish America, has been 
 exclusively the clergy, who, when they come to acquire influence in the State, always try to put themselves above 
 the government, and to subordinate the temporal interests of society to their own. This attribute appears to be 
 principally 'that of the Roman Cathohc clergy. The struggle in which, up to this time, the Mexican patriots were 
 engaged, was a holy struggle, and in it the sympathy was on their side of all the people of the United States, who, 
 whatever may be their religious behefs, adopt as a fundamental principle the most complete religious Uberty and 
 the absolute independence of the Church and of the State." 
 
 1068. The same Mr. George Bancroft said, in a discourse he delivered by nomination of the United States 
 Congress, at the apotheosis of Abraham Lincoln, celebrated February 12th, 1866, in the Capitol at Washingtoii, 
 as follows : 
 
 " But our neighboring Republic of Mexico was like us, and for a similar cause divided by a rebellion. The 
 English monarchy had implanted slavery with us, which did not end with Independence ; in a like manner the 
 eccelesiasticalpoHcyof the "Spanish Council of the Indies," in the days of Charles X. and Phillip II., retained its 
 vigor in the Mexican RepubUc. The fifty years of civil war which had made it languish proceeded from the 
 fanatical system bequeathed by the monarchy, as here the inherited slavery gave life to the political quarrel, 
 
 1064. Conformity between the opinion of Hon, Thomas H Nelson and the ideas expressed in this exposition. 
 
 1065. Hopes of John W. Foster on the future of Mexico, expresse in his speech of November, 1875. 
 
 1066. Opinions of distinguished citizens of the United States respecting Mexico. 
 
 1067. Observation of the historian George Bancroft, respecting the strugglo sustained in Mexico against the clergy. 
 
 1068. Explication of the same historian respecting the duration of the civil war in Mexico. 
 
Hi 
 
 which led to the civil war. As among us there could be no quiet but in the annihilation of slavery, so in Mexico 
 there could be no prosperity without the cessation of the ominous tyranny of intolerance." 
 
 JD. Opinion of Mr. David Dudley Field. 
 
 1069. In the same demonstration made in New York, March 29th, 1864, in favor of Mexico, which has just 
 been alluded to, Mr. David Dudley Field said as follows : 
 
 " This is not the place to enter into a discussion of the motives which hastened the French invasion, or to 
 trace the history of the parties that have divided Mexico, and which have been the pretext for the intervention of 
 foreigners in its domestic affairs. It may be said, however, that whatever have been the incidental questions 
 which may have resulted, there is one great question and one principal aspect in the controversy: the pretension, 
 on the one hand, of the Church to interfere in the affairs of the State, and on the other, the pretension of the 
 State to remain free from the intervention of the Church. We hear the Church party constantly spoken of. 
 What does that mean, about the Church party ? What has the Church to do legitimately in temporal affairs ? 
 Among us it has been a fundamental maxim, since the formation of our government, incrusted in our organic 
 laws, that there must be perpetually a total separation between Church and State. The Mexican people, that is 
 to say, the patriotic part of them, are strugghng to attain the same end, and in this, we Americans, of all beliefs 
 and all parties, desire for them the most complete victory." 
 
 E. Opinion of Mr. Roscoe Conkling. 
 
 1070. The Hon. Roscoe ConkHng, United States Senator from the State of New York, in a letter addressed 
 to Hon. Hiram Barney, dated at Utica, September 28th, 1869, in reply to an invitation to attend a demonstra- 
 tion made in New York, in favor of the Mexican Republic, October 2d of the same year, said as follows : 
 
 " The combat of ideas which has taken place in Mexico, and by Mexico, was our combat ; there the for- 
 eigner and invader, as here the ingrate and the conspirator, made a war of races ; and Mexico, like North 
 America, fought for man and participant with us of a common coritinent, the triumphs of a common cause." 
 
 F. Opinion of Mr. Horace Maynard. 
 
 107 1. The Hon. Horace Maynard, Representative from the State of Tennessee to the United States Con- 
 gress, in a letter addressed to the Hon. Hiram Barney, with the same object as the preceding oiie, dated at 
 Knoxville, September 30th, 1867, said as follows : 
 
 " The last years that have just elapsed have put their country to the proof, as well as our own ; for the same 
 in that as in this, has repbulican government been put on trial ; here, by domestic treason sustained by foreign 
 aid, and there by foreign enemies, sustained by traitors to the country, good fortune rewarding in both the friends 
 of free institutions, and doing everything possible to found their principles in the estimation of the human race. 
 Both have come to confirm, that the most powerful, benignant and magnanimous form of government is that 
 which seeks its upholding in the will and affections of the people, and both have set forth new and important 
 principles in the code of international law." 
 
 5. SUMMARY OF FACTS IN REFERENCE TO THE ORIGIN, OBJECT, RESULT AND FUTURE OF REVOLUTIONS IN 
 
 MEXICO. 
 
 1072. From what has been mentioned up to this, in reference to the origin, object, result and future of revo- 
 lutions in Mexico, from the point of view of its exterior commerce, the following facts appear demonstrated : 
 
 ist. That the wars and revolutions which occurred in Mexico from 1810 to 1867 have had for their object to 
 conquer the independence of the nation, to make this independence secure, defend the integrity of national territory, 
 secure its autonomy, establish liberal progressive institutions, similar to those of the United States, and to attain to 
 the social and political regeneration of this country, to promote its material aggrandizement by removing the 
 obstacles which stand in the way of these ends. 
 
 2d. That therefore, those revolutions have not emanated from any decided tendency of this country to dis- 
 
 1069. Opinion of Mr. David Dudley Field respecting Mexico, expressed March 29tli, 1864. 
 
 1070. Opinion of Mr. Boscoe ConMin respecting the same subject, expressed September 8th, 1867. 
 
 1071. Opinion of Mr. Horace Maynard on the same subject, expressed September 30th, 1867. 
 
 1072' Summary of the facts in reference to the origin, object, result and future of the revolutions in Mexico. 
 
212 
 
 order, nor of its public men to assault the power by means of arms, and overturn public peace for personal 
 motives, as is generally believed abroad. 
 
 3d. That even when, in the course of the wars and revolutions which occiured in Mexico, from 1810 to 1867, 
 the objects indicated might be clearly perceived in some cases, and there have occurred incidents that might give 
 ground for the belief that the cause of the revolutions was the propensity of the country to disorder, and the per- 
 sonal and ignoble motives on the part of pubHc men, the true tendency of such revolutions has been that which 
 has been indicated. 
 
 4th. That by virtue of the wars and revolutions Mexico has sustained, its independence being conquered 
 and its sovereignty, its autonomy, its Uberty, its institutions, and its social and political regeneration, it is not 
 probable that new revolutions will take place, for these would be destitute of a patriotic object, that could satisfy 
 the hopes and aspirations of the nation, and, therefore, pubHc opinion would not sustain them. 
 
 5th. That the opinion of the civilized world being generally deceived respecting the origin, object, result and 
 future of revolutions in Mexico, attributing these to very different motives from those which have occasioned 
 them, and considering them as a chronic evil of the countiy, in which they will be repeated, with no further object 
 than purely personal motives, it is a work proper to the interests of civiUzation to represent the matter as it is in 
 itself, in order to dissipate the pre-occupations which prevail respecting it. 
 
 6th. That the mistaken idea which generally prevails abroad, respecting this point, being one of the obsta- 
 cles which oppose the progress of Mexico, it is doubly proper to rectify these mistakes. 
 
 7th. That some Representatives of the United States to Mexico, and various of their most distinguished 
 fellow-citizens, have recognized these facts, which has not been sufficient up to the present time to rectify the 
 errors which prevail abroad respecting the revolutions of Mexico, and not even to make uniform the opinion of 
 the United States on this point. 
 
 II. EFFECTS WHICH THE REVOLUTIONS HAVE PRODUCED RESPECTING THE RESOURCES OF THE COUNTRY AND 
 THE POSSIBILITY OF ITS SUSTAINING A GREAT COMMERCE. 
 
 1073. The Report, on treating of this subject, states that every one who visits Mexico is impressed with its 
 marvelous natural resources, the fertihty of its soil, the benignity of its climate, and its capacity for maintaining 
 a large population and an extensive commerce; that the motto of its patron saint is the recognition of these ben- 
 efits and gifts: "The Lord has not done the same -with any other nation;" that this natural wealth of the 
 country and its admirable situation between the two oceans has caused a persistent and exaggerated idea to 
 spring up in the United States, about the present extension of its foreign commerce, and it is held by the spirit 
 of enterprise and avarice of their merchants as a rich prize, to possess which they have only to come and appro- 
 priate it. 
 
 1074. The Report says, in continuation, that, "the proof of the capacity of a nation for foreign commerce is 
 its export trade ; that in the United States it has been said that this trade was from sixty to seventy milions of 
 dollars ; that for many years it has not exceeded thirty-one millions, and that on an average it has been twenty- 
 seven miUions, more or less ; that the Secretary of the Treasury, in his last report, says, that according to official 
 data the exportations for the fiscal year ending June 30th, 1877 (the last of which there is any report), were 
 $28,772,194 24; that if this figure is compared with the exportations of other Spanish-American countries, with the 
 West India Islands, or with the British colonies, it will be found that Mexico occupies the last place on the list; \h.3X 
 taking the last statistical data that can be found in this city, which, in substance, are no doubt exact, he has 
 formed a table, in which three South American RepubUcs are wanting which have an insignificant shore on the 
 sea, and that it shows the population and the exportations of the countries named and the amount of foreign 
 trade for each inhabitant." 
 
 1075. The table the Report mentions is as follows : 
 
 1073. Observations of the report on the fertility of the soil and the benignity of the climate of Mexico 
 
 1074. Amount of the exportation of Mexico in the fiscal year of 1876-7 compared with that of other nations. 
 
 1075. Comparison between the amount of exportations from Mexico and from other countries. 
 
213 
 
 Population. Exportation. Per Capita. 
 
 Mexico 9,000,000 28,772,194 3.19 
 
 Central America 2,600,000 16,500,000 6.34 
 
 Cuba 1,350,000 90,000,000 66.60 
 
 Puerto Rico 615,000 8,500,000 13-80 
 
 Hayti 512,000 8,591,000 13.00 
 
 Santo Domingo 136,000 690,000 5.00 
 
 Jamaica 500,000 6,200,000 12.40 
 
 Columbia 2,800,000 9,984,000 3.50 
 
 Venezuela 1,800,000 17,300,000 9.60 
 
 Peru 2,500,000 35,000,000 14.00 
 
 Chili 2,068,000 37,771,000 18.20 
 
 Argentine Republic 1,800,000 45,000,000 25.00 
 
 Uruguay 450,000 16,000,000 35-5o 
 
 Brazil 10,161,000 107,310,000 10.50 
 
 Australia 1,939,000 _ 182,950,000 94-30 
 
 New Zealand 440,000 28,379,000 64.50 
 
 1076. The preceding table contains various inaccuracies, for, according to the most recent data obtainable, 
 neither the number of inhabitants nor the exportation of some of the countries comprised in the said table are 
 exact. Further on proper rectifications will be made on this subject, saying here only that the proportion per 
 capita is not accurately drawn in nine out of the sixteen countries comprised in the statement. 
 
 1077. The Report, after inserting the preceding table, again sets forth the great elements of wealth of 
 Mexico, stating that " of all the countries that appear in this Hst, there are only two that have larger national re- 
 sources and advantages than Mexico ; that Cuba has a fertile soil and great facilities respecting the sea coast ; 
 but it does not possess the inexhaustible precious metals that Mexico has ; and with all the rest it will be -found 
 that Mexico has always some important natural advantage superior to all of them \ that it can produce all the coffee 
 consumed in the United States; that it has a larger area of sugar lands than Cuba, and of equal fertiHty ; that it 
 can produce the vegetable textile fibres as well as any other country in the world ; that almost all the dyeing sub- 
 stances and all the tropical drugs, as well as all the fruits of the world, can be cultivated successfully; that its 
 varied climate permits the growth of all the cereals of every zone ; that its lands offer the best and most extensive 
 conditions for the feeding of sheep and cattle ; and that most of the able miners from American mines, who have 
 examined its mineral wealth, sustain that, even in its most distant mountains, it is superior to Cahfornia, Nevada, 
 or Australia ; that if all this is exact, or even the half of it, why then is Mexico found in the last place among civi- 
 lized nations regarding its exterior commerce ? that there is only one reply to this questioji, its revolutionary 
 state." 
 
 1078. In continuation the Report manifests the wonder it causes, that, the natural elements of Mexico be- 
 ing so great, this nation should be found in the last place among civiUzed countries regarding its exterior com- 
 merce, without finding any other answer to this inquiry than that of attributing the little exportation to its revo- 
 lutionary state, and adds : 
 
 " That this places it outside of the road of all material progress, of all enterprise, of every kind of business 
 and economic reform ; that this is what has destroyed its exterior credit ; that it is, more than any other cause, 
 what makes the building of railroads impossible ; that which prevents the making of necessary reforms in the 
 tariff and in the regulations of interior trade; that which drains the National Treasury; and that which has 
 brought the masses of the people to poverty by undermining their energy." 
 
 1079. The Report concludes on this point by saying "that reference has been made to the exalted ideas 
 that exist in the United States in regard to the magnitude of trade possible with this country ; that the persons 
 who harbor this idea forget, or do not know, that two-thirds of all the population are indigenous or Indian ; in 
 the present sad state of almost all the industries, these people have little in which to employ themselves, so that 
 the majority of them do not work half the year ; that the common price of labor, outside of a few cities and in- 
 dustrial centres, does not average more than two reals (25 cents) per day, and in many parts of the country does 
 not exeed one real (12 1-2 cents) ; that, therefore, considering the idleness and the feast days, the working mass 
 
 1076. Inaccuracies contained in the table of the exports of different countries. 
 
 1077. The Report attributes the present bad condition of Mexico to its revolutions. 
 
 1078. Description of the evils caused to the people of Mexico by its revolutions. 
 
 1079. Observations of the report on the limited consumption of foreign goods in Mexico. 
 
214 
 
 of the people of this country do not receive twelve and a half cents per day; that the necessary consequence is 
 that with the benign chmate and fertile soil, with a few cents is bought the daily food of beans, tortillas and chile 
 on which they ordinarily live, and with a few yards of mania (a coarse cotton cloth) they provide themselves with 
 clothes for a whole year ; that it does not require much ability in calculation to estimate the amount of foreign, 
 merchandise consumed by part of the population ; that there are counties in the United States which alone con- 
 sume more articles of foreign origin than all the Republic of Mexico." 
 
 1080. For the better understanding of this important subject, it becomes necessary to examine, with the 
 proper separation, the following subjects : 
 
 1. Amount of the present exportation of Mexico. 
 
 2. Comparison of this exportation with that of other countries mentioned in the Report. 
 
 3. Causes of the hmited state of present exportation in Mexico. 
 
 4. Effects of the revolution on the exportation of Mexico. 
 
 5. Present condition of the Indians in Mexico. 
 
 6. Consumption of foreign merchandise in Mexico. 
 
 7. Summary of facts in reference to the result of revolutions in Mexico, from the point of view of exterior 
 commerce. 
 
 I. AMOUNT OF THE PRESENT EXPORTATION OF MEXICO. 
 
 1081. In another part of this exposition it has already been shown, in detail, what is the present exportation 
 of Mexico, and what the causes are that have prevented this exportation from taking the growth it ought, con- 
 sidering the great elements of wealth of this country. It is beUeved unnecessary, therefore, to repeat those con- 
 siderations, which can be seen in the preceding part of this work (paragraphs 766 and 774). 
 
 1082. The Report cannot be considered exaggerated in fixing the population of Mexico at 9,000,000 of in- 
 habitants, nor its present exportation at $28,772,194, which comes to give the proportion of $3 19 per capita, 
 which sum is really Hmited, particularly compared with the exportation of other countries which have the same 
 origin as Mexico, and similar to it in various aspects. But it ought to be borne in mind that, as has been al- 
 ready shown (paragraph 204), two- thirds of the population of Mexico are composed of Indians, who neither con- 
 sume foreign goods, nor produce more than necessary for their own subsistence. The productive population of 
 Mexico ought, then, to be estimated at most in 3,000,000 of inhabitants, and in this case the proportion for each 
 inhabitant would come to be $9 57 per capita, which would place Mexico, if not among the first of the Ameri- 
 can exporting countries, neither as the last of them, as is made to appear in the table inserted in the Report. 
 
 1083. It ought to be borne in mind, besides, that the natural circumstances of Mexico, the ruggedness of its 
 mountains, the lack of easy and cheap ways of communication, the difficulty of building roads on its broken soil, 
 and the unpopulated condition of its coasts, make difficult, if not impossible, the extraction of its products from 
 the interior to the coast, and prevents completely its being able to compete "with other nations,that have natural 
 and easy ways of communication, or railways, to enable them to transport their products quickly and cheaply. 
 
 1084. In spite of all these difficulties, which must be taken into account on fixing the amount of the expor- 
 tation of Mexico, and the mention of which the Report omits completely, the exportation could be increased, 
 even without the need of constructing railways, and without varying essentially the conditions of the country 
 from $28,000,000, its present amount, to something Hke $100,090,000, by only promoting the development of 
 mining, which is the industry easiest to be worked in Mexico, for reasons that have been set forth in another 
 place. In this case, the proportion of exportable values would come to be $ 11 per inhabitant, considering the 
 population at 9,000,000, and $33 per inhabitant, if only the productive and consuming part of the population of 
 the country is taken into account. 
 
 2. COMPARISON OF THE EXPORTATION OF MEXICO WITH THAT OF OTHER COUNTRIES. 
 
 1085. From the statement of the population and exportation of various nations, principally American, which 
 the Report inserts, it appears that Mexico is the nation which occupies the last place in the production of export- 
 able articles, among the nations of this Continent, the adjacent islands, Australia and New Zealand. It is thought 
 
 1080. Rectification of the estimates of the Report of the effect of the revolutions of Mexico on its commerce. 
 
 1081. Reference made to the paragraphs which treat of the present exportation of Mexico. 
 
 1083. Calculation on the proportion betweoen the exportation of Mexico and its productive population. 
 
 1083. Special circumstances which make it difficult for Mexico to export its products on a large scale. 
 
 1084. Mining is at present the branch of industry easiest to be worked and most capable of increasing the exportation 
 of Mexico. 
 
 1085. Examination of the comparative table of the exportation of Mexico, and those of other countries. 
 
215 
 
 proper to make here some rectifications of the said notice, and to present some considerations, besides those 
 which have been just set forth, which explain the clause of the limited production of exportable effects there is 
 in Mexico, by comparing the circumstances of this country with those of the others cdmprised in the notice set 
 forth in the Report. 
 
 1086. Only the American nations and islands will be spoken of, as they are those which have the most points 
 of comparison with Mexico, dividing them in this manner : 
 
 A. Adjacent islands and North America. 
 
 B. States of Central America. 
 
 C. Nations of South America. 
 
 A. Adjacent Islands and North America. 
 
 1087. Among the countries of North America mentioned in the Report, for making a comparison of their 
 respective exportations with those of Mexico, figure the Islands of Cuba, Santo Domingo, Puerto Rico and 
 Jamaica, of which it is proper to speak separately, for due elucidation. 
 
 a. Island of Cuba. 
 
 1088. In the American nations comprised in the notice inserted in the Report, the Island of Cuba occupies 
 the first place, for its exportation is equivalent to $66 60 per inhabitant, which proportion is really considerable. 
 If it is taken into account that the form of the Island of Cuba facilitates greatly the exportation of its products, 
 inasmuch as its length is considerable and its width relatively limited, that it occupies a most advantageous posi- 
 tion, bathed on the one side by the Gulf of Mexico and on the other by the Atlantic Ocean; that it is very near 
 the market of the United States ; that its territory is almost a plain, situated in the Torrid Zone, and with great 
 advantages for the cultivation of tropical fruits, and particularly of sugar, the production of which has developed 
 largely, it will not appear strange that the production of that island, whose principal products are now sugar and 
 tobacco, should amount to $90,000,000 per annum, notwithstanding that its population hardly passes 1,000,000 
 inhabitants. If Mexico had the same advantageous condition, its products of exportable articles would undoubt- 
 edly be much more considerable than it is at present. 
 
 1089. The data of the Report respecting the Island of Cuba contain a mistake which it is opportune to 
 rectify. The almanac of Gotha for the present year of 1879 fixes the population of Cuba in 1876 at 1,414,508, 
 while the table calculates it at 1,350,000. 
 
 1090. The principal article of production and exportation of the Island of Cuba is sugar. The following 
 table demonstrates the production and exportation of that article in the years from 1873 to 1875 : 
 
 
 PRODUCTION BY TONS, OP 2,200 Lbs. 
 
 EXPORTATION BY TONS, 
 
 3F 2,200 Lbs. 
 
 
 1873 
 
 1874 
 
 1875 
 
 1873 
 
 1874 
 
 1875 
 
 
 796,179 
 242,308 
 
 695,028 
 208,676 
 
 738,430 
 223,840 
 
 714,960 
 189,333 
 
 656,151 
 175,230 
 
 665,201 
 
 
 180,965 
 
 
 
 Total 
 
 1,088,487 
 
 903,704 
 
 962,270 
 
 904,393 
 
 792,886 
 
 846,166 
 
 
 
 b. Santa Domingo. 
 
 logi. What has just been said respecting the production of the Island of Cuba is exactly applicable to the 
 other islands mentioned in the Report, as Santo Domingo, Puerto Rico and Jamaica. 
 
 1086 Division of the countries of America in order to make the comparison of their exportations with that of 
 
 1087 Islands adjacent to North America annotated in the table of the Report. 
 
 1088 Exportation of Cuba and explication of the causes of its magnitude. 
 
 1089 Rectification of the data of the Report on the population of Cuba. 
 
 1090 Production and exportation of Cuba in sugar and molasses m 1873-74-^5. 
 
 1091 Production of Santo Domingo, Puerto Rico and Jamaica, under the same conditions as that of Cuba, 
 
216 
 
 1092. It must, besides, be set forth that, according to the said almanac of Gotha, the population of Santo 
 Domingo is 250,000, while the Report fixes it at 136,000. The said almanac fixes the exportation in the year 
 1875 at $1,546,809, while- in the Report it only figures at $690,000. The principal articles of exportation were 
 in that year: Tobacco, 11,613,230 fts.; sugar, 7,152,015 fts. ; coffee, 264,179 lbs.; honey, 115,580 ftis.; wax, 
 289,062 ft)s.; acaju wood, 1,375,790, and some dye wood. 
 
 c. Puerto Rico. 
 
 1093. Besides the general observations appHcable to this Island, in speaking of Cuba, and which apply, also, 
 to Jamaica, it must be stated' that the almanac of Gotha fixes the population of Puerto Rico in 1876 at 666,144 
 inhabitants, while in the table of the Report it figures only at 615,000. 
 
 1094. The exportation of Puerto Rico was, in 1875, the following: Sugar, 1,603,851 quintals; molasses, 
 5,663,138 gallons; coffee, 254,634 quintals; tobacco, 62,514 quintals; cotton, 2,059 quintals; hides, 4,835 
 quintals, and rum, 15,548 gallons. 
 
 d. Jamaica. 
 t, 
 
 1095. The population of Jamaica, which the Report fixes at 500,000 inhabitants, was, m the year 1871, 
 
 according to the last almanac of Gotha, 506,154, it being probable that it has increased since then. 
 
 1096. The exportation of Jamaica in the year 1875 was _;^i,5i7,ooo, which, calculated at $5 to the pound, 
 made $7,585,000, and the Report calculates it at $6,200,000. 
 
 £. States of Central America. 
 
 1097. The five States forming Central America will be considered, with the proper separation, calling to 
 notice, first, that the Report fixes the population of the said States at 2,600,000 inhabitants, while the almanac 
 of Gotha calculates it, for the present year, at 2,461,974, in this form : Costa Rica, 185,000 ; Guatemala, 1,190,- 
 754; Honduras, 351,700; Nicaragua, 300,000, and Salvador, 434,520. Total, 2,461,974. 
 
 a. Costa Rica. 
 
 1098. The production of Central America had been, up to the year 1848, very hmited and inferior in propor- 
 tion to that of Mexico. Costa Rica was the first State that dedicated itself to the cultivation of coffee. From 
 the year 1835 it already exported that grain, and the cultivation has steadily increased. The President Carrillo 
 gave an impulse to this industry by selling lands at- very low prices and on long terms, to those who would sow 
 them with coffee, cocoa or sugar cane. This industry has made Costa Rica the model State of Central America, 
 for land is worth more there than in the others ; the manzana, which is 100 varas square, sells near the towns at 
 $500, which gives the caballeria a value of $33,000 ; labor is a dollar or a dollar and a-half per day, while in the 
 others it does not pass 37^ cents, and the exportation is very large, taking into account the limited number of its 
 population. 
 
 1099. The exportation of Costa Rica in the year of 1877-8 was, according to the almanac of Gotha for 
 1879, to the value of $5,887,062 through Punta Arenas, and $300,000 through Limon. It exported of coffee 
 only 28,804 lbs., and the other articles exported were rubber, hides, cheese, copper, mother of pearl shell, sarsap- 
 arilla, and various others. 
 
 b. Guatemala. 
 
 1 1 00. The exportation of Guatemala was of little importance till the year of 1848, and consisted almost ex- 
 clusively of cochineal, hides and woods, the value of which did not amount to $1,500,000 per year. 
 
 1092. Rectification of the data of the Eepoi't on the exportation of Santo Domingo in 1875. 
 
 1093. Rectification of the numher of inhabitants of Puerto Rico in 1876. 
 1094 Exportation of Puerto Rico in 1875. 
 
 1095. Rectification of the number of inhabitants of Jamaica. 
 
 1096. Rectification of the exportation of Jamaica. 
 
 1097. Rectification of the number of inhabitants of the five States of Central America. 
 
 1098. Rapid progress of Costa Rica from having dedicated itself to the cultivation of coffee. 
 
 1099. Details of the exportation of Costa Rica in the year 1877-8. 
 
 1100. Exportation of Gfuatemala up to 1848. 
 
217 
 
 HOT. From then commenced the cultivation of coffee, for which all the States of Central America have con- 
 ditions very favorable ; and this cultivation, which progressed rapidly, has caused the exportation of those coun- 
 tries to increase to a large degree; thanks to the good price coffee has had for some years past. The first coffee 
 cultivated in Guatemala was sown in Escuintla in 1854, and the first exportation was in 1859. The cultivation 
 went on spreading to the higher places, such as Peapa and Old Guatemala, and afterwards reached Villanueva, 
 and the environs of the capital and various other places of the country. 
 
 1102. The exportation of Guatemala amounted, in 1876, according to the same almanac of Gotha, to 
 $3,699,000, of which sum coffee represents $3,318,397, there having been exported 20,740,100 lbs. of that grain, 
 and the other products exported being cochineal, hides, lumber, cocoa, sarsaparilla, indigo and rubber. The 
 exportation of coffee in the last year was 209,358,077 quintals, which, estimated at 16 cts. per lb., amounted to 
 $3,349,740 32, and that of sugar 31,610 quintals, which amounted to $110,635. 
 
 c. Honduras. 
 
 1 103. According to the President, J. M. Medina, the exportation of Honduras may be estimated at 
 $1,305,000, in the following form : gold and silver, $600,000; indigo, $200,000; cattle, $150,000; lumber, 
 $i8o,ODO ; hides, $100,000, and various other articles, $75,000. In 1848 Honduras exported hides, lumber, and 
 some gold and silver. . 
 
 d. Nicaragua. 
 
 1 1 04. Nicaragua also exported hides and lumber. Now it has dedicated itself to the cultivation of coffee; 
 and although that industry has not there had the same development as in other States of Central America, it has 
 contributed, notwithstanding, to gradually increase its commerce. 
 
 1105. The exportation of Nicaragua in 1876 was $1,460,596, consisting of india-rubber, $377,586; coffee 
 $280,623 ; gold and silver, not coined, $225,745 ; Brazil wood, $100,866, and the rest in indigo, hides, cedar, and 
 other articles. 
 
 e. Salvador. 
 
 1106. Salvador exported before the year 1848 only soma indigo and tobacco for Europe, and a little sugar 
 for Guatemala, and the total value of its exportation was greater than that of Guatemala. The cultivation of 
 coffee, and the growth in the production of sugar, have augumented considerably the exportation of Salvador, 
 which now occupies an important place among the States of Central America. 
 
 1107. The exportation of Salvador was, in the year ending September 30th, 1876, $3,605,023. The most 
 important article was indigo, which amounted to $1,561,699 ; next in order, coffee, which came to $1,209,562; 
 metals, $157,732; sugar, $119,180; balsam of Peru, $711,110; tobacco, $42,175, and hides, $41,340. 
 
 1108. In the year ending September 30th, 1877, exportation amounted to $3,960,932, of which sum coffee 
 represented $1,686,194, and indigo, $1,636,227. 
 
 / General Connderations on Exportation of Central America. 
 
 1 109. The circumstance that in Central America the cordillera runs very near the coast, principally on the 
 Pacific shore, and that the principal part of the population is established on the slopes of that cordillera, near to 
 the sea and without great difficulties for the construction of roads, has contributed greatly to increase there the 
 production of coffee. The like does not occur in Mexico, for in some places the cordillera retires very much 
 from the coast, and the principal centres of population are situated at some distance from the sea, there being in 
 the intermedium difficulties of more or less magnitude for the transportation of productions. 
 
 1101. Increase in the exportation of Guatemala in consequence of the cultivation of coffee. 
 
 1102. Details of the exportation of Guatemala in 1876 and 1878. 
 
 1103. Details of the exportation of Honduras, according to the President, J. M. Medina. 
 
 1104. Increase of the commerce of Nicaiaugua in consequence of the cultivation of coffee. 
 
 1105. Details of the exportation of Nicaraugua in 1876. 
 
 1106. Exportation of Salvador before 1848, and its increase in consequence of the cultivation of coffee and of sugar 
 
 1107. Details of the exportation of Salvador for the year ending Septemlier 30th, 1876. 
 
 1108. Exportation of Salvador in the year ending September 30th, 1877. 
 
 1109. Explication of the causes why the production of Central America is greater than that of Mexico. 
 
 i8 
 
218 
 
 C. Nations of South America. 
 mo. The following States of South America mentioned in the Report will be here spoken of in the foUow- 
 ing order : 
 
 a. United States of Colombia. 
 
 b. Venezuela. 
 
 c. Peru. 
 
 d. ChiU. 
 
 e. Argentine Republic. 
 
 f. Uruguay. 
 
 g. Brazil. 
 
 h. General considerations on the exportation of South America. 
 
 a. United States of Colombia. 
 nil. The United States of Colombia are found in circumstahces similar to those of Mexico; that is, with 
 its population in the interior, and with natural difficulties for the extraction of its products, notwithstanding 
 having some navigable rivers, and for this reason its exportation comes to be nearly equal to that of Mexico. 
 
 1 112. The exportation of Colombia, according to the Records of the Treasury and Public Works, addressed 
 December 31st, 1877, to the President of that Republic, by Sr. Luis Bernal, for the Congress of 1878, was in the 
 year of 1876-7, $10,049,071 10, and importation $6,709,109 70; in the year of 1875-6 the exportation was 
 $12,722,811, and in that of 1874-5, $9>984;373- 
 
 1 1 13. The details of the exportation for the year of 1876-7 is the following, taken from the same Record: 
 
 Kilogrammes. Value. 
 
 Sugar 38,515 $3,659 
 
 Starch ■ 3S>3i8 3,352 
 
 Brandy 23,342 3,812 
 
 Rice 6,360 1,099 
 
 Cotton 820,793 201,115 
 
 Indigo 27,348 62,992 
 
 Animals 9,ii6 
 
 Balsam 23,715 17,791 
 
 Cocoa-nuts 116,532 4,040 
 
 Cocoa 4,885 2,010 
 
 Cautchouc 304,512 174,579 
 
 Hides of all kinds i,357,457 621,449 
 
 Coffee 3,428,832 1,168,828 
 
 Carmine , 26,415 13,927 
 
 Copper 42 1 56 
 
 Tortoise-shell 150 1,040 
 
 Cane 67,563 573 
 
 Beef 206 83 
 
 Dividivi 3,090,368 97,619 
 
 Money — gold and silver 1,991,872 
 
 Mats 6,063 2,342 
 
 Beans , 3,476 220 
 
 Mineral 456,465 410,500 
 
 Lumber 241,200 6,275 
 
 Indian corn 22,260 890 
 
 Yarns 31,325 467 
 
 Gold-dust 134 51,674 
 
 Gold in bars 428,828 
 
 1110. Order in whicli the States of Soutli America mentioned in the Report will be examined. 
 
 1111. Exportation of Colombia limited from its circumstances beiilg similar to those of Mexico. 
 
 1112. Amount of the exportation of Colombia in the ytetes of 1874^5, 1875-6, 1876-7. 
 1118. Details of the exportation of Colombia in th% year of 1876-7. 
 
219 
 
 Gold and silver in bars 822 724 
 
 Brazilwood ''11 ' 
 
 r. ' 220,797 7,040 
 
 Lruayacan wood ,„ „„„ -- 
 
 Mora wood , „^„ ^„-- „ 
 
 ^ , 1.039,576 18,431 
 
 Cedar /- 
 
 000,000 15,000 
 
 Panela (crude sugar in c^kes) 3^ „2 2 
 
 Plants ,„'„„, ' 
 
 o . , 20,905 13,29s 
 
 Precious stones ,„ „ 
 
 40,000 
 
 Pinuelos St^^^ 
 
 Skins 1,160 590 
 
 Quina (Cinchona) 3_457,6„o 3^^38,„^3 
 
 ^^^^^ ■■ 3,078 763 
 
 "^*^ 24,067 180,830 
 
 Cotton seed 7523^ ^^888 
 
 Tobacco m leaf 5,792,205 2,109,625 
 
 JT^ 2,616,337 304,116 
 
 Tobacco, manufactured 5,384 20 320 
 
 Various articles V.V.'.V.V.V. 2,4oi,'363 i,849,'233 
 
 1114. The population of the United States of Colombia, which, in the table of the Report, is fixed at 
 2,800,000 inhabitants, is, according to the almanac of Gotha, by the census made in 1870, 2,950,017 inhabi- 
 
 *tants. 
 
 b. Venezuela. 
 
 1 1 15. The population of Venezuela, which the statement of the Report fixes at 1,800,000 inhabitants, was, 
 in 1873, according to the " Physical and Pohtical Map of the United States of Venezuela," of Sr. Tejera, pub- 
 lished in Paris in 1876, 1,784,197. 
 
 1116. The exportation of Venezuela, which, in the table of the Report, figures in the sum of $17,300,000, was 
 according to the almanac of Gqtha, in the year of 1875-1876, $16,112,627, with the following detail: Coffee, 
 $11,410,000; cocoa, $1,502,000; cotton, $548,000; goat and deer skins, $466,000; skins of other kinds, $189,- 
 000 ; dye-woods, $169,000 ; money and gold in bars, $1,350,000 ; and other articles, $479,627. 
 
 c. Peru. 
 
 1 1 17. The exportation of Peru has increased considerably since some time past, by reason of the business 
 in guano and the nitrate of soda proceeding from the Chinchas Islands, and in some years the amount exported 
 of those articles alone has passed $40,000,000. The average exportation of guano for Europe, during the last ten 
 years, has been from 380,000 to 400,000 tons per year, with a value of from 23,750,000 to 25,000,000 sols. The 
 total exportation of nitrate of soda, in 1876, was 7,050,764 Spanish quintals, with a value of 22,209,800 sols. 
 
 1 1 18. The other products of exportation are vicuna wool, alpaca and lama, cocoa, wines, cotton, sugar and 
 metals. It is probable that the value of these other articles is considerably less than that of those exported from 
 Mexico. 
 
 1 1 19. Respecting the population of Peru there is a rectification to be made in the data of the Report. Ac- 
 cording to the almanac of Gotha for the present year of 1879 the population of Peru in 1876 was 2,699,945 
 inhabitants, and not 2,500,000, as set down in the table. 
 
 d. Chili. 
 
 1 1 20. The present situation of Chih is not very flattering, according as appears from the data set forth in 
 the commercial statistics for the year 1877, presented by the chief of the respective office, Manuel E. Carmona 
 dated August ist, 1878, to the Minister of the Treasury of that Repubhc. Its exportation hardly passes $30,- 
 
 1114. Rectification of the number of inhabitants of Colombia annotated in the table of the Report. 
 
 1115. Population of Venezuela in 1873, according to the map of Sr. Tejera, published in 1876. 
 
 1116. Details of the exportation of Venezuela in the year of 1875-6. 
 
 1117. Increase of the exportation of Peru, by the working of guano and the nitrate of soda. 
 
 1118. Exportation from Peru of other articles besides guano and nitrate of soda. 
 
 1119. Rectification of the data of the Report on the population of Peru. 
 1130. Falling off of exportation in consequence of the depreciation of copper. 
 
220 
 
 000,000 per year. Production has diminished, credit has been restricted, gold is disappearing from circulation, 
 and silver is dragged in the same current; there is deficit in the pubhc rents, depreciation of value and paralyza- 
 tion in commerce and in industry; exportation of all the agricultural products has diminished, and copper, 
 which represents more than three-quarters of the average annual exportationof mining products, has had to suffer 
 the consequences of its depreciation. 
 
 1121. The progressive fall in the prices of copper, which commenced to decline since January, 1875, has 
 provoked a general alarm in this important trade, the consequences of which have not delayed in making them- 
 selves felt in the production of that metal, already hindered in its march by various other causes. 
 
 1 1 22. In the mentioned commercial statistics of the RepubUc.of Chili the following data are found on the 
 exportation of that country : 
 
 Exportation of copper from 1868 to 1877 $139,969,811. 
 
 Exportation of silver from 1868 to 1877 26,676.554 
 
 1123. The total exportation of Chili in 1876 and 1877 was as follows, taken from the commercial statistics 
 referred to : . 
 
 1876. 1877. 
 
 Agricultural products $10,001,551 $9,139,672 
 
 Mining do 21,940,167 16,759,070 
 
 Manufactures 323,540 273,225 
 
 Articles, various 84,391 56,969 
 
 Gold coin 1,713,829 5,840 
 
 Silver do 1,835,989 1,401,807 
 
 Bank bills 465,534 1,064,891 
 
 Articles nationalized 1,483,505 1,013,898 
 
 $37,848,506 $29,715,372 
 
 1124. The population of Chili was, in 1875, according to the last census made in that country, 2,319,266 
 inhabitants, and taking this number for a basis, it results that there is the proportion of $12 81 to each inhabi- 
 tant of the sum of $29,715,372, to which amounts the exportation of 1877. It will be seen, then, that neither 
 respecting Chili is there complete accuracy in the Report. 
 
 1 1 25. The Repubhcs of Rio de la Plata, that is, the Argentine Republic and Paraguay, and even Brazil, 
 have had the great advantage over Mexico of possessing various highways of river communication, which greatly 
 facilitate the extraction of their products. 
 
 1126. The Argentine RepubUc has succeeded in constructing several railroads, which, besides its navigable 
 rivers, puts it in a very advantageous condition for the production of exportable articles. It is the only South 
 American nation that burdens the exportation of its products, and does it by collecting six per cent, on the valua- 
 tion fixed by law, with which it does not prejudice the production of its exportable articles, because they consist 
 almost entirely in objects of the animal kingdom, which have no competition, and the farming of which has been 
 facilitated extraordinarily. 
 
 1127. The present population of the Argentine Repubhc, according to the almanac referred to, of 1879, is 
 estimated at 2,400,000 inhabitants. There is, consequently, a considerable difference here also in the number 
 fixed by the table of the Report (1,800,000.) 
 
 1128. The exportation of that Repubhc, according to the same almanac of Gotha, was, in the year 1872, 
 $43,340,000. The last data on exportation are for 1876, in which year it amounted to $46,535,000, and sup- 
 posing since there has been no variation in the amount of exportation, it would make the per capita of the pres- 
 ent population $19 39, in place of $25, as is calculated in the Report. 
 
 1121. Diminution of the production of copper caused by its progressive fall in price. 
 
 1132. Exportation of copper and silver from Chili from 1868 to 1877. 
 
 1123. Amount of the total exportation of Chili in the years 1876 and 1877. 
 
 1124. Rectification of the data of the Ueport on the exportation of Chili. 
 
 1125. Advantage of river communication for Uruguay, the Argentine Republic and Brazil. 
 
 1126. Railway lines <;onstructed in the Argentine Republic, and development of its animal wealth. 
 
 1127. Difference of the data contained in the Report on population of the Argentine Republic, with ihose contained 
 in the Gotha Almanac. • 
 
 1128. Correction of the data of the Report on the exportation of the Argentine Republic. 
 
221 
 
 1129. The principal articles of the exportation carried on by the Argentine Republic in 1876 were: 
 
 KilogramiueB. Pesos. 
 
 '^°°' 89,529,122 19,676,000 
 
 Cowhides 2,324,866 7,941,000 
 
 Sheep hides 27,597,973 4,845,000 
 
 Horsehides 195,868 388,000 
 
 ^ '^'■^ 360,000 
 
 Tallow and grease 37,436,333 5,641,000 
 
 Horsehair 2,074,762 896,000 
 
 Salt meat 29,543,121 2,016,000 
 
 .Animals 133,913 2,073,000 
 
 Ostrich feathers 51,075 103,000 
 
 Metals and mineral stone 188 000 
 
 Bones and bone ashes t . 310,000 
 
 1130. The Argentine Republic has dedicated special attention to the immigration of families of European 
 agriculturists, dedicating to this object a considerable part of the revenue, and naming national commissions to 
 promote, in the interior of the Republic, the interests of immigration, and to collect information on agriculture 
 and national statistics. It appears to have been comprehended there that, on an increase of production by means 
 of the immigration of families accustomed to labor and a pacific mode of life, depends the aggrandizement of the 
 country, thickly populated up to this time, and the assurance of peace, conquered at so many sacrifices. 
 
 f. Uruguay. 
 
 1 131. The Eastern Republic of Uruguay is in a very advantageous position for exterior commerce, by the 
 navigable rivers which bathe it, and present easy and cheap highways for the extraction of its products, and it has 
 many points of contact with the Argentine Republic. 
 
 1132. The Report fixes the exportation of Uruguay at $16,000,000, and although in some years it has reached 
 this value, and in others exceeded it, in that of 1874 it was $15,200,000; in 1875, $12,700,000; in 1876, 
 $13,700,000; in 1877, $14,600,000, according to data of the -custom-houses set forth in the almanac of Gotha 
 for 1879. 
 
 1 133. The details of the exportation of Uruguay, for the year 1875, are the following, according to the data 
 published by Sr. Vaillant, chief of the section of general statistics, and which were presented in the last exposition 
 of Paris : 
 
 Hides 325,000 
 
 Sheep skins .• 5,776,600 
 
 Wool 2,596,000 
 
 Horsehair 202,000 
 
 Tallow 912,000 
 
 Salt beef 157,500 
 
 Horns, hoofs, &c 342,000 
 
 Ostrich feathers 61,000 
 
 Animals 604,000 
 
 Preserved meat and extract 324,000 
 
 Flour 14,000 
 
 Products, various 287,000 
 
 Total 1 2,693,000 
 
 1 134. The population of Uruguay, which the Report fixes at 450,000 inhabitants, the almanac of Gotha 
 estimates at 450,000 for the year 1877. 
 
 1129. Notice of tlie principal arti( les of export of the Argentine Republic in 1876. 
 
 1130. Immigration of European Agricultural families in the Argentine Republic. 
 
 1131. Advantageous position of Uruguay on account of its navigable rivers. 
 
 1132. Correction of the data of the Report on the exportation of Uruguay. 
 
 1133. Detail of the exportation of Uruguay in 1875, amounting to $12,693,000. 
 
 1134. Population of Uruguay in 1877, according to the almanac of Gtotha. 
 
222 
 
 g. Brazil. 
 
 1 135. Brazil has also, besides the great advantages of navigable rivers with which it is endowed, the circum- 
 stance that the great majority of its population is situated either on the coast itself, or on the rivers which empty 
 into the Atlantic, or in the vicinity of one or the other, so that it has great faciUties for the exportation of its 
 products. 
 
 1 136. The population of Brazil was, in 1872, according to the census made in the said year, 10,108,291 in- 
 habitants. The well known efforts made by the Government of that country to stimulate immigration must have 
 caused a considerable increase in its population, and it does not appear venturesome to assert that the present 
 number of its inhabitants, calculating that immigration and the natural increase taken place in seven years, ex- 
 ceeds 11,000,000, while the Report fixes it at 10,161,000 inhabitants. 
 
 1 137. The last data pubUshed on the exportation of Brazil, by the almanac of Gotha, which comprises'the 
 
 years of 1874-15 and 187 ';-6, are the following: 
 
 ^ ^J ^ 187^5. 1875-6. 
 
 Coffee .". 125,311,800 116,093,200 
 
 Cotton ^ 19,905,700 11,463,200 
 
 Sugar 23,126,500 ^ 14,051,300 
 
 Paraguay tea 1,487,600 1,463,500 
 
 Hides 12,576,200 11,884,000 
 
 Tobacco 5,989,000 7,65 1,500 
 
 India rubber 10,258,500 10,113,000 
 
 Diamonds 491,500 752,5°° 
 
 Articles, various 9,347,800 10,129,800 
 
 Milreis 208,494,000 183,602,000 
 
 1 138. These sums, calculated at the rate of 54.56 cts. in weight for each milrei. as is calculated in the 
 United States, would give $113,754,326, for the year of 1874-5, ^'^'1 $100,173,251, for that of 1875-6. 
 
 h. General Considerations on the Exportation of South America. 
 
 1139. As a general rule the countries of South America have greater facilities than Mexico for exporting 
 their products, either by having better means of communication or by a great part of their population on the 
 coast or near them. The truly exceptional circumstances of Mexico determine, that as long as the extraction of 
 its products is not facilitated by the building of railroads, and a larger number of its inhabitants do not dedicate 
 themselves to the pioduction of those fruits that can support the burden of freight from the interior to the coast, 
 the exportation of its products is made difficult, and it can only avail itself of its mineral wealth to sustain and 
 increase its exterior trade ; but while the special circumstances of Mexico are not taken into account, the true 
 cause cannot be known of the limited state of its exportation, and the simple enunciation of this fact, without 
 explaining the causes which lead to it, causes Mexico to be considered as occuppng the last place among the 
 nations of the American Continent, in which form the Report presents it. 
 
 3. CAUSES OF THE LIMITED EXPORTATION OF MEXICO. 
 
 1 1 40. After what has been already set forth on the causes that have prevented the exportation of Mexico 
 from assuming due proportions, in view of the great elements of wealth of this country, it is thought proper to 
 insert here the summary of the said causes already dwelt upon in various passages of this exposition. This is all 
 the more opportune as that generally (and thus does the Report) the limited exportation of Mexico is attributed 
 to very different causes from those which have produced this result. 
 
 1141. The causes indicated are, in brief, the following: 
 
 I St. The want of water communication, either of rivers, lakes or bays, to facilitate the extraction of Mexican 
 products. 
 
 1135. Facility that Brazil lias for the exportation of its products by its natural advantages. 
 
 1136. Population of Brazil in 1873 and its probable increase during the last years. 
 
 1137. Exportation of Brazil in the years of 1874-5 and 1875-6. 
 
 1138. Equivalent in dollars of the milreis of 4he exportation of Brazil in the years of 1874^5 and 1876-^. 
 
 1139. Reasons why exportation is easier in South America than in Mexico. 
 
 1140. Propriety of making a summary of the causes that have impeded the increase of the exportation of Mexico. 
 
 1141. Summary of the causes that have impeded this exportation. 
 
223 
 
 2d. The want of cheap roads, for those in existence present difficulties that raise freight to very heavy sums, 
 and, therefore, impedes the extraction of products, except those of great value and little weight. 
 
 3d. The physical configuration of the country, which does not permit tne construction of horse or wagon 
 roads or railways, except at great cost. 
 
 4th. The want of sufficient capital in the country to construct the railroads necessary to the progress of 
 the nation. 
 
 Sth. The circumstance that the population is generally disseminated in the higher, cool and temperate dis- 
 tricts, and situated generally at some distance from the coast. 
 
 6th. The difficulty of populating the coast, from their being generally unhealthy, and great difficulties attach- 
 ing to the first months of acclimation. 
 
 7th. The fact that two-thirds of the present population of Mexico are composed of pure-blooded natives, who 
 neither consume foreign goods nor produce more than is absolutely necessary to satisfy their personal necessities, 
 because of the insufficient remuneration of labor, from reasons that have just been expressed. 
 
 Sth. The circumstance that the production of the precious metals, which is one o^ the principal industries 
 of Mexico, has not been able to take upon itself the growth to which it is called, because the legislation in force 
 in the matter of imposts on mining has constituted a great obstacle to the investment of foreign capital in mining 
 enterprises. 
 
 gth. The distrust caused to the investing of foreign capital in Mexican enterprises by the erroneous ideas 
 tiiat prevail outside of Mexico, respecting the insecurity beUeved to exist here, and the dangers which threaten 
 life and property. 
 
 4. EFFECT OF THE REVOLUTIONS ON THE EXPORTATIONS OF MEXICO. 
 
 1 142. The Report attributes to the revolutions and tumults which Mexico has suffered since 1810, all the 
 evils which this nation nov/ experiences, and particularly its poverty and limited exterior commerce. It cannot 
 be ignored that the fact of the revolutions ami tumults that have taken place in this country cannot but have 
 influenced, in the state it is at present in, by contributing to prevent, or at least hinder, its material progress ; but 
 to attribute to that cause all the evils this nation suffers, and especially its poverty and limited exterior commerce, 
 appears exaggerated, for it is to ignore or to make httle of the other causes that have contributed to give this 
 result, and, at the same time, the necessity there has been, up to the present point, for the past revolutions. 
 
 1 143. The following subjects, then, in relation to the effect of the revolutions on the exportation of Mexico, 
 will be spoken of here : 
 
 A. Object and results of the foreign wars sustained by Mexico since 1810. 
 
 B. Object and results of the civil wars Mexico has suffered since 1822. 
 
 C. The wars and tumults of Mexico cannot be an insuperable barriers to its material progress. 
 
 A. Object and Results of the Foreign Wars Sustained by Mexico since 1810. 
 
 1144. It is probable that if Mexico had been in a state of peace since 1810, its situation, in point of view of 
 its material progress, would be better than what it now is ; but in order to have avoided the war of independence, 
 from 1810 to 182 1, it would have been necessary to continue as a Spanish colony, and in this case, independence 
 appears preferable, with all its consequences, and with the evils still felt on account of that war, and of others 
 that took place afterwards, to the material welfare Mexico might have attained in seventy years of peace as a 
 Spanish colony. 
 
 1 145. To have been at peace after the consummation of independence in 182 1, it would have been 
 necessary for it to deliver itself, without resistance, to the forces that the Spanish Government sent to reconquer 
 
 1143. The Report ignores the utility of the revolutions which have taken place in Mexico, and the other causes 
 
 oi the bad situation. 
 
 1143. Subjects to be treated of in relation to the effect of the revolutions on the exportation of Mexico. 
 
 1144. Necessity there was of deferring the material progress of Mexico while its independence was being consoli 
 
 dated. 
 
 1145. Impossibility for Mexico to preserve peace after the consummation of its independence. 
 
224 
 
 Mexico in 1829, and which had to capitulate at Tampico. Later, it would have been necessary to submit in the 
 same manner to the French expedition which came to Vera Cruz in 1838. 
 
 11 46. To have kept at peace since then, it would have been necessary for Mexico to have made no effort 
 to prevent its dismemberment, when the Texan colonies proclaimed their independence, and when, for that very 
 question, this country was invaded by the forces of the United States in 1846-7. 
 
 1 147. To have enjoyed complete peace since the independence, and particularly during the recent years, 
 it would have been necessary, also, when the Emperor of the French sent his forces to Mexico, in order to 
 establish here an order of things to his caprice, principally with the object of developing plans hostile to the 
 national unity of the United States, to have submitted, without resistance, to that usurpation, for the sake of pre- 
 serving, above everything, peace and tranquility. The Mexican nation believed it to be its duty to resist that 
 invasion, and the result was a war of seven years, from which it at last came out victorious; but which has been 
 undoubtedly one of the longest, most bloody and ruinous for the country, in point of view of its progress and 
 matenal prosperity. 
 
 B. Object and Results of the Civil Wars which Mexico has Suffered since 1822. 
 
 ♦ . . . / . 
 
 1 1 48. Passing from the foreign to the civil wars that Mexico has sustained since its independence, the same 
 
 considerations precisely must be borne in mind. If on the termination of the struggle of independence, Mexico 
 had enjoyed absolute peace, it is not only probable, but it is quite certain, that in seventy years of peace this na- 
 tion would have attained a material prosperity very superior to what it now has; but then, it would not have suc- 
 ceeded in emancipating itself from clerical influence; it would not have been able to establish religious liberty; it 
 would not have been able to conquer the principle of universal free education; it would not have been able to 
 attain the economical reforms it has now conquered, small in number, it is true, but of great importance compared 
 with the principles that prevailed during the domination of the conservative party; it would not have been able 
 to estabhsh the most simple liberty of the press, which it now enjoys; its coasts and frontiers would be closed to 
 foreign immigration, and this country would behold itself deprived of all the principles of civil, political, and re- 
 ligious liberty, and of the social regeneration which it has conquered in its war of reform. 
 
 1 1 49. If it is true, then, that the wars, revolutions, and tumults of Mexico have contributed, on the one hand, 
 to retard its material progress, it is none the less true that, on the other, they have removed the principal obstacles 
 there were to this progress, which were of such magnitude that they would have prevented it while they existed. 
 
 11 50. When the evils are compared, on the one hand, that have brought to Mexico its wars and revolutions, 
 and on the other, the advantages are taken into account which those wars have obtained, there cannot but be 
 found a satisfactory compensation, for the Mexican nation estimates as more than its material progress its inde- 
 pendence, its autonomy, its liberties, its institutions, and its social regeneration. 
 
 1 15 1. In order to attain in a short time the material progress of Mexico, there is needed the investment of 
 foreign capital in the construction of railroads, and in the working of the elements of wealth of this country. The 
 fact cannot be denied that the wars, revolutions, and tumults that ^Mexico has suffered, have been till now, and 
 are yet, a great drawback to the obtaining of this result ; for the object and result of those wars and revolutions, 
 not being generally comprehended, foreign capitaUsts fear that the nation may be in a state of social dissolution, 
 and that it would not be prudent, therefore, to invest their capital in Mexican enterprises. Under this aspect, it 
 is evident that the revolutions and tumults suffered in Mexico have greatly retarded its material progress; but if 
 the foreign capitalists understood the true situation of the country, recognizing that the motives for the past wars 
 and tumults have now ceased, and had the confidence proceeding from an exact acquaintance with the facts and 
 present situation of this country, all the inconveniences there are now for the investment of foreign capital in 
 Mexico would cease, and this could be brought about to the great advantage of this country, and almost without 
 any danger for the capitalists. 
 
 1152. Even although, which is not to be expected, there should again occur some tumult in Mexico which 
 
 1146. Invasion of Mexico by the forces of the United States in 1846 and 1847. 
 
 1147. The French intervention was a new obstacle to the material progress of Mexico. 
 
 1148. Beneficial results of the civil war of Mexico. 
 
 1149. The wars of Mexico have removed the principal obstacles there have been to its progress. 
 
 1150. The independence and liberty conquered by Mexico in its revolutions compensated for the evils caused. 
 
 1151. The investment of foreign capital in Mexican enterprises is made difficult by the trne situation not being 
 known. 
 
 1152. There is no real danger now existing for the investment of foreign capital in Mexico. 
 
225 
 
 in its nature would have to be transient, this would not seriously affect the foreign capital invested here, as will 
 be shown further on by facts that are more convincing than words. 
 
 "^SS- It appears more intellent, and more appropriate to the interests and growth of the exterior commerce 
 of Mexico, and to civilization in general, that, instead of exaggerating the insecurity in Mexico, and representing 
 its revolutions and tumults as a chronic evil, and a,s an insuperable barrier to the investmerit of foreign capital 
 here, the origin and object of these revolutions should be shown, the satisfactory termination they have had, and 
 the little or no danger of their repetition ; or, in the unfortunate case that they should be repeated, that they 
 would seriously affect foreign capital invested in this country. 
 
 5. PRESENT CONDITION OF THE INDIANS IN MEXICO. 
 
 11 5 4. The Reports sets forth that two-thirds of the population of Mexico are Indians; that in the present 
 sad condition of things they have little employment, so that the majority of them do not work more than half 
 the year ; that the common price of labor, outside of a few cities and centres of industry, does not pass, on an 
 average, twenty-five cents per day, and in many parts does not exceed 1 2^ cents ; and that, therefore, discount- 
 ing the idle days and the feast days, the working masses of the people do not receive i2|- cents per day, the nec- 
 essary consequences being that, with the benign climate and fertile soil of this country, the daily food of beans, 
 tortillas and chile, is bought with a few cents, on which they subsist ordinarily, and with a few yards of " manta" 
 they provide themselves with clothes for a year ; not needing, therefore, foreign manufactures to live. 
 
 1155. In speaking of the grave subject of the present condition of the indigenous population of Mexico, 
 little comprehended generally abroad, the following points must be examined separately : 
 
 A. The greater part of the indigenous population of Mexico does not now produce exportable effects. 
 
 B. Causes why the Indians of Mexico do not now produce exportable effects. 
 
 C. Means of making the Indians of Mexico producers of exportable effects. 
 
 A. The greater part of the Indigenous Population of Mexico does not produce Exportable Effects. 
 
 1 156. The conceptions of the Report quoted on this point are in general accurate, and they explain pre- 
 cisely the cause of the limited production of exportable articles there is in this country ; for, although the total 
 population is about 9,000,000 inhabitants, the producing and consuming part of them do not pass 3,000,000. 
 For this reason, when the value of the exportation of Mexico is divided among 9,000,000 of inhabitants, it hardly 
 amounts to $3 19 per capita, and this country appears in one of the last places, as regards its exportation, on 
 the list of civilized nations ; but in reality the $30,000,000 exported per year ought to be divided among 3,000, 
 000, which is Its producing and consuming population. 
 
 1 157. This very fact, which was referred to in detail in another part of this exposition (paragraphs 204 to 
 207), is the principal cause of the financial difficulties of Mexico, inasmuch, as has been already shown, whilst the 
 nation has all the necessities of a population of at least 9,000,000, dispersed over a large territorial surface, its 
 con tnbutary population hardly comes to 3,000,000 of inhabitants, thus establishing a disequilibrium, which makes 
 itself greatly felt in the financial operations of the nation. 
 
 B. Causes why the Indians do not now produce Exportable Effects. 
 
 1 158. If the Indians living in the Mexican nation are not now producers, this consists principally in the fact 
 that they have not sufficient incentive to do so, because their labor is not sufficiently remunerative. The value 
 of the grains being relatively low, and not being able to be produced except in small quantities, only low prices 
 can be paid for day labor, and neither can many laborers be employed, so that the necessary consequence of the 
 pecuHar circumstances and situation of Mexico must be the lack of work for the great mass of the population, 
 which contributes equally to the low price of labor. But from the moment in which the exportation of certain 
 products should be possible, either by the construction of railways, or by the investment of foreign capital, in ways 
 aheady shown is this exposition (paragraphs 741, 742, 747, 803, 829, 832, 836 and 837), there would be work for 
 all the major part of the indigenous population of Mexico, and day labor would rise in price ; this larger incentive 
 to the indigenous class to work, and a considerable increase in the production of exportable articles, resulting in 
 the importation of foreign goods. 
 
 1153. Propriety of not exaggerating the insecurity in Mexico for the investment of foreign capital. 
 
 1154 The Report explains why a great part of the population of Mexico are neither producers nor consumers. 
 
 1155. Points that will be examined relative to the present condition of the indigenous population of Mexico, 
 
 llofi. Proportion between the exportation of Mexico and the producing and consuming part of its population. 
 
 1157. Financial difficulties of Mexico by reason of the limited number of its contributing population. 
 
 1158. Kailways and foreign capital are necessary to increase the producing part of the population. 
 
 29 
 
226 
 
 1 159- This, which is the great economic and social problem yet to be solved in Mexico, ought to occupy 
 the attention of all the statesmen of the country, and merits the co-operation of the foreign nations interested for 
 their own convenience in the development of Mexico, and especially the United States, which, by reason of its 
 vicinity and for other reasons, ought to take a larger interest in this development, and consequently try to remove 
 the obstacles which have, up to this time, impeded it, by which the aggrandizement and wealth of this nation will 
 be promoted. 
 
 C. Manner of making the Indians of Mexico producers of Exportable Effects. 
 
 1 1 60. But although it is a fact that there is now a population in Me'xico of about 6,000,000 of inhabitants 
 which can be considered unproductive, by reason of the peculiar circumstances of the country, which have ahready 
 been expressed in detail in various parts of this exposition (paragraphs 204, 207 and 1083), the other fact ought 
 not to be ignored, that this nation can easily be made productive and consuming, and that in this case the pro- 
 duction and wealth of Mexico would greatly increase, for it would have an element which, although it is now in 
 embryo, is more difficult to obtain in other places — population. 
 
 1 161. To conclude this subject, it will be shown only that what now constitutes a difficulty in Mexico, that 
 is, that the major part of its population is neither producing nor consuming, will be turned into a great advan- 
 tage in the day that it is possible to work on a 'great scale its elements of wealth ; for then the population which 
 may be considered now dead will come to Ufe suddenly, and the 3,000,000 of producing and consuming inhabi- 
 tants which this country now has will be quickly converted into 9,000,000, thus giving to this nation a great ele- 
 ment of life and prosperity, not abtainable elsewhere, except after the lapse of many years, for in no country, not 
 even in the United States, which, in this respect, present a career of prosperity without example in the world, has 
 its population tripled, except with the lapse of many years. Therefore, the same hindrance which the Report 
 presents for the development of a great commerce in Mexico is converted into an element of life, once being con- 
 quered the obstacles already indicated, by means of the building of railroads and the investment of foreign capi- 
 tal in the development of the elements of wealth of Mexico. 
 
 1162. Instead of simply enumerating the obstacles which are presented to the growth of the commerce of 
 Mexico, without explaining their causes, and without entering into an examination of the manner of their removal, 
 in order to faciHtate the development of this country, it appears it would be more intelligent, more philanthropic, 
 and more appropriate to the interests of commerce in general, to express the causes of these difficulties and indi- 
 cate their remedy, so that their situation, being comprehended abroad, it might be easier to arrive at a solution of 
 the problem, thereby procuring the growth of commerce in benefit of the civilized world, and at the same time 
 the prosperity of Mexico. 
 
 6. CONSUMPTION OF FOREIGN GOODS IN MEXICO. 
 
 1 163. The Report, after stating that two-thirds of the population of Mexico cannot consume foreign goods, 
 because they hardly receive daily wages, which, on an average, are 12^ cents per day, it indicates that it does 
 not need much ability in calculation to estimate the amount of foreign merchandise consumed by that part of 
 the population, and adds, that there are counties in the States which alone consume more articles of foreign 
 origin than all the Mexican Republic. 
 
 1 164. In reference to this subject, then, the following points will be spoken of here: 
 
 A. Cause of the limited importation of foreign goods in Mexico. 
 
 B. Comparison of the importation of Mexico with that of other Spanish- American nations. 
 
 C. Comparison of the importation of Mexico with that of the county of New York, in the United States. 
 
 D. Easy method of increasing the importation of foreign effects to Mexico. 
 
 A. Cause of the Limited Importation of Foreign Effects to Mexico. 
 
 1 165. On speaking of this subject, it becomes necessary to repeat what has already been said several times 
 respecting the exportation of Mexico, that in proportion to the number of inhabitants it appears small, but when 
 
 1159. The United States are the most interested in effecting the development of the wealth of Mexico. 
 
 1160. The unproducing part of the of the population of Mexico can be turned into producers. 
 
 1161. The obstacle which exists for the increase of the commerce of Mexico can be turned into an element of life. 
 
 1162. Impropriety of enunciating the obstacles to the growth of commerce without indicating their remedy. 
 
 1163. Consideiations of the Report respecting the limited consumption of foreign merchandise in Mexico. 
 
 1164. Points to be considered relative to the present limited importation of Mexico. 
 
 1165. Relation between the value of merchandise imported and the consuming part of the population. 
 
227 
 
 It IS compared with the number of producers, it is not so much so. An equal thing takes place with importation 
 of foreign goods, which, compared with the number of inhabitants, is Uttle; but not so much so when it is put in 
 relation with the number of consumers. 
 
 1 1 66. It has been said (paragraph 802) that Mexico cannot consume foreign merchandise, except to a value 
 equivalent to its exportation, because it cannot pay the amount of the said merchandise, except in articles of 
 exportation. If the exportation is limited, for the reasons that have been already set forth in detail elsevvhere 
 (paragraphs 204 and 206), the importation has necessarily to be so also. 
 
 B. Comparison of the Importation of Mexico with that of other Spanish-American Nations. 
 
 1 167. In making a study of the amount of foreign goods consumed by the American nations, and comparing 
 their value with the number of inhabitants each one has, probably Mexico will come out in the last place on the 
 Ust, especially if its population be taken into account, not by the total number of inhabitants there are in the 
 country, but by the part of them that are consumers of foreign merchandise. 
 
 C. Comparison of the Importation of Meodco with that of the County of New York, in the United States. 
 
 1 168. It is true that some counties of the United States may consume a larger quantity of foreign merchandise 
 than all the Mexican Repubhc, but this fact, presented in the form in which it appears in the Report, has no 
 other object than to belittle the exterior commerce of Mexico, without doing justice to the circumstances of the 
 country, and without taking into account the considerations worthy of attention, which would modify considerably 
 the sense of the assertion. ' 
 
 1 1 69. The county of New York alone consumes, probably, foreign goods to a larger value than the Mexican 
 Republic, but if it is taken into account that the city and county of New York form the principal commercial 
 centre of the New World, and that there is concentrated, therefore, a large, rich and civihzed population, which 
 consumes a large quantity of foreign goods, this will not appear strange. The city and county have a population 
 larger than that of various States of the American Union, and notwithstanding this, in nowise demerit neither the 
 elements of wealth nor the spirit of enterprise, nor the future of those States. The consumption of foreign goods 
 is also larger in the city of New Vork than that of various American nations, and than that of various States of 
 the North American Confederation, and it does not, therefore, demerit the importance nor the future of those na- 
 tions nor of those States. 
 
 D. Easy mode of increasing the Importation of Foreign Goods to MexicQ. 
 
 1 170. But in this case it becomes necessary to repeat the same considerations which were indicated on speak- 
 mg of the growth of exportation ; that is, that it does not appear just, nor prudent, nor appropriate, to speak only 
 of the limitedness of importation without indicating the simple and easy manner in which this may take a great 
 growth, because so doing must produce the consequence, though the intention may have been quite different, to 
 dishearten all efforts to increase that importation; while it ought to be to the interests of the commercial na- 
 tions, and particularly of the United States, to do what may depend upon them that the importation of foreign 
 goods to Mexico may take great proportions, and, consequently, to facilitate the means necessary to procure this 
 important result. 
 
 1 17 1. So, then, instead of simply indicating the fact that the present importation of Mexico is limited, and 
 that it cannot but continue so while its present circumstances exist, it would be more prudent and more appro- 
 priate to the interests of commerce, to indicate the cause of that limited exportation, and to propose the practical 
 method of increasing it to considerable proportions. 
 
 7. SUMMARY OF FACTS IN REFERENCE TO THE RESULT OF THE REVOLUTIONS IN MEXICO, IN POINT OF VIEW OF 
 
 ITS EXTERIOR COMMERCE. 
 
 1 172. From the facts mentioned up to this point in reference to the result of the revolutions in Mexico, in 
 point of view of its exterior commerce, the following appears to be demonstrated: 
 
 1166. Exportation being limited, importation has to be so also. 
 
 1167. Consumption of foreign goods in Mexico in comparison with other nations of the continent. 
 
 1168. The Report tries to belittle the consumption of Mexico by saying that It is less than that of counties of the 
 United States. 
 
 1169. Comparison of the consumption of New York with that of various States of the United States and with other 
 American nations 
 
 1170. Propriety of the United States in increasing their trade with Mexico. 
 
 1171. It is more prudent to indicate means for increasing the trade with Mexico than to speak of its limited im- 
 portation. 
 
 1173. Summary of facts in relation to the revolutions of Mexico in a commercial point of view. 
 
228 
 
 ist. That although the exportation of Mexico is now very limited, compared with that of other nations, in 
 proportion to the number of inhabitants of each one, this is owing to the peculiar conditions of this country, and 
 particularly to the lack of cheap means of communication, and to the circumstance that the principal part of its 
 population is in the interior, and at a great distance from the coast. 
 
 2d. That even though Mexico appears in one of the last places, in point of view of its exportation, among the 
 American nations and countries mentioned in the Report, this consists not so much in the revolutions it has suf- 
 fered, as it does in the peculiar circumstances which have just been indicated. 
 
 3d. That the principal cause of the limited exportation of Mexico is not its revolutions and tumults, but in 
 its physical configuration, its want of roads, and its population being principally in the cold and temperate climates, 
 at some distance from the coast. 
 
 4th. That the American nations which are in conditions similar to those of Mexico, like the United States 
 of Colombia, have an exportation as reduced as that of this country. 
 
 5th. That the exportations of the American States, like Uruguay, the Argentine RepubUc, Brazil, are owing 
 principally to the circumstances of having water communications, and that the principal part of their population 
 live on those communications or in places near them. 
 
 6th. That although the fact cannot be ignored, that the revolutions occurred in Mexico have contributed 
 somewhat to retard the material progress of this country, they can, in no wise,, be considered as the principal 
 cause of its limited exportation, inasmuch as other nations that have also suffered bloody and prolonged revolu- 
 tions have, in spite of them, a larger exportation than that of Mexico. 
 
 7 th. That even though the revolutions in Mexico may have retarded somewhat the material progress of the 
 country, they have been necessary to conquer Independence, estabUshed reform, and attain the poUtical and 
 social regeneration of this country, without which its material progress would have encountered difficulties almost 
 invincible. 
 
 8th. That taking into account the good and bad results of the wars and revolutions occurred in Mexico, the 
 fact cannot be ignored that, with all their inconveniences, they have occasioned great advantages to the nation. 
 
 9th. That it is also a fact, that two-thirds of the population of Mexico are pure Indians, who consume and 
 produce little ; wherefore, the exportation is limited ; but that this is owing to the fact that the peculiar conditions 
 of this country do not permit the production of articles which the indigenous class might cultivate, who live gen- 
 erally in the interior and. in cold cKmates. 
 
 loth. That these facts make the producing and exporting population of Mexico to be not really 9,000,000, 
 but 3,000,000 inhabitants, and that the proportion, per capita, is not, therefore, as reduced as it appears in the 
 Report. 
 
 nth. That the 6,000,000 of inhabitants who at present are neither producers nor consumers, would turn 
 producers and consumers, to the great profit of the nation, the day that the investment of foreign capital permits 
 the construction of railroads and the working of the elements ot wealth of Mexico. 
 
 1 2th. That' although the consumption of foreign goods in Mexico is necessarily in relation to the quantity of 
 products the country exports, and therefore its production to each inhal)itant is low, it would increase consider- 
 ably when the building of railways and the investment of capital in Mexico should turn into producers the 
 6,000,000 of inhabitants who are not such. 
 
 13th. That if the present importation of Mexico is Umited, considering its population of 9,000,000 of inhabi- 
 tants, it is not so much so, if it is taken into account that the population consuming foreign goods does not really 
 pass 3,000,000. 
 
 14th. That although it is true that Mexico consumes foreign goods to a less amount than the county of New 
 York, in the United States, this cannot belittle the exterior commerce of Mexico, inasmuch as the great mercan- 
 tile advantages and the accumulation of consuming people in the city of New York causes that it alone, con- 
 sumes foreign goods to a greater value than several of the nations of this continent, and than several of the States 
 gf the North American confederation. 
 
229 
 
 iSth. That it appears more reasonable, and more appropriate to the interests of civilization, to present the 
 situation of Mexico, such as it is, in order that the proper remedy may be applied, than to exaggerate its dangers 
 and difficulties ; for the consequence of this cannot be other than to retard greatly the remedy necessary to pro- 
 mote the increase of the exterior commerce of Mexico, for the profit of the civilized world in general, and of this 
 country in particular. 
 
 III. PUBLIC SECURITY, FULFILLMENT OF LAW AND PRESERVATION OF ORDER IN MEXICO. 
 
 1 1 73. The Report commences, in speaking of this subject, by recognizing that "in the City of Mexico life 
 is as secure as in Chicago, for there exists a good system of police, and the order and tranquility of its streets 
 can be compared favorably with that of other civilized cities of the world ; but it observes that the manufacturer 
 and merchant of Chicago expect to have not only this city, but alltheRepubUc,as a field for their commercial enter- 
 prises, and states that he believes it to be his duty to cite some facts that have come to his notice, that are well 
 known in this country, and which demonstrate that ample security of life and property is not enjoyed here outside 
 this capital." 
 
 1 174. For the purpose of demonstrating this it states that "there is not a single train of passengers from 
 this city to Vera Cruz, the terminus of the only railway finished in the country, that does not go escorted by 
 soldiers to prevent its being assaulted and robbed ; that manufacturers who have their factories in the valley and 
 within sight of the city, whenever they send money to pay the wages of their operatives, they send armed people 
 to escort it, and the case has frequently happened, during the last twelve months, that the cars of the horse rail- 
 way from the city to the suburban towns have been assaulted by band of thieves, robbing the money of the 
 manufacturers ; that every mining company that remits its metals to the mints of this city to be coined, or to be 
 sent abroad, accompanies them always with a strong escort of chosen men ; and the owners of estates and other 
 persons who send money or valuables outside the city do likewise; but if these things occur near the capital, it is 
 natural to suppose that they take place more frequently in more distant points of the Republic." 
 
 1175. It states, in continuation, that "the principal highways over which the lines of stages travel are con- 
 stantly guarded by armed forces of countrymen and by federal troops; an J notwithstanding, robberies are so 
 common that they are seldom spoken of in the press." By way of example, it cites a recent case, 
 relating "that the Consul-General of Belgium, resident in the United States, occupied himself, a few 
 months ago, in a visit of observation throughout the country, by order of his government ; that in all 
 his joumeyings to the States of the interior he has been provided with a military escort ; that, not- 
 withstanding, on crossing one of the richest and most populous States of the Republic, the diligence in 
 which he journeyed was assaulted by a band of mounted, armed banditti ; that the escort ran with- 
 out firing a single shot ; that the Consul and his fellow travellers were robbed of the objects of value they carried 
 with them, and of their baggage ; that they arrived at the next post without money enough to pay for their food, 
 and they learned that the thieves were a part of the forces that guarded the road ; that they had deserted, 
 emplo5ang the arms and horses of the Government, to dedicate themselves to a more lucrative occupation, 
 especially in the present penurious state of the public treasury." 
 
 1 1 76. As a further proof of the insecurity which, in the conception of the Report, prevails in Mexico, it 
 states that " one of the commercial indications of the insecurity of the communications between the capital and 
 the other cities of th° Republic is found in the rates of exchange on the interior, which, according to the last 
 quotation (averate rate), are asfoUows : Chihuahua, 8 to 10 per cent.; Acapulco, Durango, Guadalajara, Zacatecas, 
 Morelia, 5 to 6 per cent.; Leon, Guanajuato, Monterey and Oaxaca, 4 to 5 per cent.; Cuernavaca and Toluca, 
 2 to 2^ per cent.; Vera Cruz, |^ to i per cent." 
 
 1 177. In order to attenuate the terrible situation in which the Report represents Mexico, it states that "it 
 does not mention these facts by way of reproach to this people, who recognize and lament them more than the 
 foreigners, but to demonstrate the deplorable effect of the revolutions ; that it is almost impossible for a govern- 
 ment that cannot count upon its stability, and which has to be constantly on the alert for a new revolution which 
 menaces its existence, and with an exhausted treasury, to suppress highway robbery, and the present Government 
 is making greater efforts perhaps than former ones ; but it is necessary that this information should come to the 
 knowledge of the foreign merchant, who is seeking to know the state of pubUc security." 
 
 1173. The Report asserts that outside of the City of Mexico there is no security for life and property. 
 
 1174. Facts which, in the judgment of the Report, demonstrate there is no security in Mexico, especially far from 
 the capital. 
 
 1175. Robbery of which the Belgium Consul-General was the victim. 
 
 1176 The rate of exchange considered as an indication of the insecurity in Mexico. 
 
 1177. Notices that have influenced the Report in the exposition of facts relative to the state of Mexico. 
 
230 
 
 1 1 78. After this the Report refers to the official documents published by the United States Government, in 
 which its representative in Mexico complained of various cases in which it was alleged that citizens of the United 
 States has suffered assaults; and, lastly, some of these cases are mentioned especiaUy, and with their individual 
 circumstances. 
 
 1179. So as to proceed with order in the examination of this important subject, the following points will be 
 considered separately, among which are some not mentioned in the Report : 
 
 1. Security in Mexico. 
 
 2. Commercial exchange in the interior of Mexico, in view of its security. 
 
 3 The insecurity there may be in Mexico ought not to be an obstacle to its progress. 
 
 4. Security in other countries. 
 
 5. Exemption of the citizens of the United States from forced loans and extraordinary taxes. 
 
 6. Complaints of the United States Legation, addressed to the Mexican Governments, for assaults suffered 
 by citizens of the United States. 
 
 7. Special cases of insecurity mentioned in the Report. 
 
 8. Summary of facts in reference; to public security,^to the fulfillment of the laws, and the preservation of 
 order in Mexico. 
 
 I. SECURITY IN MEXICO. 
 
 1 180. The subject of the want of security for life and property which, in the conception of the Report, is 
 suffered in Mexico, comprises various securities, which must be examined separately, and they are as follows: 
 
 A. Security in the towns and on the roads. 
 
 B. Foreigners have enjoyed security even when their governments have been at war with Mexico. 
 
 C. Security in Mexico, in a religious point of view. 
 
 A. Security in the Towns and on the Roads. 
 
 1 181. In reference to this subject, the Report begins by recognizing that as much security is enjoyed in this 
 capital as in the city of Chicago ; and, although it does not say so clearly, it may be understood from it that 
 there is security, also, in other towns of the Republic, inasmuch as, on speaking of security, it speaks only of the 
 roads. 
 
 1183. To prove the conception that there is great insecurity in Mexico, it states that the passenger trains 
 from the city of Vera Cruz always go escorted; that the manufacturers of the Valley of Mexico carry their money 
 to pay off their hands, with armed men to escort it; that the cars of the horse railway from the city to the 
 neighboring towns have been assaulted by robbers ; that the mining companies remit their silver to the mint with 
 an escort, the owners of estates doing likewise when they send money or valuables outside of the city ; that the 
 principal highways traveled by the diUigences are constantly guarded by forces of countrymen and federal 
 troops ; and that, notwithstanding this, there are cases of assault and robbery, mentioning that suffered recently 
 by the Consul-General qf Belgium to the United States, in a journey of inspection he came to Mexico to make. 
 
 1 183. The best mode of rectifying the preceding conceptions is to insert here a report from the ''Depart 
 ment of Government^' which is that which, according to our laws, has under its charge the rural police and secu- 
 rity of the roads, in which explications are made touching the cases mentioned by the Hon. John W. Foster. 
 The report of the " Department of Government " is as follows : 
 
 " Department of State and office of ' Government,' Mexico. Section 2d. — I have received your official 
 communication of the sth instant, in which you are pleased to ask me to rectify the facts asseverated, in regard 
 to public security, by Mr. John W. Foster, Minister Plenipotentiary of the United States, in a Report he ad- 
 dressed to the President of the Manufacturers' Association of Chicago, and, in reply, I have the honor to state to 
 you the following: 
 
 " Mr. Foster asserts, in the documents referred to, that : 
 
 " 'There is not a single train of passengers from this city to Vera Cruz, terminus of the only railway finishad 
 
 1178. Allusion of the Report to complaints of the representatives of the United States in Mexico. 
 
 1179. Points that will be conssidered in reference to insecurity in Mexico and in other nations. 
 
 1180. Points to be examined in reference to the want of security in Mexico. 
 
 1181. The terms of the Report indicates that in spealcing of insecurity it refers to the roads. 
 
 1183. Facts cited by the Report in support of its appreciations on the insecurity of roads in Mexico. 
 1183. Report of the Department of Government relative to the points and cases mentioned by Mr. Foster. 
 
281 
 
 in the country, which does not go escorted by soldiers to protect it from being assaulted and robbed. The manu- 
 facturers who have their factories in the valley, not far from this city, whenever they send money to pay the wages 
 of their operatives, send armed men to escort it, and the case has frequently happened during the last twelve 
 months that the cars of the horse railroad, from the city to the neighboring towns, have been assaulted by bands 
 of thieves, robbing the money of the manufacturers. Every mining company that remits their metals to the mint 
 of this city for coinage, or to be shipped abroad, always accompany it with a strong escort of chosen men, and 
 the owners of estates and other persons who send valuables outside of the city do likewise. But if these cases 
 occur near the capital, it is natural to suppose that they take place more frequently at points distant from the 
 centre of the RepubUc' 
 
 " This paragraph comprehends three points : 
 
 " ist. ' That there is not a single train on the Vera Cruz Railroad which does not go escorted for its security." 
 
 "The fact is true, but nowise worthy of censure, for, on the contrary, it is the best proof of the care with 
 which the Government endeavors to give guarantees to travelers. Even in the most civilized countries, the pub- 
 lic forces watch over the security of the roads, and the way of doing it makes Uttle matter, whether it be by escort 
 or stationed forces, for in both cases it indicates a sad necessity, to wit : that of sheltering individuals from the 
 attacks of evil-doers, who exist not only in Mexico, but in every part of the world. 
 
 " Notwithstanding these precautions, the vigilance of the authorities has been sometimes frustrated, and ex- 
 amples could be cited in Spain, as well as even in the United States themselves, of railroads being attacked, which 
 certainly does not argue against the culture and civilization of those nations, for criminals never represens the 
 social state of the countries in which, unfortunately, they are found. 
 
 " zd ' The manufacturers of the Valley of Mexico, whenever they send money to pay the wages of their op- 
 eratives, send armed people to escort it, and the case has frequently happened, during the last twelve months, that 
 the cars of the horse-railroad, from this city to the neighboring towns, have been assaulted by bands of thieves, 
 robbing the money of the manufacturers.' 
 
 " It is very natural that the head of any business should send with his clerks or men, to his factories or estates, 
 the sums necessary for their expenses ; although prudence might not require this, yet convenience would always 
 recommend it. These are the ' armed people' to which Mr. Foster refers. 
 
 " On the zist of June, 1877, some banditti attempted to rob a clerk of the Hacienda of Coapa, who, accom- 
 panied by some men, was conducting money for that estate; but the assaulters, far from having succeeded in the 
 robbery, were apprehended and shot, two of them the following day. 
 
 " Respecting the asseveration that ' the case has frequently happened on the railroad going to neighboring 
 towns, that the money of the manufacturers has been robbed,' it is entirely inaccurate in its nature, unless ' fre- 
 quently ' refers to the single instance that has happened, not during the period, not of a year, as Mr. Foster re- 
 lates, but in the lapse of time since the establishment of the new Administration up to date. In fact, on March 
 28th, 1877, a train from Tlalpam was assaulted between Mixcoac and Barranca del Muerto, the evil-doers having 
 robbed $900 belonging to the factory of La Fama ; but they have been tenaciously pursued, and the case has 
 not been again repeated. 
 
 "3d. 'Mining companies or individuals who send money outside of the city accompany it with strong es- 
 corts.' 
 
 "It is true that the Company of Mineral del Monte have armed men to escort their valuables, but not because 
 they have them is it to be inferred their necessity, this fact being due rather to an excess of precaution, for if the 
 said company should soUcit the protection of the public forces, it would never be dfenied them. 
 
 " Individuals rarely send large sums of money from one point to another by private envoys ; they almost 
 always make use of the envoys which go guarded by the corresponding escort. 
 
 " It is also said in the Report of Mr. Foster, that the principal highways traversed by the lines of oiligences 
 are constantly guarded by armed forces of countrymen and Federal troops, and that, notwithstanding, robberies 
 are so common that they are seldom spoken of in the press. In support of this, a case is cited occurring in 
 one of the States of the Repubhc, the Belgian Consul-General to the United States having been the victim. 
 
 " The insecurity attributed to our roads is too exaggerated, and nothing can authorize the absolute way in 
 which Mr. Foster assures that robberies are so common on the highways that they are seldom spoken of in the 
 press. 
 
 "The periodicals, w.ith data not always accurate, inform daily of the poKce events occurring in the cities, 
 among which may be found some robberies of small sums, and rarely an alarming crime; but on the public high- 
 ways for two years past there can hardly be enumerated one case or another among those referred to by Mr. 
 
232 
 
 Foster, the circumstances of which I cannot state, for want of the documents in relation thereto, which ought to 
 be on file in the Government of the State in which they took place. 
 
 " In general, the appreciations of the United States Minister, in regard to public insecurity, are rested on one 
 or another isolated fact, happening at long intervals, and there cannot be a motive for any reasonable censure 
 respecting our conditions of security, the more so, if the extent and sparsely populated circumstances of our ter- 
 rity be considered, and the tumults which civil wars bring with them. Even in the absence of these deplorable 
 circumstances, it would be very easy, in respect to any nation, to group within a given period of time the crimes 
 committed within its territory, and in view of them, to make the same censures that Mr. Foster makes respecting 
 Mexico, but there is no one but what would know that such a judgment were but little fitting. 
 
 " With what is set forth, I believe to have satisfied the wishes you were pleased to manifest to me in your 
 communication, before mentioned. 
 
 "Liberty in the Constitution, Mexico, January 14th, 1879. 
 
 (Signed) " Garcia. 
 
 " So the Secretary of Treasury. — Present." » 
 
 1 184. From the special cases mentioned in the Report, even supposing them to be accurate, a general con 
 elusion ought not to be deduced. If it is true that the Consul of Belgium to United States has been robbed in 
 Mexico, it is not to be inferred from this that all foreigners who come to this country will be robbed in it. For 
 one who may have so, there will be a hundred or a thousand who have suffered no robbery whatever, traveling 
 through unpopulated districts, notwithstanding, and by roads le^ guarded, than that on which the Belgian Consul- 
 General to the United States was robbed. 
 
 1 185. Besides, that incident could not have been of much transcendency, inasmuch as that the Government 
 of King Leopold II. has since taken steps to re-establish the official relations of Belgium with Mexico, which was 
 probably determined after having heard the report of the Belgian Consul-General to the United States respecting 
 Mexico, in view of his recent journey. That report appears to have been very favorable to Mexico. 
 
 B. Foreigners have Enjoyed Security even when their Governments have been at War with Mexico. 
 
 1 186. If there were in Mexico the insecurity which the Report supposes, it is clear that those who would be 
 the most exposed would be the subjects or citizens of the nations that have made war against this country, during 
 that same war, and for some time after its conclusion ; but, far from this having been so, it can be assured that 
 Mexico presents a notable example of moderation, and of respect for the lives of foreigners. 
 
 1 187. The most notable cases, «rhich demonstrate the moderation of Mexico in this respect, are those 
 occurred with the Spanish, the French and the English, which wiU be spoken of as briefly as possible. 
 
 a. Conduct of Mexico Respecting Spanish Subjects. 
 
 1 188. The Spaniards resident in Mexico during the war of Independence, who opposed this with all their 
 energy, and who observed a sanguinary conduct during the struggle of insurrection, remamed, at the conclusion 
 of the war, conquered, and at the discretion of the Mexican Government. It can be assured that, as a general 
 rule, they were the victims of no attack, and continued living peaceably in the country and enjoying their prop- 
 erties. It is true, that their expulsion from Mexico was decreed by the law of December 20th, 1827. It must be 
 borne in mind that all the Spaniards living in it were not expelled by virtue of that law, nor did it come to be 
 decreed, except by reason of the fresh attempts made by the Spanish Government, to recover their dominion in 
 Mexico, which attempts terminated with the invasion of General Barradas, who disembarked at Tampico 
 in 1829. 
 
 1 189. Mexico did not come to celebrate a treaty of peace with Spain until December 28th, 1836, and, 
 therefore, from the year 1821 to that of 1837, the Spaniards in Mexico remained without being able to count 
 upon the protection of their Government. Notwithstanding this, they were not the victims of any attack, and 
 
 • 
 
 1184. Prom the special cases cited in the Report a general conolusiou should not be deduced. 
 
 1185. After the robbery of the Belgium Oonsul. Belgium appears to have decided to reestablish its relations with 
 Mexico. 
 
 1186. Respect in Jiexico to the life and property of strangers. 
 
 1187. Notable cases which demonstrate the respect there is for the life of foreigners in Mexico. 
 
 1188. Conduct observed towards the Spaniards after the war of independence. 
 
 1189. Security enjoyed by the Spaniards in Mexico before the treaty of peace with Spain. 
 
233 
 
 many of the principal fortunes of the country belong to Spaniards, or to Mexicans, sons of Spaniards, who have 
 inherited them from their fathers. Many Spaniards by birth occupy high positions in the Government, civil as 
 well as mihtary. 
 
 b. Conduct of Mexico Respecting French Subjects. 
 
 1 190. The same thing has taken place with the French. The Government of Louis Philhppe invaded 
 Mexico in 1838, although his invasion was transtory, and did not have the character of a conquest, like that of 
 1861. The Emperor Napoleon III. conceived later the project of making Mexico a French dependency, and 
 sent, with that object, numerous forces by sea and land, which occupied various parts of the country for seven 
 years, trying to conquer it in behalf of France, and with designs openly hostile to the United States. Notwith- 
 standing the unjust and cruel war which Napoleon III. made upon Mexico, (for he pretended it was not a war 
 made against a foreign nation, and not subject, therefore, to the law of nations ; but that it was a struggle 
 against rebels, as he called the Mexicans that were fighting here, according to him, against the govelrnment of the 
 country, with which character he wished to invest the authority he pretended to estabhsh in Mexico) the French 
 established in this country have not had to suffer in their lives or in their property. 
 
 1 191. The war terminated in 1867, and upon the Mexican army occupying the capital, the case did not 
 occur in which a single insult was proffered, nor the demonstration of any act against the French. Twelve years 
 have elapsed since then, and official relations have not been estabhshed between Mexico and France. The 
 French have lived without the protection of their government, and, notwithstanding this, they have not suffered 
 any damages in their persons or in their property ; and what is more notable, the commerce between France and 
 Mexico, instead of diminishing after the war and the suspension of the said relations, has increased in greater 
 proportion than the commerce between Mexico and the United States. 
 
 c. Conduct of Mexico Respecting English Subjects. 
 
 1 192. The same can be said, although on a smaller scale, respecting the English residents in Mexico. Eng- 
 land and Spain took part with France at the beginning of the foreign intervention, signing the treaty of London of 
 October 31st, 1861, to intervene in Mexico, with which object they sent their forces, by land and sea, to this 
 country. 
 
 1193. Englandand Spain retired, however, at the beginning of 1862, comprehending the wild nature of the for- 
 . eign intervention in Mexico. From Great Britain, then, having taken part in that understanding, it was natural 
 
 that its subjects should feel and experience to some degree the anger of the Mexican people. Mexico has not 
 re-established its official relations with the Enghsh Government, and, notwithstanding this, the English subjects 
 resident in Mexico have not had to suffer in person or in property, and English commerce has sustained itself in 
 the preponderancy given to it by the line of steamers established between Great Britain and Mexican ports. 
 
 d. These examples Demonstrate that there is not in Mexico the insecurity which is Supposed. 
 
 1 194. If the Mexican people have not exercised acts of cruelty against the hfe, nor arbitrary acts against the 
 property of foreigners, whose governments have made unjust wars upon this country ; if, far from this, those wars 
 being hardly terminated, it has thrown a veil over the past, and has considered the subjects of those nations as 
 brethren ; if these have been able to remain in Mexico, occupied in their business, prospering in it, and increas- 
 ing their trade during those wars, and after them, without their governments having re-estabHshed official relations 
 with Mexico, it appears quite clear that there is not in this country the insecurity which the Report attributes to 
 it. If the Mexican people had the depraved instincts which would lead them to commit attempts against Ufe 
 and property, it is natural to suppose that they wouldchoose, in preference, for their victims, the subjects of those 
 nations which, by having made unjust and sanguinary wars against Mexico, ought to have the animadversion of 
 the inhabitants of this country. 
 
 C. Security in Mexico from a Religious Point of View. 
 
 1195. It IS not difficult to demonstrate that there is as much security enjoyed in this country, more or less, 
 
 1190. In spite of the invasions of 1838 and 1861, have enjoyed the guarantees of life and property. 
 
 1191. Since 1867 the French have enjoyed security without the protection of their Government. 
 
 1192 The English and Spaniards have not been molested, notwithstanding that their Governments signed the Treaty 
 
 of London. 
 
 1193. Security of English subjects, and increase of commerce with Great Britain. 
 
 1194. The subjects of countries that have been at war with the Bepublic have enjoyed security, 
 
 1195. Respecting security, Mexico is not in unexceptionally unfavorable conditions. 
 
 30 
 
234 
 
 as elsewhere, and thit, therefore, several of the assertions of the Report respecting this grave subject are entirely 
 without foundation. 
 
 1 196. In order to make plain, even to the eyes of the most prejudiced persons, the true situation of Mexico, 
 in point of security of life, it is considered opportune to mention an example which is sufficiently eloquent to 
 convince that foreigners resident in Mexico are not exposed to all the perils and misfortunes which are indicated 
 in the Report. 
 
 1 197. This example refers to the security of life and property by persons who have come to Mexico to prop- 
 agate a new religion, and on this subject, the following points will be considered : 
 
 a. Religious fanaticism in Mexico up to 1861. 
 
 b. Protestant missions come to Mexico since 1861. 
 
 c. Progress made by those missions. 
 
 d. The Protestants, their adepts and property enjoy security in Mexico. 
 
 a. Religious Fanaticism in Meocico up to 1861. 
 
 1 198. The Mexican nation was for a long time domii^ted by the Roman CathoUc clergy, which came to 
 establish the most absolute fanaticism, and the most complete intolerance. Not only was the exercise of any 
 other religion not the apostolic Roman Catholic not permitted, but for a long time the inquisition prevailed, with 
 all its horrors, and all those not professing the Roman Catholic faith were considered as men without principle 
 or morality. 
 
 1199. The exercise of any other worship, and, more still, the propagation of any other religion, except the 
 Roman Catholic, would have occasioned in Mexico up to a little more than twenty years ago, the death of any 
 one attempting to undertake such an enterprise, inasmuch as it was considered an act meritorious to the eyes of 
 the divinity, the extermination of those who pretended to make proselytes in pro of any other religion. 
 
 1200. Although the conquests obtained through the war of reform, already spoken of, have affected a nota- 
 ble change in intelligence and public sentiment in this respect, the fact cannot be ignored that fanaticism is not 
 yet extinguished, and particularly in the towns distant from the centres of intelligence, and which the indigenous 
 element predominates. 
 
 b. Protestant Missions come to Mexico since 1861. 
 
 1 201. Notwithstanding this, since the year 1861 missionaries of various Protestant religions have come to 
 estabUsh their worship, and carry on their propaganda, not only in the capital of the Republic and in its principal 
 cities, where there were also great elements in favor of fanaticism, but in the towns of the indigenous population, 
 in the country, and in the very centres where fanaticism has had the greatest dominion for a long time, and where 
 it still exists, although it has lost much of its old power. 
 
 1202. These missionaries have estabUshed their churches publicly, they have foimded their religious worship, 
 they have distributed their Bibles and other books, they have preached their doctrines in public, opened their 
 primary schools and seminanes, established their orphanages, circulated their periodicals and publications, and 
 have, relatively, and in view of the difficulties which they have had to struggle with, good success, and with 
 scarcely any danger. 
 
 c. Progress made by Foreign Missions in Mexico. 
 
 1203. There are no exact data in this Department, of the progress made in the RepubUc by those missions, 
 and only in an incidental manner has it been known what two of them have attained up to this time. The 
 first was called The Mexican Branch of the Church Catholic of Our Lord Jesus Christ, the existence 
 of which commenced in 1861; already counts upon a church which serves it as a cathedral in the ancient temple 
 of San Francisco, with the churches- of San Jose de Gracia and San Antonio Abad; it has fifty congregations 
 
 1196. Example that demonstrates that security is enjoyed in Mexico. , 
 
 1197. Points that will be considered on reli|;ious toleration. 
 
 1198. Fanaticism in Mexico while the influence of the Bomau Catholic clergy prevailed. 
 
 1199. Character of the fanatacism up to a little more than 20 years ago. 
 1300. Although notably decreased, fanatacism has not disappeared altogether. 
 
 1201. Since 1861 Protestantism has been successfully carrying on its propaganda. 
 
 1202. The Protestant missionaries have developed their work of propaganda with good success and with scaieely any 
 danger. 
 
 1203. Without much protection frdm abroad the " Mexican Branch of the Church Catholic of our Lord Jesus Christ " 
 has prospered. 
 
236 
 
 scattered in different parts of the Republic; orphanages and schools, in which it is sustaining and educating more 
 .than 500 children ; theological seminaries, in which young men are being educated for the ministry ; a weekly 
 penodical entitled La Verdad (The Truth), which is its organ, and counts upon more than 3,000 active members. 
 It must be borne in mind that this church is only one of those that work in that sense, and that from the circum- 
 stance of having the character of Mexican, it has not counted upon so decided a protection and so efficacious of 
 foreign elements, as the other churches which belong to different Protestant denominatious, estabUshed in the 
 United States and in England, which, through the desire of propagating their faith in every country, give them- 
 selves to expenses and efforts which they would not do in behalf of a new denomination having the character of 
 Mexican. 
 
 1204. Th^second Protestant communion, of which there are data, is the Methodist Episcopal, founded in 
 Mexico by Dr. William Butler, in 1873. It has extended its propaganda in the cities of Mexico, Puebla, Guana- 
 juato, Orizaba, Cordoba, Pachuca, Real del Monte and Amecameca, where it has 2 1 congregations, and employs 
 33 missionaries, 19 of whom are foreigners; it sustains a theological seminary, various schools, attended by 518 
 children of both sexes, and two orphanages ; it publishes two periodicals, with a circulation of 3,200 copies, and 
 published, in the year 1878, 830,000 pages of religious literature ; it possesses values to theamount of $75,400, and 
 its expenses for the present year are calculated at $37,000. The members of this communion number 2,350. 
 
 1205. Besides the churches of Jesus and the Methodist Episcopal, other Protestant communities have been 
 estabUshing themselves since 1861, which are now ramified in towns of the States of Nuevo Leon, San Luis 
 Potosi, Zacatecas, Yucatan, Oaxaca, Jalisco and Mexico, and are denominated, Presbyterian, Baptist, Southern 
 Presbyterian Synod, Mexican Mission of Friends (Quakers), Southern Methodist Mission, Congregationalist, 
 Independent and Presbyterian Reformed, respecting which there are not sufficient data to note with accaracy 
 their present condition. 
 
 d. The Protestants, their Adepts and their Property Enjoy Security in Mexico. 
 
 1206. The very success which has attended the efforts of Protestant missionaries in Mexico has served to 
 provoke a reaction against them and their doctrines, because intolerance has become greatly alarmed at the pro- 
 gress made by the Protestant element. 
 
 1207. Notwithstanding all this, the Protestant missionaries and their adepts live peacefully in the country, 
 not only in the capitals, but in towns of second order, and even in the country, without being molested by any 
 one. It is true that at one time and another there have been disturbances or threatened tumults in some places, 
 and that in some cases persons occupied in the service of Protestant religion have been victims to fanaticism, 
 but these cases have been isolated and exceptional, and of so Httle transcendence that they can almost be said 
 to have passed unnoticed. When they have presented themselves they have been vigorously repressed by the 
 Government, and when any threateniitg has been feared the proper measures have been taken, proceeding with 
 all energy and efficacy to prevent the perpetration of any crime, and to give security to the persons threatened. 
 
 1208. If this happens in Mexico, touching persons who come to wound the most delicate fibre of man — his 
 religious beUef — who do not limit themselves to practising their religion in public, but undertake a veritable work 
 of propaganda, endeavoring to extend their doctrines into every home, even to those of the least intelligence ; if 
 it is taken into account that the intelligence of the masses is not yet sufficient to make them respect fully the 
 religious opinions of man, when they are professed in sincerity and good faith, and to leave every one to worship 
 the Divinity according to the dictates of his reason and conscience, it will be easily understood that, far from 
 being any foundation to consider life insecure in this country, it might be maintained that there are not many in 
 which the security is greater. In fact, if the life of man were held at so low an estimate here, it is clear that the 
 consequence of that contempt of human life would fall principally upon those persons who have come to practice 
 and propagate a new religion, attacking the most delicate element of society-;-its religious belief — and if these 
 persons, without need of escort or armed force, live tranquilly and unmolested in all the cities and villages of the 
 country, and frequent the pubUc highways, it cannot in anywise be said there is no security in it. 
 
 2. COMMERCIAL EXCHANGE IN THE INTERIOR OF MEXICO, IN POINT OF SECURITY. 
 
 1209. The Report considers, as a commercial indication of the insecurity of the roads, that the drafts on 
 
 1304 The Methodist Episcopal Communion lias also realized great progress in their propaganda. 
 
 1205. Enumeration of other Protestant communities established in the country. 
 
 1306. The results obtained by the Protestants have provoked a reaction on the part pf Roman Oatholipi^pi. 
 
 1307. The cases of threatening to Protestants have been exceptional, and repressed J)y the anthprities. 
 
 1308. The condition of Protestants in Mexico argues in f ayor of the security of the country. 
 
 1309. Commercial indication -which, according to the Report, demonstrates the insecurity of the roads. 
 
236 
 
 divers markets of the country are at a discount in this capital; that for Chihuahua it is from 8 to lo per cent; 
 for Acapulco, Guadalajara, Durango, Zacatecas and Moreha, from 5 to 6 per cent.; for Leon, Guanajuato, 
 Monterey and Oaxaca, from 4 to 5 per cent.; for Cuernavaca and Toluca, from 2 to 2 J per cent., and for Vera 
 Cruz, -J^ to I per cent. 
 
 1 2 10. The details the Report gives respecting the rates of exchange are approximately those found in the 
 quotations of the Brokers' Board in their half-monthly Hst of price current, with the exception of the exchange 
 on Vera Cruz, which, instead of a discount of J to i per cent., has in this market a premium. But it must be 
 borne in mind that these quotations represent only the exchange the commercial houses dedicated to this class 
 of business exact when they take letters, and that those houses give a much less discount, and sometimes collect 
 a premium, when they are the buyers. This comes, in the first place, from the fact that there are very few houses 
 whose special business is exchange, and there are few transactions of this class ; and in the second place, from 
 the distances that intervene between this capital and the markets the Report refers to, which distance in some 
 cases prevents the quick remission of funds in specie. 
 
 12 1 1. Besides, the Report appears to have suffered another mistake on this point, for it attributes to the 
 insecurity of the roads the difficulty that exists in commuiScation, when the true cause of this are the inconven- 
 iences which long distances occasion, and other motives which have .nothing to do with the insecurity of the 
 roads, and which exist everywhere, for there is always a difference in the value of money from market to market. 
 
 12 12. The city of Chihuahua, for example, is located about 1200 miles from Mexico; to go there passen- 
 gers from this capital have to employ ten days by diligence as far as Durango, and from there in private carriage 
 or on horseback, ten days more. The communications are therefore difficult, not for the insecurity of the road, 
 but for its length and the lack of conveniences. The trade between both points is done in carts, that employ 
 nearly forty days on the road in dry season, and longer in the wet season. It is not easy, then, to send money from 
 Chihuahua to Mexico at any time and under all circumstances. For this it is necessary to take advantage of some 
 train of carts which do not go every day, and once on the road, it needs a long time to arrive at its destination. 
 
 1 2 13. The same can be said of the other towns of Mexico ; they are situated at a distance more or less 
 great from the capital ; the roads are therefore more or less long and generally difficult, for the want of railways; 
 merchandise is sent very slowly, because they either go in freight carts, which make from 20 to 25 miles per day, 
 or on pack mules, which go even slower. It is not then easy to place funds from one point to another ; but this 
 difficulty does not spring precisely from the insecurity of the roads, as the Report indicates, but from the difficulty 
 of communication, occasioned principally by long distances and bad roads. 
 
 12 14. The best proof that can be presented that it is not the insecurity of the roads that occasions the 
 high exchange between the City of Mexico and other towns of the ReputJic, is the circumstance that exchange 
 takes place in one sense only, that is to say, to place in Mexico funds that are outside of this capital, which would 
 not be so if the cause of that exchange were the insecurity of the roads. It is clear that if the exchange on 
 Chihuahua is worth 10 per cent., because, on account of the insecurity of the roads, it is dangerous to bring money 
 in coin from that town to this capital, for the same reason it ought to be equally high to send money from this 
 capital to the city of Chihuahua, and it is a fact, that the heavy exchange of which the Report speaks is paid 
 only to place in Mexico money from outside, and not to place money outside of Mexico. 
 
 1215. Another proof of this same fact is, what takes place with drafts on Vera Cruz. Instead of discount, 
 they bear a premium, as has already been said, and notwithstanding the road, is easy and secure. This demon- 
 strates that exchange is ruled here by the same causes as in other countries : the demand on one hand, and on 
 the other the cost of sending cash and other mercantile circumstances pecuUar to each place, and not on account 
 of the insecurity of the roads. 
 
 1 2 16. As a further proof of this assertion, the fact can be cited of the heavy exchange that has been paid in 
 Mexico for placing money abroad, even before the depreciation of silver, notwithstanding that these operations 
 are not affected in any way by the insecurity of the roads of Mexico. 
 
 1210. Causes of the high rate of exchange between the centres of population. 
 
 1211. Mistake of the Report respecting the difficulty of communication in Mexico. 
 1813. Difficulties of communication between Mexico and Chihuahua. 
 
 1213. Real origin of the difficulties for the placing of funds. 
 
 1314. High exchange only takes place in the placing in Mexico of funds from other towns. 
 
 1215. Exchange in Mexico is governed by the same causes as in other countries. 
 
 1316. Heavy exchange paid in Mexico for placing funds abroad. 
 
237 
 
 3- THE INSECURITY THERE MAY BE IN MEXICO OUGHT NOT TO BE AN OBSTACLE TO ITS PROGRESS. 
 
 1217. The Report gives to understand, though it does not clearly say so, that the growth of the exterior 
 commerce of Mexico is not possible, on account of the insecurity which it considers to reign here. On this 
 point great is the contrast there is between the ideas expressed by the Hon. John- W. Foster in 1875 and in 
 1878, and it is to be lamented that these ideas have suffered, in so short a time, a change so complete, and, above 
 all, so unfavorable to Mexico. 
 
 1 218. In fact, the Hon. John W. Foster said, in the speech he delivered before the New Orleans Chamber of 
 Commerce, October 18th, 1875, with the object of explaining the difficulties with which Mexico struggles, ex- 
 pressing always great hopes for the future, as follows : 
 
 " As ought to be expected, it has encountered many obstacles to attaining the tranquil and satisfactory 
 arrangement of its affairs, both public asVell as private. It is'certainly not at all surprising that its public finances 
 and its industrial and financial interests should stumble against great difficulties. Our own country, which counts 
 upon much greater elements for repairing those evils, after ten years of peace, bitterly experiences yet the conse- 
 quences of a civil war of short duration. So, then, the prostration of business, and the circumstance that it 
 does not pass right away to a state of great prosperity and development, do not indicate a future without hope for 
 Mexico." ' 
 
 1 2 19. The comparison of these conceptions, full of hope and of good will, with those of the Report of Octo- 
 ber 9th, 1878, cannot but leave the painful impression that the ideas of their author have suffered a radical 
 change, which has made him lose almost all hope in the future of Mexico. 
 
 1220. In order to consider the various aspects of the question of security in Mexico, as regards its effect on 
 its national progress, the following points will be spoken of here : 
 
 A. The wars and tumults suffered by Mexico have not prevented the development, although slow, of its com- 
 merce. 
 
 B. The wars and tumults suffered by Mexico have not made the establishment and progress of foreign en- 
 terprise in Mexico impossible. 
 
 C. Not even the want of work for the inhabitants of Mexico has been sufficient to bring about insecurity. 
 
 4. The wars and tumults suffered by Mexico have not preven^d the Development, although slow, of its Commerce. 
 
 1221. The impression which the reading of the Report leaves on an impartial observer, however different 
 may have been its intention, is indisputably that the condition of Mexico is such, that either from lack of means 
 of communication, or from the hostility which is supposed 'to exist to the building of railways in its territory, to 
 put it into communication with the railway system of the United States, or from the complicated legislation that 
 governs its foreign commerce, or from the heavy local duties imposed by the States, or from all the other ex- 
 penses foreign merchandise has to disburse in order to arrive at the place of consumption, or finally, from the 
 insecurity prevaihng for life and property, especially of foreigners that come to Uve m the country, that all com- 
 merce with it is almost impossible ; and the httle that may be done cannot but be rickety and insignificant, and 
 without the probabihty of acquiring any great increase. 
 
 1222. This consequence would be as unjust for Mexico as it is unfounded, and the Report itself cannot 
 but have recognized, for the sake of truth, that the inconveniences presented to the exterior commerce of Mexico 
 can be conquered, and that the Spaniards and the Germans have been able to increase them and to prosper. 
 
 1223. In fact, the Report says, in reference to this point, as follows: 
 
 " The import trade is principally in the hands of Germans and Spaniards, especially the former. The latter 
 have the great advantage of speaking the language, and of being of the same race as the predominating element 
 of the country. But the Germans have gained honorably their advantages by many years of patience and study 
 of the country, and by their persevering dedication to business. 
 
 " The merchants of Hamburg establish branch houses at various points in Mexico, and send to them young 
 
 1317. Change of ideas of Hon. John W. Foster respecting the possibility of the growth of the exterior commerce of 
 
 Mexico. 
 
 1218. Fragment of the speech delivered by the Hoi>. Hon. John W. Poster, at New Orleans, in October, 1875. 
 
 1319. Contract between the hopes manifested by the same in 1875, and the conceptions of the Report. 
 
 1330. Points to be considered on treating of the questions of security in Mexico. 
 
 1331. Unfavorable impression made on the impartial observer by reading of the Report. 
 
 1323. The Report itself recognizes that the obstacles to the exterior commerce of Mexico can be overcome. 
 
 1333. Fragment of the Report in which it is shown that the Spaniards and Germans prosper in the commerce of 
 Mexico. 
 
238 
 
 men educated on purpose ito serve them, aiai they acquire experience in busiofiss, and afteiiwards -.assume the 
 management of those houses. They come to famiUarize themselves with the conditions and practices of the 
 country, and they overrule the coniplications of the tariff and the interior duties. 
 
 " The revolutions and changes of government do not affect their tranquility. T'^ey accustom themselves to 
 the forced laws and extraordinary taxes. In spite of the irregularities which the employees of the custom-house 
 commit, and the embarrassments produced by contraband, they preserve their imperturbable march, and gener- 
 ally, though not always, at maturity or in old age, they find themselves in a condition to return to Germany with 
 capital. If the American merchants are disposed to follow the same system, and to subject themselves to the 
 same inconveniences, I do not doubt they will prosper equally, though I have already indicated some advantages 
 they are possessed of." 
 
 1224. This frank and sincere exposition of facts, exact and patent to all who live in Mexico, comes to be 
 the most conclusive reply that could be given to all the difficulties presented in the Report to the increase of 
 commerce in Mexico. Coming down to the commerce between Mexico and the United States, which has been 
 the principal object of the Report, and the only one of this exposition, it is proper to observe that if the Spaniards 
 and Germans, by their study and perseverence, by their knowledge of the legislation and circumstances of the 
 country, can establish themselves in Mexico, carry on a lucrative trade and retire to their countiy with a fortune, 
 it cannot be maintained that the citizens of the United States cannot do likewise, except in the case of 
 recognizing in the Spaniards and Germans a certain mercantile superiority over the North American mer- 
 chants. 
 
 1225. If there is any nation that can carry on commerce successfully with Mexico, it is clear that the want 
 of roads, favorable conditions for the building of railroads, the vulgar prejudice there may be respecting this, the 
 high import duties, the complicated fiscal legislation, the trammels imposed by the States on foreign commerce, the 
 exorbitant expense on foreign goods, the insecurity of life and property, and all the other circumstances mentionedin 
 detail in the Report, giving them a character that may be considered as highly exaggerated, are not enough to prevent 
 foreign commerce from being carried on with advantage to the foreigners engaged in it. If the Spaniards and 
 Germans can do it successfully and to their own profit, it cannot be understood why the same thing cannot be 
 done by citizens of the United States, which is a mercantile nation, occupying one of the first places in the civi- 
 lized world. 
 
 1226. If it be desired to promote commerce between Mexico and the United States, it appears to be more 
 appropriate to the realization of that object, instefH of exaggerating the difficulties presented and the obstacles 
 there are to overcome, presenting them as almost inseparable, to indicate the easy and simple mode in which 
 others have succeeded in conquering those obstacles, and carrying on a lucrative commerce in Mexico, in order 
 that the citizens of the United States may avail themselves of that experience to the great advantage of them- 
 selves and their country. The passing allusion made by the Report to the commerce carried on in Mexico by 
 the Spaniards and Germans, cannot but be a tribute to the truth, and a recognition of evident facts, which 
 cannot be denied by any one who has any acquaintance with the circumstances of this country. 
 
 1227. It is in order to call to notice a special circumstance that occurs respecting the Germans living in 
 Mexico, and that is, that their representations have never presented any diplomatic claims for damages suffered 
 in that country to person or property, which contrast greatly with the conduct observed in this respect by foreign- 
 ers of other nationalities, and their respective legations accredited to the Mexican Government. It is .not proba- 
 ble but that the Germans have suffered sometimes in their persons or in their property on account of the tumults 
 occurred in Mexico ; but in a commercial point of view they considered it more appropriate to obtain reparation 
 of those damages in the form established by the legislation of the conntry, and as the Mexicans obtain it, than by 
 the way of diplomatic and international methods. It is told that a German resident in Mexico having presented 
 once some claim, the Prince of Bismarck refused it, saying, that he that lives in a country ought to submit to its 
 conditions. Perhaps an impartial observer may find in this circumstance the explication of one of the reasons 
 that have contributed to give to the Germans the mercantile preponderance they now have in Mexico over the 
 subjects of other nations that carry on trade with this country. 
 
 B. The Wars and Tumults Suffered by Mexico has not made the Establishment and Progress of Foreign 
 
 Enterprises in the Country Impossible. 
 
 1228. If the wars and tumults suffered by Mexico had established in the country a state of insecurity, such 
 
 1324 Only a lesser mercantile ability would cause the citizens of the United States not to prosper in Mexico 
 
 1335. The United States occupy one of the first places as a mercantile nation. 
 
 1326. Propriety of indicating the mode of overcoming the obstacles that exist to the commerce between the United 
 States and Mexico. 
 
 1337. Abstaining of the German mercha,nts from diplomatic claims, and their progress in the commerce of Mexico 
 1328. If insecurity were as the Report presents it, Mexico would be in a worse condition than before the indepen- 
 dence. 
 
239 
 
 as not to permit the development of commerce or the material progress of the nation, the natural consequence of 
 this state of things tvould be a statu quo in Mexico, since the proclamation of Independence, and as a nation 
 that stops in its material progress, retrocedes, relatively, to others, the situation of Mexico would be now inferior 
 to what it was, even during the Colonial regimen. 
 
 1229. This, far from being so, thfe Mexican nation has progressed, though, unfortunately, not in the same 
 proportion as others, or, as might be expected, taking into account its elements of wealth ; but the fact cannot 
 be ignored, that it has succeeded in progressing, and this fact is the clearest demonstration that can be presented, 
 that the wars and revolutions it has suffered has not determined a state of insecurity such as to prevent all 
 progress. 
 
 1230. It would be necessary to very much extend this exposition, and even to disregard its principal object, 
 to relate all the mercantile and material progress that Mexico has attained since it is an independent nation . 
 Besides, many of them, such as the construction of the Vera Cruz railway, for example, the Unes of steamers that 
 frequent its ports and others, are so potent, that they are known to every one ; and, on the other hand, they have 
 already been spoken of in detail, in this same exposition. 
 
 123 1. But there are, still, other undeniable facts, and which would be sufficient to remove all fear, even in 
 case that Mexico should again suffer some interior war or tumult. These facts are, that in the wars and tumults 
 occurred in Mexico since the independence, mercantile enterprises or foreign capital, come to Mexico, have not 
 had to suffer seriously or grievously, wherefore, it is natural to expect, that if any new tumult occurred, neither 
 would they have to especially suffer. Not to make a long enumeration of the enterprises which represent a con- 
 siderable capital, and. which are, in this case, mention will be made only of the Vera Cruz railway, the General 
 Stage Company, and the Company of Real del Monte. 
 
 1232. The railway from Vera Cruz to Mexico commenced to build in 1842, and, notwithstanding, all the 
 changes, wars, revolutions and tumults occurred since then, the work was able to be carried out, without the polit- 
 ical events having any more influence on its construction than that the constructing company obtained, at each 
 change, more favorable conditions for their interests. In fact, in examining the various concessions which the 
 constructing company of this railway obtained, which are enumerated in another part of this exposition, it is 
 noticed that each new concession was more favorable than the preceding one. On the other hand, the Mexico 
 and Vera Cruz railway was finished towards the end of 1872, and smce 1871 two revolutions have taken place in 
 Mexico, those of La Noria and Tuxtepec, without the Vera Cruz Railway Company having suffered greviously 
 by any of them. 
 
 1233. The case of the General Stage Company of the Republic, estabHshed since the year 1830, is still more 
 notable, for it has put the principal cities of the RepubUc into communication with each other, by means of a 
 regular hue of carriages, and their carriages are constantly on the roads. In spite of the insecurity of these and 
 of all the disadvantages of Mexico, the Stage Company has prospered in a notable manner, and it can be assured 
 that it is one of the most lucrative enterprises there has been in the country. 
 
 1234. The same can be said of the Mining Company of Real del Monte, which was organized with foreign 
 capital; it has existed a great many years; it has obtained large profits, and the wars, revolutions and tumults 
 occurred in Mexico have not been sufficient to ruin it or to stop its progress. 
 
 1235. If those who have come to propagate religious ideas repugnant to the most deeply-rooted belief of 
 this country have found in it security, is it even presumable that those who do not come with the idea of religious 
 propagation, but who bring their capital to invest it in lucrative enterprises, which serve to develop the elements 
 of wealth of the country, giving occupation to needy people, and bettering the condition of the poor classes of 
 society, would encounter resistance and persecution, or be in danger of their Uves ? The most eloquent answer 
 that can be given is, to present the Protestant religious congregations established in this country and enjoying 
 ample security. 
 
 1229. Mexico has progressed, although not in the proportiou that might be expected. 
 
 1230. Ma'erial and mercantile progress of Mexico since it is an independent nation. 
 
 1231. Mercantile enterprises have not suflEered seriously on account of the wars and tumults taken place in Mexico. 
 
 1232. Advantages obtained, insteed of serious damages, by the Vera Cruz Railway Company in each political change. 
 
 1233. The General Stage Company of the Republic established in 1830 has prospered. 
 
 1234. The Mining Company of Real del Monte has progressed equally, notwithstanding the political commotions. 
 
 1235. The security enjoyed by the Protestants proves that there is no danger for the investment of foreign capital. 
 
240 
 
 1236. But even though this were not so, and even if, unfortunately, new disturbances should occur in 
 Mexico, they would not prejudice the enterprise or capitals invested in the country, and if this- situation were gen- 
 ^erally known abroad, the principal difficulties would cease, which there now are to the investment of foreign 
 capital in Mexico. 
 
 C. The Wars and Tumults suffered by other Nations have Abridged their Development and Material Progress. 
 
 TZ37. Although it is a fact about which there can be no doubt, that the political disturbances of a country 
 contribute, in a great measure, to retard or diminish its material progress and mercantile movements, two im- 
 portant considerations must be borne in mind respecting this subject; first, that those tumuits and revolutions 
 are indispensable in certain cases, to promote the material progress of a country, for they remove difficulties 
 almost insuperable in the way of the attainment of that object; and second, that those tumults and revolutions 
 alone, in themselves, are not sufficient to destroy or indefinitely retard the material progress of a nation. 
 
 1238. In fact, in certain cases, revolutions with their consequent disturbances, are absolutely necessary to 
 conquer great obstacles, which the nations find to their progressive march, in vicious systems of government, or 
 other causes. Among these obstacles, and meriting particular mention, are the monopolies, or other privileges, 
 established in favor of certain classes of society, to the injury of the great majority of the people; their abolution 
 is altogether necessary, if it is desired to promote the advancement of the nation, and it cannot be said that the 
 sacrifices that have to be made to obtain that abolition are not necessary, nor that those sacrifices put back 
 material progress. 
 
 1239. In fact, France sufiered grave disturbances during the latter years of the past century, and in the first 
 years of the present one ; but after those disturbances it arose more powerful and with more Ufe than it had 
 before. The United States suiBfered, also, a great commotion in the consummation of their independence from 
 England, and after that commotion they arose more powerful than before, and without the trammels which the 
 character of a British colony imposed upon them. In 1861 they sustained a colossal struggle which lasted four 
 years, with the Southern States, which caused the destruction of much property and the spilUng of much blood, 
 and other disturbances of a grave character ; but after that memorable struggle they have been more powerful 
 and more prosperous than ever, commanding the admiration of the world for their progress and development. 
 
 1240. The Island of Cuba sustained a struggle for ten years in which there was proclaimed nothing less than 
 the holy principles of independence and the abolition of slavery, and in spite of the disastrous character of that 
 contest, it did not sensibly diminish commerce, nor the production of that privileged Island ; and after the ^ 
 termination of that war, far from showing this result, it has recuperated, in a yery short time, from the evils suffered 
 from the war, and it is natural to suppose that its prosperity is still in progress. 
 
 1 2 41. A similar thing has taken place, and has to take place in Mexico; the struggles which this country 
 has sustained, first against the Metropolis, and then against fanaticism and retrogression, have resulted in remov- 
 ing the principal causes that impeded the progress of the nation, and that result is in itself of much value, and a 
 great step on the road of progress. 
 
 1242. If the wars and tumults occurred in other countries have not established in them a state of insecurity 
 such as to ruin their commerce, and have not even served as a barrier to prevent their progress, it does not 
 appear that there is any reason for their producing this result in Mexico, and when they have not given this result 
 in other countries under circumstances similar to those of this, as are almost all the Spanish American Republics, 
 whose mercantile progress appears in the table of exportations inserted in the Report. 
 
 D. Not even the lack of Work for the Inhabitants of Mexico has Established Insecurity. 
 
 1243. The peculiar circumstances of Mexico, which have been related in detail in various passages of this 
 exposition, cause that frequently, not only the indigenous portion of its inhabitants, but even those of European 
 origin and of the mixed race, are found without any occupation to give them an honest means of livelihood. 
 
 1336. Acquaintance with the situation of Mexico will cause the diflaculties for the investment of foreign capital in 
 Mexico to cease. 
 
 1337. Revolutions do not indefinitely impede material progress, and at times they are indispensable. 
 
 1338. The sacrifices of revolutions are necessary to remove the obstacles to material progress. 
 
 1339. Increase of prosperity in France and in the United States after their political commotions. 
 
 1340. The Island of Cuba has not suffered seriously during the struggle it sustained to gain its independence. 
 
 1341. The revolutions in Mexico have removed the causes which prevented its progress. 
 
 1343. It must not be supposed that Mexico does not progress as other nations which have been in analogous circum- 
 stances. 
 
 1343. Lack of work in Mexico, 
 
241 
 
 1244- In fact, the production of articles for the interior consumption of the country must be necessarily , 
 limited, because the indigenous population that form almost two-thirds of the nation, produce themselves the. 
 articles they consume. The production of exportable effects is also very limited, from the causes which have * 
 been already set forth in detail, and all this causes that there is no occupation for a large number of the people 
 of the country from the lack of business in which to employ their activity. 
 
 1245. The consequence of this state of things is, that there are a considerable number of people without em- 
 ployment, and not having any honest means of Uvelihood, they are disposed to take part in whatever illegal 
 enterprise, in order to procure themselves the necessities of life. 
 
 1246. Taking these circumstances into consideration, what calls attention greatly in Mexico, are not the few 
 cases of robbery and attempts against property which take place, but, that these are not more frequent and alarm- 
 ing, causing in consequence a complete and absolute insecurity in the country. 
 
 1247. These considerations demonstrate with aU clearness, that when, by the building of railroads, and the 
 investment of foreign capital in Mexico, it is possible to develop the elements of wealth in this country, and to 
 give lucrative occupation to the people Uving in it, all danger will cease of insecurity, or of any rising against the 
 constituted authorities, for the principal cause of the greater part of the crimes of this kind that take place, is the 
 want of honest and productive labor to afford means of subsistence to a considerable portion of the inhabitants of 
 Mexico, and also, that the development of elements of wealth of the nation being once consumed, all of its in- 
 habitants will find labor, which will give them the means of living easily and honestly, instead of the dangers and 
 inconveniences attaching to a career of crime. 
 
 1249. In examining the question from this point of view, it appears that even though the insecurity of 
 Mexico were as great as the Report represents it to be, that is to say, were complete and absolute, far from its 
 preventing the immigration of foreign capital and enterprises, the best remedy against this greivous and serious 
 evil would be precisely the investing of foreign capital in developing the elements of wealth of this country. 
 
 4. SECURITY IN OTHER COUNTRIES. 
 
 1249. The assertions of the Report respecting the cases of insecurity in Mexico, suffer all of them from. the 
 logical vice of deducing general consequences, from individual and isolated facts. With this system of reasoning , 
 it would be easy to prove that there is insecurity in every nation on the earth, because, in all of them crimes are 
 committed against persons and property. 
 
 1250. It is proper to remember, that cases of robbery are general in all countries, and that Mexico is not ' 
 the only one that is subject to them ; and it cannot even be maintained that they are more frequent here than 
 in other places. The human species has not yet arrived at the perfection of repressing completely all crime. 
 There are bad men everywhere, who, through passions they cannot control, from evil instincts, from ignorance, 
 and at times, even from necessity, rush into a career of crime, and a special charge cannot be made against any 
 nation, that it has not foresight or force sufficient to prevent crime completely. If then, Mexico as in the case of 
 all other nations, and the crimes committed here are more or less the same as those committed in every part of 
 the civilized world, it does not appear prudent to exaggerate them, nor to represent them as the principal obstacle 
 to the development of this country. 
 
 1 25 1. For every crime against life or property occurred in Mexico, a greater number of similar cases that 
 have taken place in the United States could be cited, and this is not strange, for in proportion as the population 
 of a country is larger, it appears that its criminal record must be larger also. Moreover, horrible crimes have 
 been committed in the United States, some of which have not even passed through the imagination of the wick- 
 edest men in Mexico, such as the robbery of the remains of the philantrophic capitalist, A. T. Stewart, in order 
 to get a ransom for them. 
 
 1252. This exposition would cease to have that conciliatory and friendly character towards the United States, 
 
 1344. Causes of the lack of work in Mexico. 
 
 1345. Dangers originating from the lack of work in Mexico. 
 
 1346. In view of the situation of Mexico, it is to be noted that there is not entire insecurity. 
 
 1347. Efficacious corrections against insecurity. 
 
 1348. The investment of foreign capital is the best means of establishing security. 
 
 1349. Vicious logic affecting the asseverations of the Report. 
 
 1350. Mexico is not in exceptional conditions of insecurity. 
 
 1351. More attempts have been committed in the United States against life and property than in Mexico. 
 
 1353. It would not be sensible to attribute insecurity to the United States on the ground tliat crimes are committed 
 
 there. 
 
 31 
 
242 
 
 which every effort has been made to give it if it should enter into further considerations and details on those 
 crimes ; wherefore, it is considered sufficient to say that they have been committed, and that particularly those 
 cormnitted against property are frequent, without any sensible man having therefore ground for beUeving that in 
 the United States there is insecurity for life or property. 
 
 1253. From what has been set forth, it will be comprehended that it would be highly unjust, because some 
 crimes have been committed in the United States, to represent that neighboring nation as a country in which no 
 security is enjoyed, and because some persons have been victims of crimes committed against their life or their 
 property. No other than this the Report does, respecting Mexico, upon deducing from special and isolated facts, 
 general consequences, which are as unjust towards this country as inconvenient for the development of its exte- 
 ior commerce. 
 
 1254. In nations whose civilization and progress enable them to be presented as a model of security for life 
 and property, crimes are frequently committed that move humanity by their horrors and the depravity of the 
 criminals. London and Paris have been the theatre of some of these horrible crimes. It would be necessary to 
 very much extend the hmits of this work, and distract it from its object, if we were to stop to enumerate some 
 of these crimes, far greater in evil and horror than those which have been committed in Mexico ; and, notwith- 
 standing, no one attributes to France or England insecurity for life and property. 
 
 1255. What has injured Mexico in this matter is, the exaggerated idea which prevails abroad respecting its 
 security, for it is generally believed that no one can go out upon a road without being assaulted and robbed, 
 and that this danger is run in the streets of the principal towns, and even within the very houses. It might be 
 considered as a duty to justice, instead of giving pabulum to those errors by exaggerating the insecurity of Mex- 
 ico, to rectify the wild ideas that prevail respecting this abroad, and to manifest dispassionately what really takes 
 place in the country. 
 
 5. EXEMPTION OF CITIZENS OF THE UNITED STATES FROM FORCED LOANS AND EXTRAORDINARY TAXES. 
 
 1256. The Report says, in reference to this point, as follows : 
 
 " It is proper, however, to set forth here, that although the Supreme Court has most explicitly declared that 
 the forced loans, and all the other military and executive imposts, are contrary to the Constitution, and illegal 
 even in time of war, the Mexican Government has declined imperatively to agree to any treaty stipulation, or to 
 make any declaration or arrangement to exempt residents in the country from those irregular and unjust exac- 
 tions." 
 
 1257. The preceding conceptions comprehended various questions of great pubUc interest, the principal 
 being the following, which wiU be considered separately : 
 
 A. Legality of the imposts decreed by the Executive, in the exercise of powers extraordinary. 
 
 B. Actions of the Supreme Court on this subject. 
 
 C. Practices and provisions of the laws of the United States respecting the same matter. 
 
 D. Reasons why Mexico has not been able to agree to a treaty excepting the citizens of the United States 
 from extraordinary taxes. 
 
 A. Legality of the Imposts Decreed by the Executive in exercise of Powers Extraordinary. 
 
 1258. In Mexico, as in all coimtries governed by a written constitution, upon putting this in practice, and 
 in the first years of its observance, important questions arose on the meaning and application of various of its 
 precepts, beUeving to find in them contradictory provisions. This is precisely what has passed on the point rel- 
 ative to the imposts decreed by the President of the Republic, in exercise of powers extraordinary. 
 
 1259. Article 50 of the Mexican Constitution determines, that no two or more powers shall be joined in 
 one, nor shall the Legislative Power be deposited in one person only, and the text of this Article has served as a 
 groimd for political parties to contend, that the President of the Republic can in no case legislate, and, therefore, 
 cannot impose taxes. This meaning of the Constitutional precept, which" has, generally, been presented as a 
 
 1253. The Report deduces general consequences from isolated facts. 
 
 1254. Conditions of insecurity are not attributed to France and England, notwithstanding crimes axe committed 
 there. 
 
 1255. It is due to justice to rectify the opinion generalized abroad on the insecurity in Mexico. 
 
 1256. Fragment of the Report on forced loans and executive imposts. 
 
 1257. Questions of public interest comprised in the conceptions of the Report on executive imposts. 
 1358. Questions raised in Mexico on the meaning of constitutional articles. 
 
 1259. Erroneous meaning wished to be given to Article 50 of the Constitution. 
 
243 
 
 political arm, wielded, by the opposition, when, by the abnonnal circumstances of the country it has been neces- 
 sary, to invest the Executive with powers extraordinary, is entirely unsustainable before Article 29 of the Consti- 
 tution, and so all the parties have practically acknowledged. 
 
 1260. In fact, the Constitution, foreseeing the case of foreign war, or of grave interior disturbance, in which 
 it might be necessary to decree measures indispensable for the defence of the country and the salvation of its 
 dearest interests, it determined, in Article 29, that in case of war, interior disturbance, or any other grave perturbation 
 of public peace, the President might suspend, with the consent of the Council of Secretaries of State, and with 
 the approbation of the General Congress, and in its recess of the Permanent Deputation, the guarantees granted 
 in the Constitution, excepting only those which secure the life of man, and that Congress might grant to the Ex- 
 ecutive the authorizations it should esteem necessary to face the situation. 
 
 1 26 1. This Article clearly authorizes the delegation, in extraordinary circumstances, and for a limited time, 
 of legislative faculties to the Executive Power, in exceptional cases, and, particularly when the circumstances of 
 the country do not permit the meeting of Congress. The wisdom and foresight of this precept have already been 
 practically demonstrated in Mexico, during the wars of Reform and of Intervention. In neither of these epochs 
 could Congress assemble for a relatively long period of time, and if the Executive had not been able to sustain 
 the war, which was impossible without resources, the country would have been delivered up, with hands tied, first 
 to the Conservative party, which rebelled against the same Constitution in 1857; and, afterwards, to the Emperor 
 of the French, submitting itself to his dominion in Mexico, and losing its independence. The nation was able 
 to overcome those grave perils, and the Constitution was able to recover its empire, thanks to the foresight 
 of Article 29, which authorized the delegation of legislative powers to the President of the Republic, 
 
 1262. What Article 50 of the Constitution prohibits, is .the permanent and normal joining of two or more 
 powers in one only, or the deposit permanent and normal, also, of the Legislative Power in one person only; but 
 that Code does not prohibit it, but, on the contrary, expressly authorizes in Article 29, the exercise by the Presi- 
 dent of the Republic, with the previous authorization of Congress, of legislate powers, for a grave motive, in ab- 
 normal circumstances, for a limited time, and with the obligation to make account to Congress of the use made 
 of the powers conceded to him. 
 
 B. Actions of the Court of Justice on this Point. 
 
 1263. The Report states that the Court of Justice has declared, in the most explicit manner, that the forced 
 loans and all the other imposts decreed by the Executive Power, are contrary' to the Constitution, and illegal 
 even in time of war. 
 
 1264. It is true, that in some case, the Supreme Court of Justice has made this declaration j but it must be borne 
 in mind, that according to the express tenor of Article 102 of the Constitution, all judgments of relief {juicios de 
 amparo), to which category the one belongs that was instituted in the case referred to by the Report, have to be 
 decided by a sentence which only has to do with particular individuals, "limiting itself to protecting and relieving 
 them, in the special cases on which the process turns, without making any general declaration respecting the law 
 or act, which gives rise to it," and that, therefore, the declaration of the Court of Justice, in a special case, cannot 
 affect in any way the legitimacy or force of a law, or of administrative provisions. 
 
 1265. These considerations become more forcible when it is borne in mind that the determinations of the 
 Court on this point have not been uniform, for although it be true that in one case, that of the judgment of 
 relief, moved for by Sr. Faustino Goribar against the extraordinary tax decreed by the President of the Republic, 
 in the exercise of powers extraordinary, on July 19th, 1876, the Supreme Court decided in its sentence of July 
 6th, 1877, to relieve the plaintiff against the said law, and among other considerations, there figures in the 
 sentence the assertion that the delegation of powers extraordinary to the Executive is not legitimate, in other 
 similar cases, such as that for relief, moved for the same cause and against the same law by Srs. Guadalupe Bros, the 
 Court denied the relief in its sentence of November 13th, 1876, on the ground that the provisions of a legislative 
 character are legitimate, which the Executive issues in the exercise of powers extraordinary. 
 
 1266. If all the actions of the Supreme Court were uniform in the sense the Report indicates, the uncon- 
 
 1360. Article 29 of the ConBtitution authorizes in certain cases the delegation of legislative faculties to the; Executive. 
 
 1361. Wisdom and foresight of this article. 
 
 1263. Prohibition which Article 50jof the Mexican Constitution contains. 
 
 1363. The Report asserts that the Supreme Court has declared the imposts decreed by the Executive to be illegal. 
 
 1364 The declaration of the Court in a special case cannot effect the legitimacy of the dispositions of the Executive. 
 
 1365. The determinations of the Court on this point have not been uniform. 
 
 1866. The actions of the Court cannot be a foundation for the opinion of the Report from their being contradictory. 
 
244 
 
 ' stitutionality of the imposts decreed by the Executive in' the exercise of powers extraordinary might be sustained 
 with some ground, notvnthstanding that the express and absolute prohibition of Article 102 of the Constitution, 
 that the sentences of the Court shall be limited to protecting and relieving individuals in the special cases on 
 
 1 which the process turns, without making any general declaration respecting the law or act which gives rise to the 
 sentence; but when those actions are in contradiction to each other, the opinion manifested in the Report can- 
 not be considered to have any foundation. If the case is presented of an action of the Court in the sense of the 
 Report, various others can be presented in a contrary sense, which in themselves, alone, and .prescinding Article 
 ro2 of the Constitution would come to destroy, even in fact, aU basis for. an .opinion founded on the first action. 
 
 1267. Respecting this subject it is proper to set forth the report given to this Department by that of Justice, 
 because it brings out with all clearness the circumstances of the case cited in the Report : 
 
 " Department of Justice and Public Instruction. — Section ist. — In reply to the communication of that 
 Department of January 5th, in which it is pleased to ask an acclaration on the point treated of in. the Report of 
 Mr. Foster, Minister of the United States of America, paragraph 104, and referring to the declarations made by 
 the Supreme Court of Justice on the illegality and unconstitutionality of the forced loans and executive imposts, 
 I have the honor to say, that in abnormal circumstances ^d in case of grave purtubation of public tranquility, 
 Article 29 of the Constitution prescribes, that individual guarantees may be suspended with the exception of those 
 which secure the hfe of man; and the Legislature may concede to the Executive the authorizations it may esteem 
 necessary to enable the latter to face the situation. That in view of this precept, the legality of executive imposts 
 is beyond all doubt, notwithstanding any decision of the Court, to make declarations of a general character, nor to 
 establish jurisprudence in its decisions, and cannot serve as a legal precedent for other analogous cases. Such 
 is the special temper of the 'Action of relief provided in Articles loi and 102 of the Constitution, and embodied 
 in the law of January 20th, 1869. 
 
 " The Supreme Court of Justice has not communicated to this Department any of those declarations to 
 which the Minister of the United States refers; and knowledge is had only, of the one relative to the rehef moved 
 for by Sr. Goribar, from the imposition taxes which the Government imposed, with powers extraradinary,, by vir- 
 tue of the authorization of the Legislature. And by order of the President of the Republic himself, 1 communi- 
 cate it to you, as an acclaration of the point on which you were pleased to consult me in the before-mentioned 
 communication. 
 
 " Liberty in the Constitution, Mexico, Jan. 14th, 1879. P- Ga.gle. To the Secretary of the Treasury, 
 Present." 
 
 C. Practice and Provisions of the Laws of the United States on the same Point. 
 
 1268. The Constitution of the United States has no provision like that of Article 29 of ours, that is, which 
 authorized the delegation of legislative powers to the President in certain cases, and notwithstanding, when that . 
 nation has been in a grave conflict, it has established, in fact, the same thing that has been authorized in Mexico 
 by an express provision of our fundamental Code. The only provision of the North American Constitution, 
 similar to that of Article 29 of ours, is that of Section 9th of Article ist, which estabhshes that the right of 
 habeas corpus, in cases of rebeUion or invasion, but it does not determine who ought to decree the suspension. 
 In spite of this; President Lincoln, at the commencement of the war with the South, in March, 1861, decreed by 
 himself the suspension of the habeas corpus, and authorized General Scott to suspend it in certain districts. 
 
 1269. There are other facts still more eloquent in the same sense. After the breaking out of the war be- 
 tween the Southern States and the Federal Government, President Lincoln declared, in a Proclamation dated 
 April 19th, 1861, the state of war with the Southern States, which belonged, according to Article ist, Section 8th, 
 Para^aph nth of the United States Constitution, to the General Congress; and in another proclamation, of 
 the 27th of the same month of April, the President estabUshed a blockade of all the ports of the rebeUious States, 
 which was also an attribute of the General Congress. The Thirty-seventh Congress did not consider these acts 
 unconstitutional, but, on the contrary, sanctioned them, determining, in its law of August 6th, 1861, that all the 
 acts, proclamations, and orders of the President of the United States, issued since the 4th of March, 1861, to the 
 army and marine, calling for miUtia, etc., were, in all respects, approved, legalized, and made valid, and of the 
 same effect as if issued and executed under the previous and express authorization of the Congress of the United 
 States, whereby Congress came to give legislative powers to the President, in a retroactive manner. 
 
 1367. Note of the Department of Justice on the case cited by the Report. 
 
 1268. In the United States the suspension of the Tiaheas corpus act, has been decreed extra-constitutionally. 
 
 1369. Extra-coristitutional measures of President Lincoln approved by the eoBgress'of the United States. 
 
245 
 
 I270- After that, President Lincoln, in exercise of the powers of war, and in an extra-constitutional way 
 restncted the liberty of the press, and took possession of telegraphic messages, in order ;o discover Confederate 
 sympathizers. On the assembling of the Congress of December, 1862, this subject was discussed at length, and 
 the law of March 3d, 1863, was issued, which granted the President power to suspend the right of habeas eorpus 
 whenever, in his judgment, public security should require it. 
 
 1271. On March 2d, 1867, the United States Congress issued still another law by which were ratified and 
 legitimatized all the preceding extra constitutional acts of the President, and not only were these ratified and 
 approved, but it was determined that no tribunal of the United States might withhold the recognition of affairs 
 taken place by virtue of these acts of the President. 
 
 1272. On January I St, 1863, President Lincoln issued a proclamation, decreeing the emancipation of the 
 slaves in the Confederate States. It must be borne in mind that according to the Constitution of Ae United 
 States not even Congress itself could decree emancipation. After this proclamation President Lincoln recom- 
 mended to the Congress of 1 864 to amend the Constitution in this sense, and the reform which abolished slavery 
 in the United States was sanctioned February ist, 1865. 
 
 1273. The Congress of the United States, far from considering the legislative measure dictated by President 
 Lincoln as a usurpation of power, or as a violation of Constitutional precepts, approved by its laws of August 
 6th, 1861, and March 2d, 1867, all the acts of the President, and presented them as valid and legal as if they 
 had been issued by Congress itself, which, judicially speaking, is equivalent to a concession ex post facto of powers 
 extraordinary, m a country whose Constitution has no provision which authorizes the granting of those powers ; 
 and notwithstanding this, it has been sustained here, and by Representatives of the United States, that powers 
 extraordinary are unconstitutional, and therefore the acts of the Executive exercised by virtue of said powers are 
 illegal. 
 
 1274. With the object of procuring the filling of the vacancy on this point existing in the Constitution of the 
 United States, a book has been written , entitled " The Powers of War According to the Constitution of the United 
 States," by Mr. William Whitney, in which it is maintained that in time of war the President of the Republic 
 ought to assume dictatorial powers. 
 
 1275. The Government of the United States published besides, during the war with the Southern States, 
 some "Instructions for the Regulation of the United States Army in Campaign," written by Mr. Francis Lieber, 
 which sets forth the powers of military chiefs during war, and whose powers are not expressed in the Constitution, 
 and they comprehend extra constitutional attributes. These instructions were substantially adopted by General 
 Porfirio Diaz, in 1867, for the forces under his command, and on some other occasions they were put iii force, as 
 will be shown further on. 
 
 D. Reasons why Mexico has not been able to agree in a Treaty excepting citizens of the United States from Ex- 
 traordinary Taxes. 
 
 1276. The Report states that the Mexican Government has declined imperatively to agree in any stipula- 
 tion of treaty, or to make any declaration or agreement whatever to exempt North American residents in the 
 country from taxes decreed by the Executive, in virtue of powers extraordinary, and classes them as irregular 
 and unjust exactions. Inasmuch as the Report mentions this fact, and in a certain degree gives it the character 
 of blame against the Mexican Government, it is considered proper to refer as briefly as possible to the substance 
 of this incident. 
 
 1277. The United States Representative to Mexico has for some time soHcited the celebration of a treaty 
 between the two Republics, by virtue of which citizens of the United Slates resident in Mexico should be ex- 
 
 1270. New extra^constitutional acts of President Lincoln approved by Congress. 
 
 1371. Law of the United States Congress legitimatizing the extra-constitutional acts of the President. 
 
 1372. President Lincoln proclaims the abolition of slavery, and an amendment on this point sanctioned by Congress. 
 1273. What has occurred in the United States does not authorize certain estimations on the delegation of legislative 
 
 powers. 
 
 1374. Object of the work of Mr. Whiting, entitled " The Powers of War According to the Constitution of the United 
 
 States " 
 
 1375. The " Irusbruetims of Lieber " have been in force in Mexico. 
 
 1376. Assertion of the Report respecting the subjection of United States citizens to the payment of Executive im- 
 posts. 
 
 1377. The United States representative has solicited that his countrymen should be exempted from the payment of 
 
 extraordinary imposts. 
 
246 . 
 
 cepted from forced loans and extraordinary taxes, on the ground principally that those loans and taxes are ille- 
 gal, and that Mexico should have no objection to enter into obligations with a friendly nation, not to do that 
 which its condition prohibits. 
 
 1278. Respecting the forced loans, which name is given to the war taxes imposed by military chiefs during 
 the period of subversion of peace, it is proper to remember that various articles of the " Instructions for the 
 Regulation of the United States Army in Campaign;' comprehended the power of the chief of a military force 
 to impose taxes, the principal ones being, the 7th, the loth and the isth, which read as follows : 
 
 " 7th. The martial law extends to property and to persons, be they subjects of the enemy or strangers to its 
 government." 
 
 "loth. The martial law works principally on matters of pohce, or of coUection of taxes on public rents, be 
 they imposed by the power expeUed or by the invading one, and refers, above all, to the sustaining and good pre- 
 servation of the army, its security and the security of its operations." 
 
 " istk Mihtary necessity permits the taking for the army of all the country affords, necessary for the sub- 
 sistence and safety of the said army." 
 
 1279. Passing from the question of forced loans, which has many points of contact with that of the extraor- 
 dinary taxes decreed by the Executive, in the exercise of legislative powers, to that of extraordinary imposts de- 
 creed by the Executive by virtue of legislative powers, it will be seen that the considerations of the Report are 
 unfounded here also. 
 
 1280. The constitutionality being once demonstrated, of the delegation to the Executive of legislative powers, 
 according to the precept of Art. 29 of the Constitution, it will appear excusable to say one word more upon this 
 subject, for the basis is lacking completely to the reasonings of the Report, because it starts out on the supposi- 
 tion that such delegation is unconstitutional. In fact, if, according to the Mexican Constitution, the legislative 
 powers can in certain cases delegate its powers to the Executive, and if the Executive power, by virtue of this 
 delegation, decrees an impost, which all the inhabitants of the country are under obligation to pay, with what right 
 can it be pretended that the citizens of the United States residing in Mexico should be exempted ? 
 
 1281. The imposition of taxes by the Executive power being, then, in' accordance with the Constitution of 
 Mexico, in the exercise of delegated legislative powers, Mexican citizens are obliged to pay those taxes, and, m 
 fact, they have paid them. If the Mexican Government should celebrate a treaty with the United States, by 
 virtue of which citizens of that country residing in Mexico would be free of those imposts, the result of such a 
 stipulation would be to put United States citizens in Mexico in a better condition than the Mexicans, inasmuch 
 as they would be exempt from the payment of a tax which these were obliged to satisfy, according to the provis- 
 ions of the Mexican Constitution. 
 
 1282. It ought to be borne in mind, besides, that such exemption to the United States being granted, it 
 could not be denied to other nations friendly to Mexico, and the result of this would be that foreigners would be 
 in a better condition in Mexico than its own people. Would the government of the United States consent to 
 celebrate treaties, by virtue of which foreigners resident in its territory should be in a better condition than the 
 North Americans ? If, as it is to be beUeved, the United States would not consent to this strange principle, it 
 cannot be comprehended how they would try to obtain it of Mexico, for the most a nation can do in favor of 
 foreigners is to equip them in their rights and obhgations the same as its own people, but it would be indefensi- 
 ble to put them in a better condition than these. 
 
 1283. Considering all the force and gravity of what has just been very briefly noted, it appears unnecessary 
 to say a single word more upon this subject, by having demonstrated that the asseveration of the Report on the 
 unconstitutionality of the imposts decreed by the Executive in the exercise of powers extraordinary lacks founda- 
 tion, and that the stipulation referred to would come to place the citizens of the United States and all foreigners 
 resident in Mexico; in a better condition than the Mexicans. 
 
 1378. Provisions contained in the •' Instruetiona of Liebe/r" on extraordinary imposts. 
 
 1279. The considerations of tte Report on extraordinary imposts decreed by the Executive are unfounded. 
 
 1280. The delegation of powers being constitutional, the basis of the reasonings of the Report is lacking. 
 
 1281. United States citizins cannot be placed in a better condition than the Mexicans. 
 
 1282. Consequence that would result from the exemption the Report alludes to. 
 
 1283. It is unnecessary to insist on the constitutionality of the extraordinary imposts. 
 
247 
 
 6. COMPLAINTS OF THE UNITED STATES LEGISLATION TO THE MEXICAN GOVERNMENT FOR INJURIES TO NORTH 
 
 AMERICANS. 
 
 1284. In reference to this point, the Report states that there are so many banditti, and so much rob- 
 bery takes place, it is natural to suppose that American merchants, miners and travelers should be sometimes 
 the victims. Therefore, I have believed it to be my duty to complain frequently to the Mexican Government for 
 assassinations of American citizens, there being in some cases a supposed complicity of the local authorities, and 
 in many of them their abandonment, and indifference to the punishment of the assassins. About fourteen months 
 after my arrival to this mission, I thought it necessary to address an energetic note to the Mexican Minister of 
 Foreign Affairs for this reason, and as President Grant wished the same published, there is no objection to copy- 
 ing the following. 
 
 1285. It is proper to call to notice that the Report recognizes that the injuries that may be committed in 
 Mexico against hfe and property are not directed especially against citizens of the United States, and not even 
 against foreigners in general, and that it considers that the North Americans are exposed to them, and are vic- 
 tims the same as any of the inhabitants of this country, whether they are countrymen or foreigners. 
 
 1286. Further on the Report recognizes that the Mexican Government does not approve of the attempts 
 that may be committed in Mexico against citizens of the United States, when it says as follows : 
 
 " The preceding cases will show the inconveniences to which merchants from the interior of the country are 
 sometimes subjected. I do not wish to give to understand that all American merchants are treated so, but there 
 are few who have lived many years in the interior but what can bear testimony to those inconveniences from their 
 own experience. Neither do I desire it to be believed that the General Government, or the better class of 
 Mexican citizens, approve such conduct, but what I wish to note is, that these occurrences are the natural con- 
 sequence of every revolution that occurs." 
 
 1287. There will be set forth here, in the first place, the text of the accusation which the Report makes re- 
 specting the non-enjoyment of security in Mexico, and, in continuation, will be inserted a memorandum from the 
 Department of Foreign Affairs on this subject, which sets forth some eloquent facts. 
 
 A. Text of the Accusation of the Report Respecting the Injuries Suffered in Mexico by United States Citizens. 
 
 1288. In reference to injuries suffered in Mexico by United States citizens, the Report inserts fragments of 
 a communication addressed by the Hon. John W. Foster, in his quahty of Envoy Extraordinary and Minister 
 Plenipotentiary of the United States to Mexico, to the Department of Foreign Relations, August nth, 1874, 
 which fragments are these : 
 
 " During the short time that I have been in charge of this Legation I have been officially informed by the 
 consuls of my government, resident in different localities of the Republic of Mexico, of the death of thirteen 
 American citizens by violence and outrage, some of them assassinated in the most brutal manner, and to the 
 offense of our common civilization. Besides these, I have received also official reports of divers brutal attacks 
 and personal attempts against American citizens, which have not resulted in loss of fife.'' 
 
 " I am sorry to state that, up to date, I have no knowledge that any punishment has been applied in a single 
 case of this long list of murders and personal offences. Therefore, with the most sincere _sorrow, and the 
 most profound conviction of my duty for the dignity and honor of my government, and the security of the lives 
 and persons of Americans residing and traveling in this country, I energetically protest against the apparent indif- 
 ference and carelessness of the local authorities in punishing crime, and the attempts committed against Ameri- 
 can citizens, and I ask the Federal Government of Mexico to employ, in an efficacious manner, its influence and 
 its authority to protect the lives of my fellow- citizens, and to punish those who murder and outrage them." (See 
 Foreign Relations of the United States, 1874, pp. 15-78). 
 
 1289. The Report continues speaking of this subject in the following terms : 
 
 " Since I wrote that note more than four years have passed, and the list of American citizens has increased 
 considerably, and notwithstanding, up to date I have been informed that punishment has been applied in only 
 one case, and when a Mexican was assassinated zX the same time. 
 
 1284. Allusion of the Report to complaints for assassinations of American citizens. 
 
 1385. The Report recognizes that the attempts are not made especially against citizens of the United States. 
 
 1286. The Report recognizes that the Mexican Government does not approve those attempts. 
 
 1287. ~ The text of the accusation will be set forth here, which the Report makes respecting insecurity. 
 
 1288. Text of the accusation of the Report respecting the injuries suffered by United States citizens. 
 1389. The Report asserts that for four years past new offences have occurred. 
 
248 - 
 
 B. Memorandum of the .Department' of Foreign Affairs respecting- the Preceding Accusation. 
 
 1290. This Department having asked of that for data, on the incident to which the anterior fragment refers, 
 in order to comprehend, in this note, what took place respecting this subject, the following memorandum was 
 received from that Department, which, from its interest, it is thought proper to set forth here, notwithstanding it 
 pertains to its archives : 
 
 " Mr. Foster was received in his capacity of Envoy Extraordinary and Minister Plenipotentiary of the United 
 States of America, on June i6th, 1873. The nth of August, 1874, he wrote the foregoing wordsj that is to say, 
 thirteen months after his reception. 
 
 "The Department of Foreign Affairs made reply to the note of August i ith, communicating the steps taken 
 in the case referred, dispersing the charges of negligence, and expressing its judgment on 'the propriety of pre- 
 cisely stating the cases, of which the General Government has had no knowledge, to the end that efficacious 
 measures may be dictated to obtain the prosecution and punishment of the delinquents, and to know to what 
 degree the local authorities might appear guilty of negligence or abandonment.' " 
 
 "The Minister of the United States repUed, August 29th, 1874, as follows: 
 
 " ' It would be difficult to show, in all the cases that«'have come to my knowledge, the facts that prove the 
 negligence or indifference of the authorities, or the prejudices of the people; but the simple fact expressed in my 
 note of the nth of this month, that 13 American citizens had lost their life, violently, and in an outrageous man- 
 ner, and not upon a single occasion had the condign punishment been inflicted, is sufficient to found the convic- 
 tion expressed, as a consequence.' " 
 
 " Up to this date the United States has not been pleased to. correspond to the just demand of the Department 
 of Foreign Affairs, to precisely state the 13 cases of murder mentioned in:his note of August nth. 
 
 " In exchange, an examination of the proceedings instituted on murders, and attempts of every kind, both 
 commited on American citizens by Mexican citizens, or in Mexican territory, as well as vice versa, will be the 
 best proof to determine on which side is found the greatest number of attempts, and where is noted the want of 
 fulfillment of the duties of most primitive justice. 
 
 " Here is a list of the cases : 
 
 "Americans assassinated by Mexicans or in Mexican territory: 
 
 " 187 1. Murder of James W. Bard and J. Johnson, near Guerrero;' it has not been possible to discover the 
 authors. 
 
 "1874. John W. Dumbar and Adolphus Strauss, assassinated in Mazatlan; one murderer condemned to 
 death. 
 
 " Alexander Sanders, murdered in Nuevo Leon ; case pending. 
 
 " Juan Stephens, Protestant missionary, murdered by some fanatics in Ahualuleo. Five criminals executed. 
 
 "1875. Murder of two Americans, unknown, at the ford of Carretas; the presumed criminals, who were 
 found in Sonora, have been sent so Chihuahua, where the crime was committed. 
 
 " Death of Henry Morris, in a Protestant temple in Acapulco, by a horde of fanatics. 
 
 "Murder of Dr. Lowell and of George Hill in Texas, by Mexican banditti, who fled to Mexico. It is said 
 that by not having complied with the requisites of Mexican laws on the prosecution of crimes committed abroad, 
 the course "of justice has not been able to proceed. 
 
 " Assault on the estate of Ramon Aznar, Xuxub, and death of R. L. Stephens, by the Rebel Indians of 
 Yucatan. The widow of Stephens asked for indemnity, but her petition was thrown out, for the same reasons 
 which the American Government objected in the case of the seven shepherds of D. Toribio Lozano, murdered in 
 Texas by a party of banditti ; to wit: "Because no Governtnent is pecuniarily responsible for the murder of 
 individuals committed by other individuals within the limits of its jurisdiction'' 
 
 " 1877. Attempted homicide on the person of A. A. Russel; this case is pending. 
 
 "A party of Mexicans pass to Brownsville and commit various excesses. The military commander of Mat- 
 amoros hastens to assist in quelling the disorder. 
 
 "1878. November. Walter Henry, murdered near Zaragoza, Coahuila. The investigation not yet finished. 
 
 "See now the list of Mexicans assassinated by Americans or in American territory: , 
 
 "1871. Death of the wife of Quirino. Garcia; burning of the town of Algodones, Lower California; the 
 
 extradition of the banditti who assaulted that town, has been asked, but up to this date not obtained, in spite of 
 
 repeated eflForts for that purpose. 
 
 " 1872. In the beginning of June the Mexican, Joaquin Cardona, was lynched in Arizona. 
 
 1390. Memorandum of the Department of Foreign Affairs respecting the complaints contained in the Report. 
 
249 
 
 "1873. The Government of Chihuahua complains of the hostile conduct of John Burgess and his friends, 
 against Mexicans established oh the left bank of the Rio Grande. On November 28th they killed the Mexicans 
 Epitacio Ortega, Mariano Flores and N. Burgos. Up to date there has been no notice that the American tribu- 
 nals have taken any steps in the investigation of that matter. 
 
 " On the 2d of July, Mariano Tiznado was murdered at Phcenix, Arizona, by B. F. Patterson. 
 
 "On the 8th of August, lynching of three Mexicans in Tuxson. 
 
 " 1874. August isf. The Consul at Brownsville communicates that some soldiers of Captain Wallace, belong- 
 ing to a company of Texas miUtia, wounded Ambrosio Mousesvalles, citizen of Conception ; that he arrested 
 them, and afterwards, being convinced of their innocence, put them at hberty. 
 
 " Mousesvalles decUned to sue, for fear of being assassinated, as were Matias and Roman Carza. Horrible 
 murders committed at Penascal and unpunished up to this date. 
 
 " July 25th. Mateo Robles and Gabriel Leyva murdered by the citizens of San FeUpe, Texas. The Legation 
 at Washington protested against these crimes without any effect. 
 
 " February 6th. Murder of seven shepherds of D. Toribio Lozano in the county of Nueces. Up to this date 
 no notice is had of any judicial proceedings being instituted. 
 
 " September 19th. Invasion of armed men from the United States, and damages committed on Mexican 
 territory. The respective complaint was made by the Legation at Washington ; produced no result. 
 
 " 1875. Manuel Hernandez Gonzalez murdered at the rancho del Refugio, United States. It does not 
 appear that the American authorities have taken any proceedings in the matter. 
 
 " March. Mauricio Villanueva, Mexican merchant, murdered at the rancho of Sauz, Texas. The complaint 
 presented has produced no result. 
 
 " April Benigno Contreras wounded and maltreated near Ojinaga by Americans. 
 
 " May. The Majordomo of the Hacienda of Cieneguita, Chihuahua, killed by five American banditti coming 
 from Texas. 
 
 " May. Rape and wounding of the Mexican girl Juarez, at Laredo, by banditti from Texas. 
 
 " 1876. May. The American banditti pass the frontier, kill Macario and burn the house of Pablo Blanco at 
 Jacuma. 
 
 " 1877. Eight Americans pass the Bravo and rob and wound the owners of the ranch of Gonzalez. Murder 
 of two Mexicans at San Diego, California. 
 
 " The Lieutenant-Colonel, D. Jose Ramirez, and his wife Amanda Write, murdered at their ranch of Sauz, 
 Texas. It does not appear that American justice has taken any steps to punish those crimes. 
 
 " December. A train of Mexican carts assaulted near Corpus Christi by Texan banditti. 
 
 " Eleuterio Escobedo murdered in the environs of Bejar. The action of American justice was confined to 
 proving the death of Escobedo. 
 
 " Murder of Sotero Gonzalez, Inocencio Gongora and Catarina Gutierrez by a party of Texan banditti. 
 
 " Murder of a Mexican servant in the service of D. J. Hernandez, at Castroville. 
 
 " 1878. January. A party of American Indians entered the District of Monclova, committing robberies and 
 all kinds of outrages. 
 
 " Robbery committed on Roman Aranda del Paso by American Apaches. 
 
 " Assault and depredations committed by Salinas, at Candela and other towns of TamauUpas, at the head 
 of Texan banditti. Punishment of these attempts has not been able to be obtained, for it had been alluded to 
 with every kind of specious pretexts. 
 
 " April. Indians proceeding from the United States invade the jurisdiction of Lampazos, and wound Julius 
 Samaniego. The Indians returned to Texas without being molested in the least degree. 
 
 " The preceding list comprises but a small part of the numerous complaints and notices registered in our 
 archives. In all the proceedings relative to American complaints, there is noted the effort and genuine 
 earnestness of the Mexican Government, in the clearing up of the facts and the prosecution and punishment of 
 the criminals. If these efforts have not always had the desired effect, it is to be taken into account that the 
 Secretary £)f the United States himself has had to set forth that ^ the Mexicans in Texas, as well as the Americans 
 in Mexico who undertake business near the frontier, must not for the present, and perhaps for some time to come, 
 expect that either government can assure them against the risks inseparable from such enterprises! 
 
 " The cases of Americans murdered in Mexico or by criminals refuged in the Republic, from 1871 to 1878, 
 
 are thirteen. 
 
 " The cases of Mexicans murdered in the United States of Amenca, or by criminals refuged in their territory, 
 
 from 1 87 1 to 1878, are forty-two." 
 
 32 
 
260 
 
 C. Considerations Springing from the Preceding Memorandum. 
 
 1 291. The two following facts appear from the preceding memorandum: 
 
 ist. That although the United States Representative to Mexico set forth, from August nth, 1874, that 
 during the time he had been in charge of the Legation, that is to say, for thirteen months, there had been thirteen 
 cases of attempts committed, in Mexico, against the life of United States citizens, and he complained that the 
 authors of those crimes had not been punished, and he did not come to state precisely what were the cases to 
 whidi he referred, in spite of the instances which were made, with this object, by the Department of Foreign 
 Affairs J and, 
 
 zd. That even considering the number of cases exact in which citizens of the United States have suffered 
 in life and property, according to the complaint addressed by their Representative to Mexico, on August i ith, 
 1874, and even taking into account the other cases occurred from 1871 to 1878, there appears to be a greater 
 number of attempts suffered by Mexican citizens in United States territory, the authors of which do not appear 
 to have been pursued or punished. 
 
 1292. It is seen, then, that even the United States Representative, having ground to complain of injuries 
 suffered by his fellow-citizens in Mexican territory, Mexico would have more ground to present a similar com- 
 plaint against the United States Government, and even to give this the character which the United States Rep- 
 resentative gives to his Report. 
 
 1293. If there having been committed in Mexico offences against the Ufe and property of United States 
 citizens, and the culprits having even remained without immediate punishment, could be a sufficient motive for 
 maintaining that there is no security in Mexico, the same thing could be maintained respecting the United 
 States, from there having been a greater number of attempts against the life and property of Mexican citizens, 
 aud from the culprits having received no immediate punishment. 
 
 7. SPECIAL CASES OF INSECURITY MENTIONED IN THE REPORT. 
 
 1294. The Report, after having set forth general considerations respecting the insecurity he believes to pre- 
 vail in Mexico, and having cited the complaints addressed by the United States Representative, on account of 
 injuries suffered by his fellow-citiztns, he mentions various special cases, for the purpose of demonstrating his 
 asseverations. Coming down to this ground, the question is facilitated greatly, for it loses its vague character, 
 and events are referred to that can be estimated at their value. It is to be supposed that facts presenting a 
 graver character have been sought, for setting forth in the Report as a clearer proof of the insecurity in Mexico. 
 So that, if these facts are demonstrated to be inaccurate, or greatly exaggerated, the basis of the Report comes 
 to the ground, and will remain reduced to declarations which are not justified nor sustained by practical facts. 
 
 1295. This makes it necessary to take up each one of the facts mentioned in the Report. These facts are 
 five : the first refers to the case of Mr. Henry Miller, located in Chihuahua ; the second to the vessels Dread- 
 nought and Montana, arrived at Mazatlan in January and February, 1857 ; the third to the events occurred at 
 Acapulco, in February, 1877, and especially to the putting of the Consul, John A. Sutter, in prison; the fourth 
 to the events occurred at Matamoros, in December, 1876 ; and the fifth to themu»der of the American merchant, 
 Walter Henry, which took place near Piedras Negras, in August, 1878. Each one of these, then, will be spoken 
 of especially. 
 
 1296. In that part of the Report which has been examined up to this point, insecurity of person is princi- 
 pally spoken of, and the cases mentioned in continuation refer to insecurity of property, which is presented as 
 more alarming than the former, for it is assured that frequently a man would expose his person, but not his 
 property. 
 
 1297. In reference to this subject, the Report says the following, in which is indicated the object to make it 
 appear that in Mexico not only are life and property in general not protected, but especially so those of the citi- 
 zens of the United States : 
 
 129i. Facts which appear from the meiBorandum of the DepaTtment of Foreign Affairs. . 
 
 1292. Mexico would have greater ground for complaint against the United States for complaints committed against 
 Mexicans. 
 
 1293. If a country is considered insecure because some crimes are committed in.it, all would be insecure. 
 
 1294. The bases of "the Report respecting security are the special facts which it cites on this point. 
 
 1295. Number of facts specified in the Report. 
 
 1396; The Report presents the insecurity of property as more alarming tftian that of life. 
 
 1297. Fragment of the Report on the insecurity of property in Mexico. 
 
251 
 
 There is, besides, another cause for the insecurity of property that has come to my ofScial knowledge, and 
 which is known to the pubUc, and to which I ought to refer, for the purpose of giving a perfect idea of the 
 kmd of protection that is given to American merchants and capitalists in this country. 
 
 Murders and personal violence are a great evil, but although it may appear strange, it is, however, certain 
 that capital and property claim more protection than life itself A man will frequently risk his person, and will 
 not do so with his money or effects, although American citizens are barbarously assassinated by banditti, and 
 no immediate punishment is meeted out to them. As the business men gathered in Hershey Hall do not propose 
 to abandon their comfortable houses of Chicago, and its beautiful environs, they must be interested to know what 
 protection will attend their capital invested in mines, or their merchandise sent for sale to the interior of Mexico. 
 I can inform them better by citing cases which have taken place, and which have been pubhshed by our Govern- 
 ment and by American periodicals. The archives of this Legation and of the Department of State are full of 
 complaints of American merchants, miners and business men, for illegal embargoes and confiscations of money 
 and effects by Federal and State authorities, and by military chiefs and local officials, by government troops and 
 by revolutionists, and generally without there being in any case due reparation made. But not to be diffuse, and 
 to concrete the events of a recent period, I shall hmit myself to facts which took place during the last revolution, 
 and under the present Administration of Mexico, and I shall embrace points of country a long distance apart."* 
 
 1298. Note, that the facts to which the Report refers, and which it mentions in continuation, occurred during 
 the last revolution. A country cannot be judged by what passes in it during a period of revolution, for then 
 everything is abnormal and extraordinary. Revolution is war, and it is impossible that during war the guaran- 
 tees can be enjoyed which all countries grant for a time of peace. 
 
 A. Case of Mr. Henry Muller in Chihuahua. 
 
 1299. In reference to the citizen of the United States, Mr. Henry Muller, which is the first the Report refers 
 to, the following points will be considered : 
 
 a. Text of the Report respecting the case of Mr. Henry Muller. 
 
 b. Report of the Department of Foreign Affairs on that case. 
 a Report of the War Department on the same case. 
 
 d. Action of the Treasury Department on the same case. 
 
 e. General considerations on the same case. 
 
 a. Text of the Report respecting the case of Mr. Henry Muller. 
 
 1300. The Report says,, in reference to this case, as follows : 
 
 " A short time after General Diaz had ' pronounced ' against the late government of Sr. Lerdo, the State of 
 Chihuahua was the theatre of many despicable contentions between the armed factions of Diaz and Lerdo. The 
 cities and towns change frequently their military possessors. When the revolutionists possessed themselves of 
 one, their first act was to impose a ' forced loan,' for they were destitute of money to carry on the revolution. As 
 the government forces had extraordinary expense to combat the revolution, their coffers were also exhausted, and 
 they were obUged to have recourse to ' extraordinary taxes.' In this way some American merchants of that State 
 were obUged to pay to the divers parties no less than thirteen different ' forced loans,' in the space of six months. 
 These ' loans ' fall almost exclusively on the commercial and mining companies, which ought to pay their amount 
 in a few hours, or at least in a few days ; so it is that recourse was had in preference to those who could dispose 
 of money or realizeable effects. The complaint of all the foreign merchants is also that they suffer the most, for 
 the Mexican merchant has Uttle difficulty of hberating himself from the payment, or the ' negotiating ' with his 
 fellow countrymen, the military chiefs, on very advantageous terms. I will relate what occurred to a banker and 
 mining capitalist of Chihuahua, which is an example of this, during the last revolution. The partizans of Diaz 
 took possession of the city of Chihuahua, keeping it for some weeks, in the latter part of 1876. Their first act 
 was to impose a forced loan, and $3,500 were apportioned to the American banker, who, at that time, was absent 
 from the city, residing on his estate. An armed force was commissioned to collect the same loan. As he had 
 paid considerable sums of the same kind, he thought he had satisfied all the part that belonged to him, and re- 
 fused to pay. The force arrested him and carried him to the city; but, meanwhile, the forces of Lerdo had 
 recovered the place, and the banker was taken out of there and carried to the mountains, from whence he sent to 
 tell his family that $80,000 was owing for his ransom. He refused to council his family to pay so dear for his 
 
 1398. A country cannot be judged for what happens in it during a period of revolution. 
 
 1399. Subjects which will be considered on treating of the case of Mr. Henry Muller. 
 1300. Text respecting the case of Mr. Henry Muller. 
 
252 
 
 liberty, and was carried from here to there with the wandering band of revolutionists, now to one mountain, now 
 to another, according as they were persecuted by the government forces, obliged to sleep on the bare ground 
 and in the cold air of the mountain ; exposed many times to the fire of the enemy, to the imminent danger of 
 his life ; at last he was set at liberty, after 30 days of sufferings, by paying the sum of $3,500 asked at first. This 
 American having suffered in nearly $50,000 from forced loans and military exactions of various kinds in the last 
 revolution, and not having succeeded in getting the local authorities to recognize his claim, he made a journey to 
 this city, 1,200 miles distant, at the beginning of the present year, to apply directly to the General Government 
 in demand for reparation ; but, after losmg five months in vain efforts, in the capital, he returned to Chihuahua, 
 without making any arrangement." 
 
 1301. The circumstances of this case wiU be examined first, according to the official statements that exist 
 of it, and afterwards some general considerations will be made respecting the same, and some conceptions put 
 upon it by the Report, will be rectified. 
 
 b. Report of the Secretary of Foreign Affairs on the case of Mr. Henry Muller. 
 
 ^ 1302. Having asked that Department for the data it might have respecting this case, so as to take them into 
 consideration in this note, the following memorandum was received, which is here inserted for the comprehension 
 of all relating to this subject : 
 
 " Mr. Foster, in referring to the vexation which he said American citizens suflfered in Chihuahua during the 
 last revolution, expresses himself on these terms : 
 
 " 'In this way some American merchants of that State were compelled to pay to divers parties as many as 13 
 separate and distinct forced loans, in the course of six months,' and adds, ' that those forced loans weighed almost 
 exclusively on merchants and mining companies, and that foreign merchants complain besides, that they are the 
 principal victims.' And, as a sample of those cases, he presents that of an American banker and mining capitalist, 
 without telling his name. The description which Mr. Foster makes of this case is an extract from that contained 
 in an article which was published in the New York Herald, and which the Monitor Republican pubUshed a trans- 
 lation of June 13th, 1877, and the name of the banker, Henry Muller. 
 
 "The 'headings' of that article are as follows: 'The Turkey of America. Mexico and its outrageous 
 American citizens. Its rulers, thieves, and its employees banditti.' The simple enunciation of those headings 
 is sufficient to reveal their spirit. Notwithstanding, as soon as the government came to know of the statements 
 in it, and without Mr. Foster having presented any claim on the subject, as he has done up to now, the corres- 
 ponding information was asked for : 
 
 "From that received in the Department of Foreign Affairs, it appears that Muller is a German by birth, nat- 
 uralized in the United States, who went to Chihuahua in 1841 without any capital whatever; that he there made 
 a considerable fortune, mostly from business with the government, and that when General Trias, in June, 1876, 
 imposed a loan on the merchants of Chihuahua, Muller at first consented to pay the quota assigned him, but im- 
 mediately after he absented himself from Chihuahua, and took an active part against the revolution, by arming 
 the people on his estates, with which he joined the forces of the government, helping it through aU the campaign, 
 the reverses being owing to his efforts which were suffered by the partizans of the revolution ; that, taken prisoner 
 by Lieutenant-Colonel Delgado, he was sent to Presidio del Norte, and that he was treated with every considera- 
 tion compatible with his condition, notwithstanding the conduct of the American Chief, Andrews, who threat- 
 ened to level that town to the ground if Muller were not delivered up, and that when General Trias returned, he 
 was put at liberty, without its appearing that Muller has presented any complaint against the government. 
 
 " General Tnas, in order to prove that it was not true that he extorted money from the American residents 
 of Chihuahua, remitted the following letter : 
 
 "' United States Consulate, Chihuahua: 
 
 " ' I have the honor to reply to your dispatch, received this morning, and in reply, to say that no complaints 
 have been received from any of the Americans that they have been treated with any rigor by the present Govern- 
 ment, nor oppressed in preference to the Mexicans, or to foreigners of other nationahties. Adjoined I send you 
 a Ust of the American citizens of this city. 
 
 (Signed) " J. C. Huston, Vice-Consul of the United States." 
 
 " ' Chihuahua, August 3d, 1877. " 
 
 1301. Order which will be followed in speaking of the case of Mr. Muller. 
 
 1302. Memorandum of the Secretary of Foreign Affairs on the case of Mr. Henry Muller. 
 
268 
 
 ^^^ To the Governor and Military Commander of the State of Chihuahua, present : 
 
 " ' In order to give an adequate understanding of the circumstances of Mr. MuUer, it is proper to insert here 
 some paragraphs of the American Commissioner, Mr. Wadsworth, formulated on a claim presented by the said 
 MuUer : 
 
 "Opinion of Commissioner Wadsworth, presented in the session of April 2d, 1875: 'In 1862 the 
 claimant was a clerk of Macmanus & Co., who worked the mint at Chihuahua, by virtue of a contract of lease 
 which Macmanus holds by transfer from Potts, Carmis & Munoz. Miller made a secret agreement with two 
 partners of Macmanus, Sainz & Maceyra, in consequence of which he was to pass to Mexico to procure this lease 
 of the mint in his own name, but really in his own behalf and that of the two rascally partners of Macmanus. 
 Miller well knew that he was working illegally, and in bad faith, but he expected to succeed in his object through 
 the connivance of his companions in deception. 
 
 lb 
 
 "'He has no claim, inasmuch as he renounced it ; his claim commenced in fraud and rests on fraud. The 
 Mexican Government might easily have foreseen a multitude of difficulties, as well for itself as for others having 
 any business with the mint, when it delivered that institution to people who commenced by building themselves 
 up upon it by availing themselves of intrigues which violate good faith, and the confidence that ought to reign in 
 all mercantile society, and by laying to one side the obligations of honorable men. My judgment is that this claim 
 should be rejected, and it is so decided.' " 
 
 c. Report of the War Department respecting the ease of Mr. Henry MuUer. 
 
 1303. Information having been asked of the War Department respecting the case of the United States 
 citizen, Mr. Henry MuUer, and the other four mentioned in the Report, it was given on the 1 2th instant, and in 
 the part in point it says as follows : 
 
 " Mexican Republic, Department of War and Marine : 
 
 "Section ist. The Department under my charge has informed itself of the contents of your note, dated the 
 5th instant, in which you ask for information about some facts to which Mr. John W. Foster, United States Min- 
 ister, refers in an exposition which he addressed to the Chicago Manufacturers' Association, about the difficulties 
 existing for the extension of commerce between Mexico and that country ; and in reply, I have the honor to state 
 to you, as a rectification of the facts cited, as follows : 
 
 "Paragraph 93. General Porfirio Diaz, aschief of the revolution initiatedin this country against the Govern- 
 ment of Lerdo de Tejada, being obliged to furnish the resources indispensable to his troops in the points they 
 occupied, and not wishing to attend to this imperative and unavoidable necessity in an arbitrary manner, for our 
 country is lacking in a law on war taxes, notwithstanding that these are now generally determined in all civilized 
 nations, he fixed upon the ' Instructions for the Government of the United States Armies in Campaign,' issued 
 by the Federal Executive of that Repubhc ; he adopted them as good and appropriate, and ordered them to be 
 observed among the forces which then formed the Restorative Constitutionalist Army. 
 
 " The chief of the revolution, supported by the ist, 7th and loth Articles of the ' Instructions,' referred to, was 
 able to provide the necessary resources throughout the country for the subsistence of the troops; and of the 
 debts contracted by them some have been acknowleged and are now being paid, and others are pending in the 
 General Congress, which will decide the form of their recognition and payment. Consequently, the damages 
 which the operations of the Constitutionahst army necessarily occasioned to foreigners and countrymen were 
 consequences of the war, and resting on a law which, for special circumstances already referred to. General Diaz 
 put in force as I have shown. 
 
 " The articles of the ' Instructions ' cited say textually : 
 
 "Art. ist. A town, district or country occupied by an enemy is, by consequence of its occupation, underthe 
 martial law of the invading or occupying army, whether any decree or pubhc notice declaring martial law has 
 been made to the inhabitants or not. This is the effect, immediate and direct, and the consequence of the occu- 
 pation or conquest. The sole presence of the inimical army puts in force the martial law." 
 
 " Art. 7th. The martial law operates principally in matters of police, and the collection of taxes and pubhc 
 rents be they imposed by the power that has been expelled, or by the invading one, and refer above all to the 
 sustaining and good preservation of the army, its security and the security of its operations." 
 
 1303. Report of the War Department of January 14th, 1879, part relative to the case of Mr. Henry MuUer. 
 
254 
 
 " Paragraph 94. The Federal Executive of the late Administration being empowered, in the branches of the 
 Treasury and of War, by the General Congress, it could impose the loans to which this paragraph alludes; and, 
 although it might be true that they were repeated in the State of Chihuahua, they were in proportion to the 
 exigencies which that situation demanded. Foreigners, as well as countrymen, bore equally the same damages in 
 this respect ; and if the former suffer heavier imposts it is not because they fall on them exclusively, but from 
 the reason that mercantile speculations of some future and commerce, on a large scale, are in their hands, and it 
 is just to burden them proportionately and equitably.- In every case the Federal Government has tried to place 
 in the same conditions of recognition and payment the credits presented, either by foreigners or by countrymen, 
 when their legitimateness has been duly proved." 
 
 " Paragraph 95. It would be desirable that there should be some indication by which the name might be 
 knoivn of the American banker and capitalist of Chihuahua who suffered the over-taxation and injustice to 
 which the paragraph refers, in order to make the respective acclarations ; but in relation to the pecuniary ex- 
 hibit which he made, they are comprehended, respecting the General-in-Chief of the ConstitutionaUst army, in, 
 the power to exact them conceded by the law on war taxes ; and, in relation to the Government of Lerdo de 
 Tejada, in the powers conferred on him by the General Congress to that effect." 
 
 " By what has been set forth, it remains demonstrated that when proceedings are in consonance with a law 
 those that are effectuated cannot be rightfully declared, by any legislation or authority, as acts of vandalism. 
 
 " All of which I communicate to you, in reply to your before-mentioned note, for the end which it expresses. 
 
 " Liberty and Gonstitution. — Mexico, January 14th, 1879. 
 
 (Signed) " Gonzalkz. 
 
 " To the Secretary of the Treasury and Public Credit — Present!^ 
 
 d. Action of the Treasury Department Respecting the Case of Mr. Henry Muller. 
 
 1304. Mr. Muller came, in fact, to this capital, as the Report says, and being in it, presented to the De- 
 partment of the Treasury, on May 21st, 1878, the following application: 
 
 " (A revenue stamp of 50 cents, cancelled in Mexico May 21st, 1878). 
 " Citizen Secretary of State for the Finances and Public Credit: 
 
 " Henry Muller, an American citizen, and resident of Chihuahua, appears before you with due respect, 
 saying : That by the adjoined thirteen original documents it appears that the Supreme Government of the Re- 
 pubhc owes \&xa. forty-one thousand four hundred and thirty-seven dollars and forty-one cents ($41,437 41), which 
 sum he supplied by orders of the civil and military authorities established in that capital, and in character of the 
 forced loans, suppUes of war and exactions, which, by orders of their superiors, some military chiefs made from 
 my estate, taking effects, horses and other interests, as appears from some one of the documents with which I 
 duly accompany ; for I have never opposed obedience to the orders of the established authorities, as I could 
 prove by all the neighborhood of that capital, in which I have resided for more than twenty-five years, and in my 
 capacity as an American citizen I have had no other recourse than to obey the civil and military authorities, 
 without mixing even in the discussion of their origin, nor taking any part in the political affairs of the country. 
 
 " I must notify j'ou. Citizen Secretary, that amdng the documents figures a writing given in Chihuahua, 
 April 1 6th, of the year last passed, by which it appears that I, in company with Citizens Dr. Jesus Munos, Do- 
 mingo Legumazabal, Juan Terrazas, in behalf of his father, Pedro Zuloaga, and Luis Faudoa, lent ($10,000) ten 
 thousand dollars to the Citizen-General Naranjo for the requirements of his forces, that Citizen-General agree- 
 ing to pay said sum and seven hundred dollars more ($760), which, for rent of the locality occupied by the mint, 
 which is my property, were owmg me up to that date, with the duties which the said mint should realize for coin- 
 age, assays, &c., &c., and those which also the Treasury office should receive for exportation of silver ; and 
 agreeing, likewise, the said General, to give to the Itianer one per cent, interest, whilst they were being reim- 
 bursed their respective sums. In the writing pertaining, it appears that, to effect the loan to which I refer, I 
 gave five thousand dollars, and one thousand each by the said citizens ; and that there has been given us by the 
 Treasury office only ($3,948) three thousand nine hundred and forty-eight dollars, including the interest liqui- 
 dated up to February 8th of the present year. 
 
 "From all that is set forth, I petition you. Citizen Secretary, that giving account to the President of the 
 RepubUc, with this^application, and both taking into consideration the justice that is on my side, you will be 
 
 1304. Petition of Mr. Henry Muller pieaented to the Treasury Department for the payment of forced loans. 
 
255 
 
 pleased to obtain the order, that I may be paid the said sum of $41,437 41, whereby I shall receive a marked 
 service from the Mexican Government, and which will serve to make less sensible tne losses and damages I have 
 suffered for the lack of the so many times before-mentioned sum. 
 
 "Mexico, May 21st, 1878. 
 
 H. MULLER. 
 
 " Furthermore, I have to say that, as intermediator named by Messrs. Munoz, Leguinazabal. Terrazas, Zuloaga 
 and Faudoa, I represent them to arrange for the payment of what they represent in the writing spoken of in the 
 body of the preceding application, and which, in testimony, figures among the thirteen documents above referred 
 to. 
 
 " Date ut supra. 
 
 "H. MULLER." 
 
 1305. It is proper to note, before all, that the sum which Mr. MuUer claimed of the Treasury Department, 
 as a credit against the Federal Government, is not a matter of $50,000, as the Report says, but of $41,437 41, 
 and being deducted from it $555, the difference between $3,948, which he confesses having received, and the sum 
 of $4,503 06, which he really appears to have been paid by the Treasury Office of Chihuahua, up to June 30th, 
 1877, there would only remain pending payment, up to this date, the sum of $40,882 35, and that, moreover, in 
 that amount are comprised sums which belong to Mexican citizens who commissioned Mr. MuUer to coUect 
 them; for, of the $10,000 advanced to General Naranjo, $5,000 were furnished by Muller, and the other $5,000 
 by the persons who commissioned their collection, they having furnished one thousand dollars each. 
 
 1306. Attention must also.be caUed to the manner in which the events that happened to Mr. Muller are 
 stated in the Memorandum of the Department of Foreign Affairs, which has been already asserted '(paragraph 
 1302), which differs greatly from the form in which they are presented by the interested in his preceding applica- 
 tion. 
 
 1307. This application, and the documents annexed to it, having been passed on the same day they were 
 presented. May 21st, 1878, to Section 2d of this Department, that they might be studied, and the proper action 
 recommended, the following report was brought for the approval of the Secretary, on the 23d of the same month 
 of May, subscribed by the third official of Section 2d, in charge of the Department of Public Credit: 
 
 " Mr. Henry Muller, resident of Chihuahua, for himself, and in the name of Messrs. Jesus Munoz, Domingo 
 Leguinazabal, Juan Terrazas, Pedro Zuloaga and Luis Fraudoa, business men of that place^ asks for the payment 
 of the sum of $41,437 41, which he and those he represents have supplied in divers offices, by reason of loans 
 which have been imposed upon them, and by other exactions of which he asserts to have been the victim, accord- 
 ing as he pretends to prove it, with the thirteen accompanying documents. 
 
 " From the examination the Section has made, according to the accompanying manifest, it results : 
 
 " ' ist. That Document No. I. is a copy of a writing of contract celebrated in Chihuahua, April i6th, 1877, 
 between General Naranjo and Messrs. Muller, Munoz, Leguinazabal, Terrazas, Zuloaga, and Faudoa, upon a loan 
 of the said gentlemen to the said General, for the sum of $10,700, which was to be paid to them with the cash 
 proceeds of the mint of that city, giving them the interest of one per cent, per month during all the time they 
 should remain unpaid. This contract was approved by the Governor of that State, and by the chief of the Treas- 
 ury of that date, Jose Maria Revilla. There are no antecedents in this Section on the authorization that should 
 have been given in 1877 to General Naranjo to celebrate contracts of this nature, nor to the Chief of the Treas- 
 ury to approve them. As Mr. Muller expressed in his application, the Treasury Office has paid over on account 
 of this credit $3,948, including the interest accrued up to February 8th last. According,as appears from the prin- 
 cipal official paper on the Naranjo credits, existing in this Section (leaves 2 to 5), the said sum appears in the list 
 remitted by the Office of Chihuahua, May nth, 1877 (page i, principal foUo), of credits contracted by General 
 Naranjo with various merchants of Chihuahua, this Department (leaves 56 and 57, principal folio) authorized 
 the Treasury Office of Chihuahua, on December 21st last, to provide itself with resources, by celebrating con- 
 tracts with the holders of Naranjo bonds, issuing their orders against the Custom-houses of El Paso and Presidio 
 del Norte, with the understanding that the holders should receive 60 per cent, in cash and 40 per cent, in Naranjo 
 credits and that in the payment of import duties the Custom-houses should receive said for 80 per cent., and 20 
 per cent, in cash. Wherefore, it appears that with regard to this credit, Mr. Muller might be informed of the 
 
 1305. Rectification of the data of the Report on the sums owing Mr. Henry Muller. 
 
 ISOe". Divergence between the statements made by the report of the Department of Foreign Aflairs, Etnd those of .Mr. 
 
 Muller. 
 
 1307 Eepoi-t of the third- official' tff SectdoaSd^of the Treasury Department, on the collection by Mr, Muller. 
 
256 
 
 basis on which Naranjo credits are admissible in case it may suit the said gentleman to enter into an operation 
 on the terms provided, whenever you may be pleased to accord it, with the understanding that the interest of i 
 per cent, per month ought not to be approved, which was stipulated in the said contract on the $io,ooo furnished 
 in cash, nor on the $700 that were owing for the rent of the locality occupied by the mint of Chihuahua, accord- 
 ing to Clause 5th of said writing (Doc. No. i), the knowledge of this credit ($700), belonging to Section 3d of 
 this Department. In regard to the legal requisites of the mentioned document, No. i, the Section calls to notice 
 that the writing it contains is lacking in the proper stamps that should be used according to the revenue law 
 (Article 4th), and that in the testimony of the same, issued by the Notary, Luis G. Irigoyen, stamps to the value 
 of $10.70 were not affixed, as was due, but that the only figures on it, one stamp of fifty cents, on the first foja 
 of the two it contains ; wherefore, the Chief of the Treasury at Chihuahua, J. Severo Perez de Leon, should have 
 withheld from certifying a document calling for pa)nnent. 
 
 " ' 2d. That the examination of documents Numbers 2, 3, and 1 1 belong to the Section of Liquidation, for 
 they pertain to sums supplied to Constitutional chiefs during the movement of Tuxtepec, and to the value of ob- 
 jects that were extracted from the house of Mr. MuUer (Document No. 2), as it appears in the extract of the ac- 
 companying manifest made by this Section. On the said three documents there figures a value of $9,780.72. 
 
 " '3d. That the documents Nos. 4, 5 and 6, to the value of $5,913 60, furnished by Mr. MuUer to the 
 Revenue Department of Chihuahua, in the year 1862, pertains to credits contracted in the epoch of the revolu- 
 lution of La Noria, the basis for the regulation of which are not yet known. 
 
 " ' 4th. That the documents Nos. 7 and 10, dated January 2d and March 13th, 1877, to the value of $900, 
 pertain to sums furnished by Mr. Muller to the Revenue Department of the State of Chihuahua, for loans 
 imposed by the Governor and military Commander of the same State, arid the reintegration of which was in part 
 guaranteed by the federal rents, according as set forth in the said documents. As nothing appears in this section 
 of any power having been given to that government to impose loans on account of the federal revenue, it appears 
 that information ought to be asked of the Government of Chihuahua and of the Treasury office, with the 
 insertion of the said documents, as well as on the purpose to which those sums were devoted, in order to deter- 
 mine regarding them. 
 
 " ' 5th. That the documents 8 and 9, to the value of $18,226 39, pertain to : $150 furnished by Mr. Muller 
 February 5th, 1877, to the Government of Chihuahua in the nature of a loan, which sum was to be paid him 
 from the revenues of that State, and to $18,076 39, amount of a bond issued by the Revenue Department of the 
 State of Chihuahua, November 3Qth, 1876, in favor of Muller, which sum was recognized to him by that Govern- 
 ment, according to the account presented, to the eff'ect by the said Muller the payment of that credit affecting 
 the revenues of the State therefor. Consequently those credits pertain to the State of Chihuahua, and not to 
 the Federation. 
 
 " ' 6th. That the documents Nos. 12 and 13, dated August 7th, 1872, and April 15th, 1877, both to the 
 value of $65, ought to be rejected for want of justification, lacking in the requisites expressed in the adjoining 
 manifesto made by this section.' 
 
 " From all of which it results, that to avoid the confusion which the examination and despatch of credits of 
 diverse natures on the same official paper, might give room, for it appears that there should pass to the Section 
 of Liquidation those so pertaining, that they may be dealt with according to law. 
 
 " In view of what is set forth, you will be pleased to determine as appears. 
 
 "Section 2d, May 23d, 1878. — Francisco Ramirez Castaneda, third official." 
 
 1308. Section 2d of this Department accompanied its preceding Report with the following manifest of the 
 documents presented by Mr. Muller, with his application of May 21st, 1878, which gives an exact idea of the 
 details of the credits which Mr. Muller claims of the Mexican Government. 
 
 Manifest of Documents Presented by Mr. Muller, a Business Man of Chihuahua, Asking for the Payment 
 
 of the Sums Expressed Below. 
 
 Number i. Writing of contract celebrated in Chihuahua April i6th, 1877, between General 
 Francisco Naranjo and Messrs. Henry Muller, Jesus Munoz, Domingo Lequinazabal, 
 Juan Terrazas, Pedro Zuloaga and Luis Fauda, on a loan made by them of $10,000, 
 
 1308. Manifest of Documents presented by Mr. Muller asking the payment of $41,437 71. 
 
257 
 
 which were to be paid to them out of the cash proceeds of the Mint, allowing them i 
 per cent, per month for all the time they should be unpaid. That contract was ap- 
 proved by the Governor and Chief of the Treasury $10,700 00 
 
 No. 2. An account to the value of $6,180 72, which was presented for acknowledgment to 
 an office of Uquidation, established in that State, by decree of May loth, 1877, which 
 account was rejected as being exaggerated. It pertains to effects, which, as Mr. Mul- 
 ler expresses, were extracted by order of General Trias in July, 1876, without giving 
 receipt ; and according to the certification of the same General, dated February 9th 
 last, some objects were extracted by various individuals, availing themselves of the 
 effervescence Chihuahua was in, and of the abandonment of the house of MuUer in 
 which the abuse was committed ; as the list of some objects extracted by order of 
 General Trias, was lost on Chihuahua being occupied by the chief, Machorro, and as 
 there is no reason to doubt the veracity of the American Muller, the value set forth in 
 the mentioned account is just. The examination of this credit belongs to the Section 
 of Liquidation ^ $6,180 72 
 
 No. 3. A receipt from the commander of the ist Company of Cayame, given December 
 19th, 1876, in favor of Sr. Remigio Rivas, for the sum of $3,500, which was imposed 
 as a loan upon Mr. Henry Muller, by General Angel Trias. This document is want- 
 ing in the receipt of the respective pay-master, and the acceptance of General Trias. 
 Its examination belongs to the section of liquidation -SiSoo 00 
 
 Na 4. Certificate of the revenue officer of the State of Chihuahua, of Henry Muller, having 
 delivered on August 22d, 1872, as a subsidy of war, the sum of $513 60. This credit 
 belongs to those contracted by the revolution of La Noria. 513 60 
 
 No. 5. Certificate of the same nature in which it appears that Mr. Henry Muller delivered 
 at the revenue office of the State of Chihuahua, July 29th, and August ist, 1872, 
 $2,400, which was the portion assigned him in the loan imposed by General Donato 
 .Guerra on July 6th, 1872. This credit belongs to those contracted by the revolution 
 of La Noria 2,400 00 
 
 No. 6. Receipt of July 3d, 1872, given by the general revenue office of the State of Chihua- 
 hua, in which it appears that Mr. Henry Muller delivered in that office, $3,000, as a 
 loan which was assigned him by virtue of the decree issued by the Legislature of that 
 State, June 26th, of the same year, which was to be returned from the revenue of that 
 State, as circumstances permitted, that revenue office having paid him $200. Amount 
 
 of balance 2,800 00 
 
 The payment of the said credit belongs to the Federation. 
 
 No. 7. Receipt of the revenue office of the State of Chihuahua, given in favor of Henry 
 Muller for $500, which he delivered by virtue of a loan imposed by the government of 
 the same, January 2d, 1877, the payment of which was guaranteed with the federal and 
 State rents. There is nothing appearing to show the powers given that government to 
 impose loans, on account of federal revenue, upon which information should be asked 
 of the Treasury Office of that State 500 00 
 
 No. 8. Receipt of the Revenue Office of Chihuahua, February 5th, 1877, given in favor of 
 Mr. Henry Muller for $150, the portion assigned him, in the loan imposed on that date 
 by the Governor and Military Commander of that State, which sum was to be paid to 
 him out of the rents of the same. Said credit does not belong to the federation 150 00 
 
 No. 9. Bond issued by the Revenue Office of Chihuahua, November 30th, 1876, to the 
 value of $18,076 39, in favor of Mr. Henry Muller, which sum was acknowledged to 
 him by the government of that State, according to the certified account presented by 
 the said Muller, the payment of that credit affecting the rents of the same State j it 
 does not belong therefore to the Federation 18,076 39 
 
 No. 10. Evidence of Mr. Muller having delivered in the Revenue Office of the State, March 
 13th, 1877, the sum of $400 00, assigned in the loan of five thousand dollars, imposed 
 on that date, by the Governor and Military Commander of the State of Chihuahua, 
 guaranteeing its payment out of the federal revenue. There is nothing in this Section 
 relative to any authorization granted the said Governor, to impose loans guiaranteed 
 with the federal revenue 400 00 
 
 No. II. Receipt of the Lieutenant-Colonel of the Trias Brigade, Sr. Antonio Delgado, for 
 33 
 
258 
 
 $100 advanced him by Mr. Muller, December 29th, 1876, which were to be returned 
 by Mr. Moses E. Kelley. The official character of the last named gentleman is not 
 known, and the document lacks the acceptance of General Trias, and the acceptance 
 of general Treasurer, in case he were the paymaster. The examination of this docu- 
 ment belongs to the Section of Liquidation ^°° °° 
 
 No. 12. Receipt of a Sr. Francisco CanaUzo of the Western Army, given in favor of Mr. 
 Henry Muller, August 7th, 1872, for $42, value of a horse, saddle and bridle. By the 
 date of the document, the said credit appears to belong to those of the revolution of 
 La Noria, but as it is not authorized according to law, it must be rejected for want of 
 justification •■ 4z 00 
 
 No. 13. Bond subscribed, April 15th, 1877, by Sr. Eslanislao G. Porras, as GeneraWn-Chief 
 of the Military Colonies in Encinillas, for $23, value of four bushels of corn and 
 seven sheep, and for attentions to the forces of his command. Said bond does not 
 express the person who made the levy, and, in the opinion of Section 2d, it should be 
 rejected entirely ^3 °° 
 
 Amount (E. O. E.) $4S,38S 7i 
 
 "Mexico, May 22d, 1878. — Francisco Ramirez Castaneda, third official. 
 
 Note. — The preceding sum amounts to - $45)3°S 7 1 
 
 Payments deducted, according to the tenor of Doc. No. i, as the interested expresses 
 
 in his application 3i94° '°° 
 
 Amount of the claim $4ii437 7i 
 
 Date ut supra, 
 
 F. R. Castaneda, Third Official" 
 
 1309. As seen, the credits claimed by Mr. Muller, which are not his, in their totaUty, belong to the five fol- 
 lowing categories: 
 
 Credits of supplies made to the revolution of La Noria in 1872 $5>7i3 6° 
 
 Credits of supplies made to the revolution of Tuxtepec in 1876 9>78o 72 
 
 Credits of supplies made to General Maranjo in 1877 10,700 00 
 
 Credits of suppUes made to the Government of the State of Chihuahua 19,126 39 
 
 Credits without proof. 65 00 
 
 Total $45,385 71 
 
 Payments deducted, made by the Treasury office of Chihuahua, on account of the Naranjo 
 
 loan up to June 36th, 1877 > 4)S03 °6 
 
 There remains $40,882 65 
 
 That which belongs to Mexican citizens for supphes to General Naranjo Jieing deducted. . . S,ooo 00 
 
 There remains $35,882 65 
 
 1310. On May 25th, 1878, account was given to the Secretary of the Treasury with the pre-iiiserted report 
 from Section 2d (paragraph 1307), and on the same date it was, in conformity With what was advised, ordering 
 the credits to be passed to the Section of Liquidation, which pertained to that office, and that Section 2d be 
 informed of those which were incumbent upon it. 
 
 13 1 1. In virtue of this Section zd, presented May 28th, 1878, the following Report: 
 
 "In comphance -with the order of the 25th inst, documents Nos. 2, 3 and 11 were separated from this legal 
 paper, and passed to the Section of Liquidation for its examination. 
 
 "As the claim of Mr. H. Muller comprises credits of diflferent natures, and in the report of the 23d inst., the 
 resolution of various points of different kinds is recommended, the Section permits itself to advise you that the 
 verdict of ' approved,' which fell upon said report, be extended to the following resolutions: 
 
 1309. Divers epochs to which the credits claimed hy Mr. Muller pertain. 
 
 1310. Order of the Secretary of the Treasury for Section 3d to report respecting the credits incumbent Upon it. 
 
 1311. Report of Section 2d of the Treasury Department, May aSth, 1878. 
 
259 
 
 ist Thatthe contract of loan be admitted and recognized, made by Muller and his associates with General 
 Maranjo, for the sum only of $io,qoo (leaves 3 and. 4), without the interest of one per cent, per month, which is 
 therein stipulated. That the recognition and payment be not admitted of $700, for dues on rent of the locality 
 occupied by the Mint of Chihuahua. That the matter relative to this credit pass to Section 3d, that it may 
 report, as well as to the stamps the copy of the writing ought to bear on foUo 3 and 4, of which a copy will be 
 given it. 
 
 " ' 2nd. That Mr. Muller be acquainted of the order of December 21st last, on the terms on which the Na- 
 ranjo credits were ordered to be admitted and paid (fs. 23 and 24), by the Treasury Office of Chihuahua, upon 
 celebrating contracts with the holders of those credits, to provide itself with resources, in the case that it 
 should suit the said MuUer to enter into some operation with the said office on the terms provided 
 
 " '3rd. That the Treasury Office of Chihuahua be told to abstain from certifying documents which lack the 
 corresponding stamps, particularly when these import a claim against the Treasury (fs. 3 and 6). 
 
 " ' 4th. That Mr. Muller be told that documents Nos. 2, 3 and 1 1 have passed to the Section of Liquidation 
 for their examination and payment (fs. 5, 6, 7, 8 and 16) ; that the credits cannot yet be taken into considera- 
 tion, represented by the documents Nos. 4, 5 and 6, (fo. 25,) contracted in the epoch of the revolution of La 
 Nona, until the bases are dictated to which their recognition must be subject; that the documents Nos. 8 and 9 
 (fo. 26), to the value of $18,226 39 are chargeable to the State of Chihuahua, and cannot be recognized by the 
 Federal Government; that documents Nos. 12 and 13, which will be returned to him, leaving a copy in the legal 
 paper, are inadmissible for want of justification. 
 
 " ' sth. That information be asked of the Government of Chihuahua upon the powers it may have had in Jan- 
 uary and March of 1877, to impose loans with the guarantee of the Federal revenue, as expressed in documents 
 Nos. 7 and 10, whicliwill be remitted in copy. 
 
 " In view of what you may be pleased to decide regarding the force that should be given to the decree of the 
 25 th instant, this Section will be able to give it exact fulfillment. 
 
 " Section Second, Mexico, May 28th, 1878. 
 
 " Francisco Ramirkz Castaneda, Third Official." 
 
 13 iz. On account being given to the Treasury Department, with the preceding Report, it ordered, June 
 5th, 1878, as follows : 
 
 Mexico, June 5th, 1878. 
 
 " Be the Report of May 28th last made known to the claimant, when he shall apply, that he may express if 
 it is in accordance with the general arrangement which has been made respecting the Naranjo credits, and what 
 else he may think proper. Be the Chief of the Treasury of Chihuahua dismissed, for having certified the copy 
 of the writing against different prohibitions that have been circulated and recorded, that no office emit that class 
 of certifications which may cause double payment, and because he did not take care that the copy had the cor- 
 responding stamps, for which he is responsible. Be notice asked of the same Chief of the Treasury, of the pay- 
 ments that may have been made on such credits, and the same of the Treasury. • 
 
 " Signed, in rubric, by the Secretary of the Treasury." 
 
 J313. On June 12th, 1878, a communication was addressed by the Treasury Department to Mr. Henry 
 Muller, inserting therein for his information the report of Section 2nd, of May 23d previous, (paragraph 1307,) 
 communicating to him that the report had been approved by the President, and asking him if he was in con- 
 formity with the general arrangements made of the credits contracted by General Naranjo, without Mr. Muller 
 having replied to that note. 
 
 13 1 4. The Treasury Office of Chihuahua notified the Treasury Department, in an official dispatch, dated 
 July 3d, 1878, that, according a? it appeared from its books, it had paid Mr. Muller, in the fiscal year of 1875-6, 
 on account of the loan to General Naranjo, the following sums: 
 
 1313. Order of the Secretary of tlie Treasury in view of the report of Section 2d on the case of Mr. Henry Muller. 
 1313! Communication addressed to Mr. Henry Muller June ISth. 1878, without having received any reply. 
 1314^ Notice of the Chief of the Treasury of payments made in 1876 to Mr. Henry Miller. 
 
260 
 
 On May 29th, 1876 $2,000 00 
 
 On June 30th of the same year • 2,500 06 
 
 Total $4,500 °6 
 
 1315. Mr. Muller, without replying, as has just been said, to the note which was addressed to him on June 
 1 2th, 1878, on this claim, presented himself at the Treasury Department on August 17th following, asking 
 verbally for the documents annexed to his application of May 21st previous, which were immediately returned to 
 him. 
 
 13 1 6. The part of the credit which refers to supplies made to the revolution of Tuxtepec, passed to the 
 Section of Liquidation, established in this Department to examine and hquidate credits proceeding from said 
 revolution, in accordance with the Regulation of June i8th, 1877, whilst the general Congress determines what 
 may be proper, and the Chief of the Section presented on June 17th, 1878, the following opinion: 
 
 " To the Secretary of the Treasury : 
 
 " The North American citizen, Henry Muller, resident in Chihuahua, claims of the national Treasury the 
 payment of the sum of $9,780 72, proceeding from supplies made to the regenerating forces which fought in that 
 State in the year 1876, and from damages caused to his interests by the same forces. 
 
 " To justify this claim he presents three documents, of which the first and third refer directly to Mr. Muller, 
 and the second to Remigio Rivas, to whom was granted that receipt for the sum of $3,500, mentioning the loan 
 imposed by General Trias on the said Muller. 
 
 " Respecting the first voucher, which consists in the certified copy by the Secretary of the State Govern- 
 ment, of an account which the claimant presented to him, comprising the effects which he lost in the abandon- 
 ment he made of his house, located in the suburbs of the City of Chihuahua, there are various circumstances to 
 note, very important to estimate the justice of this part of his claim. 
 
 " In the first place, it has the character of injuries and damages that cannot be recognized according to the 
 regulation of July i8th of the passed year, entirely equal in this matter to the prescriptions of the law of November 
 19th, 1867. In the second place, by the confession of the interested himself, in his appUcation prensented to 
 the Governor of the State, that account to the value of $6,180 72 was already rejected in the revision of the 
 credits, made by the revisory committee estabhshed in the State, according to the decree of the same of May loth 
 of the past year, of which there appears a copy in the legal paper No. 5 of the file existing in this section, because 
 that account was exaggerated. 
 
 " Third. That according to the certificate of the Governor, which accompanies that application, the objects 
 were taken without his order, and the house being abandoned by its owner in the popular effervesence of those 
 circumstances, the said objects were lost, so that notwithstanding the deference which said Governor pays to the 
 affirmations of the claimant in the said account, this is not proved by anything but his word, which, accordmg to 
 the laws of the Repubhc, constitutes no judicial proof, except in that such affirmations are contra producentem. 
 
 " Although in the same certificate of the Governor, mention is made of a list of objects which were taken 
 out of the house by his order, it does not express what they were nor their value, but, according to the context 
 of this part of the certificate, it does not confine itself to the account the claimant presented, but to others 
 different from this. So it is, that being indefinite it cannot be estimated in any way, and needs proof. 
 
 " Voucher No. 2, or the receipt of $3,500 given by the commander, Satumino Navarrete, to Remegio Rivas, 
 as it lacks the authorization of the superior Chief, properly empowered, as well as the signatures of the commissa^ry 
 or sutler of those forces, it is insufficient for the end presented. 
 
 " In the same case is found receipt No. 3, given for the sum of $100, directly in favor of Mr. Muller by the 
 Lieutenant- Colonel, Antonio Delgado. It results from what has been set forth, that the principal charge of 
 $6,180 72, as proceeding from injuries and damages, cannot be recognized, as well for the lack of proof as 
 becanse the laws prohibit it ; that the other two charges need fuller proof for their recognition. Such is the 
 opinion of the Section, subject to your better and most respectable judgment. 
 
 " Mexico, June 17th, 1868. Francisco G. Mactezuma." 
 
 1317. On the 8th of June, 1878, in which account was given to the Secretary of the Treasury, with the pre- 
 ceding Report, it was ordered that information be asked of the Governor of the State of Chihuahua, respecting 
 
 1315. Return to Mr. Henry Muller of the documents annexed to his application May 21st, 1878. 
 
 1316. Opinion presented by the Chief of the Section of Liquidation on part of the credit of Mr. Muller. 
 
 1317. Fragment of the Report of the Governor of Chihuahua on the documents presented by Mr. Henry Muller. 
 
261 
 
 the documents presented by Mr. MuUer. The Governor of that State rendered, on August 26th, 1878, the re- 
 port that was asked of "him, which, in the part in point, says as follows : 
 
 " Executive Power of the State of Chihuahua. Section of Finance, No. 608. — In compliance with the 
 order of the President of the Republic, according to the note from that Department, of date June i8th, which 
 was received two days ago, I proceed to render the report which is asked of me. 
 
 "On June ist, 1876, a loan of $56,000 was imposed on the business men of this Capital, to attend to the 
 necessities of the war. Of that sum, it was Mr. MuUer's share to pay $3,500, by his having in operation a capi- 
 tal of three hundred and fifty thousand dollars. This gentleman did not pay, but went away to points occupied 
 by the enemy. Some time afterwards he was apprehended by a chief, who was in the knowledge of all that had 
 passed, and obliged to pay the $3,500 loan, which went into the Paymaster's office. The other receipt refers to 
 $100, which Mr. MuUer voluntarily lent to a chief sent by me from Presidio del Norte, on a commission to this 
 Capital. 
 
 " Liberty and Constitution. Chihuahua, August 26th, 1878. 
 
 (Signed) "Angel Triaz. 
 
 " To the Secretary of State for the Finances and Public Credit. — Mexico. 
 
 13 1 8. For the better understanding of this subject, it is proper to state the general basis ordered for the pay- 
 ment of the loan made to General Naranjo, in Chihuahua, in April, 1877, on which account Mr. MuUer supplied 
 $5,000. It being in reference to supplies made, not to a revolution, but to the representative of a legitimately 
 constituted Government, almost all the Federal rents of that State were applied, and a large part, in fact, of that 
 credit was paid, as already stated, during the fiscal year in which it was contracted. This being expired on June 
 30th, 1877, it was necessary to give new rules for its payment in the fiscal year following, and it being necessary 
 to conciliate the payment of the said credit with the fulfillment of other obligations of the Fedeaal funds, the basis 
 was fixed on December 21st, 1877, which appear in the following telegram, addressed by the Treasury Depart- 
 ment to the Chief of the Treasury, in the State of Chihuahua : 
 
 " Mexico, December 21st, 1877. To the Chief of the Treasury, in the State of Chihuahua. — You are au- 
 thorized to provide yourself with resources necessary to cover your estimate, by admitting in payment 60 per cent, 
 in cash and 40 per cent, in credits of General Naranjo, issuing therefor orders against the custom-houses for im- 
 port duties, direct or indirect, by El Paso or Presidio del Norte, in 80 per cent, of their amount, the importers 
 paying 20 per cent, in cash. 
 
 " Render account of each contract you may celebrate, by authority of this, and render report of what is owing 
 by the Naranjo contract. 
 
 "To decide on the Trias obligations, information asked for is awaited. 
 
 (Signed) " Romero." 
 
 1319. On April 13th the preceding resolution was modified in the terms expressed in the following telegram 
 addressed to the Chief of the Treasury in Chihuahua: 
 
 " Mexico, April 13th, 1878. To the Chief of the Treasury in the State of Chihuahua, — In reply to your 
 telegram of the 7th, received yesterday, I inform you that the order of December 2 ist last, communicated by this 
 Department, is modified in the following terms : 
 
 "ist. There may be received 50 pei cent, in credits of the Naranjo contract, and 50 per cent, in cash for 
 90 per cent, of the duties due in the custom-houses of El Paso and Ojinaga. 
 
 "2d. Importers shall pay the 10 per cent, remaming in cash, and its amount shall be applied to satisfying 
 the wages of the employees in said custom-houses. 
 
 (Signed) " Romero." 
 
 1320. According to these bases, those credits are since then being paid, and a considerable part of them has 
 already been satisfied. 
 
 132 1. Mr. Muller, without presenting better proofs of his doings in the sense indicated by the Chief of the 
 Section of Liquidation (paragraph 1316), asked verbally, on the 17th of August, 1878, that the documents in 
 
 1318. General bases ordered for the payment of the loan made to General Naranjo in Chihuahua in April, 1878. 
 
 1319. Modification of the order of December 31st, 1877, on the payment of the loan made to General Naranjo. 
 
 1320. A considerable part of those credits has been satisfied according to the bases ordered. 
 
 1321. Mr. Muller did not present better proofs of his claims, and those he presented were returned to him. 
 
262 
 
 proof of his claim should be returned to him, and in the same day their return was ordered, having delivered 
 to him these, together with those referring to the rest of the credit (paragraph 1315). 
 
 e. General Considerations on the case of Mr. Henry Muller. 
 
 1322. By the expHcations that have been made respecting the case of Mr. Henry Muller, it will be seen that 
 that very case, cited in the Report to demonstrate the insecurity that prevails in Mexico, could be presented to 
 sustain the contrary. In fact, Mr. Muller came to the country about 25 years ago, without resources, and thanks 
 to his labor and spirit of enterprise, he has succeeded in making a large fortune in the State of Chihuahua, in 
 possessing large estates, city property and mines, and his resources permitted him to estabUsh a bank. He has 
 been, besides, contractor of the mint of that city, which, as has already been said, is one of the richest branches 
 of business there are in Mexico. This example demonstrates then, that the insecurity prevailing in Mexico is 
 not so great, when in spite of it, the very persons that are presented as victims of it, each prosper and make a 
 large fortune. 
 
 1323. It appears equally, that Mr. Muller, either from personal friendship, or from some other motives, was 
 inclined to one of the parties into which the State of Chihuahna was divided, and, that when the opposite party 
 conquered, he considered himself insecure and fled from Ms house, having also the object of evading the payment 
 of an impost, that had been decreed by the military chief of Chihuahua, and which had not a personal character. 
 After a httle, he was captured by a subaltern officer of the said chief, and in spite of the fears of the said Muller, 
 of suffering some personal violence or great pecuniary exactions, he was not molested in his person, and there 
 was simply extracted the payment of the impost that belonged to him, without increasing the quota that was as- 
 assigned him, and which pertained to him, according to the respective decree. It appears clear, that the insecu- 
 rity of the distant State of Chihuahua cannot be so great, when foreigners are treated in this manner who flee to 
 elude the payment of an impost, and for fear of being attacked on account of having been inclined to the con- 
 quered poUtical party. 
 
 1324. It appears also, that of the loan that Mr. Muller made to General Naranjo in Chihuahua, in April, 
 1877, which was a voluntary operation on his part, had been about half paid back to him up to June 30th, 1877, 
 without its having been necessary for the federal government to take action in the matter, which also demon- 
 strates that there is much exaggeration in assuring that loans to nearly $50,000 had been imposed on Mr. Muller, 
 and that he could not obtain the payment of these. 
 
 1325. It appears, besides, that of the $41,431 71, amount of the credits presented by Mr. Muller, 
 $19,126 39 pertain to supplies made to the State of Chihuahua in 1876 and 1877, which were acknowledged to 
 him by the government of that State, the respective endorsements having been issued to him. All who know 
 our system of government, identical in this point to the government of the United States, will comprehend that 
 the federation is not responsible for the pecuniary obligations of the States, for, if it could make the expenditures 
 of the States, the Independence of these would cease. 
 
 It is not understood, then, how it is that Mr. Muller claims of the federation the payment of a credit against 
 the State, and still less, that the United States Representitive finds it censurable that the federation does not pay 
 the debt of the States. 
 
 1326. It appears, finally, that when Mr. Muller came to this capital to arrange the payment of the credits 
 referred to, he was attended to with every efficacy and opportunity, inasmuch as his legal paper was examined 
 without delay the moment it was presented ; that if the amount of his claim was not satisfied, this is owing in 
 part, that some of his credits were not proved, and that there is no legitimate authorization to pay others as is 
 expressed in continuation, and that the payment of others was being made according to bases fixed for the same 
 class of creditors, respecting which he was asked if he admitted them, without his having replied thereto, there 
 being, therefore, no foundation for assuring that he had come to this capital without having succeeded in arrang- 
 ing for the payment of his credits because of the Government 
 
 1327. According to Article 119 of the Constitution, the Executive can make no payment which is not com- 
 
 1322 The siccess of various enterprises of Mr. Henry Muller proves that insecurity is not so great in Mexico. 
 
 1323. Attitude of Mr. Henry Muller during the political disturbance, and the consideration with which he was treated. 
 
 1324. The assertion is exaggerated that loans to 150,000 were imposed on Mr. Henry IViuUer, and that he has not been 
 paid. 
 
 1825. Part of the sum claimed by Mr. Muller belongs to the State of Chihuahua to pay. 
 
 1826. It is not true that by reason of delays Mr. Muller did not succeed in the arrangement and payment of his 
 credits. 
 
 1327. Necessity of a law to authorize the payment of credits proceeding from the revolution of Tuitepec. 
 
263 
 
 prehended in the estimate or in posterior law. The payment of the credits procefeding frorti the Revolution of 
 Tuxtepec has not yet been authorized by the General Congress, for although various projects have been pre- 
 sented for authorizing it, and even when, in the last period of sessions an approval of a proposed law respecting it 
 was arrived at by both houses, the Executive was under the necessity of making observations upon it December 
 20th, 1878, which were pubUshedin the Diario Oficial, of the 25th of the same month. By virtue of these ob- 
 servations the proposed law will return to Congress and will have to be discussed and approved again by both 
 Houses, in order to have the force of law. Congress will not open its session again until the ist of April next, 
 there being, therefore, up to this time no legal authorization to make the said payment. 
 
 1328. With the object of facilitating the work previous to the recognition and payment of the said credits, 
 the Executive detennined, since June i8th, 1877, to estabhsh in the Treasury Department a Section of Liquida. 
 tion, charged to receive, examine and substantiate the legal papers of claims proceeding from the Revolution of 
 Tuxtepea With this object the regulation of the said date was issued, which contains substantially the provisions 
 of the law of November 29th, 1867, issued by the Federal Government, for the recognition of credits proceeding 
 from the European intervention in Mexico. It appears clear that the condition of this revolution of 
 Tuxtepec could not exact that they should be treated with more favorable conditions than those who made 
 supplies to the National Government to defend the independence of the country during the French inter- 
 vention. 
 
 1229. The Section of Liquidation has been discharging itsfunctions since June i8th, 1877, up to date, sub- 
 ject to what Congress may determine about the credits emanated from the revolution of Tuxtepec. The part of 
 the legal paper of Mr. MuUer in reference to the credits of the said revolution; it has already been seen what 
 was the opinion of the section; and that Mr. MuUer preferred to withdraw his vouchers, probably with the inten- 
 tion of presenting them in the form of a diplomatic claim, without complying with the provisions of that regula- 
 tion. If it has not been possible to terminate the arrangement and recognition of this part of his credit, it is in 
 nowise owing to any omission or fault of the Mexican Government. 
 
 1330. After these explications, it does not appear grounded to Mr. MuUer's as an example of the little justice 
 of the Mexican Government towards its creditors. Is it beUeved that the Mexican Government ought to pay the 
 obligations of the States ? Is it believed that it can pay for the supplies made to revolutionary movements 
 before the payment of these is approved by Congress, and without the interested presenting the corresponding 
 justification? Is it believed that respecting those of which the payment is authorized by the laws, special bases 
 ought to be established for the payment of each credit separating it from the general bases ordered for the pay- 
 ment of all ? 
 
 B. Case of the Schooner " Dreadnaught" and Pailebot "Montana," arrived at Mazatlan in 1877. 
 
 133 1. The second special case mentioned in the Report, to demonstrate the insecurity which prevails in 
 Mexico, is that of the United States vessels " Dreadnaught " and "Montana" arrived at Mazatlan, the former, 
 January 4th, 1877, and the latter, the 8th of February following. 
 
 1332. In order to duly examine what occurred in these two cases, the following points will be considered 
 here: 
 
 a. Text of the Report respecting the vessels "Dreadnaught" and "Montana." 
 
 b. Report of the War Department respecting the case of the Schooner " Dreadnaught." 
 
 c. Report of Sr. Adrian Busto respecting the Schooner "Dreadnaught." 
 
 d. Relation of facts occurred with the " Montana." 
 
 e. Consequences flowing from the preceding facts. 
 
 f. Modification of the Mexican laws on account of the case of the "Montana." 
 
 1328. Section of liquidation for examination, and substantiation of the legal papers of claims of the revolution of 
 
 Tuxtepec. 
 
 1329 It is not the fault of the Government that it has not been able to terminate the arrangement of the credit of 
 
 Mr. Mailer. 
 
 1330 The case of Mr. Henry Mnller does not prove that Mexico acts with little justice towards its creditors. 
 
 1331 The Report presents the cases occurred with the vessels "Dreadnaught" and ''Montana" as a proof of in- 
 
 sBCuritv 
 
 1332. Points to be considered relative to the cases of the vessels " Dreadnaught " and " Montana." 
 
264 
 
 a. Text of the Report Respecting the Vessels " Dreadnaughf and "Montana." 
 
 1333. In reference to the case of the United States vessels " Dreadnaught " and " Montana," the Report 
 says, as follows: 
 
 "In the autumn of 1876, when the Presidency of this country was disputed by three different persons, an 
 American vessel sailed from San Francisco, with a cargo for Mexican ports. The first point it was to touch at 
 was Mazatlan, but in view of the state of revolution of the country, she had instructions not to enter the port, 
 without receiving notice from the consignees that the city was at peace. 
 
 " The vessel drew near to the port precisely when the forces of Lerdo surrendered to those of Iglesias, and 
 when these, in their turn, were threatened by those of Diaz. Having signaled her arrival, she kept in the open 
 sea to await instructions ; but her movements having been perceived by the employees of the custom-house, who 
 feared the city would fall into other hands before they had a chance to collect the duties, they ordered a steam 
 gunboat, which, with another, constitutes the Mexican armada on the Pacific, to seize her and take her into port 
 immediately. The gunboat stopped her by firing a cannon at her stern, and in spite of the protest and represent- 
 ation of the captain, with the American flag floating at her mainmast, on the high seas, she was seized and carried 
 by force to the port, and her cargo was discharged, opportunely, for the inter-reigning government to receive the 
 duties. The captain of the vessel and the American Consul protested against these proceedings in writing. 
 When our Government asked reparation, that of Mexico, after obtaining from the local authorities a report on 
 the subject, replied, that it was informed, that as the Mexican steamer was navigating along the coast, it came 
 across the American vessel becalmed to one side of the bay of Mazatlan; and that, at the petition of the captain, 
 and as an especial favor to him, it towed her into port. And this is the only satisfaction given for the capture 
 of an American vessel on the high seas, and under the American flag. A month after this, another American 
 vessel was seized in the same port on a specious pretext, and, notwithstanding that the Minister of Finance in 
 this capital, who revised the subject, gave order that she should be unconditionally released, the cargo destined 
 for foreign ports was discharged and confiscated; and a similar circumstance took place a few months after, 
 refusing all reparation for these injuries to our commerce. 
 
 b. Report of the War Department Respecting the Case of the Schooner " Dreadnaught^ 
 
 1334. The War Department, in its Report, aheady mentioned, (paragraph 1332,) said, respecting the 
 schooner " Dreadnaught," as follows : 
 
 " Mexican Republic — Department of War and Marine. — Section 1st. 
 
 " Paragraphs 96 and 97. It is a fact that, at the period to which these paragraphs refer, there arrivedat Ma- 
 zatlan an American vessel rigged as a 'paileboat,' and which attracted the attention of the authorities of the 
 .port by remaining within sight of it for several days, without entering. In consequence. General Valle, then 
 Commander-in-Chief of the steamer of the Pacific, ordered the steamer ' Democrata,' which he was aboard of, 
 to go out and reconnoitre the pailebot, and see what it meant; and not having found anything in it that could give 
 rise to suspicion, the ' Democrata' would have returned alone, had not the captain of the said pailebot begged 
 General Valle to tow him up to the port, as he was becalmed, which was done as a special favor to the said cap- 
 tain, and not as an attack on the American flag. 
 
 " All of which I communicate to you, in answer to your note, already cited, for the purpose it expressed. 
 
 " Liberty and Constitution. Mexico, January 14th, 1874. 
 
 (Signed) Gonzalez." 
 
 " To the Secretary of Finance and Public Credit. — Present." 
 
 c. Report of Sr. Adrian Busto respecting the Schooner " Dreadnaught." 
 
 1335- Sr. Adrian Busto, who was Administrator of the Mazatian Custom-House, when the schooner 
 " Dreadnaught " arrived at that port, having been asked for information, he rendered the following report of 
 what occurred in this case : 
 
 " Chief of the Bureau of Adjustments of the Treasury Department. — To the Secretary of the Treasury : 
 
 " In campUance with your preceding order, dated to-day, that the subscriber should report on what he 
 may know about the apprehension of the American vessel " Dreadnaught," referred to by Section ist of this De- 
 
 1333. Statement made by the Report of events happened to these vessels. 
 
 1334. Report of the Department of war and Marine onthe case of the schooner " Dreadnaught." 
 
 1335. Report of Sr. Adrian Busto on the case of the schooner " Dreadnaught." 
 
265 
 
 partmeat, in relation to the points which the Hon. John W. Foster, Minister Plenipotentiary of the United States 
 to Mexico, beheved to find in it, in the Report he addressed, October 9th, 1878, to Mr. Carlisle Mason, Presi- 
 dent of the Manufacturers' Association of Chicago; I have the honor to state to you the following : 
 
 " The schooner ' Dreadnaught,' as I recollect, and as appears by the Register No. 37, on file in this De- 
 partment, arrived at Mazatlan January 4th, 1877, having sailed from San Francisco, California, December 22nd, 
 1876, with only a cargo for Mazatlan, and not for any other Mexican portj it being untrue that the employees of 
 the custom-house had sent a steam gunboat to sea to seize her and take her into port, for the subscriber being 
 the Administrator of the custom-house, the only one who could have given the order, did not give it, and could 
 not give it, as well because the vessel was on the high seas as for the reason that the said Mexican gunboat was 
 not at the disposal of the custom-house, being under commission of war, and depending exclusively on the 
 Admiral of the National Armada on the Pacific. Respecting as to whether or not the schooner in question was 
 seized on the high seas by the Mexican gunboat, the subscriber had no knowledge of that fact, there having been 
 at that time no complain communicated to the custom-house, either from the captain of the said schooner, nor 
 from the commander of the American war steamer ' Lackawanna,' nor from any of the consignees of the mer- 
 chandise brought ; but rather these and the captain of the said schooner came freely and openly, asking for the 
 discharge and dispatch of the goods. The assertion about the fears which, according to the Report, (if it refers 
 to the said schooner,) were entertained by the custom-house employees, that the city of Mazatlan would fall into 
 other hands before they had a chance to collect the duties on the goods brought by the said schooner, as a 
 motive for ordering her seized, is a supposition, both because in those days, when the entry and dispatch of the 
 vessel took place, the port was at peace, and because, the duties belonging to the revenues of the nation, they 
 had no interest, nor could they prevent that the duties of a vessel on the high seas, without any suspicious ap- 
 pearance, should be availed of by one or another Mexican authority that might be estabhshed in that locaUty by 
 deed or by right. 
 
 " Regarding the pailebot ' Montana,' spoken of in the said report of Section ist, I cannot inform you, for 
 the said pailebot anchored in the port of Mazatlan February 9th, 1877, as appears from the register No. 46, on 
 file in this Department, after my exit, which took place January 23d of the same year, in consequence of the 
 political events which happened at the middle of the month, and after the despatch of the schooner ' Dread- 
 naught.' 
 
 " Accept my regards. Adrian Busto." 
 
 " Mexico, January 7th, 1879." 
 
 d. Statement of Facts Occurred with the " Montana" 
 
 1336. A brief relation of the facts occurred respecting the United States pailebot " Montana " wiU be the 
 best means of showing that the Mexican Government does not merit the censures which the Report addresses to 
 it, for Its conduct in this case. 
 
 1337. In the afternoon of February 8th, 1877, the United States pailebot "Montana," 92 tons. Captain C. 
 Anderson, anchored in the port of Mazatlan, proceeding from San Francisco and La Paz, with 2,7, passengers and a 
 cargo of foreign goods, part destined for the mentioned port, and the rest for the Central American ports of 
 Champerico and San Jose de Guatemala. Of this the Mexican Custom-House already had previous notice by a 
 remittance from Le Paz, of the manifest or notice of the effects which said vessel was carrying to Guatemala, 
 advising that such notice was given because some abuse might be committed by landing the effects unlawfully on 
 the Mexican coast. 
 
 1338. The chief Revenue officer of Mazatlan having made the corresponding visit to the " Montana," it 
 resulted that she was bringing outside of her manifest 349 packages, which her captain said were destined for 
 Champerico and San Jose de Guatemala. In view of this report of the Revenue officer, the Administration 
 ordered on the 14th of the same month of Februray, that the effects cited should be discharged and deposited in 
 the warehouses of the custom-house. 
 
 1339. By telegrams of the 13th and 14th of the same month, the Mazatlan Custom-House brought to the 
 knowledge of this Department what had occurred. In the second it reported, besides, that the United States 
 Consul resident in that port, has presented himself, stating that if the order was carried into effect. Captain 
 Anderson would abandon his vessel, and the Consul would protest against the said order as unjust, for the same 
 
 1336 The Mexican Government does not merit censure for its conduct in the case of the pailebot " Montana." 
 
 1337 The " Montana " cast anchor in Mazatlan February 8th, 1877, with a carg'o for said port and for Guatemala. 
 
 1338 Discharge and deposit of 349 packages arrived without manifest and destined for Guatamala. 
 
 1339 The Mazatlan Custom-House informed the Treasury Department on what had occurred with the " Montana." 
 
 34 
 
266 
 
 vessel, in a voyage it had made in August, 1873, carried effects to Central America, and no observation was made 
 about it. In regard to this point the Administrator informed this Department that the fact was true, for on that 
 occasion security was exacted and there was in the respective manifest an explanatory note by the Mexican 
 Consul of San Francisco, while in the present case there was no note whatever, nor did the bills of lading, pre- 
 sented by Captain Anderson, cover all the cargo, nor were they, therefore, sufficient to make inapplicable the 
 prescriptions of the tariff. 
 
 1340. On the 17th of the same month of February, 1877, the United States Consul in Mazatlan, addressed 
 an official communication to the Administrator of the custom-house, stating that, at the instance of the captain 
 of the " Montana," he solicited permission for the exit of the said vessel, bound for San Jose de Guatemala, and 
 that if said permission were not granted the captain would abandon the pailebot, from this proceeding being 
 contrary to international law and to the contracts existing between Mexico and the United States. The protest 
 of Captain Anderson is dated February 15th, and in it is set forth, among other things, that the detention of the 
 " Montana " originates grave damages to the owners of the mentioned effects, as well as to the captain and pro- 
 prietor of the vessel. 
 
 1 341. To the solicitation, as well as to the protest referred to, the Administration of the custom-house re- 
 phed, that permission for the " Montana" to proceed on her voyage was not denied, but that to grant it it was 
 necessary to comply with the law, exacting the respective security, in order to assure the fiscal interests, which 
 security, it appeared, that Mr. Farber, the agent of the vessel, could not obtain ; and that at all events, before 
 being able to do otherwise, he was awaiting the resolution of the Federal Government, which he had informed of 
 what had occurred. 
 
 1342. On the 22d of February, 1877, the Administrator of the Mazatlan Custom-House addressed a com- 
 munication to this Department, in which he made further explications on this matter, accompanied with a part 
 of the legal paper. From this explication, it appeared that the captain of the " Montana," wishing to avoid the 
 payment of double import duties, which are imposed on merchandise outfide of the manifest, in conformity with 
 Part II. of Article 8 of the Tariff in force, caused them to be put down in the Ust of ship suppUes, saying they 
 were destined for ports of Central America. The Administrator manifested that he did not beUeve such excuse 
 to be legal, for it is not natural that a barque of 92 tons, with a crew of five individuals, should need 349 pack- 
 ages for their supphes ; and that the transit, which was pretended was expressly prohibited by the last part of 
 Article 2d of the tariff of June ist, 1853, which is not opposed to that of January ist, 1872, which was then in 
 force. He added, that with the accord of the American Consul he acceded to suspending the discharge of said 
 effects, whilst this Department decided, on the advice contained in his telegram of the 14th, that he did not pre- 
 tend to detain the goods unjustly, but only to assure the fiscal interests. 
 
 1343. This Department replied to the two telegrams of the Mazatlan Custom-House the same day they were 
 received, which was the 28th of the same month, stating that if it had proceeded in the discharge of the 349 
 packages, or had done it in contravention of the determination of this same Department of January nth, 1875, 
 and that, consequently, it should amend, as far as possible, what it had done, it being noticeable, as will be 
 shown afterwards, that it fell into a mistake in supposing that the order of that date had been communicated to 
 the custom-houses of the Pacific. 
 
 1344. The communication of the Mazatlan Custom-House, addressed to this Department, February 2 2d, 
 1877, was answered April 3d following, stating that no reason was found for varying the opinion expressed on 
 this point in the telegram of February 28th previous, for since the tariff of January ist, 1872, commenced to be 
 in force, the ordinance of January 31st, 1856, was derogated, as well as the tariff of June ist, 1853, and that, 
 consequently, the Department sustained its anterior resolutions relative to the " Montana." 
 
 1345. On March 15th, 1877, a telegram was received from the same custom-house, in which it asked advice 
 as to whether or not it should exact of the captain of the " Montana " a manifest and consular invoices to cover 
 the merchandises which he said were destined to foreign ports, referring to the circular of July 8th, 1874, and to 
 the articles 24, 29, 30, 31 and 35, of the tariff in force. This Department replied, that the " Montana" did not 
 
 1340. Intervention of the United States Consul in Mazatlan February 17th, 1877, in the case of the " Montana." 
 
 1341. Beply of the Administrator that the vessel could not continue on its way without complying with the requisites 
 of the law. 
 
 1343. Further explications given to the Treasury Department February 33d, 1877, by the Mazatlan Custom-House. 
 
 1343. The Treasury Department disapproves the proceedings of the Mazatlan Custom-House and orders them 
 amended. 
 
 1344. Confirmation by the Treasury Department of its opinion on the case of the vessel "Montana." 
 
 1345. The Treasury Department decides that the " Montana" does not need a bill of lading tor a foreign port. 
 
267 
 
 need documents of lading for foreign ports, and that the custom-house should limit itself to watching, to prevent 
 the clandestine discharge of said effects. 
 
 1346. In a telegram of March 23d, 1877, this Department notified the Mazadan Custom-House to report in 
 detail what had taken place in this business, besides to comply with the orders which had been communicated to 
 It by telegraph, but, before the Administrator received this telegram, he had consigned the business since the 9th 
 of March, to the District Court of Sinaloa, stating that it had taken this determination, because the captain of 
 the " Montana " had decided to abandon the vessel and go to San Francisco, without waiting for the resolution 
 of the government not yet received. In fact, it remitted to the court the relative legal paper said custom-house 
 had formed. In reply to that telegram, this Department repeated what it had said on March 15th, 1877, that is 
 to say, that the " Montana " had no need of bills of lading for foreign ports, adding that this resolution be brought 
 to the knowledge of the District Court. 
 
 1347. In view of the relative legal paper, the said District Judge ordered, on March 13th, to proceed in the 
 discharge of the 349 packages, to deposit them in the warehouses of the custom-house, remitting to the proper 
 court a notice of their examination and rating. By virtue of this order, the discharge of the effects was proceeded 
 with, the customs officer making the examination, rating, and appraisal of them, which documents appears in the 
 legal paper. 
 
 1348. In an official communication of March 19th, 1877, the Mazatlan Custom-House reported to this De- 
 partment, that the agents or those interested in the merchandise of the " Montana " are the same of the vessel 
 " Eustace," which came in the same way from San Francisco to Magdalena and La Paz, which were put in force, 
 the penalties incurred by having brought effects outside of the manifest, as well as the thirty cases of tea and the 
 four bags of cinnamon which the American schooner " Dreadnaught " brought outside of the manifest ; the said 
 Administrator adding, that in his conception the interested had wished to protect their merchandise be means of 
 protests, so that, when the chance offered, they could introduce them clandestinely. 
 
 1349. On the 20th of March, 1877, the Administrator of the Mazatlan Custom-House addressed a communi- 
 cation to this Department, acknowledging receipt of the note from this same Department of February 28th pre- 
 vious, in which was inserted the telegram of the same date. He stated, that the telegraphist had made a mistake 
 putting the word marcar (to mark) for sacar (to take out) ; that there is not existing in the custom-house, nor in 
 the Treasury office, the order of January nth, 1875, and for that reason he could not fulfill it; but that he be 
 lieves that in entire harmony with that order, the goods in question have incurred the penalty set forth in the tar 
 iff, for they came without manifest. He cites as a precedent in his support, what happened with the vessel 
 "Eustace" in La Paz, as well as the circular of November 8th, 1872, which says imperatively, that foreign goods 
 in transit through the Republic must come accompainied with the respective manifests and consular invoices ; 
 that the most recent circulars as those of January nth, 1875, and February 28th, 1877, provide that the docu- 
 ments authorizing foreign goods in transit, must be deposited in the maritime custom-houses, and that this requisite 
 not having been compUed with in the case of the " Montana," he beHeves to have proceeded rightly in consigning 
 the said cargo to the District Judge for his decision." 
 
 1350. On the 2ist of March, 1877, the Administrator of the Mazatlan Custom-House, reported respecting a 
 communication, which the preceding Administrator addressed to the District Judge, dated January 26th, 1877, 
 consigning him thirty cases of tea and four bags of cinnamon, which the American schooner " Dreadnaught " 
 brought outside of the manifest, said to be destined for Champerico, but without having presented the corres- 
 ponding documents. The Administrator cited this case to show that whenever a cargo arrives without manifest, 
 although in transit, it has always been consigned to the District Judge. He inserted, also, in his support, a copy 
 of an official communication from this Department, dated February 6th, 1876, in which the proceedings of the 
 La Pays Custom-House were approved in an analagous case, in which, also, some effects came on board the Eus- 
 tace, outside of the manifest destined for Guayaquil. 
 
 1351. The Administrator of the Mazatlan Custom-House, addressed, besides, on March 28th, 1877, another 
 official communication to the District Judge of the same State, in which he makes some exphcations relative to 
 
 1346. Consignment of the business to the District Court of Sinaloa by the Administrator of the Mazatlan Custom 
 
 House. 
 
 1347. Order of the District Judge of March 13th, 1877, ordering discharge, deposit and examination of the 349 bultos. 
 1848. The Administrator of the Mazatlan Custom-House compares tlfe case of the " Montana" with two other pre- 
 vious ones. 
 
 1349. Communication of the Administrator of Mazatlan of March 30th, 1877, explaining the motives of his conduct. 
 
 1350.' Eeport of the same of March 31st, 1877, on the cases of the vessels " Dreadnaught " and " Eustace." 
 
 1351. Oflacial communication of the same Administrator to the District Judge of Sinaloa of March 38th, 1877. 
 
268 
 
 the difference which ought to be observed between effects coming on board of the Pacific and Colorado steamers 
 destined for foreign ports, and those brought by saiHng vessels that are not comprehended in the respective con- 
 tracts. He added, that effects in transit must not be authorized by individual manifests, or lists of suppUes, but 
 by consular invoices, as provided by law. He referred again to the case of the " Eustace," in support of his 
 conduct, observed, respecting the " Montana," and asked that the consignation made by his predecessor to the 
 same court, of merchandise brought outside of the manifest, by the American schooner " Dreadnaught," might 
 appear in evidence. 
 
 1352. On April 2d, 1877, the Admistrator of the maritime custom-house of Mazatlan, rendered to this De- 
 partment a detailed report on this subject, in which he related the circumstances of the case, defended his mode 
 of proceeding, and stated that if, in the telegram of February 28th, the liberty of the goods come outside of the 
 manifest, had been ordered in the same terms as those contained in that of the isth of March, the affair would 
 have ended there. 
 
 1353. In April 28th, 1877, this Department said to the Mazatlan Custom-House, that it did not consider it 
 necessary that vessels arriving at our ports with foreign goods, in transit, for foreign ports, should bring consular 
 invoices and manifests; that the documents covering the ggods ought to deposited ift the custom-house, and vigi- 
 lance redoubled in these cases. 
 
 1354. The District Judge of Mazatlan gave his decision on this subject, on April 13th, 1877, declaring that 
 the Administrator of the custom-house, D. Augustin Migoni, had not incurred any responsibility, and ordering 
 the 349 packages mentioned, to be returned to Captain Anderson, without the latter having right to claim costs, 
 injuries or damages, nor to require that they should be sent to the place of their final desrination at the cost of 
 the Government. This sentence was confirmed, in all its parts, by the Circuit Court of Mazatlan, August 4th, 
 1877, and order was issued accordingly. 
 
 e. Consequences Resulting from the Statement of Facts in Reference to the " Dreadnaught" and " Montana!' 
 
 1355. In order not to confound the facts in reference to each one of the mentioned United States vessels 
 arrived at Mazatlan in January and February, 1877, each one of them will be spoken of separately. 
 
 §. Case of the Schooner ^^Dreadnaught." 
 
 1356. On account, probably, of the political tumults occurred in Mazatlan, in January, 1877, when the 
 schooner "Dreadnaught" arrived at that port, which are referred to in the Report, there are not in this 
 Department exact data of what took place with said vessel, though they ought to be found, rather, in the War 
 Department. To fill, therefore, this vacancy, information was asked respecting this case of Sr. Adrian Busto, 
 who then filled the office of Administrator of that maritime custom-house, whose report has been already inserted. 
 
 1357. In the legal paper of the " Montana," it appears that the District Judge of Sinaloa decreed, on April 
 26th, 1877, in the case of the " Dreadnaught," declaring that 30 chests of tea and 4 bags of cinnamon, which she 
 brought from San Francisco destined for Champerico, had not incurred the penalty of paying triple duties ; that 
 the said effects must be retiuned to the captain of the vessel or to his legal representative, the rights of the latter 
 being good against the ex-administrator of that maritime custom-house, Sr. Adrian Busto, for costs, injuries and 
 damages he might have suffered. 
 
 1358. It appears, also, from the same legal paper that the Circuit Court of Mazatlan decreed definitely on 
 this matter, on August i6th, 1867, confirming the sentence of the first instance, as far in as it declared that the 
 30 chests of tea and 4 bags of cinnamon had not incurred the penalty of triple damages, and revoking it, in the 
 part touching upon the responsibility of the administrator, Adrian Busto. 
 
 1359. ^'i* this is only an incident in the case of the " Dreadnaught " and respecting the principal part the 
 Department of Foreign Affairs said to that of the Treasury, in its memorandum already cited (paragraph 1302), as 
 follows : 
 
 1353. Detailed report rendered by the Admiiustrator of tie custom-liouse to the Treasury Department April 2d, 1877. 
 
 1353. Instruction given by the Treasniy Department to the Mazatlan Cnstom-House April 28th, 1877. 
 
 1354 Decision of the District Judge of Sinaloa, in the matter of the " Montana " confirmed by the C!ircmt Court. 
 
 1.855. Each one of the cases cited of the vessels " Dreadnaught " and " Montana " will be spoken of separately. 
 
 1356. Motive wherefore information was asked of Sr. Adrian Busto on the case of the vessel " Dreadnaught." 
 
 1357. Decree of the District Judge of Sinaloa April 26th, 1877, in favor of the captain of the schooner "Dread- 
 naught." 
 
 1358. Decree of the Circuit Court of Mazatlan absolving Sr. Adrian Busto from responsibility. 
 
 1359. Fragment of the Memorandum of the Department of Foreign Affairs relative to the case of the " Dread- 
 naught." 
 
269 
 
 " In continuation, Mr. Foster refers to the cases of the ' Dreadnaught ' and ' Montana,' which proved to be 
 attempts at smuggling, and were submitted to the judicial authority which dictated its decree according to the 
 laws. In the first of these cases, the captain having fled as soon as the process commenced, and General Valle, 
 who was commanding the squadron, being dead, the investigation could not be concluded, which was ordered on 
 the fact of the towing of that vessel into the port." 
 
 §§. Case of the Pailebot " Montana^ 
 
 1360. It must be borne in mine, in reference to this case, that it appears clearly demonstrated, from the 
 preceding statement of facts, that the Administrator of the Mazatlan Custom-House was in his right to proceed 
 respecting the " Montana " in the terms which he did ; inasmuch as, according to the provisions of the tariff in 
 force, a vessel could be in no wise authorized, still less a sailing vessel, to bring to a Mexican port goods in 
 transit destined for foreign ports; that on January nth, 1875, mail steamers coming to Vera Cruz were 
 authorized to carry on that trade, exacting, in the interim of their return to sea, or concluding their discharge, 
 that they should keep deposited in the custom-house the documents covering the effects destined to other 
 countries ; that this provision was circulated to the custorn-houses of Tampico, Tuxpam, Campeche and Pro- 
 greso, at which ports the mail steamers touched, wherefore this privilege was extended to those custom-houses ; 
 but that it was. not extended to the other custom-houses of the Gulf, nor to any on the Pacific; that, therefore, 
 the Administrator of the Mazatlan Custom-House had no knowledge of the provision of January nth, 1875, on 
 February 8th, 1877, the date of the arrival of the " Montana," at that port. This is for what applies to the con- 
 duct of the Administrator of the Mazatlan Custom-House respecting the " Montana." 
 
 1361. In what relates to the Government of Mexico, it must be called to notice that it showed all the earn- 
 estness and solicitude possible in the case of the " Montana.'' No sooner did it know of it, on February 28th, 
 1877, the day the telegrams were received which that custom-house sent on the 13th and 14th, than it ordered 
 that the effects should not be disembarked, and the vessel should not be molested on that account ; these same 
 orders were repeated' in various subsequent telegrams and communications ; not satisfied with this, it issued the 
 circular of this Department, No. 3, of February 28th, 1877, in which it extended to all the ports of the Republic 
 the determination of January nth, 1875, to the end that no obstacle or difficulty might be placed in the way of 
 vessels arriving at our ports bringmg articles of commerce for these, and at the same time for other foreign ports, 
 recommending custom-houses to have due vigilance; and respecting the effects destined for foreign countries, to 
 keeping the documents covering the merchandise in the custom-house, to the end of returning them on the exit 
 of the vessel for their final destination, although assuring inexactly that such disposition had been circulated pre- 
 viously to all the maratime custom-houses of the Repubhc. 
 
 1362. It must be borne in mind, that the great contraband trade carried on through the Pacific ports of the 
 Mexican coast is proverbial, from the reason that the coast of that sea is much more extensive than that of the Gulf 
 of Mexico, and relatively less populated than the latter. A regular system of smuggling has been orgaized , which 
 consists in a combination of signals to the vessels bringing merchandise to the said coast. These approach some 
 of the Pacific ports ; they make some signals previously agreed upon, understood by the house of the consignees, 
 and the latter, in its turn, repUes with other signals. If the landing of the goods is easy, either at the port on a 
 lonely part of the coast, the discharge is made ; and if not, the vessel retires, to return again on a more propi- 
 tious occasion. This system of contraband trade, perfectly well organized, causes the customs employees to be 
 vigilant, and even suspicious respecting vessels which approach the port, without immediately entering it. 
 
 1363. To recapitulate, the following appears to be demonstrated from the effects occurred respecting the 
 United States pailebot "Montana:" 
 
 ist. That the Administrator of the Mazatlan Custom-House, having no notice of the dispositions of January 
 nth, 1875, and having in view the precedents of the "Eustace" and the " Dreadnaught," he proceeded, as he 
 believed to be his duty, in exacting the discharge in Mazatlan, as a measure of security to prevent fraud, of the 
 effects brought by the " Montana" for foreign ports. 
 
 2nd. That with the object of proceeding with all justice in this case, he submitted the affair to the action of 
 the Federal courts, which decided definitely, exculpating the Administrator of that custom-house from all respon- 
 sibiUty. 
 
 1360. Foundation for the conduct of the Administrator of the Mazatlan Custom-House in the case of the " Montana " 
 
 I861! Earnestness of the Mexican Government that the pailebot " Montana " should not be molested. 
 
 1362! Suspicion of the Administrator of the Mazatlan Custom-House that the " Montana" was trying to smuggle. 
 
 \mi. Summary of facts occurred respecting the United States pailebot " Montana." 
 
270 
 
 3rd That the Mexican Government, as soon as it had notice of the events of the " Montana," ordered that 
 that vessel should not be molested in any wise, but permitted to continue her voyage with the cargo destined for 
 Central America, and that, if its orders were not complied with immediately, this was owing partly to the cir- 
 cumstance that the telegraph does not yet reach to Mazatlan, and to accidental interruptions of the part con- 
 structed, and partly from the fact the telegrams of this Department were changed on being transmitted, and 
 were not left duly clear. 
 
 4th. That the Mexican Government, with the object of avoiding ulterior difficulties similar to those of the 
 " Montana," has modified with the greatest liberality the fiscal dispositions respecting the arrival to Mexico of 
 vessels with cargo destined for foreign ports. 
 
 5th. That, therefore, far from the case of the " Montana," serving to demonstrate the dangers to which citi- 
 zens of the United States are exposed, who trade with Mexico, it justifies the good will that the Mexican Govern- 
 ment has to get over all the difficulties that may present themselves in practice to the enlargement of that 
 commerce. 
 
 / Modification of the Mexican Fiscal Laws by reason of the case of the " Montana!' 
 
 1364. The incident of the "Montana," contributed as has just been indicated, to cause some important 
 modifications in the fiscal laws of Mexico respecting foreign vessels bringing goods to Mexican ports in transit 
 destined for foreign .countries. On September 8th, 1877, circular No. 33 was issued by this Department, which 
 contains a regulation for commerce done by steam vessels in Mexican ports, for all the previous tariff provisions 
 on this point, referred to saiUng vessels, and comprised provisions that were very difficult of application respecting 
 steamers, occasioning frequent difficulties and detention of the said vessels. 
 
 1365. In Arts. 7, 8, 9 and 10, of that regulation, it was ordered that steamers bringing effects for Mexican 
 ports, and at the same time for foreign ports, they should bring a manifest authorized by the respective Mexican 
 Consul or commercial Agent, in which should appear the portion of goods destined for Mexican and foreign ports. 
 
 1366. On December i8th, 1877, by means of a circular of this Department, No. 47, the said articles were 
 modified, simplifying the work of the captains of the vessels, for, by this, they are duly required to present a no- 
 tice of all the effects they bring for Mexican ports, specifying what they bring for each one of them. 
 
 1367. Finally, on April nth, 1878, this Department issued a circular. No. 74, which authorized since Au- 
 gust I St following, sailing vessels to carry on the transit trade, subjecting them to the regulations of September 
 8th, 1877. 
 
 1368. As in the said circular of April nth, 1878, all the provisions of the Mexican laws on this point, are 
 stated in detail, applicable to the case of the pailebot " Montana," it is thought proper to insert it in continuation. 
 It says as follows : 
 
 " Department of State for the Finances and PubUc Credit. Section rst. Circular No. 74. 
 
 " The tariffs that have been in force until now in the Repubhc, have been issued for sailing vessels for trade 
 by steamer, is of relatively recent use. In the two first, that is, in that of December isth, 182 1, and in that of 
 November i6th, 1827, no foreign vessel was permitted to bring merchandise, except from one sole foreign port to 
 one sole Mexican port. 
 
 "That of the nth of March, 1837, then authoiized in its 17th Article, that merchandise could come from 
 various foreign ports to one sole Mexican port. The tariff of April 30th, 1842, on prohibiting foreign vessels 
 from carrying on transit or coasting trade, authorized them to touch in another Mexican port, different from that 
 in which they discharged, though, for the sole object of loading national effects destined for exportation. 
 
 "Art. 2d of the tariff of September 26th, 1843, prohibited every vessel, whether foreign or national, from 
 bringing foreign effects to more than one Mexican port, and punished the infraction of that prohibition with the 
 penalty of confiscation of the vessel and of the effects destined to the same port ; but, in its 105th Art., whilst it 
 prohibited foreign vessels from carrying on the transit and coasting trade in Mexican ports, it authorized them on 
 
 1364. Liberal modification of the Mexican laws, made in view of the case of the "Montana." 
 
 1365. The reflation of September 8th, 1877, obliges vessels to bring a manifest for effects in transit. 
 
 1366. Liberal modification of the regulation of September 8th, 1877, by the circular of December 18th, of the same 
 year. 
 
 1367. Authorization of sailing vessels to carry on transit trade by the circular of April 11th, 1878. 
 
 1368. Text of the circular of April 11th, 1878. 
 
271 
 
 the conclusion of their discharge at their port of destination, to take national effects in any Mexican port author- 
 ized to carry on export or coasting trade. 
 
 "These same provisions were repeated in Articles 2 and no of the tariff of October 4th, 1845. The like 
 prohibitions and authorization were reproduced in Arts. 2 and 100 of the tariff of June ist, 1853. 
 
 " The tariff of January 31st, 1856, was the first that spoke of steamers, although only to accord them better 
 terms respecting the payment of duties on tonnage (Article 3, fraction II.). In its 18th Article it permitted foreign 
 vessels, eitlier sail or steam, after their discharge at their port of destination, to pass to some other Mexican port 
 of export or coast trade, to take passengers and correspondence only. Fraction V. of Article 21, authorized, 
 moreover, foreign vesssels to bring cargo for two or three Mexican ports. Fractions V. and IX. of Article 3d, 
 preserved the authorization of foreign vessels to load national effects at one or more Mexican ports of export or 
 coast trade. 
 
 "The tariff of January ist, 1872, though preserving relatively high duties, contains more liberal measures 
 for exterior commerce than any of the preceding ones. In fractions II. and V. of Article 6th, the privileges of 
 the preceding tariff in favor of steamers was preserved as regards the duties of tonnage, and the 8th granted them 
 other new ones. Article 45 especially authorized foreign vessels to bring cargo for two or more Mexican ports. 
 The 49th authorized them to carry the mails and passengers from one Mexican port to another. The 79th, to 
 touch at any point on the coast, even though not a place of export or coast trade, to take in national effects, for 
 the purpose of facilitating their exportation; and the 77th authorized the transit of foreign goods across the terri- 
 tory of the Republic. 
 
 " Mail steamers coming frequently to Vera Cruz with cargo for foreign ports, besides what they brought for our 
 own, this Department determined, on January nth, 1875, to permit them to carry on the transit trade, on the 
 terms expressed in the adjoining document, marked No. i. This determination was circulated on the same date 
 to the cnstom-hbuses of Tampico, Tuxpam, Campeche and Progreso, at which ports the steamers touched, to 
 which these privileges were granted, and it was transmitted, besides, to the Department of Foreign Affairs, and to 
 the Consul of the Republic at New Orleans, without its being communicated to any of the custom-houses of the 
 Pacific. 
 
 "On February 28th, 1877, this Department issued a circular, a copy of which accompanies, marked No. 2, 
 in which the disposition of January nth, 1875, was extended to all the ports of the RepubHc, asserting inexactly 
 that it had been circulated to all the maritime custom-houses, when it had only been communicated to some of 
 those of the Gulf. In both dispositions it was determined that the cargo in transit should be covered by cer- 
 tain documents. 
 
 " With the object of making uniform the provisions of these regulations, in all the ports of the Repubhc, 
 the said provision was comprised in the regulation of this Department for the trade of steamers in Mexican 
 ports, which it issued September 8th, 1877, and circulated on the same date, under the No. 33. In Articles from 
 7 to 10, of said regulation, transit trade is authorized, and the requisites are established by which this must be 
 done, and the penalties incurred by the infractors of the same regulation. A copy of the said Articles accompa- 
 nies, under the No. 3. 
 
 "The President, wishing to extend these liberal dispositions to the sailing vessels coming to our ports, has 
 been pleased to order, in exercise of the authority granted him by the law of December *i2th, 1872, the following 
 dispositions. 
 
 " ist. From August ist, 1878, sailing vessels touching at Mexican ports, are authorized to carry on transit 
 trade ■ that is, to bring, besides the foreign goods destined for Mexican ports, others destined for foreign ports. 
 
 " 2d. Sailing vessels, doing transit trade, shall be subject, as regards foreign goods destined for foreign ports, 
 to the provisions 7th, 8th, 9th and loth of the regulation for the trade of steamers of September 8th, 1877, con- 
 tained in Circular No. 33 of this Department. 
 
 "And I communicate it to you for your fulfillment. 
 
 "Mexico, April nth, 1878. 
 
 "Romero. — To " 
 
 C. Events Occurred in Acapuko in February, 1877. 
 1360 The events occurred in Acapulco in February, 1877, has also some complications, because treating of 
 
 1369 Points to be examined relative to the property of Mr. Kastan and tlxe imprisonment of Consul Sutter in Aca- 
 pulco. 
 
272 
 
 various incidents, the principal being in reference to the property of Mr. Rastan, and the putting of Mr. Sutter, 
 the Consul, in prison. In reference to the said events, the following points will be examined : 
 
 a. Text of the accusation contained in the Report. 
 
 b. Report of the Department of Foreign Affairs on the imprisonment of Consul Sutter. 
 
 c. Report of the War Department on the same subject. 
 
 d. Fragment of the manifest of General Vicente Jimenez, respecting the event of Acapulco. 
 
 e. General considerations on diplomatic claims. 
 
 f. Summary of the provision of Mexican laws in reference to the power of foreigners to acquire real estate. 
 
 g. Statement of what occurred in Acapulco respecting the property of Mr. Rastan. 
 h. Arrangements celebrated by the Mexican Government with Mr. Rastan. 
 
 i. Considerations resulting from the preceding facts. 
 
 a. Text of the Accusation contained in the Report on the Events of Acapulco. 
 
 1370. With reference to the events of Acapulco, the Report says as follows : 
 
 " During the past year, the Revolutionary Chief of Diaz, in the State of Guerrero, through a manifest spirit 
 ofrevenge, took and tried to confiscate the personal property and three valuable "haciendas" (farms) of an Amer- 
 ican merchant of Acapulco. The American Consul of that port protested against this proceeding, and he was 
 arrested immediately afterwards on the public street by a band of armed soldiers, and put in prison, where he was 
 retained for two weeks, with the object, as the Revolution General said, of frightening the Consuls, and making 
 them use a more measured language with him. The Consul was called before a tribunal, constituted by the Gen- 
 eral, for an unfounded charge, from which he was completely acquitted by its Judge. The Mexican Government 
 returned the American citizen his property, but it has imperatively refused to give any satisfaction, or acknowl- 
 edge any responsibility for the arrest and imprisonment of the Consul." 
 
 b. Report of the Secretary of Foreign Affairs on the Imprisonment of Consul Sutter. 
 
 137 1. Information having been asked of that Department on this incident, the following memorandum was 
 received, which has already been spoken of (paragraph 1303), which, in the part referring to this subject, is as 
 follows : 
 
 "The imprisonment of Consul Sutter in Acapulco, was occasioned by an attempted homicide on the person 
 of Francisco Ayon Sutter, himself confesses the fact in the communication he addressed to the Consul-General 
 of the United States in Mexico, in the following terms : 
 
 "Acapulco, March loth, 1877. 
 " Son. Julius A. Skilton, United States Consul- General in Mexico — Sir : 
 
 "I was myself arrested in the street by an detachment of twenty men, on the 5th instant, at 4 P. M., by or- 
 der of the Prefect. On the 7th, at 9 A. M., I was carried before the Judge of the ist instance, who informed me 
 that I had been arrested on a criminal accusation against me, made in January last, in which I was shamefully 
 threatened by a drunken man at the door of my house (at the blinds of the Consulate), with an enormous stone 
 in each hand, and obscenfe words. I ordered him to retire or I should be obliged to call the poliee. He replied 
 that he cared nothing for the police, and I being alone in my house at the time, for I had sent my servant on 
 some errand, I went to my room, and from three pistols there were on my table, I chose the smallest (the smallest 
 four-barrelled Sharp's), and with the intention of intimidating my agressor, I fired, slightly wounding him on the 
 head, retiring immediately. 
 
 " The detention of Sutter took place in the Capitular Hall, where he could dispatch his affairs, treating him 
 with every consideration, and as soon as he gave the bonds the Judgie asked of him, he was put at liberty. Sutter 
 had also another cause pending, for injuries he inflicted on Miguel Verdiguel, which was not prosecuted, without 
 knowing the motive." 
 
 c. Report of the War Department on the events of Acapulco. 
 
 1372. In the Report referred to of the War Department (paragraph 1302), there is said respecting the 
 events of Acapulco, as follows : 
 
 1370. Text of the accusation contained in the Report on the events of Acapulco 
 
 1371. Imprisonment of Consul Sutter for attempted homicide according to the memorandum of the Department of 
 Foreign Affairs. 
 
 1372. Report of the Department of War and Marine, of January 8th, 1879, on the events of Acapulco. 
 
273 
 
 Mexican Republic, Department of War and Marine. Section ist. 
 
 " Paragraph 98. Touching what is stated in this paragraph, there is nothing appearing in this Department un- 
 der my charge, than that the Consul Sutter protested against the appropriation of some bundles of hay, of the 
 property of a Mr. Kastan, and for which appropriation the corresponding receipt was given him, and not for con- 
 fiscation of estates, as is stated. 
 
 " In consequence of the wounds inflicted by Consul Sutter, in a quarrel, on Francisco (called £/ Aguallo), 
 the civil authority ordered the imprisonment of Sutter, and the Government of the Republic is in its perfect 
 right in not giving satisfaction, or accepting any responsibility whatever for that imprisonment, for even though 
 this were a fact produced by the necessities of war, the Consul Sutter, had the character of any other citizen of 
 that locahty. according to Article 8th, of the 'Instructions to the United States Armies in Campaign,' which says 
 thus : 
 
 " ' Art. 8th. The Consuls of the European and American nations are not diplomatic agents, notwithstanding 
 their persons and their offices shall only be subject to martial law in cases of urgent necessity; their property and 
 individual affairs are not exempt. Any offence or crime they may commit against the dispositions given by the 
 military authority, may be punished as those of any other of the inhabitants, and such punishment is no national 
 foundation for any international complaint' 
 
 " All of which I communicate to you, in reply to your note already mentioned, for the ends which I 
 expressed. 
 
 " Liberty and Constitution. Mexico, January 8th, 1879. 
 
 " Gonzalez. — (A rubric.) 
 " To the Secretary for the Finances and Public Credit. Present '\ 
 
 d. Fragment of the Manifest of General Viceute Jimenez, respecting the Events of Acapulco. 
 
 1373. On a manifest which General Vicente Jimenez published on his return from Acapulco to this capital, 
 n the middle of 1877, giving account of his conduct in that expedition, he says, in reference to what happened 
 respecting Messrs. Kastan and Sutter, as follows : 
 
 " Mr. Henry Kastan is a ruined merchant of Acapulco, who has sought the means of growing rich by col- 
 luding with the politics of D. Diego Alvarez, and making himself his principal agent in the State, which is a no- 
 torious fact in the latter. Without referring to more distant periods, I will confine myself to recent events. Let- 
 ters have been intercepted which I have in my possession, addressed to D. Diego Alvarez, by which is accredited 
 the part he has taken in latter events. He was, besides the agent of Alvarez, to procure him arms and ammuni- 
 tion. Our forces captured 73 packages of war material, most of which had the mark of Kastan. Kastan was 
 quite guilty, for on my entry into Acapulco, he, together with some other adherents of Alvarez, fled to Pouton. 
 This person, who thus mixes in our disturbances to speculate with them, invokes his nationality when an endeavor 
 is made to repress his excesses. I do not know in how many chapters the claim of Kastan will be founded, but as 
 it must be notoriously calumnious, it will be easy to dispel it. I will relate two certain facts related with the first. 
 Kastan has on the outskirts of Acapulco, a garden, in which there was grass ; the Prefect, in fulfilment of my or- 
 ders, commanded that grass for necessary forage for the cavaby, should be taken of whosoever had it, giving them 
 receipts, with which they were to apply to the paymaster's office ; some was taken from the garden of Kastan, as 
 well as from other persons, and the corresponding receipt was given him ; if he did not present it at the paymas- 
 ter's office, he must have it in his possession, and by it can be proved that the quantity of grass taken from him 
 was a minimum amount. Later, the garden of Kastan was occupied, either to make effective the responsibilities 
 that bore upon him as one of the agitators that had most co-operated with the poHtics of Sr. Alvarez, or to con- 
 tain him, for, under the shadow of his American nationality, he had been one of the principal agents of the adher- 
 ents of Alvarez. The occupation was rather nominal than otherwise, and it gave rise to a claim from Mr. Sutter, 
 
 the United States Consul. 
 
 " Another fact related with Mr. Kastan, is that of a factory for ginning cotton, situated in La Sabana, four 
 leagues from Acapulco. This factory is in operation every year from January to March, but this year it lacked 
 work from the crop having been lost; it was paralyzed when a force of cavalry of fifty men passed near to it; 
 these took the stubble necessary for the horses; there were sixteen mules, ten of them harnessed, which were em- 
 bargoed for the transportation of munitions. On the same day the force continued its march. 
 
 "On this is founded, also, another claim of Kastan, but it is almost totally fraudulent; the machinery is not 
 the exclusive property of Kastan, but belongs to a company composed of him and three other persons, among 
 
 1373 Fragments of the manifest of General Vicente Jimenez respecting the events of Acapulco. 
 
 35 
 
274 
 
 whom are Messrs. Sauceda and Ueloya ; the claim is founded in that the factory could not work on account of 
 the embargo of the mules, the fact being that it was paralyzed, as it could not but be from the lack of cotton. 
 
 " Mr. Sutter, as American Consul, made official claims for Kastan, the points of which I do not recollect. 
 Smce Mr. Sutter is so zealous for the interests of Mr. Kastan, it would be proper for him to put the latter in 
 mind of his duties, and the obligation he is under not to take any part in our political affairs. The State Gov- 
 ernment did not esteem the efforts of Mr. Sutter, for to the former the question did not refer to an American 
 citizen, but to an agent of Don Diego Alvarez, together with whom he had been disturbmg the State. 
 
 " The Consul of the United States had a case pending for having wounded an individual ; under the admin- 
 istration of D. Diego Alvarez he was set at Uberty, under bonds, a proceeding attributed generally to the friend- 
 ship of the former. 
 
 " After this, the case had remained paralyzed, and so it was on my arrival in Acapulco. 
 
 "The tribunals being installed, and the affairs examined by the Judge, he believed that the bondsman (Kas- 
 tan) having absented himself, Mr. Sutter was to be confined until he gave new bonds. I am ignorant of the 
 details of this incident, wherefore I abstain from setting them forth. What there is no doubt about is, that im- 
 prisonment was imposed because there was a crime in question to which crirporal punishment attached. Mr. 
 Sutter imagined that because of his efforts for Kastan, the pending case had been agitated under my influence. , 
 
 " I can assure that I was occupying myself very little about Mr. Sutter, but as he judged the contrary, the 
 question took all the character of his personal resentment.'' 
 
 e. General Considerations on Diplomatic Claims. 
 
 1374. The case of Mr. Henry Kastan having been the object of diplomatic claims on the part of the United 
 States Legation, accredited in this capital, it is considered proper to set forth here some general considerations 
 on these claims. 
 
 1375. The diplomatic claim being generally in accordance with established usage and agreed rules between 
 civilized nations, a formal representation on the part of a foreign public minister, before the Government to which 
 he is accredited should not be made, but when it treats of a violation committed, tolerated or counselled by the 
 said Government, to the prejudice of the country which the minister represents, or in prejudice of the said minis- 
 ter, or of the persons belonging to his mission. Treating of individuals, even in fault of a written agreement con- 
 taining the clause of submission to local justice, the diplomatic claim should not be made, but in case of a 
 flagrant denial of justice, and this last only after the individual complainant has appealed to all the resources 
 admitted against arbitrary injudicial acts. 
 
 1376. The diplomatic claim is a supreme appeal reserved for notoriously grave cases; because, in reality, it 
 is a charge or accusation made directly by a sovereign or his representative to another sovereign, and that step 
 may easily lead to a rupture of relations. 
 
 1377. So, then, outside of the circumstances indicated, no pubhc minister ought to appeal to that recourse, 
 if it is not in the last extreme, and he is already authorized and decided to use an imperative tone in his commu- 
 nications. He who, without those grave motives, should make a frequent and inopportune apphcation of the said 
 recourse, would work against the true spirit of diplomacy, and the rightly understood interests of his government. 
 Apropos of this, it has already been said (paragraph 1227) that the Germans resident in Mexico have not had any 
 necessity of diplomatic claims to be guaranteed in their persons and to prosper in their commerce, and that per- 
 haps from having abstained from them they have in this point gone ahead of other nations whose representatives 
 have been prodigal in presenting diplomatic claims. 
 
 1378. European pubUcists have not treated on this point to the same extent as the writers of Spanish Ame- 
 rica, where the governments have allowed the custom to be introduced of the so-called " diplomatic clause " on 
 the most futile and importune motives. The following have, however, occupied themselves prominently with it: 
 Charles de Martens, "La Guide Diplomatique" (Paris, 1851), vol. ist, pages 178, 179, 180. L. E. Albertini, 
 "Derecho Diplomatico en sus aplicaciones a las RepubUcas Sud-Americanas " (Paris, 1866), pages 100 to 102. 
 Riquelme, "Elementos de derecho publico intemacional" (Madrid, 1849), pages 472, 473. Pinheiro Ferreira, 
 "Principes de Droit Public" (Paris, 1834), pages 645, 646,651. Kluber, " Le Droit de gens modeme de 1' 
 Europe" (Paris, 1861), pages 58, 79, 80. Calvo, "Droit Intemacional," liv. X., page 465. 
 
 1374. The case of Mr. Kastan was the object of diplomatic claims on the part of the United States Legation. 
 
 1375. Conditions under which claims against a government can be made by diplomatic intervention, 
 
 1376. True character of diplomatic claims and their danger to the peace between nations. 
 
 1377. Diplomatic intervention in individual affairs without grave motive or authorization. 
 
 1378. Titles of works of European authors which refer to the abuse of the diplomatic character in preferring claims. 
 
275 
 
 __ ^375- Moreover, the following Mexican authors have occupied themselves with the same: Pena y Pena, 
 "PrnnT!^' '^!,™'^^ ^^'^^^^ Mexicana " (Mexico, 1839), vol. III., pages loi, 105. El Conde de la Cortina, 
 (Me2o, "376) ^ Consular" (Mexico, 1856), pages 63, 68. Azpiroz, " Codigo de Extranjeria" 
 
 1380. The United States have estabhshed a Tribunal to judge of aU claims presented against the Govern- 
 ment, under the name of the Court of Claims, and foreigners can carry before this Tribunal their complaints or 
 aemanas ; but the organization of that Court is yet defective, and in the President's message of September 
 9tn, i»70, the reorgamzation of the Court of Claims was still recommended to Congress in an especial 
 
 manner. 
 
 1381. When, m tlie years immediately after the independence of the United States, the organization of the 
 juaicial power of the Union was discussed, with the proposition to subject to the Federal Courts the controver- 
 sies between a State, or its citizens and foreign States, their citizens or subjects, the " Federalist " expressed itself 
 in these terms : 
 
 " General Peace ought not to be at the mercy of one of the parties. The Union yviU undoubtedly be 
 responsible towards foreign powers for the conduct of its members, and the responsibihty for an injury must 
 always be accompanied by the power to prevent it. As the denial or perversion of justice by the sentences of 
 the tnbunals is classified with reason, as among the just causes of war, it follows from this that federal justice 
 ought to know aU the causes in which the citizens of other countries are interested. This is as essential to the 
 preservation of pubhc faith as it is to the tranquihty of nations. A distinction might be imagined between cases 
 that anse, in consequence of treaties and international laws, and those which have only municipal law for their 
 basis, supposing that the former belong to federal jurisdiction, and the latter of the States ; but in the present 
 state of things, it is doubtful if an unjust sentence pronounced against a foreigner, when the subject of controversy 
 IS related exclusively to local law, would, in the' case of not being reformed, not be an offense against his 
 sovereign, in the same manner as a sentence in violation of the stipulations of a treaty, or the general law of 
 nations, and to make this distinction, an inconvenience results, greater even than the immense difficulty, if not 
 impossibiUty of distinguishing with certainty the cases of one and the other nature. 
 
 " Questions between nation and nation give room for so large a number of controversies in which foreigners 
 figure, that it is much safer and more convenient to refer those in which they are interested to national 
 tribunals." 
 
 1382. In the coUection of general treaties of the United States, it does not appear that any rule has been 
 estabhshed for the presentation of claims, and excepting those which have been adjusted with barbarous coun- 
 tries (as Argel Borneo, etc.,) all those treaties subject the United States citizen to the territorial jurisdiction ; 
 but m some, among others the one in force with Mexico, of April sth, 1 831, is found this stipulation : 
 
 " Article XXXIV 
 
 " Third. If (which is not expected) some of the articles of the present treaty should unfortunately be 
 
 violated or otherwise infringed, it is stipulated that neither of the contracting parties shall dispose or authorize 
 any kind of reprisal, nor declare war against the other for any complaint of injury or damage, until the same 
 partythat considers himself agrieved, has presented to the other a statement, of the injuries or damages, com- 
 petently proved, and has asked for justice and satisfaction thereon, and this has been denied or unreasonably 
 delayed." 
 
 1383. Finally, as an evident proof that the presentation to the Executive of " Diplomatic Claims," using 
 this word in the sense which it is vulgarly and customarily used in America, is an act extraordinary, and not 
 admitted as a rule of law, or of custom between civilized nations, it is sufficient to note that, when individual 
 cases occur, which have a direct bearing upon treaties or poHtics, and which, therefore, have to be treated in a 
 diplomatic way, that is to say, have to be taken out of territorial jurisdiction, it is necessary to adjust special 
 agreements, and that then only it is that the Executive power can decide on these complaints according to their 
 merits. 
 
 f. Dispositions of Mexican Legislation Respecting the Acquisition of Real Estate by Foreigners. 
 
 1384. Treating in the case of Mr. Kastan of a claim proceeding from real estate acquired in Mexico 
 
 1379. Titles of works of Mexican authors treating of the same subject. 
 
 1380. Tribunal established in the Bnited States to judge of all claims against the Government. 
 
 1381. Opinion of the North American periodical " The Federalist," on the inconvenience of diplomatic intervention. 
 1383. Text of Article 34 of the treaty between Mexico and the United States. 
 
 1383. Diplomatic intervention in individual claims is not admissible as a rule of law. 
 
 1384 Opportunity of referring to Mexican legislation on the acquisition of real estate by foreigners. 
 
276 
 
 according to Mexican laws for a foreigner, it does not appear out of order to refer briefly to the dispositions of 
 said laws on this subject, for the purpose of demonstrating the liberality which, from the first days of independence, 
 Mexico has shown in favor of foreigners who come to dwell in its territory. 
 
 1385. In 1822, the Constituting Assembly issued a colonization law, which authorized foreign colonists to 
 acquire real estate in the country. On April 2zd, 1823, the Executive Power commissioned D. Francisco Fa- 
 goaga to examine the law for the distribution of land to foreigners, made by the Constituting Assembly, and to 
 propose the measures he might judge convenient on so important a subject. 
 
 1386. In October 27th, 1823, the Mexican Congress decreed the suspension of the provisions which required 
 foreigners to be naturalized or ''■tolerated" with express Ucense from the Government, to acquire property and 
 work their own mines. That suspension only empowered them to covenant with owners of mines that needed 
 funds, and left them subject in everything to the mining ordinances and other obligations, and burdens with 
 which the nation grants the propriety of such productive sources to every citizen. Exploration of new mines 
 was prohibited them, and no alteration was made in the Government tax and statute on quicksilver; but other 
 articles of mining consumption remained subject to the eventual Government tax that was exacted on them. 
 
 1387. On August i8th, 1824, the general Constituting Congress issued a decree on colonization, offering 
 foreigners security in their persons and property, provided they subjected themselves to the laws of the country. 
 
 The object of the law was to colonize the wild lands of the nation; but its fourth Article provided: "That the 
 territory might not be colonized which was comprised within the twenty leagues bordering upon any foreign 
 nation, or ten leagues on the shores, without the previous approbation of the Supreme General Executive Power. 
 
 "Art. 12 prohibited the holding by one person of more than one square league of irrigated land, four of 
 temporal and six of grazing. Article 15th provided, that no one who, by virtue of this law, should acquire lands 
 in propriety could keep them, living outside of the Republic. This law, at the same, time that it is pretty gen- 
 erous, appears to have been sufficiently studied ; unfortunately, its restrictions were not scrupously observed. 
 
 1388. The subjection of the foreign possessor of immovable property to the laws of the country in which 
 said property may be situated {Lex loci, rei sites), is a principle recognized by all publicists, and has been so set 
 forth in the law of August 18th, 1824, as well as in all our international treaties and other laws, which rule in 
 the matter of possession of real estate by foreigners. Au equal thing has happened with the derivation from said 
 principle contained in the 15th Article of the mentioned law of 1824, and it can also be said that both provisions 
 have been generally observed. 
 
 1389. Regarding that concession made in 1824, it cannot be explained how, afterwards, the perfection of 
 the right of foreigners to the acquisition of real estate, was put in doubt, except on account of the 
 limitation contained in Article 2d, which says, textually: "This law (that of 1824) applies to those lands of the 
 nation, which, not being individual property, nor belonging to any corporation or town, can be colonized." That 
 is to say, that the foreigner could acquire unappropriated wild lands, but not buy "■haciendas" already formed, 
 or the commons of a town ; nor could he acquire, for example, an unproductive desert, nor lands situated in the 
 asperities of the sierras, or in swampy and unwholesome places, which lands are not considered colonizable. 
 
 1390. The treaty with England, of November 26th, 1826, the lamentable stipulations of which have weighed 
 so heavily on the destinies of Mexico, says, in its Article 9th: " In that which pertains to the succession of per- 
 sonal property, by testament or otherwise, and to the right of disposing of personal property, of whatever class or 
 denomination, by sale, donation, exchange or testament, or in whatever other way, as well as also to the adminis- 
 tration of justice, the subjects and citizens of the two contracting parties shall enjoy in their respective dominions 
 and territories, the same privileges, liberties and rights as if they were native subjects ; and they shall not be 
 burdened in any of these points or cases with greater imposts or duties, than those paid by the native subjects or 
 citizens of the power in whose territory they reside.'' 
 
 1391. Apparently the stipulations of this article involve a provision advantageous for Mexico, for the regid- 
 ity of English laws on those points is notoriously exaggerated. It must, however, be observed, that the English 
 negotiator, who also edited the treaty, used the words personal property, and evading to write in the English text 
 the words real estate, he preferred to say of whatever class or denomination, leaving thus the door free for Eng- 
 
 1385. Dispositions of the years 1822 and 1823 on the same subject. 
 
 1386. Suspension of the provisions which required reqaisites of foreigners, to acquire and work their own mines. 
 
 1387. Eestrictions of the law of August 18th, 1834, on colonization. « 
 
 1388. The foreign possessor of personal property is subject to the laws of the country in which be is. 
 
 1389. Text of Article 2d of the law of 1834 and meaning that ought to be given it. 
 
 1390. Text of the 9th Article of the treaty with England, of November 27th, 1836. 
 
 1391. Spirit of that article and practical results which would be derived from its stipulations. 
 
377 
 
 hsh interests in Mexico, but reserving the occasion to sustain a contrary opinion. But even supposing that the 
 said stipulations were written bona fide, and that the Mexicans were not comprehended in certain exceptions of 
 Enghsh laws which modify them, it is clear that very few Mexicans would come to enjoy the reciprocity. 
 
 1392. Almost all the other treaties celebrated by Mexico with foreign nations, being traced after that formed 
 with Great Britain, on Nov. 26th, 1826, they contain the same stipulations. 
 
 1393- On March nth, 1842, a decree was issued more extensive than previous ones, permitting foreigners 
 to acquire property in the RepubUc, and authorized those dwelling in the country to possess city and country 
 propert}', as well as the mines they might discover, but without their being able to acquire more than two estates 
 in the same department without the consent of the Government, and only the one being independent from the 
 other. Tenants should enjoy the laws thereof, and foreigners who might acquire property should be subject to 
 Mexican laws in all that refers to these, jjithout ever being able to allege the rights of foreign citizenship ; and 
 the questions that might arise should be settled in the ordinary way, to the exclusion of any other intervention. 
 Foreigners who might acquire property, or work on it, were not obhged to the service of arms, but merely to 
 pohce service, and subject to the imposts that might be imposed for militia. If the foreigner should absent him- 
 self from the Republic, with his family, and without the permission of the Government, or the property should pass 
 into the possession of a person not resident in the country, he was obliged to sell it within two years of the ab- 
 sence or transfer of ownership, and if not done an official sale should be made. The same should take place 
 whenever it should be proved that the owner was residing out of the Republic, and that the so-called proprietor 
 was only in place of the absent person. Foreigners could never acquire property without the consent of the 
 Government, in departments bordering on or forming the frontier of other nations, but in those not so, but hav 
 ing coasts only within five leagues of these, could they acquire country property. For foreigners and proprietors, 
 that character, with two years' residence and good conduct, would be sufficient to obtain a chart of citizenship. 
 To acquire wild lands they would have to be contracted for with the Government of the Republic. 
 
 1394. On July 1 2th of the same year, 1842, a decree was issued declaratory of the previous law, in which 
 it is provided that natives or foreigners who prove clearly to have been restorers of old mines, decayed or aban- 
 doned, shall be considered as discoverers, and consequently empowered by Article 2d of the law of March nth, to 
 acquire property in mines. 
 
 1395. On August 31st of the same year, 1842, another decree was issued, declaring that "the law of 
 March nth of that year, which empowered foreigners to acquire real estate, did not derogate that of October 
 7th, 1823." It appears that the word derogate was used in the sense of abrogate ; in reahty the law of March 
 I ith derogates a great part of the law of 1823. ^ 
 
 1396. On March 2d, 1843, another decree was issued declaring that the law of October 7th, 1823, remained 
 in forced in all that was opposed to the decrees of March nth and July 21st, 1842. 
 
 1397. On October 2d, 1842, a circular was issued to the Governors of the Departments, declaring that for- 
 eign partners of companies, discoverers of mines, or restorers of abandoned ones, even though absent from the 
 Republic, preserved their property therein. 
 
 1398. On January 30th, 1854, a decree was issued on foreign citizenship, and nationality of the inhabitants 
 of the RepubUc, Article isth of which, declared in force, in all its parts, the decree of March nth, 1842, on the 
 acquisition of real estate by foreigners, except in the cases in which by treaties any of its dispositions should be 
 modified. 
 
 1399. On July loth, 1855, a treaty was signed with the kingdoms and sovereign states of Germany, Article 
 loth of -which only partially acknowledges to the Germans the right to possess houses and property. In the last 
 fraction or said article, having in mind some peculiarities of the German laws on real estate, it is said : "Like- 
 wise, if by the death of any person possessing real estate in the territory of one of the two contracting parties, 
 this should fall, according to the laws of the country, to a citizen or subject of the other party, and such citizen, 
 even though by his quality of foreigner he should be inapt to possess said property, a proportionate time shall be 
 
 1393. The other treaties celebrated by Mexico are traced after that of 1826. 
 
 1393.' Provisions of the law of March 11th, 1843, on the acquisition of real estate by foreigners. 
 
 1394. Prescriptions of the decree of July 12th, 1842, on the same subject. 
 
 1395. The decree of Au^st 31st, 1842, declared that the law of March 11th, 1833, does not derogate that of Octo- 
 ber 7th. 
 
 1396. The decree of March 3d, 1843, declared that part of the law of October 7th, 1823, remained in force. 
 1397! Favorable provision for foreign partners of Mining companies in the circular of October 2d, 1842. 
 1398 Decree of January 30th, 1854, which in its 5th Article declares in force that of March 11th, 1843. 
 1399. Treaty of July 10th, 1855, with the Qermanic Confederation. 
 
278 
 
 granted him to sell it and collect its value, without any impediment, and he shall be exempt from all right of re- 
 tention on the part of the government of the respective States." The Constitution of the German Empire has 
 got over some of the difficulties on this point, (see BluntschU StaatsleAre, 1874, p. 391); but others subsist, such 
 as that of a Federal law of December 21st, 1871, which hmits the acquisition of real estate in the neighbor- 
 hood of fortresses, and those which still exist in Oldenburg, (see Holtzendorff Encyclopadie der Rechtswissen- 
 schaft). 
 
 1400. On August Tst, 1855, a contract was signed with Sardinia, Article 3d of which says ; " That citizens 
 of each one of the high contracting parties shall have the right to acquire in property, to possess and to alienate 
 movable and immovable property in the territory of the other, whether it be by testate or intestate succession, 
 donation or contract, without being subjected to other or greater imposts of transfer of ownership, succession, 
 or similar ones than those paid by the natives, subjecting themselves to the laws in force, or which shall in the 
 future be given on these points." This is the iirst treaty in which the right is recognized to possess immovable 
 property. 
 
 1401. On December 3d, 1857, a decree was issued. Article 6th of which declares to be in force the disposi- 
 tions prohibiting unnaturalized foreigners from acquiring real estate on the frontiers, or on the shores, without 
 express permission of the Government. 
 
 1402. Article 72, fraction XI. and XII. of the Constitution of February 5th, 1857, empowers Congress "to 
 dictate laws on naturalization, colonization and citizenship," and " to fix rules to govern the occupation and 
 alienation of wild lands, and the price of them." Article 2d of the law of July 22d, 1863, on the occupation and 
 alienation of wild lands, issued in exercise of the preceding power, prohibits the natives of nations bordering on 
 the Republic, and those naturahzed in them, from the abiUty to acquire wild lands in the States contiguous to 
 them. 
 
 1403. On July 20th, 1861, the treaty with Belgium was signed by Sr. Montes, Art. 7th, of which says: " The 
 citizens of the contracting parties shall have the right in the respective territories to possess property of every 
 kind, and to dispose of it in the same manner as the natives, conforming themselves to the laws of the country." 
 This clause might be interpreted as an abolition for the Belgians of the prohibition to acquire lands on the fron- 
 tier, for, if they can possess in the same manner as the Mexicans, they do not need any special permission to 
 estabhsh themselves there. 
 
 1404. On August 28th, 1869, the treaty with the North German Confederation was signed. Its Art. 14 
 repeats the provisions of Art. to of the treaty of July loth, 1855. 
 
 1405. On December 14th, 1870, the treaty with Italy was signed. Art. XIII. of which establishes that " the 
 citizens of each one of the contracting States shall be able to acquire and possess real estate according as the laws 
 of the respective countries then permitted, or should permit in the future." 
 
 1406. These are the principal laws that have been issued in the Republic, in relation to the acquisition of 
 real estate by foreigners. There is to record, besides, the decision of the arbirator of the Mixed Commission of 
 Claims established in Washington, in the cases Nos. 333 and 446, relative to fraction III, of Art. 30, of the Con- 
 stitution of 1857, by virtue of which " foreigners who acquire real eatate in the Republic, or have Mexican chil- 
 dren, are Mexicans, whenever they do not manifest the resolution to preserve their nationality." The arbitrator 
 said in his resolution : " it is said that the claimants were turned into Mexican citizens, by the fact of having ac- 
 quired lands in Mexico, because, according to a law of that Republic, every one who buys land in it is naturalized 
 by that very fact, unless, at the time of the purchase, he declares his intention to the contrary. The meaning of 
 this law is to confer a benefit on the foreigner who buys land in the country, and it is contrary to equity that this 
 benefit (converted in the present case into a penalty) should be imposed on the claimants against their will, for the 
 sole reason that they omitted to make the declaration of a negative ; or in other terms, because they prefeired to 
 continue being citizens of the United States, as they were no less than by birth, which is that which imposes the 
 strongest and most positive of all national ties." 
 
 1400. Treaty of August 1st, 1855, celebrated by Mexico with Sardinia. 
 
 1401. Dispositions of this subject of the decree of December 3d, 1857. 
 
 1403. Dispositions relative to the same subject, of the Constitution of February 5th, 1857. 
 
 1403. Stipulations of the treaty with Belgium, of July 20th, 1861. 
 
 1404. Stipulations of the treaty with the North German Confederation, of August 38th, 1869. 
 
 1405. Stipulations of the treaty with Italy, of December 14th, 1870. 
 
 1406. Opinion of the Arbitrator of the Mixed Commission of Washington on fraction 3d, Article 30 of the Constitu- 
 tion. 
 
279 
 
 1407- The mannej- calls attention, which the arbitrator found, of evading the fulfillment of an express pro- 
 vision of the Mexican Constitution, and the character of penalty which he attributes to what Mexico considers a 
 favor and an act if liberality on its part, in conceding its own citizenship. A nation cannot do more for a foreigner 
 that to declare him its citizen, and to grant him all the rights and prerogatives which these enjoy. 
 
 It cannot, therefore, be sustained, that the concession of citizenship is a penalty. 
 
 1408. From the preceding summary of the dispositions of Mexican legislation respecting the right granted to 
 foreigners to possess real estate in the country, it appears that since Independence was consummated, the Re- 
 public has been very liberal on this point, and that the few restrictions contained in its laws are reasonable and 
 founded, and less in number than those existing in other countries. 
 
 1409. It appears, equally, that Mexico couldhave sustained founding itself on the provision of Article loth 
 of the law of March nth, 1842, and on Article 6th of that of December 3d, 1857, that Mr. Kastan had not been 
 able to legally acquire the propriety of- the " hacienda " of San Marcos, from its being situated on the Pacific 
 shore, and said law providing that foreigners may not acquire real estate except at five leagues distant from the 
 coast, from which is abstained from motives which will be stated in continuation. 
 
 g. Statement of the Occurrences in Acapulco Respecting the Property of Mr. Henry Kastan. 
 
 1410. Political passions were greatly excited in the State of Guerrero, on the triumph of the Revolution of 
 Tuxtepec. The local parties were two principally ; that of General Diego Alvarez, who had the character of 
 Governor of the State, and supported the Administration of Sr. Lerdo de Tejada, and that of General Vicente 
 Jimenez, who proclaimed the Plan of Tuxtepec. This revolution having triumphed in almost all the country in 
 November, 1876, General Jimenez was sent to Guerrero for the purpose of causing it to prevail in the State, and 
 reached Acapulco. 
 
 1411. A little before the arrival of General Jimenez at that port. General Alvarez retired to Costa Grande, 
 and some time before he had alienated his property to Mr. Henry Kastan, a Pole by birth and citizen of the 
 United States, who has been considered as a partizan and associate of General Alvarez, as will have been noticed 
 in reading the fragment of the manifest of General Jimenez, which was inserted a little past (paragraph 1373). 
 The antagonists of this General believed, and not without some show of foundation, that the sale of his property 
 had been simulated, and made for the purpose of putting it out of the way of his political enemies, and under the 
 safeguard of the United States flag. 
 
 1412. Among the property figured, in the first place, figured the estate (hacienda) of La Providencia and 
 that of San Marcos — the first situated near the road from this capital to Acapulco. The second, which is 
 adjoining that port, comprises an extension of more than 40 square leagues, it belonged to ecclesiastical property, 
 and was " denounced," as is assured by General Juan Alvarez, father to General Diego Alvarez, and acquired, 
 according to the laws of nationalization, although there are no antecedents of that operation appearing in the 
 Treasury Department. There are persons who assure that " La Brea," " Tres Palos," " Veladero," and other 
 districts of the " hacienda " of San Marcos, do not belong to General Alvarez, which measures 6^ leagues in width, 
 and 18 in circumference, which property they say corresponds to the entail of the Earldom of Santiago. The 
 friends of General Alvarez assure that San Marcos was sold to Kastan since August, 1875, iu payment of a debt, 
 wherefore they believe that sale was not simulated. 
 
 1 41 3. There were a considerable number of inhabitants in the "hacienda" of San Marcos, estabhshed there 
 for several generations, some of which had never come to recognize the ownership of General Alvarez over that 
 estate, for they considered the lands they occupied as their own, and they paid, therefore, no rent- whatever for 
 them. In spite of the influence of the said General in the State of Guerrero, he did not think it prudent to 
 enforce his dominion over various lands of the said estate. 
 
 1 41 4. General Jimenez considering that it would be a popular measure in the State of Guerrero to give the 
 dwellers on the lands of San Marcos to understand that the titles of General Alvarez were not legitimate, and 
 perhaps animated by the desire of harassing his adversaries, he so gave the inhabitants of said estate to under- 
 
 1407. The Arbitrator found a way of evading the fulfillment of the Mexican constitution in this respect. 
 
 1408. Liberality of Mexican laws on the rights of foreigners to acquire real estate. 
 
 1409. Mr. Kastan could not legally acquire the •' Hacienda " of San Marcos. 
 
 1410. Sending of General Jimenez to the State of Guerrero, iu November, 1876. 
 
 1411. Betreat of General Alvarez from Apaculco, and sale made previously of his property to Mr. Kastan. 
 1413. Extent of the estate of San Marcos, and situation of it, and of that of '• La Providencia." 
 
 1413. General Alvarez did not esteem it prudent to enforce his dominion over various lands of San Marcos. 
 
 1414 General Jimenez gave to understand extra -officially that the titles of General Alvarez were not legitimate. 
 
280 
 
 stand, without his declaration on this point, which appears to have no official or even written form, being capable 
 of producing any legal effect, according to Mexican laws. 
 
 1 41 5. This declaration served as the foundation for Mr. Henry Kastan, to consider himself despoiled of a 
 property of which he had never been in entire quiet and peaceful possession, and to present for this motive his 
 claim against the Federal Government of Mexico, through the United States Legation. In that claim are com- 
 prised the damages which, he said, the forces of General Jimenez had caused him on the estate (hacienda) of La 
 Providencia, in passing through it, and others of less amount, the enumeration of which will be found specified in 
 continuation. 
 
 h. Arrangement Celebrated with the Mexican Government by Mr. Kastan. 
 
 1416. The very desire of the Mexican Government, and on the part of the authorities, and subaltern em- 
 ployees of Acapulco, not to give the slightest motive of offense to the United States Government, caused that the 
 case of Mr. Kastan, and especially the incident in reference to the imprisonment of Consul Sutter, were treated 
 with some irregularity, and to the prejudice of the rights and interests of Mexico. The cause against the said 
 Consul became lost purposely, and the judgement, therefore, could not be concluded. Sr. Esteban Zenteno was 
 named arbitrator to investigate and estimate the damages Suffered by Kastan, who decided that Kastan was cred- 
 itor to payment of $1,957 46. 
 
 141 7. All these proceedings greatly embroiled this matter, and the Mexican Government, considering that it 
 was proper to cut off this claim at its origin, and, besides, that it was opportune, in order to avoid new difficulties 
 in the future, to grant the propriety of the lands in question of San Marcos to the present occupants, for obvious 
 reasons, which it is considered unnecessary to enumerate here, determined to purchase of Mr. Kastan his rights 
 to the said estate of San Marcos, and to indemnify him for all the other injuries and damages of which he com- 
 plained, and for which the United States Representative had presented claims against the Mexican Government. 
 It was so done by means of a contract celebrated September 4th, 1878, between the Secretaries of Foreign Affairs, 
 of Public Works, and of the Treasury, and Mr. Kastan, in which the latter sold to the Mexican Government for 
 the sum of $82,500, his rights to the said estate, and withdrew all his other claims against Mexico. The sum 
 stipulated is being paid in the form agreed upon in the same contract, and more than half the amount is covered. 
 
 1 41 8 It is thought proper to set forth here the text of this contract, which is as follows: 
 " Mexican Republic — Department of Foreign Affairs : 
 
 " In the City of Mexico and Department of Foreign Affairs, on the fourth (4th) day of September, eighteen hun- 
 dred and seventy-eight (1878), present the Secretary of the Treasury, Matias Romero; Secretary of Public Works, 
 Riva Palacio, and Secretary of Foreign Affairs, J. M. Mata, the three in representation of the Mexican Govern- 
 ment, and Mr. Henry Kastan for himself, to sell to the Federal Government the estate (hacienda) of San Marcos, 
 and to put an end to the claims which the same Kastan has presented up to date against the Mexican Govern- 
 ment, by himself, and through the Legation of the United States of America, have agreed in the following 
 points : 
 
 " ist. Mr. Henry Kastan sells to the Mexican Government the hacienda (estate) of San Marcos, situated in 
 the District of Tabares, in the same State of Guerrero, with the same hmits and extent it had when the render 
 acquired it, and with everything contained thereon, with no other exception than the horses and cattle theron, 
 and the Uving things and cultivated fields of the employees, servants and inhabitants of the said estate; tlie said 
 estate of San Marcos, passing, in consequence, from to-day, to the propriety of the Federal Government of 
 Mexico, to which effect this sale is caused to be set forth in the public writing, the said Kastan binding himself 
 at all times to assure and guarantee the said estate. 
 
 "2d. The Government shall pay to the said Kastan the sum of eighty-two thousand five hundred dollars 
 ($82,500), in the following manner : The Treasury Department shall issue, through the General Treasury of the 
 Federation, orders on the Maritime Custom-House of Acapulco, for twenty-four thousand five hundred dollars 
 ($24,soq); on that of Mazatlan,for twenty-eight thousand dollars ($28,000), and thirty-thousand dollars ($30,000) 
 on that of Manzanillo, making, altogether, a total of eighty-two thousand five hundred dollars ($82,500). These 
 
 1415. Mr. Kastan considered himself as despoiled, and presented his claim to the United States Legation. 
 
 1416. The Government and Mexican authorities proceeded irregularly, so as not to give motive of complaint to the 
 United States. 
 
 1417. Reasons which determined the Mexican Government to celebrate an arrangemeat with Mr. Kastan. 
 
 1418. Text of the arrangement celebrated with Mr. Kastan, September 4th, 1878. 
 
281 
 
 orders shall be issued in fractions of two thousand dollars ($2,000) each, to the order of Mr. Henry Kastan, 
 endorsable by him, excepting ten thousand dollars ($10,000), in Manzanillo, to the order of Messrs. Alejandro, 
 Oetling & Co., of Colima; said orders shall be received as cash in payment of import and export duties, caused 
 directly or indirectly by the holders of them, except the railway and municipal duties, and they shall be payable 
 in the following order: Ten thousand dollars ($10,000) in Manzanillo, to the order of Messrs. Alejandro, Oetling 
 & Co., and two thousand dollars ($2,000) in Acapulco, in the present month of September ; in that of October, 
 eight thousand dollars ($8,000), in Mazatlan. and four thousand dollars ($4,000) in Acapulco ; in those of Novem- 
 ber^ December, January and February following, four thousand dollars ($4,000) in each one of the said custom- 
 houses, or twelve thousand dollars ($12,000) each month, and in the month of March, four thousand dollars 
 ($4,000) in Mazatlan, four thousand dollars ($4,000) in Manzanillo, and two thousand five hundred dollars 
 ($2,500) in Acapulco. 
 
 " 3d. In consideration of this purchase, the said Kastan, on his part, rescinds and renounces all the claims 
 he has presented by himself, or through the Legation of the United States of America, against the Mexicans 
 Government, acknowledging them as definitely, completely and satisfactorily arranged; said claims are those re- 
 ferring to the restoration of the same estate of San Marcos, and those which appear in the memorandum an- 
 nexed to the note of the Legation of the United States of America, dated August ist, 1878, the original and 
 translation of which is as follows : 
 
 " Statement of Claims. — Claim ist. For injuries suffered upon the hacienda of San Marcos, in the month of 
 February, 1877, consisting of loss of pasturage from breeders, rents, tolls, rent of salt mines, appraised by judges 
 appointed by Consul Sutter, at $2,942 50. 
 
 " Claim 2d. Claim for year 1877 and 1878, for rents of San Marcos. The rents for this year amount to 
 $iS>386 12J, being larger than for preceding year, owing to the fact that Mr. Kastan intended to work the salt 
 mines himself this year, as he informed the President, in his petition of October, 1877. The salt was appraised 
 by judges appointed by the Consul, at from 5,000 to 6,000 " cargas '' annually, by at from $3 to $4 a "carga." 
 Mr. Kastan reduces the product of the salt mines, in consideration of expenses. No appraised valuation of 
 rents, pastures, &c., was made for this year, as the basis of last year was sufficient, $15,386 12J. 
 
 " Claim j,d. For damages suffered at ginning estabUshment of La Sabana and the Papagayo, consisting of 
 suspension of work during cotton season, thereby losing contracts for delivering cotton; inability to collect 
 money advanced to different farmers, hay, and 20 pack mules never returned, appraised by judges appointed by 
 Government Commissioner Zeuteno and Mr. Kastan, $10,957 46. 
 
 " Claim J^h. For damages upon Ranches Jaltianguis, Plauzuela, San Juan, Cacahuatepec, Monte Alto and 
 garden in Acapulco, appraised by judges named by Consul Sutter ; said damage consisting in loss of cattle, 
 horses and hay, $13,856.25. 
 
 " Claim ^th. For destruction of property upon hacienda of La Providencia, consisting of house, sugar ma- 
 chinery, sugar cane, utensils of cultivation, &c., appraised by judges appointed by Consul Sutter, at $14,000. 
 The whole amount of Mr. Kastan's claim is $57,142 33^^. On this amount he claims interest at rate of 12 per 
 cent, per annum, from February, 1877, to date of payment, excepting that in claim No. 3, the appraisers included 
 interest for one year, from May, 1877, to August 3d, 1878. This is the document cited by Mr. Foster, under 
 the name it bears of ' Statement of Claims,' in his note of day before yesterday, and which he remitted with it. 
 
 (Signed) "Fernandez, O. M." 
 
 4th. Mr. Henry Kastan declares, moreover, that in the document which has just been inserted, are set forth 
 and enumerated all the titles he has to claims he has instituted against the Mexican Government up to date, by 
 liimself and through the United States Legation, but that, notwithstanding, although he should have others, it is 
 his will to renounce them, and does hereby renounce and cede them in favor of the said government, so that, at 
 no time, either by him or by his heirs, shall it be possible to make to the latter any other claim for interest, omis- 
 sion of any one or more charges for extreme injury, or any other motive; for it is his purpose and will, that by 
 the arrangement to-day made, and which is set forth in the present Act, his claims are paid in full, without his 
 being able in any case or by any motive whatsoever, to insist in all or any one of them, or much less appeal to 
 the diplomatic intervention of his government. And, in due evidence, of which the contracting parties sign in 
 duplicate the present Act, which, for its perfect valadity, is made a pubHc instrument. 
 
 (Signed) M. Romero. 
 
 Vicente Riva Palacio. 
 J. M. Mata. 
 (Copy.) Mexico, September 4th, 1878. H. Kastan. 
 
 (Signed) Jose Fernandez, Chief OflficiaL 
 
 36 
 
282 
 
 /. Considerations Resulting from the Facts in Reference to the Events of Acapulco. 
 
 1419. Examining impartially the events of Acapulco, which have just been spoken of, it does not appear 
 that there is any grounded motive for censure against the Mexican nation, or its government, on account of them; 
 for, even supposing that the conduct of General Jimenez, respecting Mr. Kastan, had been arbitrary, the Mexican 
 Government amply idemnified him for all the damages he suffered, with the sum of $82,500, as has been just 
 shown (paragraph 1418). 
 
 1420. It is proper to note, that the United States Representative on writing his Report to the Chicago 
 Manufacturers' Association, of the North-West of the United States, had already knowledge of that contract, iilas- 
 much as it was signed in this capital, September 4th, 1878, and the Report is dated also in this city, October 9th 
 of the same year. 
 
 It would seem natural that on speaking of the injuries suffered by Mr. Kastan, he should have stated that 
 they had been amply indemnified. 
 
 1 42 1. Notwithstanding, then, that the claims presented by the United States Legation, in favor of Mr. Henry 
 Kastan, could be considered untenable under various aspects, and, according to the provisions of international 
 law, among other motives, for there was ground to suspect that in the sale of the property of General Alvarez was 
 simulated the desire to avoid difficulties with the United States Government, which had intervened in this matter, 
 decided the government of Mexico to satisfy Mr. Kastan, by pajfing him $82,500, in the terms already stated, 
 and this, notwithstanding the poverty of the Mexican Treasury, presented so vividly in the Report. It does not 
 appear, therefore, that the latter has any foundation for considering the case of Mr.- Henry Kastan as a proof of 
 the injuries which United States citizens suffer, without retribution in Mexico. 
 
 1422. As to what relates to Consul Sutter, the case appears still more simple. He confesses, himself, in the 
 communication he addressed from Acapulco, March loth, 1877, to Mr. Julius Skelton, United States Consul 
 General in Mexico, that he fired all the charges of his pistol at a man, wounding him in the head. This fact 
 constitutes an offence for which a Consul can be adjudged, who does not enjoy diplomatic immunity. It could 
 very well be that Consul Sutter might have inflicted those wounds in self defence, although, from his own testi- 
 mony, it does not appear that his life was in danger, and in that case he would not merit any punishment at all ; 
 but these facts had to be substantiated in the respective trial, and it was the part of the Judge to make the cor- 
 responding decison. 
 
 1423. It appears clear that the incentive of the proceedings against Consul Sutter had been a motive of per- 
 sonal passion, for he is considered also as a friend of General Diego Alvarez, and inclined to his party, it would have 
 been easy to have terminated the trial and obtain a sentence of condemnation, which, perhaps, he would not have 
 been able to avoid, if on the tnal, all the legal formalities had been observed. But this, far from being so, 
 Consul Sutter was immediately put at liberty, the trial suspended, and the cause purposely lost, which proves 
 that the very enemies of General Alvarez preferred to terminate this subject, though in an irregular manner, in 
 order to avoid its being given the character in which it had already been presented, of an act of little good will 
 towards the United States Government. It appears, consequently, clear that neither in reference to the case of 
 the Consul, Sutter, do the assertions of the Report rest on any solid foundations. 
 
 D. Events Occurred in Matamoros in 1876. 
 
 1424. Respecting the events occurred in Matamoros, in 1876, to which the Report refers, there are also 
 various incidents which it is necessary to examine separately for the proper understanding of what then passed in 
 that port. 
 
 1425. It is to be regretted that the names of the persons referred to are not designated in the Report, in 
 order that the reply might be entirely precise, and the danger not run of mentioning facts that may not be exactly 
 those of which the Report speaks. 
 
 1426. For the better understanding of this subject, then, the following points will be spoken of here with the 
 corresponding separation. 
 
 1419. There is no ground for making accusations against Mexico for what occurred to Mr. Kastan. 
 
 1420. The Report omits to speak of the arrangement celebrated with Mr. Kastan, of September 4th, 1878. 
 1431. The Mexican Government passed over the irregularities of the claims of Mr. Kastan. 
 
 .1433. There is no foundation for any accusation against Mexico for what occurred to Consul Sutter. 
 
 1433. It would have been easy to have passed sentence on Mr. Sutter, but it was preferred to terminate the matter. 
 
 1434. Examination of the events of Matamoros occurred in 1876 stated by the Report. 
 
 1425. Difficulty of replying, from the Report's not naming the persons to which it refers. 
 
 1426. Points to be considered relative to the events mentioned of Matamoros. 
 
283 
 
 a. Text of the Report respecting the events occurred in Mexico in 1876. 
 
 b. Report of the Department of Foreign Affairs on this subject. 
 
 c. Report of the War Department on the same subject. 
 
 d. Statement of what occurred in Matamoros during the Administration of General Revueltas. 
 
 e. Extract of the dispatch of the Treasury Department of Mr. Frederick O'Boyle. 
 
 f. Report of Eugenio Chavero, former Administrator of the Matamoros Custom-House, on the same 
 matters. 
 
 g. General considerations respecting the events of Matamoros. 
 
 a. Text of the Report Respecting the Events Occurred in Matamoros m 1876. 
 
 1427. Respecting the events occurred in 1876 in Matamoros, the Report says as follows : 
 
 " Crossing the Continent from Acapulco to the mouth of the Rio Grande, we find that the American 
 merchants of Matamoros suffered the same revolutionary exactions. The General of Lerdo's forces, who com- 
 manded there, was cut oflf from the capital by the forces of Diaz, and he soon found himself without any money 
 to pay his troops and defend the place. He then had to recur to the customary expedient, forced loans. The 
 two first he imposed were covered with all possible good will ; but when it came to the third, following immedi- 
 ately after the others, some of the merchants met with difficulties in getting money, and refused to pay, obliging 
 the General to take vigorous measures. An American merchant, or rather a retail trader, already aged, was put 
 down for three hundred dollars, which he could not pay, or which, in fact, he did not pay, and he was appre- 
 hended at night by soldiers, and carried to the exterior of the parapets of the city, where they were fighting with 
 the revolutionists outside, and was kept on top of the trench, exposed to the fire of the enemy, until the American 
 Consul interfered and obtained his release. 
 
 " Another American merchant was required to furnish several thousand dollars, which he believed to be 
 unjust and excessive, in view of what he had already paid ; so he refused and sought the protection of the Consul, 
 whose office was happily in the same house. But the most earnest demonstrations of the Consul were in vain. 
 Orders were given to enforce the loan, and a picket of soldiers was sent to the establishment, and when the 
 American flag was fl3ang on the Consul's' house, within range of an American gun-boat that was lying in the 
 river, the doors were forced, the merchandise on hand taken out and sold at public auction for a song. One of 
 the partners of that house came to this capital a -year ago to proQure the recognition of the claim for those 
 injuries, conforming to receive orders on the Matamoros Custom-House, but he could not obtain any arrange- 
 ment whatever." 
 
 b. Report of the Department of Foreign Affairs on this Subject. 
 
 1428. In reference to this fact, the Memorandum of the Department of Foreign Affairs, already cited (para- 
 graph 1302), says as follows: 
 
 " On the fact which Mr. Foster assures took place in Matamoros, with a retail merchant, an aged and peace- 
 able man, who, for not having given $300 which was imposed on him, was carried by soldiers outside of the 
 trenches, where they held him exposed to the fire of the enemy, there is no notice whatever, and in the investi- 
 gation that was raised in Matamoros on the conduct observed by General Revueltas, there is not the least 
 mention made of that fact.'' 
 
 c. Report of tfie War Department on the Events of Matamoros. 
 
 1429. In the report cited of the War Department (paragraph 1303), it says, on the events of Matamoros, as 
 follows : ' 
 
 " Mexican Republic. — Department of War and Marine. Section 1st 
 
 " Paragraph 100. — It mentions facts which have exact connection with Articles ist, 7th and loth, of the 
 rights of war, which have ahready been specified. 
 
 "Paragraph 102. There are no antecedents in this Department, as said paragraph treats of affairs which are 
 
 1427. Statement made by the Report of the events occurred in Matamoros in 1876. 
 
 1438. Fragment of the Memorandum of the Department of Foreign Affairs relative to one of the facts stated by th« 
 
 Report. 
 
 1429. Fragment of the communication of the War Department on the events of Matamoros. 
 
284 
 
 not within the incumbence of the War Department ; with the exception of forced loans, to which reference has 
 been made in this Report, treating of analogous cases. 
 
 "All of which I communicate to you in reply to yoin- note already cited, for the ends which it expresses. 
 " Liberty and Constitution. Mexico, January 8th, 1879. 
 
 " Gonzalez. A rubric. 
 '•'■To the Secretary of the Treasury and Public Credit." 
 
 d. Statement of what Occurred in Matafnoros during the Administration of General Revueltas. 
 
 1 430. It is proper to state, succinctly, the state the town of Matamoros was in in the last days of the year 1876 and 
 in the first of 1877, to which period the Report refers^ General Revueltas, who recognized the authorityof the Gov- 
 ernment represented by Sr. Sebastian Lerdo de Tejada, was beset by forces belonging to the Plan of Tuxtepec, 
 and almost reduced to the city of Matamoros ; he had a large force of the line at his orders, and the national 
 guard of the locality, and to sustain them he counted only upon the resources he could get out of that city. He 
 believed it his duty to sustam the authority of the Government he represented, even after the battle of Tecoac, be- 
 cause the events occurred in the capital of the Republic in the last days of the month of November, 1876, by 
 which Sr. Lerdo de Tejada had been overthrown, did not come to the knowledge of General Revueltas in a 
 credible manner, by reason of the interruption of communication, only in the first days of January, 1877, which 
 contributed to make him prolong his resistance. 
 
 143 1. With this object, and using the powers conferred upon it, the Administration of Sr. Lerdo de Tejada 
 was under the necessity of decreeing taxes in order to sustain the forces of its command. It does not seem that 
 the Representative of the Government which authorized the instructions for its armies in campaign, to which ref- 
 erence has already been made (paragraph 1278), should find it irregular or censurable that the military chief of a 
 place declared in a state of siege, and occupied by an armed force, should impose the taxes necessary for the 
 support of his force. 
 
 1432. When General Revueltas received notice that the Administration of Lerdo de Tejada had been over- 
 turned in consequence of the battle of Tecoac, he ceased his resistance" to the forces which were besieging Mat- 
 amoros, and those entered into possession of that city. 
 
 1433. In a short time claims were presented to the present Administration for amounts supplied to General 
 Revueltas in Matamoros, which reached a considerable sum ; and notwithstanding that they had all been used 
 against the triumph of the Plan of Tuxtepec, which at last prevailed in the Repubhc, the present Admmistration, 
 for the object of preserving the credit of the country, and recognizing that General Revueltas was working in the 
 name of a constituted government, has accepted all the credits that have been presented for suppHes made in 
 Matamoros, up to the date on which notice was had of the abandonment of this capital by Sr. Lerdo de Tejada, 
 and has paid, notwithstanding the poverty of its treasury, a part of said credits, among which are some of citi- 
 zens of the United States, as, for example, those of Sr. Julius Eversmann, who came to this capital in October, 
 1877, and to whom was acknowledged and paid a credit of $30,000, which originated in that way, and another 
 besides of $17,000, of different origin. 
 
 1434. Respectmg the other case of which the Report speaks, and respecting the forced loans decreed by 
 the military chief of the garrison of Matamoros, very important details will be seen in the report of Sr. Eugenic 
 Chevero, which will be inserted in continuation, which demonstrate the inaccuracy, in various important points, 
 of the data which served for the writing of the Report. 
 
 e. Extract of the Issue of the Treasury Department Respecting the Claim of Mr. Frederick O Boyle. 
 
 1435. Probably one of the cases to which the Report refers, as occurred in Matamoros, during the Admin- 
 istration of General Revueltas, is that of Messrs. Francisco Iturria and Brothers, and Frederick O'Boyle, who 
 have presented themselves before this Department, claiming the payment of $19,454 20, value of goods embar- 
 goed, and for injuries, damages and costs, which resulted to them through orders of General Revueltas. 
 
 1430. Resistance of General Revueltas in Matamoros in 1876, and January, 1877. 
 
 1431. Necessity OJeneral Revueltas was under to decree extraordinary taxes. 
 
 1433. Entry of the besieging forces into Matamoros on the fall of the Administration of Sr. Lerdo de Tejada. 
 
 1433. Recognition and partial payment of supplies made tp General Revueltas in Matamoros. 
 
 1434. Statement made of a case cited in the Report and of forced loans decreed in Matamoros. 
 
 1435. Claims of Messrs. Iturria and Brothers and Frederick O'Boyle for injuries and damages suffered in Matamoros. 
 
2S5 
 
 1436- The best mode of setting forth this incident, is to insert the report of the Section of Liquidation o<- 
 this Department, of September 22d, 1877, in reference to this matter, which is as follows : 
 
 " Mr. Secretary : In this legal paper, the American citizens Francisco Iturria Brothers and Frederick O'Boyle, 
 claim of the national Treasury the sum of $19,449 23, value of merchandise embargoed, injuries, damages, and 
 costs which resulted to them through orders of General Ignacio Revueltas. 
 
 "The fact was as follows: the latter being General-in-Chief of the 2d Brigade of the 3d Division, Political 
 Chief and Military Commander of the ' Free Zone ' on the line of the Bravo, and by virtue of the powers with 
 which he was invested by the general government of the Mexican Republic, he issued the decree of December 
 8th, 1876, which is found on leaves 10 of the first folio, by which he imposed an extraordinary tax on all the in- 
 habitants of his district of three per cent, on all kinds of capital. 
 
 " Messrs. Iturria Brothers and Frederick O'Boyle not only refused to pay this tax, but put themselves' in 
 rebeUion, for which reason the general collector of rents of that district, gave an order of embargo against 
 O'Boyle and the firm of Iturna Brothers, which is composed of Messrs. Bernardo, Santiago and Francisco Iturria; 
 which, tlirough the rebellion of the former, and the representative of the latter, the revenue officer was under the 
 necessity of carrying out the execution ; but, with especial care to comply with the laws in force in the matter, 
 which are : those of January 20th, 1837, and November 20th, 1838, ordered to be observed by that of December 
 nth, 187 1, as is set forth in the legal paper, which begins on page 32, and which was enforced, even to the sale 
 by auction of the goods, and the judical delivery of the warehouses to their owners. The section in examining 
 scrupulously the legal paper mentioned, has not been able to note a single contravention of the laws in relation 
 thereto. 
 
 " The claimants allege to establish their claim, that General Revueltas, at the date on which he issued the 
 decree, had no power to do so, because, at the said time, Sebastian Lerdo de Tejada had already left the capital 
 of the Republic, whence they erroneously infer that the pohtical chief no longer represented the federal govern- 
 ment. 
 
 " By the laws of December 2d, 187 1, November 12th, 1875, and April 28th, 1876, the general Congress 
 granted to the President of the Republic extraordinary powers in the Departments of war and finance. On Feb- 
 ruary 19th, 1876 (as appears in the War Department), a telegrani was addressed, authorizing, among others, Gen- 
 eral Revueltas, in case of urgent need, to provide himself with resources, and the telegraph being interrupted, he 
 should avail himself of them in the way least onerous for the Treasury. It is a fact, that General Revueltas was 
 empowered by the general Government, which is not^enied by the claimants; on the contrary, they affirm it when 
 they allege that those powers ceased on the exit of President Lerdo from the capital. It is a principle of public law, 
 that a country should not have its government suspended even for a moment, and therefore every nation adopts 
 it in its constitutional rules, as Mexico, whose fundamental charter provides : that in fault of the President of 
 the Republic, the Supreme Court of Justice shall immediately enter to substitute him. 
 
 " From that pnnciple, this other is logically deduced ; in no point of the country does any publie employee 
 cease to officiate with all his powers, whilst he is not substituted by another. What would have passed in all the 
 extensive territory of Mexico, if, by the exit of the President from the capital, all the authorities had ceased to 
 officiate without being replaced ? The most complete anarchy with all its horrors. 
 
 "Therefore, General Revueltas ought to continue with his powers, while he was not substituted ; and there- 
 fore, when Sr. Lerdo de Tejada vacated the capital November 21st, 1876, on the 8th of December of the same 
 year, General Revueltas was still at his post, and with power consequently to decree the impost spoken of The 
 Constitution says in its Art. 33, foreigners are under the obligation to contribute for public expenses in the way 
 
 the laws provide. 
 
 " The treaty of peace, friendship, boundaries and definite arrangement between the Mexican Repubhc and 
 the United States of America, celebrated February 2d, 1848, transmits this point from the 17th Art. of the treaty 
 of April 5th, 1831, and says in its 9th Article, ' Citizens of both countries respectively, shall be subject to all the 
 burdens, taxes,.or imposts that are paid by the citizens of the States in which they reside.' 
 
 " Hence it results very clearly that, with the international arrangement between Mexico and the United States, 
 Messrs. Iturria Brothers and Frederick O'Boyle were obliged to pay the tax of three per cent, emanating from 
 a decree, which obliged aU the inhabitants of the Free Zone of the Mexican Republic. 
 
 " The reason given by the petitioners, that many did not pay their tax, is a common case to every public 
 impost, for never is what ought to be collected equal to what is collected. 
 
 " That those who paid the tax of three per cent, obtained bonds in exchange. This is only proved in the 
 legal paper by the word of the petitioners themselves. 
 
 1436 Report of the Section of Liquidation of the Treasury Department on these daims. 
 
286 
 
 "As regards injuries and damages, the Treasury is not responsible, 'according to the law of November 19th, 
 1867, and the Regulation of June i8th, 1877, and less in cases like the present one, that have sprung from the 
 fact that Messrs. Iturria Brothers and O'Boyle were rebellious in the fulfillment of their obhgations as foreigners 
 resident in the Mexican Republic. The collector of the Une of the Bravo fulfilled his mission as revenue officer, 
 as well as the executing agents, according to the laws on the subject. 
 
 " If Mr. Francisco Iturria stated, on regaining his warehouse, that there were wanting 1,298 lbs. from a tierce 
 (bocoy) of tobacco, it does not appear except by his word ; and if judicial presumptions result from the legal 
 paper that that effect was extracted through the underground passage communicating with the contiguous house 
 of the same owner, when the first was closed and sealed ; above all, if the complainant believes that some indi- 
 vidual has stolen it, it would be a fact for a criminal process, which should be prosecuted according to the com- 
 mon law of the country, and not for a claim against its Government. 
 
 " They set forth that the appraisements were made by the official judges at a sordid price. That is their 
 individual responsibility and not that of the Treasury. That, on embargoing Francisco Iturria, they extended 
 the act to the property of Bernardo and Santigo Iturria, which was because the three are the individuals forming 
 the firm of ' Iturria Brothers,' and all were debtors to the tax. 
 
 " Lastly, the pleas, the claimants allege that the money which resulted from the embargo served to succor 
 the troops which afterwards proclaimed the plan of Tuxtepec, and that the petitioners have always been punctual 
 in the payment of their ordinary taxes, are so insignificant and slight to found a claim, that they ought not to be 
 taken into consideration. 
 
 " On the foundations set forth, it is the opinion of the Section of Liquidation that this claim ought to be 
 rejected totally. 
 
 " Mexico, September 22d, 1877. 
 
 " From the illness of the Chief of the Section, T. Valera." 
 
 / Report of Sr. Eugenia Chavero on the Events of Matamoros. 
 
 1437. Sr. Eugenio Chavero, who was Administrator of the Matamoros Custom-House during almost all of 
 the period in which the events occurred which the Report refers to, and who was therefore a personal witness of 
 several of them, has rendered to this Department the following report, dated the loth instant: 
 
 "The subscriber, in compUance with the provisions of the order of the Secretary, dated the 8th instant, 
 that he should report regarding the facts which the United States Minister relates in his report of October 8th, 
 1878, as occurred in Matamoros during the revolution of Tuxtepec, I proceed to set forth the following: 
 
 " In the said document two facts are cited : That of an American merchant already aged, who did not pay 
 the loan imposed on him, and for such reason was apprehended by night and carried outside the parapets of the 
 city, where they were fighting with the revolutionists, holding him outside of a trench, exposed to the fire of the 
 enemy, until the Consul interfered and obtained his release ; and that of another American merchant, whose 
 house was forced and his effects embargoed and sold at auction for having refused to pay a loan that was imposed 
 on him. 
 
 " These two facts, which from Mr. Foster's Report, might be thought to have taken place simultaneously, 
 occurred in two very different periods ; the first in the last days of March, 1876, and the second in the last days 
 of December of the same year, or first days of January, 1877. I do not recollect well the date of this event, for 
 when it took place I had already left the custom-house of that port, and was in New Orleans, on my way to this 
 capital, but I do reecoUect perfectly the first, and I will try to dispel the inaccurate reports communicated by the 
 United States Minister. 
 
 " General Diaz, now President of the RepubUc, who had arrived at Brownsville, January ist, 1876, passed 
 to the RepubUc in the month of February following, already declared against the government which then ruled 
 the country. For this reason all commercial transactions were benumbed in that place, nullif}'ing .the resources of 
 the Matamoros Custom-House, the only ones that were counted upon to pay the garrison that defended the same 
 place. 
 
 " This situation, aggravated by the necessity of daily supplies to the National Guard that had been raised to 
 help in the defense, caused General Barra, appointed military commander of that port, to apply to commerce, soli- 
 citing loans, the greater part of which were covered, not with all possible good-will, as the minister states, but as a 
 brilKant stroke of business on the part of commerce, for in exchange for the sums supplied, orders were given 
 against the custom-house, payable in duties of importation, and with a premium of thirty and forty per cent.. 
 
 1437. Report of Sr. Eugenio Chavero on the events of Matamoros daring the revolution of Tuxtepec 
 
287 
 
 which orders were issued to all the loaners, and there were some who, before delivering the money on the loan 
 dispatched their effects ; so that in reality there was no such loan, but under that name the introduction of effects 
 was forced, the loaners obtaining thereby rich gains. 
 
 " In the last loan that was imposed, some merchants refused to respond to the call of the military authority, 
 among others Mr. Sustendhal, a Frenchman by birth and an American by naturalization; ordered to be 
 searched, for he was found at night at hours in which General La Barra was in the Monterey guard station ; and 
 General Toledo, the second in command, gave orders for him to be carried to a trench, which was one of the 
 points where the garrison was. The American Consul having gone to my house for me for the purpose of our 
 going to see General La Barra, to get his permission for the merchants detained in the custom-house to pass the 
 night at their houses, the Consul compromising himself on his word that they should present themselves on the 
 following day, he learned what had happened to Mr. Sustendhal, and asked for his release. Both things were 
 granted at once. This was what passed. In regard to that they were fighting in the trenches, and that Mr. 
 Sustendhal is an aged man that was exposed to the fire, are notoriously false reports given to the minister, for 
 neither is Mr. Sustendhal an aged man, nor was there a single shot fired inside or outside of the city of Matamo- 
 ros until the 2d of April, on which the place being deUvered up, and part of the garrison having taken refuge in 
 the ' Casa Mata,' a sUght resistance was made before surrendering to the forces under the command of General 
 Diaz. 
 
 "Such are the facts which took place; perhaps in some of the incidents I may be mistaken, for after so long 
 a time my memory may fail, but I am sure that in the principal part they are correct. 
 
 "Eugenic Chavero. 
 " Mexico, January loth, 1879." 
 
 g. General Consideratiotis Respecting the Events of Matamoros. 
 
 1438. From the official documents in reference to the events of Matamoros which have just been inserted, 
 it appears that the Report refers to two cases ; the first of an aged man, a retail merchant, and United States 
 citizen, who for not having paid $300, which was imposed on him as a forced loan, was carried by the soliers, 
 by night, to an entrenchment, where he was exposed to the fire of the enemy ; and the second, to the exactions 
 suffered by a United States merchant, without his having been indemnified therefor. 
 
 1439. Respecting the first case, it can be deduced from the terms of the Report, being compared with what 
 has just been inserted (paragraph 1437), from Mr. Eugenio Chavero, that this case is that of Mr. Sustendhal, 
 and the explications about it which Chavero gives, who accompanied the United States Consul when he. pre- 
 sented himself on the very night of the event to the General-in-Chief to ask for the release of the persons detained, 
 appear to be sufficient to sustain that neither Mr. Sustendhal is an aged man, nor was he exposed to the fire of 
 the enemy; for there were then no hostilities ; but that he was taken to a trench, for there were the quaiters of 
 the force to whose custody his person was entrusted. 
 
 1440. The second case to which the Report alludes, is probably that of the claim instituted by Messrs. 
 Francisco Iturna and Frederick O'Boyle. From the report of the Section of Liquidation already inserted 
 (paragraph 1436), it appears that, in fact, such a claim was presented, in which was asked the payment of injuries 
 and damages, these being calculated by the estimate of judges named by the interested parties ; but this matter 
 could not be decided without a previous clearing up of the facts, and information was asked of the Government 
 of the State of Tamaulipas and of the Treasury office in the port of Matamoros, entrusting the communications, 
 in which said reports were asked for, to the attorney for the claimants. Later, the reports asked for were re- 
 ceived, but the interested parties have not made any further motion in the matter, notwithstanding that they have 
 pioved for the payment of other credits of similar origin, presented at the beginning by the same attorney, which 
 were acknowledged to them, and more than half of the amount of which has already been paid them by the 
 custom-house of Matamoros 
 
 1441. The Report asserts that a partner of the commercial house of Matamoros, which suffered the extra- 
 ordinary taxes, came to this capital in October, 1877, to solicit the payment of his credits without having obtained 
 it, notwithstanding he was willing to receive orders on the custom-house of Matamoros. If the Report refers 
 to the credit of Messrs. Eversmann & Co., it has ahready been stated, that those he presented were paid; if it 
 
 1438 Cases stated by the Report of United States citizens who suffered injuries and vexations in Matamoros. 
 
 1439. Inaccuracy in the statement of one of these cases, according to the report of Sr. Eugenio Chavero. 
 
 1440 The second case to which probably the Report alludes has received the attention of the Government. 
 
 1441 Reply td the observation of the Report on the failure to pay one ot the partners of a commercial house of Mata- 
 
 moros. 
 
288 
 
 speaks of the claim of Messrs. Iturria and O'Byle, it is clear that the claim, being neither justified nor acknowledged, 
 it was not possible to order its payment. 
 
 1442. From what has been shown thus far in reference to the events of Matamoros, it appears that the data 
 which served as a basis to the Report, were very exaggerated, inasmuch as what was presented as a great exaction 
 for the merchants of that port, was, in reality, a lucrative business for them, for they obtained, by that operation, 
 a profit on their suppUes of from 30 to 100 per cent., according to evidences in this Department ; that the col- 
 lection was made by virtue of- a decree, which imposed a general tax, and that only those who refused' to pay it 
 suffered the consequences of their negative. 
 
 E. Assassination of Walter Henry, near Piedras Negras. 
 
 1443. This disagreeable event is perhaps the gravest of those mentioned in the Report, because the murder 
 of a man took place, which did not occur in any of the other cases, and on account of the grave and unfounded 
 charges made for that motive, by the United States representative, against the employees of the custom-house of 
 Piedras Negras. To proceed with order in this matter, the following points respecting it will be considered : 
 
 a. Text of the Report respecting the case of Mr. Walter Henry. 
 
 b. Conduct of the Mexican Government respecting tfie same case. 
 
 c. Blamelessness of the employees of Piedras Negras. 
 
 d. Considerations resulting from the preceding facts. 
 
 a. Text of the Report Respecting the Case of Mr. Walter Henry. 
 
 1444. In relation to the United States citizen, Walter Henry, the Report says as follows : 
 
 " An American merchant, M<r. Walter Henry, who h^ad for many years carried on trade in Chihuahua, had 
 suffered so much on account of the Diaz revolution, being obliged to pay various forced loans of $2,500, $300 
 and $150, besides giving a Henry rifle, a pair of pistols and a horse to the revolution, that he had at last to 
 abandon that city and seek a more peaceful part of the country, choosing the city of Saltillo, m the State of 
 Coahuila. He went to the United States, and bought a new supply of goods. On leaving San Antonio, Texas, 
 he passed to the Mexican city of Piedras Negras, on the Rio Grande ; carried his goods, as was in order, to the 
 custom-house of the place, and paid the duties to the Administrator. On doing this, it became known that he 
 carried with him a sum of four hundred dollars in cash. He left for the interior, with train of merchandise, 
 towards Saltillo. At a short distance he was barbarously assassiaated and despoiled of all his money, destro)dng, 
 besides, all his papers. The Administrator, on learning of the murder and the destruction of his papers, sent a 
 guard to take possession of the goods as contraband. But the Alcalde of the neighboring city of Zaragoza had 
 already taken possession of them, and sold them for $1,000, to pay the expenses af the burial of the deceased. 
 
 "Meanwhile the Consul of Piedras Negras, on being informed of the murder, went to the custom-house to 
 acquire all the particulars possible about the quantity and kind of goods of Mr. Henry, for the purpose of taking 
 possession of them, in the name of his heirs, and, after an investigation, it appeared that the former had not 
 made any account of the money collected for duties, but had appropriated it, and that on learning that Henry 
 was dead, and that his papers had been destroyed, he proposed to hide his fraud by confiscating the goods. 
 These events took place about fifty days ago." 
 
 b. Conduct of the Mexican Government Respecting the Case of Mr. Walter Henry. 
 
 1445. On September 19th, 1878, this Department was informed in an extra-official manner, that some effects 
 carried by Mr. Walter Henry had been seized, with documents that were supposed to be false, and information 
 was immediately asked by telegraph of the Administrator of the custom-house of Piedras Negras, who replied in 
 the same manner, with date of October 5th following, stating that the seizure of thirty-nine packages of merchan- 
 dise belonging to the United States citizen Walter Henry was true, and that the falsification of documents issued 
 by the Administrator himself in favor of these goods was a calumny. 
 
 1446. On October 4th, 1878, this Department sent a copy and translation of the note addressed to it on 
 the 2d of the same month, by the United States Minister, in which he stated that he had received orders from the 
 
 1443. Great exaggeration of the Eeport respecting the events occurred in Matamoras in 1876. 
 
 1443. The murder of Mr. Walter Henry is the gravest case of those mentioned in the Report. 
 
 1444. Text of the Eeport respecting the case of Mr. Walter Henry. 
 
 1445. Report of the Administrator of the custom-house of Piedras Negras on the seizure of 39 packages of Mr, 
 Walter Henry. 
 
 1446. Note of the United States Minister of October 2d, 1878, on the facts in reference to the murder of Mr. Henry. 
 
289 
 
 Department of State, to call the attention of the Mexican Government to the facts in reference to the assassina- 
 tion of the United States citizen, Walter Henry, and the embargo of the effects belonging to him. It mentioned 
 the facts as they were communicated to it, and informed that the commercial agent of the United States stated, 
 tnat Mr. Henry had paid the duties on those goods to the Administrator; that an investigation having been made 
 at the custom-house, it came out, that the said goods were not registered in that office; that the Administrator 
 and his subordinates had appropriated the money; adding, that there appears to exist suspicions that the Admin- 
 istrator was not ignorant of the murder. 
 
 1447 On the 7th of the same month of October, 1878, this Department ordered this matter to be communi- 
 cated to the District Court of Coahuila, in that a serious crime had been denounced, in order that it might insti- 
 tute the proper investigation, prosecuting the guilty, and working according to its powers ; and to this effect a 
 copy was sent of the complaint of the United States Legation of the 2d. The Governor of the same State was 
 also urged to make investigations and to administer justice according to what resulted respecting the death of Mr. 
 Walter Henry. Lastly, copies of the same documents were sent to the Custom-House Commissioner, Manuel 
 Sevilla, for him to go immediately to Piedras Negras, to make the most scrupulous investigation of the facts, 
 availing himself of every means he might think proper to discover the truth, reporting, without delay, to this 
 Department. 
 
 1448. On September nth, 1878, Sr. Joaquin Ortiz de Montellano, Auditor of the frontier custom-house of 
 Piedods Negras, addressed an official communication to this Department, informing of the accusation of pecula- 
 tion, which the United States Commercial Agent at that point, had made against the employees of that custom- 
 house, in the matter of Mr. Walter Henry, and sending copies of the communications exchanged between the 
 Auditor, himself, and said functionary. The principal of these documents is that subscribed by the Commercial 
 Agent, September 2d, 1878, addressed to the Administrator of Piedras Negras, claiming that the latter had 
 received the duties on the goods belonging to the deceased Walter Henry. 
 
 • 1449. In an official communication, dated at Piedras Negras, September 3d, 1878, the Administrator of that 
 frontier custom-house, gave account to this Department of the contraband attempted by the United States citi- 
 zen, Walter Henry, and of the incidents occurred in its arrest, which official communication was transmitted, 
 October 8th, 1878, to the Department of Foreign Affairs, and to the Revenue Officer, Sevilla. 
 
 1450. On October 8th, 1878, the Department of Foreign Affairs addressed a communication to the Treasury 
 Department, remitting copy and translation of a note addressed to that Department by the United States Minis- 
 ter, dated the 7th of the same month, giving new particulars of the compUcity of the Admistrator of the custom- 
 house at Piedras Negras, in the detention of the effects of Walter Henry, and still presenting the custom-house 
 employees as accomplices in the authorship of that crime. 
 
 i.451. In view of that communication, it was resolved by this Department, on October 9th, to remove the 
 Administor and Auditor from the frontier custom-house of Piedras Negras, the Inspector, Sevilla, remaining in 
 charge of the office, in order that the presence of the suspended employees in the custom-house might not serve 
 to shield them from the responsibility which should result; that this resolution be communicated to the Depart- 
 ment of Foreign Affairs, and to the Inspector, Sevilla, and that to this functionary as well as to the District Judge 
 of the State of Coahuila, be transmitted the official communication of the Department of Foreign Affairs, of 
 October 8th, 1878, accompanied with a copy of the adjoined note from the United States Minister. 
 
 1452. It is considered proper, for the purpose of demonstrating the efficacy and justice with which the Mexi- 
 can Government proceeded in this case, to insert here the instructions it gave to the Inspector, Sevilla, for him 
 to discharge the commission which was entrusted to him in Piedras Negras. Those instructions are as follows: 
 
 " Particular instructions for the Government of Manuel Sevilla, appointed inspector of the frontier custom- 
 house of Piedras Negras, relative to the fact of the importation of goods by the American citizen, Walter Henry, 
 which are detained in Zaragoza. 
 
 " I St. He shall fulfill exactly the orders communicated to him by this Department on the 7th, 8th and 9th 
 instant, remitting him copies of the documents passed to this same Department, by the Department of Foreign 
 
 1447. Steps taken by the Treasury Department to investigate what occurred, and to proceed with justice. 
 
 1448 Report of the Auditor of Piedras Negras on the accusation of peculation by the United States Commercial 
 
 Agent. 
 
 1449. Report of the Administrator of Piedras Negras the seizure of 39 packages of Mr. Henry. 
 
 1450! Note of the United States Minister of October 7tli, 1878, on the complicity of the employees of Piedras Negras. 
 
 145l' Suspension of the Administrator and Auditor of the custom-house of Piedras Negras. 
 
 1453 Instructions communicated by the Treasury Department to the Inspector Sevilla. 
 
 37 
 
290 
 
 Affairs, and by the custom-house of Piedras Negras, all relative to the murder of Mr. Walter Henry, and to the 
 embargo of the effects he was importing. 
 
 " 2d. He shall examine minutely the custom-house books, to see if the goods brought by Mr. Henry paid the 
 respective import duties. 
 
 "3d. He shall ascertain if it is true that the good swent covered by documents of the custom-ljouse of Pedras 
 Negras, and if the originals, or copies, can be seen, he will make the due examination of the books with greater 
 facility. 
 
 " 4th. Through Messrs. Helario Herrera, J. M. Hartz, Riojas & Canales, Vicente Rodriguez, Alfredo Guyes, F. 
 Burchardt, and J. W. Riddle, merchants of Paso del Aguila, who are those that most frequently certify to the 
 invoices of goods imported to the Repubhc by Piedras Negras, proceeding from the United States, according to 
 Art. 31st of the tariff, the Inspector aviU ascertain if Walter Henry had the invoices of his goods legalized, and 
 in case this occurred he will try to procure copies of those documents, in order to compare them with the cargo, 
 and add the respective legal paper. 
 
 " 5th. He shall make the same investigation, and for the same ends of other merchants established in Paso 
 del Aguila, if he thinks it will contribute to the desired result. 
 
 " 6th. If the carrying out of the provisions of the preceding instructions throws no light on the subject, he 
 shall try to find out the truth of the facts from the employees of the custom-house, and from the neighbors of the 
 town, and so he shall learn if the goods went covered by documents issued by some employee of the custom- 
 house, without making the due entries in the books, or if it is an unfounded calumny which is raised against some 
 one of these. 
 
 " 7th. The Inspector shall bear in mind that in the clearing up of these facts, and throwing the light of truth 
 upon what has occurred, is interested not only the good of the pubUc service, but even the good name of the 
 country. 
 
 " 8th. The Inspector shall give notice of all that is done under these special instructions, with the promptness 
 which the case requires. 
 
 " Mexico, October 9th, 1878. 
 
 (Signed) Romero." 
 
 1453. In continuation wdll be seen the thorough and just manner with which the Inspector Sevilla dis- 
 charged the commission that was entrusted to him in the custom-house of Piedras Negras. 
 
 C. Blamekssmss of the Employees of Piedras Negras in the Affair of Walter Henry. 
 
 1454. The Inspector Sevilla transferred himself without delay from the custom-house of Monterey Laredo, 
 to that of Piedras Negras, by virtue of the order that was communicated to him by this Department, October 8th, 
 1878, he immediately suspended the Administrator and Auditor of the said custom-house, and proceeded to make 
 the investigation that was commended to him respecting the conduct of the employees in the case of Mr. Walter 
 Henry. On the termination of this, he remitted a full account to this Department, with a report in which he 
 sums up all the important incidents of the investigation, and demonstrates in a conclusive and indubitable man- 
 ner the innocence of the employees of Piedras Negras in the matter of Mr. Walter Henry. 
 
 1 45 5' Treating of an important affair, from the accusations that have been directed against the employees 
 of Piedras Negras, it is thought proper, although with danger of making this exposition more extended than it 
 should be, and since the investigation cannot be inserted in extenso to set forth, in continuation, the report of 
 the Inspector Sevillo, which, although it is long, contains a concrete statement of the facts, which it is impossible 
 to abreviate without injuring its clearness, nor omit anything it says, for the complete clearing up of the facts 
 occurred in the case of Mr. Walter Henry. 
 
 1456. The report of Mr. Sevilla is as follows : 
 
 1453. The thoroughness and justness to be shown with which the Inspector Sevilla proceeded. 
 
 1454. Proceedings of the Inspector Sevilla, and his report on the innocence of the employees of Piedras Negras, 
 
 1455. Propriety of inserting, for greater clearness, the report of the Inspector Sevilla. 
 
 1456. Text of the report of tlje Inspector Sevilla of January 15th, 1879. 
 
291 
 
 " Frontier Custom-House of Piedras Negras, No." 26. In fulfillment of the instructions which that Depart- 
 ment thought proper to remit me, and with the documents accompanying said instructions, I proceeded, as soon 
 as those documents and instructions were in my possession, to carry out the investigation ordered, relative to the 
 facts denounced by the United States Commercial Agent resident in this village. 
 
 ' The said Commercial Agent throws upon the Administrator of this custom-house, and upon some other 
 employees of it, whom he does not designate, the grave charges of peculation and complicity in the murder of the 
 Amencan citizen, Mr. Walter Henry, according as appears from the note he addressed to the Auditor of the 
 same custom house, Sr. Ortez de Montellano, dated September 6th, ultimo. An accusation made, also, in clearer 
 and more absolute terms by the United States Minister resident in Mexico, as results from the different notes 
 passed by the said Minister to the Department of Foreign Aifairs, dated October 2d and 7th last passed. 
 
 " The first of said functionaries in his said communication of September 2d, says : That the goods brought 
 by Mr. Henry were passed from Paso del Aguila to this village on August loth, and at hours in which despatch 
 was yet being done at the office and in one of the boats engaged in the trade between one and the other shore of 
 the river, fixing at 46 as the number of packages imported by Mr. Henry. He claims that this importation took 
 place legally, and says that Mr. Henry paid the Administrator, Sr. Morell, $1,700 for the duties, and $100 for 
 the issuing of the custom-house documents, adding that the said Sr. Morell sent to Zaragoza, an employee of the 
 guard, in his entire confidence, for the purpose of recovering those documents, which highly compromised Morell, 
 and that employee tried to seduce the cartmen, offering them money to declare they had received Mr. Henry's 
 goods by night in the mountain in a place outside of Piedras Negras. He rests this accusation on the word of 
 Messrs. Emilio Callgen and Juan Canterbury on the report which, according as he says, was furnished him by 
 three person, whom he does not designate, and on the word of the Alcalde of Zaragoza, who, according as the 
 Commercial Agent states, manifested upon refusing to deliver the goods of Henry to the custom-house employees 
 sent for that purpose, that he had proofs that the said goods had been imported through the port and the duties 
 paid. 
 
 " For his part, the United States Minister resident in Mexico, in his note addressed to the Department 
 of .Foreign Affairs, October 2d, says, in absolute terms, that Mr. Henry introduced his goods publicly through 
 the custom-house, and there paid the corresponding duties ; and referring to the report of the Commercial Agent, 
 he accepts as a fact, which admits of no doubt, that the employees appropriated the money product of those 
 duties for individual purposes, and that the Administrator Morell, decreed the seizure of the goods Mr. Henry 
 was carrying, as soon as he learned of the disappearing of the papers of the latter. He is still more explicit in 
 his note of the 7th of the same month of October, for in it he says that he has received, from a confidential 
 source, and worthy of every credit, a more complete proof of the evil proceedings of the employees of this cus- 
 tom-house, the proof of which consists in the confession made by the Administrator, Sr. Morell, of having received 
 the amount of duties due on the goods imported by Mr. Henry, and in the attempt of Morell to celebrate an 
 arrangement with the Commercial Agent, on the basis of the return of part of the duties paid by Henry, re- 
 maining with the rest, and the goods, declaring them contraband. 
 
 " For the United States Minister to have said this, with such certainty, the report remitted by the Commer- 
 cial Agent to the American Government, must have been written in such a positive manner, and rested on such 
 proofs that they leave no room for doubt respecting the facts which they denounce ; a positiveness which is not 
 noted in the communication which the same Commercial Agent addressed, on September 2d, to the Auditor, Sr. 
 Ortez de Montellano. As regards the proofs on which the said agent rests his accusation, I have not been able 
 to perceive them, for he did not even deign to reply to the note which I addressed him on November 27 th last 
 past, having, therefore, to limit myself to the testimony of the persons whom he cites in his communication in 
 relation thereto, of September 2d, and to the declarations, reports and other documents accompanying the legal 
 paper I have the honor to remit. They are, however, sufficient in my conception, to enable that Department to 
 form an exact judgment of the events, and to deduce the degree of guilt of the employees who are accused. 
 
 " The books and whatever documents existing in this office, that might have any bearing upon the affair in 
 reference to Mr. Henry being examined with the greatest care, it does not appear from them that the duties were 
 paid which were due on the merchandise imported by the latter, nor do any of the entries refer to the number of 
 packages designated by the Commercial Agent, nor does the name of Mr. Henry appear in any way; nor in ex- 
 amining the invoice made on receiving the effects of the custom-house, is there any document whatever of mer- 
 chandise which agrees in class, number or measure with those brought by the said Henry. 
 
 " From the declarations of Messrs. Morell and Montellano, it appears that the custom-house had no knowl- 
 edge of the importation of goods accomplished by Mr. Henry, except on the day on which the Commercial 
 Agent presented himself at the office, soHciting that the data he was in search of on this same importation might 
 be furnished him. Then it was, according to those declarations, that it was ascertained, through the same agent, 
 the date (August loth) on which the importation took place, and knowledge was had of the death of Mr. Henry, 
 
292 
 
 it being noticeable that the said agent was the first to give the news of this event in the town, which up to then, 
 as appears from the evidences of the legal paper, was totally unknown. It appears in the same declarations, and 
 is corroborated in that of the chief revenue officer, that previous to the date of August loth, Mr. Henry presented 
 himself at the office in quest of the Administrator, Mr. Morell. This employee says, in his declaration, and his 
 word is confirmed by what Sr. Emilio Callsen states in his communication of November 8th (leaves 56 and 57 of 
 this legal paper), that Mr. Henry's object was to inquire if the custom-house was authorized to make any reduc- 
 tion of the duties fixed in the tariff on foreign goods imported into the Repubhc. An inquiry he also made 
 through Mr. Callsen according as appears in his said communication of November 8th. To such question the 
 Administration replied, that he had no authorization whatever for it, the interview being thus concluded. 
 
 '• It is necessary for me to call the attention of that department to the pretension of Mr. Henry, because 
 from it results very naturally the presumption that he did not come with the object of trading legally with the 
 Republic, a presumption which is strengthened by the reading of the said note of the United States Minister of 
 October 2d. In it the said Minister says that Mr. Henry had been occupied for many years in mercantile 
 affairs in various parts of Mexico, and that during five- years or more he had resided in Chihuahua as a trader, 
 and it is not possible even to presume, that a person having so long a practice in the commercial affairs of the 
 country, and who ought to know its fiscal laws so well, could suppose that an administrator of a custom-house 
 would have any authorization to estabUsh differential duties. The present tariff has been in force for many years, 
 and if by reason of the disturbance of pubHc peace, and in certain localities it might fall momentarily into dis- 
 use, it has been put again in force as soon as peace has been re-established, and on August loth, the date fixed 
 by the Commercial Agent for the importation, the entire country was quiet, and consequently its fiscal disposi- 
 tions were in all their vigor. But there is, also, another fact which must be borne closely in mind ; Mr. Callsen, 
 in his communication referred to, of November 8th, says that Mr. Henry was recommended to him by a Galves- 
 ton house, which house begged Mr. Callsen to assist Mr. Henry in the arrangement of his affairs ; that the latter 
 stated to him that he had some goods in San Antonio, which he intended for the Zacatecas market, and that he 
 came to him for information on the respective expenses and duties. There being in San Antonio a Consul of 
 the RepubUc accredited to the United States Government, and the same city of San Antonio being the place 
 where Mr. Henry bought the goods he intended for the Zacatecas market, it was more natural that he should 
 have appKed to the said Consul, either in soHcitation of the data he desired to obtain, or to legalize the docu- 
 ments with which he must introduce his goods ; but in no wise was the Consul consulted, and this causes the 
 suspicion that the preconceived idea was entertained of defrauding a part of the revenue duties, if he could cor- 
 rupt the custom-house employees, or all of the duties, if the first intention being frustrated he succeeded in get- 
 ting his goods in at all hazards ; for I repeat, it cannot be supposed in a person who knew thoroughly the manner 
 of doing business in Mexico, such an ignorance of the rules which the custom-house tariff establishes for the im- 
 portation' df goods coming from abroad, and that for the same reason it cannot be admitted that after the pay- 
 ment of a greater or less sum of money, it should consent to the delivery of documents, which, were not issued 
 in proper form to authorize the goods which he carried. A circumstance very worthy of note also is, that accord- 
 ing to the statement of Sr. Ortez de MonteUano in his declaration the United States Commercial Agent had, and 
 still has, motives of personal enmity towards the Administrator, Sr. Morell, a circumstance that ought not 
 to be disregarded in treating of the Commercial Agent, for reasons I shall have the honor to set forth 
 further on. 
 
 "The revenue officers covering the service of the River on August loth, being examined, it does not appear 
 that on that day, nor before nor after it, up to the afternoon of the 14th, on which they were relieved, were the 
 goods belonging to Mr. Henry introduced, both of them affirming that the only effects proceeding from Paso del 
 Aguila that were nnported on the afternoon of August loth were the property of Messrs. Riojas & Canales. As, 
 according to the Commercial Agent, the goods of Mr. Henry were carried in four carts, passing to the village in 
 one of the boats employed in the river trade, it is to be noticed that one of the said revenue officers, Ramon de 
 la Hoz sets forth in his declaration, that on the afternoon of August 2 2d, he was called by the Commercial Agent, 
 and that the said gentleman made him offers of money to declare against the Administrator, Morell, in the affair 
 relative to Mr. Henry, because it so suited the individual interests of the said agent, and of the Auditor, Sr. Ortez 
 de Mbntellano, a thing which Sr. Hoz refused, adding that on that afternoon the Commercial Agent was in a 
 complete state of intoxication. I may be permitted to call the attention of that department to this part of the 
 declaration of Ramon de la Hoz, because it supports and proves in a certain manner, the statement of Sr. Ortez 
 de MonteUano, respecting the personal animosity harbored by the Commercial Agent against the Administrator, 
 Aforell. 
 
 " The revenue officer in command, as well as the other individuals of the preventive service, being exam- 
 ined, with the object of ascertaining exactly in relation to the importation effected by Mr. Henry, and the truth 
 concerning the sending an individual of the service to the village of Zaragoza for the purpose of getting posses^" 
 
293 
 
 sion of the papers, which, according to the United States Minister and the Commercial Agent, were carried by 
 Mr. Henry, and which disappeared after the death of the litter, it does not appear from the respective declara- 
 tions that any employee was despatched by the custom-house in the direction of Zaragoza, except it was on the 
 day that notice was received by the same Commercial Agent, that on the death of Mr. Henry, the authorities 
 and neighbors of the village of Zaragoza had seized the goods carried by Mr. Henry, and then it was not one of 
 the revenue guards, but a section of these, assisted by another of the Federal force, that was sent for the pur- 
 pose of gathering and taking to the custom-house the cargo that was represented to be of contraband importa- 
 tion, inasmuch as there was no evidences of the payment of the respective duties. In examining the roll book 
 of the service of the corps of revenue guards, it does not appear, though, in said book, as well as in the declara- 
 tions to which I refer, that on the 6th day of August a party was appointed, composed of four revenue guards, 
 with the commander at their head, which, assisted by some soldiers of the Federal force, went out towards the 
 Presidio of Rio Grande, following the shore of the Bravo to the point called ' Las Islitas,' from whence it re- 
 turned by the same road, arriving at this village the 14th of the same month of August ; that is, the party 
 went out four days before and returned four days after the one on which the Commercial Agent says the impor- 
 tation of Mr, Henry's goods took place. By the declarations already made, it does not appear that from the 
 party that went out towards the Rio Grande, any individual was dispatched in the diiection of Saragoza, and 
 likewise there is no evidence that any one of the revenue guards remaining in the town were dispatched to that 
 village. 
 
 " Jesus Loy, in charge of the Mexican boat that carries freight from one side of the river to the other, 
 being called upon to testify, and on whose testimony the Commercial Agent also rests his accusation, it does not 
 appear from his declaration, that the goods carried by Mr. Henry passed in the boat then under his charge, and 
 the said Loy has not been able to recollect a single circumstance relative to this affair, for all that I tried to 
 help his memory. If the declaration of Sr. Loy is considered, it will be understood that it would not be possible 
 but that if Mr. Henry's cargo ha^ passed through his hands, he would recollect some circumstance, whatever it 
 might be, that would giveroom to presume even that said cargo had been imported legally. 
 
 " Apropos of the declaration of Sr. Loy, it is necessary for me to call the attention of that Department to 
 some facts that have taken place by reason of the unfortunate affairs of Mr. Henry, facts which I do not doubt 
 will help that same Department to estimate the conduct of the Commercial Agent and his accusation at their 
 real value. Previous to Loy's being called, I was informed by several persons that the Commercial Agent was 
 occupied in Paso del Aguila, in raising before one of the judges of that city, Mr. Dell, a suit of inquiry, the object 
 of which was to seek proofs on which to support his accusation, causing me to notice both the irregularity of the 
 proceedings followed, and the class of persons called upon to testify. It surprised me much that four months 
 after the events which resulted in the death of Mr. Henry and the confiscation of his effects, the Commercial 
 Agent should have to appeal to that recourse to prove the truth of his statement, for it was very natural to sup- 
 pose that when he resolved to formulate his accusation, he had already in his possession proofs of such a nature 
 as not to leave the slightest doubt of the guilt of the persons indicated by him. No less did it surprise me to 
 know that the persons were examined in his presence, whom the judge called to testify, and taking part himself 
 at times in the interrogation, it being noted that some of the witnesses are Mexicans who do not know the Eng- 
 lish language, and, notwithstanding, their declarations are put down in that language, making them so to sign 
 them. Perhaps my ignorance of the practices observed in the American courts, makes me class these doings as 
 irregular ; but what cannot be satisfactorily explained is the following : not many days ago there was present in 
 this village an American citizen, Mr. James Gibson, accused of being one of so many marauders who pass to our 
 frontier to steal cattle. Gibson succeeded in escaping, and his flight was favored by some fellow countrymen of 
 his, who corrupted the force that guarded him, those being not lacking who say that the Commercial Agent was 
 one of those who projected that flight ; well, then, once in Paso del Aguila, Gibson, as I am informed, has been 
 called to testify in the inquiry before Mr. Dell, and he has been seen walking with the latter and the Commercial 
 Agent, it being noted that many of those that have declared in the inquiry raised in Paso del Aguila are more or 
 less of the class of Gibson. What can be the dicision from such an inquiry ? It is not for me to say. 
 
 " On the day following my having received the declaration of Loy, the latter was called to declare before 
 Judge Dell, and information having been given me that a proceeding analogous to what I have indicated, had 
 been followed, I call Loy again that he might rectify this report, and I appUed to the civil judge of this village, 
 in order that, in the presence of the Commercial Agent, he might be interrogated on the points embraced in my 
 communication, which figure on leaves no and in of this legal paper, dated December sth ultimo. The Com- 
 mercial Agent declined to attend, the business I solicited being accomplished without his presence. Doubtless 
 in consequence of this, and also, perhaps, because the declaration given by Loy before the judge at Paso del 
 Aguila did not result to the taste of the Commercial Agent, it was, that the latter tried to get Loy removed from 
 the charge of the river boat, thus depriving him of his only resource for the support of his family. 
 
294 
 
 " At the same time, that by means of the declarations of the employees, I was trying to ascertain the truth, 
 as well upon the legality of the importation of the goods introduced by Mr. Henry, as upon the participation of 
 some of the same employees in the double crime of peculation and complicity in the murder of Henry, I applied, 
 according to the instructions of that Department, to Messrs. Emilio Callsen, Juan Canterbury, J. M. Hartz, Rio- 
 jas and Canales, Vicente Rodriguez, Alfredo Guyes, F. Burchardt and J. W. Riddle, that they might furnish me 
 with what data they might have on the Henry affair, informing myself at the same time if they had certified to 
 the documents by which the importation should me made. I have already had the honor to notice, apropos of 
 the communication of Mr. Callsen, one of the persons on whose statement the Commercial Agent rests his accu- 
 sation, that Callsen himself confesses, that he had nothing more to do with the business of Mr. Henry than to 
 have afforded him a place in which to store his goods, to deposit his money and arrange for him the documents 
 which for exportation he must present in the custom-house of Paso del Aguila, having tried also to arrange the 
 introduction into the RepubUc, for which he addressed a writing to the Administrator, Sr. Morell, asking him if 
 he was authorized to make any reduction in the duties, to which he was answered in the negative, and that by 
 reason of this answer he informed Mr. Henry that it was impossible for him to take charge of the importation of 
 the goois, except on the basis of satisfying the full duties. Callsen states, also, that the Commercial Agent him- 
 self, it was, who told him .that some guards had departed vejy hurriedly in the direction of Zaragoza, and for that 
 reason he gave Ijim his opinion on the event, though, without authorizing him to make use of it, expressing what 
 in fact he showed, that he was very mortified when he learned that the custom-house had confiscated the effects 
 of Mr. Henry, in the supposition that the money the latter had asked of him, would be for the payment of the 
 import duties, but he doubts having said that what he paid Henry, was paid to Morell, or other person, for he 
 was ignorant of this, and he concludes by saying that in so grave an affair, he cannot mention or declare anything 
 that he has not witnessed, or of which he has not sufficient proofs to sustain. The obscurity noticed in the com- 
 munication of Mr. Callsen, gives reason to believe that this gentleman, if he does not know it to a certainty, at 
 least suspects that Henry had same arrangement with Morell for the introducticJh of the goods, and so he stated 
 to me in the interview I had with him, telling me besides, that he had seen the carts loaded with the merchandise 
 of Henry pass by the door of his house, but it does not appear to him that they passed the river. 
 
 " Here it is necessary for me to again call the attention of that Department. Henry being recommended to 
 Sr. Callsen, for the arrangement of the business relative to the importation of the goods he carried, destined for 
 Zacatecas, it is evident that he manifested his intention of passing those goods, by eluding the payment of all or 
 part of the duties due the Mexican Custom-House, for only so is it explicable that Mr. Callsen should have 
 addressed Mr. Morell, asking him if he was authorized to make any reductions in the duties, an inquiry which 
 was on Callsen's part entirely useless, for he knew perfectly well himself what to abide by in that particular, being, 
 as he is, one of the persons that import goods every month from the United States. The idea that Henry made 
 his importation in contraband, is further supported by the circumstance that, on not being so, he would not have 
 asked if a reduction of duties could be made to him, and Mr. Callsen, better than any one else, would have taken 
 charge of making the documents which were to be presented at the Mexican Custom-House, a thing which it does 
 not appear had been intended by Mr. Henry. It might be objected that Henry availed himself of Callsen for 
 for the arrangement of the documents with which he was to legalize, and did legalize, in fact, the exportatipn of 
 his goods, pretending to prove with this the legal importation into the Republic. This circumstance proves 
 nothing, for the cases are, unfortunately, very frequent, in which the goods imported have left the duties unsatis- 
 fied, and, notwithstanding, have legalized the exportation in the American offices; for the smugglers, who try so 
 hard to defraud the duties of the Mexican revenue, do not elude any of the formahties prescribed by the United 
 States Government, doubtless, because there the punishment is not delayed, which the laws impose on the trans- 
 gressors. There is no doubt, then, that the goods imported by Mr. Henry were so done in contraband, notwith- 
 standing he may have paid Morell a greater or less sum for the dissimulation of this clandestine operation ; but 
 yet this part of the accusation has not been able to be proved, even though Mr. Callsen harbors the suspicion 
 that it was so. 
 
 " The Commercial Agent, supporting himself, also, on the word of Mr. John Canterbury, states, in his note 
 of September 2d, that Mr. Canterbury told him that the transaction of the importation of the goods of Mr. 
 Walter Henry, was made with Mr. Morell, and that the latter gentleman was very uneasy about it, for if' it was 
 discovered, he did not know how to save himself from such responsibility. Mr. Canterbury, in his communica- 
 tion, v/hich appears on leaves 58 of this, legal paper, dated November 9th, says that all he knows in relation to 
 the affair of Mr. Henry, is that the said gentleman was assassinated m a place beyond Zaragoza, and that in 
 regard to what the Commercial Agent states, respecting what he told him about Mr. Morell is completely false, 
 or he has never mentioned to him even the name of the latter gentleman. 
 
 "From the communications of Messrs. Hartz, Vicente Rodriguez, Riojas cSz: Canales, Alfredo Guyes, Burch- 
 ardt and J. W. Riddle, which appear on leaves 78, 79, 80, 99, 103 and 104 of this legal paper, it does not appear 
 
295 
 
 that said gentlemen have certified the invoices and manifest with which Mr. Walter Henry should introduce his 
 goods into the RepubKc, nor does it appear, either, that he apphed with such object to any of them, whether per- 
 sonally or through Mr. Callsen, who had been recommended to assist Mr. Henry in the arrangement of this busi- 
 ness. It being noticeable that not a single one of the said gentlemen, who speaks of having had even the slightest 
 relations with Mr. Henry, taking notice that, with the exception of three or four houses, they have absolutely no 
 relations with this office, because they make no importations to the RepubUc, at least, directly and legally. I 
 have apphed to all the merchants in Paso del Aguila. The communications of the said gentlemen are, in my 
 conception, a further proof that the goods carried by Mr. Henry were not imported with the formalities provided 
 by law. 
 
 " The Commercial Agent says, in his so often-mentioned communication of September 2d, that one of the 
 employees of this office, who was in Zaragoza, tried to seduce one of the cartmen conducting the goods, by offer- 
 ing him money, to declare that he had received the cargo in the mountain outside of Piedras Negras, and by 
 night, a thing that he learned through the report of three different persons, which he does not name; and adds, 
 that the Alcalde of Zaragoza refused to deliver up the goods of Henry, when they were claimed by the custom- 
 house, saying that he had proofs that said goods had been imported through the port and the duties on them 
 paid. 
 
 " The Alcalde of Zaragoza in his report, dated December nth, which appears on leaves 126, 127 and 128 
 of this legal paper, denies having said that he had proofs that the goods of Mr. Henry had been imported 
 through the port and the duties on them paid. In the same report he says that, in order to clear up the fact that 
 one of the revenue guards of this custom-house tried to seduce one of the cartmen conducting the cargo, a con 
 cise process of inquiry was entered, and in the name of the law, the four cartmen, conductors of the cargo, were 
 examined, that they might express clearly and precisely if they had been seduced, or any offers had been made to 
 them by any employee of the custom-house, and if they knew such employee they should tell his name, and not- 
 withstanding having been examined under the severest formulas of the law, they all affirmed that no employee nor 
 any private individual had come to make them any offer in that respect. The same Alcalde in his mentioned 
 report states (and to this point I again call the attention of that Department) that the government taxes being 
 abohshed in the State, and treat-ng of a cargo composed of foreign goods, nobody paid any attention to those 
 carried by Mr. Henry, nor sought to ascertain if they had been imported legally or not; that it is true that the 
 carts were standing in the streets of the town three or four days, putting their number at three, adding that 
 afterwards another was taken to hghten the load of the rest ; that it was after the unfortunate event of the 
 death of Henry, when suspicions were conceived, that the cargo had been wrongly passed, from the circumstance 
 that the said Henry had presented himself to the Revenue Collector (which that employee confesses), inquiring if 
 foreign goods needed a guide or pass to travel through the State, and that not being so, if they would provide 
 him with a guide, he paying what he might be worth, that employee, having replied that he did not wish to com- 
 promise himself by despatching guides for foreign merchandise. The Revenue Collector of Zaragoza says, on his 
 part, in his report, dated December 2 2d, found on the leaves of the legal paper, that the said Henry presented 
 himself at his office, very reservedly asking him, as the second revenue office of the district, to provide him with 
 documents to take some goods to the interior he was bringing from San Antonio, offering to pay him the duties, 
 as coming from the State, provided he could pass through it without any obstacle ; offering at the same time a 
 gratification to those who should make out said documents for him, provided this was done with the greatest 
 reserve possible, which that employee refused, telhng him that only the custom-house could supply such docu- 
 ments, by virtue of which the State does not collect duties on goods passing through it, unless for pieces of foreign 
 ' manta ' that are sold, and for that reason he could not give him a guide to the point he asked, still less the 
 proceeding he sohcited, as he considered it a grave prejudice to his character of public employee. A Uttle 
 further on the said receiver of rents adds ' that it is beUeved, from the instances he made him, that he was not 
 legally registered with documents.' From the reading of the reports I have cited, it is comprehended without any 
 violence whatever that the goods carried by Mr. Henry were not imported legally, for if they had been so he 
 would have carried with him the documents which the custom-house should have issued to him to cover those 
 goods It may be objected that Henry had an extra official understanding with Morell, and that the amount of 
 the duties were distributed between the latter and the employees, for individual purposes, instead of going into 
 the cash of the office, as the United States Minister relates; but even in this case, Henry should have exacted 
 of Morell documents sufficient to cover his goods up to the point of their final destination, for he knew that these 
 documents were altogether necessary, as well because the law so provided, to which it was his duty to comform, 
 as because it was necessary to cross the hne covered by the counter-guard, where such documents would be 
 required of him, and I say he knew this, because it is not possible to suppose that he was ignorant of it, if his long 
 residence in the country as a merchant, is taken into account ; but even admitting such ignorance on his part it 
 cannot be adnitted that Mr. Callsen, to whom he came recommended for assistance in this business, should fail 
 
296 
 
 to acquaint him with the formalities he had to fill in order to carry his goods to the point of their final destination. 
 I have not lost sight of the fact that the United States Minister, as well as the Commercial Agent, say that 
 Morell issued the documents which authorized the cargo of Henry, that the latter paid a hundred dollars for the 
 issue of such documents, and that after the death of Henry, Morell sent an employee, in his confidence, for the 
 purpose of recovering those said documents, which highly compromised him. 
 
 "I have already had the honor to state, that it in no way appears that any employee was dispatched for the 
 purpose of recovering such documents ; but even admitting for a moment that it had been so, how explain, then, 
 that Mr. Henry should present himself to the sub-receiver of rents of the State in Zaragoza, soliciting of this 
 employee the issue of documents to authorize the transit of his cargo through the State of Coahuila, ? What ne- 
 cessity had he of those documents, if the Administrator Morell had issued them to him, and not only that, but 
 collecting a hundred dollars for them? The pretension of Henry, his insistence that the sub-receiver should 
 issue him the documents, offering to pay him what they were worth, is it not proving that he did not carry such 
 documents? — and proved as this is, what were the documents that Morell tred to recover, sending therefor an 
 employee in his confidence as soon as he knew of the death of Henry ? Very naturally, there results this con- 
 clusion : Henry imported and took into the interior, as far as Zaragoza, clandestinely, the goods he carried ; 
 there he doubtless comprehended that, traveling as he was, with carts drawn by oxen, the progress of which is 
 very slow, it was almost impossible that he would escape being reached on the road by some section of employees, 
 either of this custom-house or of the counter-guard, and necessarily, he tried to procure, at all cost, documents to 
 authorize his goods, at least until he could get out of the State, or get means of more rapid transportation. 
 There is, then, nothing appearing in the legal paper that supplies the sUghtest proof that the goods of Henry 
 had been legally imported, or even introduced into this town. The communications of Messrs. Conrado Perea, 
 Francisco Mondragon, Jose M. Gonzales and Jesus Villareal, all neighbors of standing of this village, throw no 
 light upon this ; and, respecting the two first, I must note the circumstance that the position occupied by their 
 respective business houses puts them in a position to see everything coming from the margin of the- river to the 
 office, and, with more reason, that which, by its volume, is transported in carts. 
 
 " But there is still more : Sr. Perea, in his communication, dated December 17th, says, that on Saturday. 
 August loth, in the afternoon, precisely ou the date indicated by the Commercial A^ent as the day on which the 
 importation of Henry's goods took place, he paid to the latter an order proceeding from the house of -Eiojas and 
 Canales, to the value of $1,730, and adds, that he did not see either carts or merchandise introduced by Mr. 
 Henry, and he is almost certain that the said gentleman never presented any goods at this custom-house, for the 
 reason that he has never observed any cargo in this place which was said to belong to him, and it must be borne 
 in mind that Sr. Conrado Perea is the agent in this village of Messrs. Gros & Callsen. Well, now, if the goods 
 of Mr. Henry were imported to this place on the afternoon of August loth, at the hours in which dispatch was stiU 
 made at the office, according as the Commercial Agent states, how could such an operation have passed vmperceiyed 
 by Sr. Perea, it being that same afternoon that he paid Henry the orders of Messrs. Gross & Callsen and Riojas 
 & Canales? Mr. Perea, being as he is, agent in this place of the former of said houses, how explain that Mr. Call- 
 sen should neglect to recommend Perea to assist Henry in the arrangement of the business relative to the im- 
 portation, and how is it that Henry, receiving from Perea precisely on that day, the value of the orders of which 
 he was bearer, made no mention to him of the cargo he was bringing, which in those moments ought to be pass- 
 ing to that place ? In the communication to which I refer to, no mention whatever of this is made ; on |the con- 
 trary, Sr. Perea says he is sure that Henry has never presented any goods at that custom-house. Sr. Francisco 
 Mondragon, in his communication of December nth, says that he does not know, nor does it appear to him, 
 that Mr. Walter Henry introduced any goods into this place on the afternoon of August loth, for their revision 
 at the custom-house ; that he did not know Mr. Henry, and adds : ' Up to the present time I have no suspicion 
 whatever that the Administrator and employees of the custom-house have celebrated any arrangement to 
 defraud the duties of this custom-house.' I have already had the honor to call to the notice of that department 
 that Messrs. Mondragon & Perea have their respective commercial establishments, situated in such a way that 
 they cannot but see anything coming to the custom-house from the margin of the river. 
 
 Sr. Jose Maria Gonzalez, in his communication dated December 21st, says : that he knows nothing, nor did 
 anything come to his knowledge respecting the goods brought by Mr. Henry, his statement being the more not- 
 able, as Sr. Gouzalez was the President of the municipal corporation in the year last past, and in the case that 
 Mr. Henry's goods had been imported he would have known it immediately, for the carts which pass to this 
 villiage, loaded from Paso del Aguila, pay to the muncipaUty a duty of five reales for each one, without there ex- 
 isting any evidence that the said payment took place in anything connected with Mr. Henry, on the date referred 
 to by the Commercial Agent. Sr. Jesus Villareal, an honored citizen of this village, manifests an equal ignorance 
 respecting the affairs relative to Mr. Henry. In conclusion, all the persons I have appHed to in search of data, 
 which might in some way contribute to the clearing up if the truth, reply that Mr. Henry did not make his impor- 
 
297 
 
 tation through this village, and that the news of the death of the latter came to his knowledge by public report, 
 and by what the Commercial Agent himself said on the unfortunate event ; but, there are documents and declar- 
 ations in the legal paper, that make it manifest that Henry neither imported his goods legally nor passed them 
 through this village, nor carried with him any document to accredit that those same goods had been introduced 
 and taken into the interior, subject to the provisions of the law in the matter, the charges remaining consequently 
 destroyed of peculation and complicity m the murder of Mr. Henry, which is thrown upon the employees of this 
 custom-house by the United States Minister resident in Mexico, and by the Commercial Agent of the same 
 Republic in this village. 
 
 " But the Minister, in his note addressed to the Department of Foreign Affairs, dated October 7th, sa.ys: that 
 through a confidencial source, and worthy of all credit, a more complete proof had been received by the American 
 authorities of the evil proceeding of the employees of this custom-house, which proof consists in the confession of 
 the Administrator Morell of having received from Henry the amount of the duties, and his attempt to arrange 
 this affair with the Commercial Agent, on the basis of a return of a part of those duties being made by Morell, 
 remaining with the rest, and with the goods, declaring them contraband. The confidential source, and worthy of 
 all credit to which the United States Minister refers in the* said note, is, as I am informed, Sr. Raimundo Na- 
 varro, a merchant established in Laredo (Texas). With the object of properly clearing up this point, I addressed 
 to the Administrator Morell, dated December 7th, the communication which appears on leaves 114 of this legal 
 paper, who replied with one of the same date, received the 9th, and which appears on leaves 1 23. In it Morell 
 says : ' that he does not comprehend how the Commercial Agent has been so hasty in saying things that have 
 never passed, for, if he has confessed that he received the duties on the goods of the deceased, Walter Henry, it 
 is to be supposed that that person has his name, and that consequently he would like the Commercial Agent to 
 say who he is, in order to thus clear up that doubt.' In fact, no one, however stupid he may be supposed, makes 
 free and full confession of a crime, without his being convicted of having committed it, with proofs that leave no 
 room for the least doubt. Mr. Morell explains in continuation the participation of Mr. Raimuno Navarro in the 
 affair, and says as follows : respecting my attempting to make any arrangement with him (the Commercial Agent), 
 by means of any person representing me, it is a falsehood, rare for its magnitude ; in my conception, the Com- 
 mercial Agent ought to indicate pointedly who those persons are, who had to do with that subject, in order to 
 come promptly to the end of it. The Commercial Agent also says that Sr. Raimundo Navarro, merchant of 
 Laredo (Texas), tried to celebrate an arrangement with him; of this, I only know that Sr. Navarro was, one day, 
 with the Commercial Agent, in the morning, and then Sr. Navarro went to my house in the night of 
 the same day, and told me that he had spoken with Mr. Schuchartt respecting the affairs of the deceased Henry, 
 and he wished officiously to enter into arrangements with the said Schuchartt. On learning this, I disapproved 
 it, and told him seriously that he had said things that I would not do or say myself, having had no participation 
 in the importation of the goods of Mr. Henry. By a happy casualty Mr. Raimundo Navarro arrived in this 
 village in those moments, and as soon as I knew of his arrival I addressed him a communication dated December 
 i6th, which appears on leaves 129 of the legal paper, to which he replied with date the 17th, received on the 20th, 
 which is found on leaves 136. In it Sr. Navarro says, that in fact he spoke with the Commercial Agent on the 
 unfortunate event of Mr. Henry, whom he did not know personally, and respecting whom, he only knows that he 
 was assassinated at a point called ' Puerto de las Codornices,' on the road from Zaragoza to San Juan de Sabino, a 
 thing that came to his knowledge by public report, and by the conversation he had with the Commercial Agent, 
 and adds 'that it is beyond measure strange to him, the matter in reference to his having been an intermediary to 
 the United States Commercial Agent to arrange the said affair, for it was absoluteiy false that he had approached 
 the said Commercial Agent with the object of celebrating arrangements in relation to the Henry affair, as well 
 as that he had any commission for such arrangements, nor much less any authorization of Morell that could give 
 him the character of an intermediary in the affair. Sr. Navarro, in the said communication, does not enter into 
 particulars on the conversation he had with the Commercial Agent, nor does Morell detail either what passed in 
 his interview with Sr. Navarro, Umiting himself to saying that the latter stated to him that he wished officiously to 
 enter into arrangements with Mr. Schuchartt, a thing which Navarro does not notice, rather on the contrary, he 
 denies having pretended to make arrangements with the Commercial Agent, and much less with authorization 
 and by commission of Morell. 
 
 " The disagreement noted in the statements on this point by Messrs. Navarro and Morrell in their respective 
 communications would give room for some suspicion as to whether Morell had in fact any arrangements with Mr. 
 Henry for the importation of the goods; but outside of these circumstances, which cause some slight shade of a 
 doubt to be harbored, there is nothing in the legal paper that can raise a suspicion that it had been so, for it 
 would be absurd to suppose that Morell would have denounced himself, availing himself of the intervention of a 
 friend precisely before the Commercial Agent, who was his accuser and his personal enemy. Perhaps a wrong 
 interpretation of the events springing from the conversation which the Commercial Agent had with Sr. Navarro, 
 
 38 
 
298 
 
 and perhaps also the terms in which the Agent presented the question, and his manner of estimating the facts 
 caused Mr. Navarro to be inclined to intervene officially to save Morell the mortifications and disgusts which 
 enter always into affairs of this kind, but in this case can the imprudent officiousness of a friend be admitted as a 
 plain proof^ when from the investigation instituted it is proved that Henry did not effect the importation legally, 
 nor carry the documents with which he ought to cover his goods. That department will estimate this fact as it 
 may deem just. 
 
 "The United States Minister, in his so often-cited note of October 7th, says: 'That he has instructions 
 from his Government to renew the demand already made, and that a scrupulous investigation should be carried 
 into effi^t, to discover and rigorously punish the guilty ones in this complex crime, and to say that this case of 
 outrage and murder is considered by his Government as an important factor in the problem, on the capacity of 
 Mexico to protect life, and enforce the laws on its respective frontiers. It is evident that the Mexican Govern- 
 ment, for its own honor and for the decorum of the Republic, has the greatest interest, that the crimes should be 
 severely punished both on the frontier and m the rest of the country, and I do not doubt that the tribunals to 
 which the laws entrust the knowledge of this class of affairs will fulfill strictly their duty, whenever the true authors 
 of this crime are discovered; but as a Mexican, and employee of the Government, it may be permitted me to 
 manifest my humble judgment on the final part of the note^in point, of the United States Minister. The perpe- 
 tration of crimes in the neighboring State of Texas, as horrible, or more so, than that which justly calls the atten- 
 tion, of the United States Government, is of frequent occurrence. Many of these crimes have remained unpun- 
 ished, either because it has not been possible to apprehend the delinquents, or because the tribunals have not had 
 sufficient proof on which to found a condemnatory sentence ; not a few times have Mexicans been the victims of 
 those crimes, who, however obscure and humble they may be supposed, were men and citizens of the Republic^ 
 and it would occur to no one to deduce from this the incapacity of that Government to protect Ufe and enforce 
 the law in its respective frontier. To punish a crime with all the rigor of the law, it is not sufficient to denounce 
 it and indicate the authors of it; it is necessary to convict them with proofs that leave no doubt of their perpe-. 
 tration, it being the part of the judge to estimate the value of these proofs, much stress being due to the circum- 
 stances touching the accuser, in order to estimate the degree of veracity of the accusation. As a consequence of 
 the state of advancement to which modern society has arrived, a greater respect for the liberty and life of man 
 has been attained, and the appUcation of the penalties which the law indicates for the repression of crime is 
 not possible without society being convinced that the punishment applied bears the impress and seal of the strict- 
 est justice. 
 
 " From the evidences found in the legal paper I have the honor to remit, there appeared nothing that can 
 be estimated as a proof of the guilt of the Administrator Morell, or any other employee, in the double crime of 
 peculation and murder which is thrown upon them by the United States Commercial Agent ; what does appear 
 is the enmity which the said agent professes towards Morell ; it appears, for there are no proofs to the contrary, 
 that the news Mr. Morell had of the passage of the goods, and of the death of Mr. Henry, was given him first by 
 the said Commercial Agent on the afternoon on which the latter presented himself at the custom-house in quest 
 of the data he believed to exist there, on the operation made by Henry ; and, as a consequence of this news, 
 Morell acted as he ought, by despatching a section of the revenue guard with orders to apprehend the goods that 
 had been introduced in contraband; and I say, in contraband, because there is not a single proof that Henry paid 
 the duties, as weU as there is none that he bore with him the documents, which, as it is said, he tried to possess: 
 himself of by committing a murder ; quite the contrary, the proofs are, that no such documents existed, for Henry 
 tried to provide himself with them in Zaragoza, without stopping at the price, as is very distinctly stated by the 
 sub-receiver of rents of the State of Chihuahua, resident in Zaragoza, in his communication, I have referred to a 
 statement that is confirmed by the Report rendered by the local Judge of the said village. 
 
 " But, it will be said, the death of Mr. Henry is a fact which admits of no doubt. The fact, unfortunately, 
 is true, but to explain it there is no necessity, in my conception, of going in quest of the authors of that crime 
 precisely where they could least be found, and where only the hatred professed by the Commercial Agent towards 
 the Administrator Morell, the causes for which it is not for me to investigate, could have found them. Criminals 
 abound, unfortunately, in this frontier. They pass every day from the State of Texas to the territory of the Re- 
 public, individuals who, either fleeing from the American Courts, or with the object of stealing cattle to sell thenr 
 in Texas, take refuge, or Uve for a longer or shorter period of time in the Mexican towns near the margin of the 
 river. Henry stopped for three or four days in the streets of one of those towns (Zaragoza) ; he made no secret 
 that he carried funds with him ; he presented himself, offering whatever was asked for the documents he sohcited; 
 the cartmen themselves who carried the goods, could not have been ignorant of the circumstance that he carried, 
 funds ; besides,, in the small towns, any unknown person attracts attention, particularly if he is a foreigner, andf 
 travels with a team, as Henry did. Would it be venturesome to suppose that the assassins went out from the- 
 same town to post themselves in a certain place to rob him? Can the cartmen prove that they did not see or 
 
299 
 
 know any one of the authors of this crime, if perchance it be proved that it was not perpertated with their coii- 
 nivance, and they had no part in it ? I have been informed by D. Vicente Cardenas, that three or four days 
 after the murder of Mr. Henry was known in this village, that is, the 24th or 25th of August, the event was spoken 
 of in a reunion of persons, and that one of them, whom he does not know, said, that on the day before Henry 
 started on his way towards San Juan de Sabinas, two men were seen to leave Zaragoza, one of them mounted on 
 a greyish horse, and the other on a dark one ; that some days after one of these same men was seen buying sheep 
 near Zaragoza, the said Cardenas recollecting to have heard one of them calling the other by the name of Mesa. 
 Finally, the civil Judge of this village, in speaking to me a few days ago on the escape of Gibson, he stated to me 
 that he was exceedingly sorry for this event, because he had suspicions of the participation of compUcity of the 
 said Henry Gibson, in the murder of Henry, besides the causes for which he had been arrested. All this was 
 tended, and still tends in my humble opinion to strengthen the proofs that the employees of this office are not 
 guilty of the crimes of which they are accused by the United States Commercial Agent, it bemg equally proved 
 that Mr. Henry introduced his goods in contraband, without any arrangements with the Administrator mediating 
 in such operation, it being due to repute his death as an isolated crime, in which the employees have had no 
 part. 
 
 " On the examination of the trunks in which Mr. Henry carried his baggage being made by the civil judge 
 of this village, there were found, among other papers of little importance, some documents which come to throw 
 a great deal of light on this affair. The first of the documents I refer to is a letter from D. Daniel Milmo, a 
 merchant of Monterey Laredo, dated July 22d, 1878, in reply to another which Mr. Henry addressed to him with 
 date of July 5th of the same year ; in this Henry asks if he could pass some goods through the Laredo custom- 
 house with discount of duties ; the reply being given him that no business of such a nature could, be done through 
 that custom-house. The letter from Mr. Milmo manifestly shows that Henry never intended to make his im- 
 portation legally ; quite to the contrary, he always had the design of defrauding the duties, although it were in 
 part. The second of the documents I refer to is the permit, dated August loth, which was issued by the custom- 
 house of Paso del Aguila to Mr. Henry, for him to make the exportation. Two notable circumstances consist in 
 this document ; first, that it was issued for the exportation of fifty packages, and not forty-six, as the Commercial 
 Agent states ; second, its^ having been found among the papers of Mr. Henry. The export permits issued by the 
 custom-house of Paso del Aguila, excepting those for the transit of beasts and carriages, which remain in the 
 possession of the parties interested to be presented on their return, are collected by an employee of that custom- 
 house, on the passage of the goods, by the ford established opposite this village. Well, now, if, as it is said, the 
 goods belonging to Mr. Henry passed in one of the boats doing' the river trade, how is it that he kept the per- 
 mit in his possession, and it was not collected by the employee of that custom-house, as is done in all cases of 
 exportation of goods ? The proofs, then, abound, that Mr. Henry introduced the effects he carried, in contra- 
 band, and therefore, in my judgment, action should be taken respecting them, according to the provisions of 
 the tariff in force, saving the better opinion of that Department. 
 
 " From the evidences bearing in the legal paper, which I have the honor to remit, it appears that the Alcalde 
 of Zaragoza, auctioned a part of Henry's goods and disposed of the proceeds, as he says, to cover the expenses 
 he had to disburse for the burial of the body and in the transportation and custody of the cargo ; expenses which 
 that authority pretends to justify by the documents found on leaves 138, 139, 140, 141, 142, 143 and 144. The 
 District Judge to whom the law commends the cognizance of this afi'air, will estimate the conduct of the Alcalde 
 of Zaragoza as it may esteem in justice, and that Department will dispose what it may judge proper, in view of 
 the documents to which I refer. 
 
 " In conclusion, it is necessary for me to further call the attention of that Department to some facts which, 
 as I see them, have the highest significance in treating of the difficult and complicated affairs of this frontier, 
 which, not unfrequently, take upon themselves an international character, embarrassing the relations between 
 one and the other Republic. PubHc report unanimously accuses the United States Commercial Agent in this 
 village of being the constant promoter of disturbances and complications with the North American authorities on 
 the margin of the Bravo. His passionate reports, his special manner of narrating the events, commenting upon 
 and disfiguring them to suit himself, has already produced most bitter fruits, for nothing is sufficient for him to 
 satisfy the hate he professes towards the Mexicans, and everything related to Mexico. He was the instigator of 
 the invasion of General MacKenzie, in May, 1874 ; he was equally so of those which, in the beginning of the 
 year last past, the same General and Colonel Shapter, carried into effect, and, in short, he lets no means escape 
 him of making the relations difficult between the two countries. There reports, which were given me by persons 
 of the highest standing in this town, have been confirmed and strengthened by various persons in Paso del Aguila, 
 American citizens, whose statement could not be suspected. 
 
 " Such conduct on the part of one who is invested with official functions, is the least calculated to lead to 
 a just estimate of the value of events, which, in any way, are connected with the relations between both coun- 
 
300 
 
 tries. In order to put he right value upon those same facts, to establish them at what they really are, a justice 
 and impartiahty are needed, proof against everything, a very upright judgment, and an exquisite criterion to 
 not leave unperceived any circumstance, however insignificant it may appear, and to estimate them at their real 
 value, for only thus can he be satisfied, of having fulfilled his mission in truth and in conscience. Hate is a bad 
 adviser, and the Commercial Agent listens only to the voice of hate in treating of question having any relation 
 with Mexico. 
 
 " In effecting the investigation which that department was pleased to order me to make, I have subjected 
 myself exactly to the instructions that were communicated to me; I have proceeded with loyalty and good faith, 
 omitting no means whatever that could lead me to the discovery of the truth, endeavoring to deduce and to bring 
 it out from the proofs and evidences that appear in the legal paper ; it concerns that department to rectify 
 wherein I may have been mistaken, and to decide as it may esteem in justice, in presence of the said proofs, cor- 
 recting what, in a rough style, I have had the honor to set forth in this report. 
 
 ■' Liberty and the Constitution. Piedras Negras, Jan. 15th, 1879. 
 
 "M. Sevilla." 
 
 " To the Secretary of the Finances and Public Credit, Mexico. 
 
 d. Considerations Resulting from the Preceding Facts and Documents. 
 
 1457. The preceding report demonstrates, with aU clearness, the complete inaccuracy of the accusations 
 made by the United States Consular Agent at Piedras Negras, against the employees of that custom-house, for 
 the crimes of peculation and complicity in the murder of Walter Henry, inasmuch as no evidence whatever ap- 
 pears that the goods were imported through it, not having passed either through the custom-house or even the 
 town of Piedra Negras, neither on August loth (the date on which the United States Consular Agent in that 
 town stated they had been dispatched,) nor on the days immediately before or after that date. It appears, also, 
 that the persons on whose testimony the United States Consular Agent rehes, to formulate the charges against 
 the employees of that custom-house, have either completely denied having ever made any accusations against 
 said employees, or have stated that they have no proof or suspicion against them, or have Hmited themselves to 
 saying that they have vague suspicions of the compUcity of some of the employees, without founding them upon 
 any fact or proof whatever. 
 
 1458. It is to be noted that the United States Consular Agent in Piedras Negras, author of the accusations 
 against the employees of that custom-house, did not make any move to furnish the Inspector, Sevilla, with the 
 proofs he might have on which to formulate those accusations, when the latter asked him for them, for the pur- 
 pose of clearing up the facts. 
 
 1459. It would be jiecessary to repeat here all the preceding report, in itself sufficiently extensive, to se- 
 forth all the proofs and all the incidents which convince, in the most absolute manner, that the employees of the 
 custom-house of Piedras Negras are innocent of the crimes that have been attributed to them by the United 
 States Consular Agent in that place. It is sufficient only to say, in concluding this subject, that those accusa- 
 tions have proved to be totally unfounded, calumnious, and even unlikely, in view of the circumstances of the 
 case, as stated in detail in the preinserted report of the Inspector, SeviUa. 
 
 1460. It appears from that document, that there is foundation for believing that the murder of Walter Henry 
 has been perpetrated by citizens of the United States on Mexican territory, to possess themselves of the money 
 that Henry had taken out of Piedras Negras, and which, it was generally known, he carried with him. It is 
 seen, then, to what the charge is reduced, which was formulated against the employees of Piedras Negras, and 
 against security in Mexico, on account of the murder of the United States citizen, Walter Henry. 
 
 1461. The five special cases which the Report thought proper to insert, in proof of its assertions respecting 
 the lack of security in Mexico, and the dangers persons are exposed to who come to trade with this country — 
 and which, it is supposed, are the most notable of later years, to produce the effect indicated — once analyzed, 
 and, the inaccurate reports furnished respecting them, rectified, they lose completely the character in which they 
 are presented, for they remain reduced to the category of common facts, frequent in other countries, and in which 
 no irreparable damage has followed to the persons presented as victims, with the exception of Sr. Walter Henry, 
 
 1457. Information demonstrating the inexactitude of the accusations against the Consular Agent at Piedras Negras. 
 
 1458. The United States Consular Agent did not furnish the proofs asked for by the Inspector Sevilla. 
 
 1459. The accusations made by the United States Consular Agent proved to be totally unfounded. 
 
 1460. There is ground for believing that the murder of Mr. Henry was perpetrated by United States citizens. 
 
 1461. The cases stated by the Eeport do not prove that there is any greater insecurity in Mexico than in other coun- 
 tries. 
 
301 
 
 respecting whom there is reason to believe, he was assassinated by United States citizens. If this results from 
 the analysis of those cases, it will be easy to comprehend the force which ought to be given to the general asser- 
 tions of the Report, respecting the insecurity and the dangers to which persons living in Mexico are exposed. 
 
 8. SUMMARY OF THE FACTS IN RELATION TO SECURITY, FULFILLMENT OF LAW AND PRESERVATION OF ORDER 
 
 IN MEXICO. 
 
 1462. From what has been stated up to this point respecting public security, fulfillment of law and preserva- 
 tion of order in Mexico, the following facts appear to be demonstrated : 
 
 I St. That, although the Report presents Mexico as a country in which there is no security for life or prop- 
 erty, an impartial observer can find, in the very facts mentioned in the Report, evidences that security is 
 enjoyed. 
 
 2d. That the Report begins by acknowledging that there is security in this city, it gives to understand that 
 there is also, in the other principal towns of the country, and considers that the insecurity exists in the roads. 
 
 3d. That the facts the Report mentions, to demonstrate the insecurity on the roads, do not sufficiently 
 justify his assertion, inasmuch as they are isolated events, from which a general consequence cannot be deduced, 
 for from the fact that some crimes have been committed, it is not inferred that they are always committed, and 
 still less, that every one that travels the roads cannot be free from them. 
 
 4th. That the same example of assault, suffered by the Consul-General of Belgium to the United States, in 
 his recent journey to Mexico which the Report presents, as a proof of the insecurity on the roads, demonstrates 
 the little importance given to that fact by the victim of the assault and his Government, inasmuch, as after it had 
 occurred, the Belgian Government has taken the necessary steps to re-establish its official relations with Mexico. 
 
 5th. That if there were in Mexico the insecurity the Report supposes, the persons most exposed to its con- 
 sequences would be the subjects of nations that have made war upon it at various periods during those wars, and 
 immediately after them, and that, far from those subjects having suffered special injuries, to persons or property, 
 Mexico presents, in this respect, a notable example of magnanimity and moderation. 
 
 6th. That, notwithstanding the prolonged and bloody wars Mexico has sustained with Spain and with 
 France, neither the Spanish nor the French subjects have suffered especially during them, but, on the contrary, 
 they have been able to remain in the country without having diplomatic representatives, for long periods of time, 
 and have proceeded occupying themselves in their business, increasing considerably their commerce, notwith- 
 standing those circumstances, and, in some cases, in a greater proportion than commerce has increased with the 
 United States. 
 
 7th. That if there were in Mexico the insecurity the Report supposes, the first victims of it would be the 
 foreigners who have come to propagate the Protestant religion, for they have touched upon the most delicate fibre 
 in a people dominated, during various centuries, by religious fanaticism, and that, in spite of this, the Protestant 
 missionaries that have come to Mexico, live securely in the cities, villages, and country, and travel over the roads, 
 preaching their doctrines, and make truly notable progress in their religious popaganda. 
 
 8th. That the high rate of mercantile exchange between this capital and the other towns of the country, 
 which the Report attributes to the insecurity of the roads, is due to the great distances and difficulty of commu- 
 nication on the one hand and on the other, and principally to the necessities of commerce, which here, as in 
 other nations, always rule the operations of commerce. 
 
 gth. That what necessity there may be in Mexico is not, nor has been, an inseparable obstacle to its mate- 
 rial progress, inasmuch as] the country has progressed, though not as rapidly as is to be desired, during the 
 periods of greatest war and revolution, and which might be considered as periods of the greatest in- 
 security. 
 
 loth That the Report itself recognizes this fact upon assuring that the Spaniards and Germans progress in 
 the countiy; that if there are some foreigners engaged in mercantile pursuits who progress, it cannot be com- 
 
 1462 Summary of facts in relation to insecurity, fulfillment of law and preservation of order in Mexico. 
 
802 
 
 prehended why the citizens of the United States would not progress equally as well, except in the case 
 of considering them inferior, mercantilely speaking, to foreigners of other nationalities, which is un- 
 tenable. 
 
 « 
 
 nth. That respecting the Germans estabUshed in Mexico, there is the special circumstance that their gov- 
 ernment has never presented diplomatic claims in favor of them, contrary to which some other governments have 
 done, and that probably to that circumstance is owing, in a large measure, the increase that has attended Ger- 
 man trade in Mexico. 
 
 1 2th. That there are examples of various foreign enterprises, of the principal ones of the country, which have 
 been established and have prospered in spite of the revolutions, some of which, in certain cases, have been fa- 
 vored by those revolutions, mention being made principally of the Mexico and Vera Cruz railway, the general 
 stage line and the Mining Company of Real del Monte, which practically demonstrates that the wars and revo- 
 lutions suffered in Mexico are not of such a nature that they destroy or make impossible eyery foreign enterprise 
 in the country. 
 
 13th. That other nations, and among them the United States, have had to sustain wars and revolutions as 
 well as Mexico, and that in spite of them they have been able to progress in an astonishing manner, for those 
 wars are many times indispensable to remove obstacles opposed to the material progress of a nation, which other- 
 wise cannot be overcome. 
 
 14. That one of the most efficacious" means of estabUshing the most complete security in Mexico, would be 
 the immigration of foreign capital to this country, for it would give honest and lucrative occupation to many 
 of its inhabitants, who, for reasons expressed elsewhere in detail, do not now find it, and because every 
 one being busy in useful and lucrative enterprises, every motive and pretext for insecurity would cease. 
 
 iSth. That in other parts, and even in nations that figure in the vanguard of civilization, among which are 
 comprised the United States, crimes are committed still more horrible than the worst committed in Mexico, and 
 from the fact that horrible or frequent crimes are committed in a country, it is deduced that there is no security 
 in it, it must be agreed that if there is no security in Mexico there is neither any in the United States, in France, 
 or in England, or in any other civilized nation. 
 
 1 6th. That the complaint of the Report against Mexico because it has not agreed by treaty with the United 
 States, to exempt United States citizens resident in the country from forced loans and extraordinary taxes, 
 lacks foundation from the inaccuracy of its basis, which consists in considering said loans and taxes uncon- 
 stitutional. 
 
 17th. That Article 29, of the Constitution, expressly authorizes the delegation of legislative powers to the 
 Executive, in abnormal circumstances, and that the exercise by the Executive of legislative powers has been had 
 recourse to in fact in other countries, as in the United States, in critical circumstances, and without constitutional 
 authorization for it, for above all, stands the necessity for self-preservation. 
 
 1 8th. That although in some cases the Supreme Court of Justice has granted relief against an extraordinary 
 tax decreed by the Executive in exercise of legislative powers, as the Report says, in others it has denied the 
 relief, founding itself on the provision of Article 29, of the Constitution ; that even though it should have granted 
 it in all cases, this could not derogate the laws in force, inasmuch as according to Article 102 of the Constitution, 
 the sentences of the Court in suits of relief, must be reduced to granting or denying the relief in the special cases 
 that are submitted to it, without making any general declaration respecting the law or act giving rise to it, still less 
 derogating any law. 
 
 rgth. That if Mexico should agree with the United States to exempt its citizens from forced loans, it would 
 be placing them, and all foreigners in general, resident in its territory, in' a better condition than the Mexicans, 
 which is indefensible in any civilized nation. 
 
 20th. That the United States Government sanctioned, during their last war with the Southern States, some 
 " Instruetions for the Regulation of the United States Armies in Campaigns" which authorizes the imposition 
 of the requisitions necessary for the support of the forces, and that the forced loans and extraordinary taxes de- 
 creed in Mexico in time of war have no other origin or object. 
 
 2ist. That the fourteen cases of attempts against the lives of United States, citizens, which, the, Report con 
 
303 
 
 siders to have occurred in Mexico in the space of three months, from June, 1873, to August, I874 ; besides that, 
 they would not be sufficent to demonstrate that insecurity was the normal state of Mexico, never were speci- 
 fied by the United States Representative, in spite of his having been urged to it by the Mexican Government. 
 
 22d. That, if in Mexico there have occurred fourteen attempts against the lives of United States citizens, 
 and whose authors were not punished immediately, a greater number of attempts against the lives of Mexican 
 citizens have occurred in the United States, without their authors having been punished either, not only in the 
 period of the thirteen months referred to, but also in the eight years, from 1871 to 1878. 
 
 23d. That, therefore, if by the number of attempts committed in a country against foreigners, without taking 
 into the circumstances of each case, the security prevaihng in it were to be judged, there would be larger foun- 
 dation to sustain that insecurity was greater in the United States than in Mexico. 
 
 24th. That the special cases the Report cites to justify its assertion that there is no security in Mexico, and 
 w'lich it is to be supposed are the most notable and conclusive that could be found, come to demonstate that 
 the persons supposed to be victims of some of these attempts have made a profit out of the political situation of 
 Mexico, and that the Government of the Republic has tried by everything on its part to do justice to the United 
 States citizens, and to repress the attempts committed against them, and to indemnify them for the injuries suf- 
 fered by the same. 
 
 25th. That in the case of Mr. Henry MuUer, which is the first cited in the Report, it appears that Mr. Mul- 
 ler came to Mexico twenty-five years ago, without capital ; that he has succeded in making a fortune, which is 
 estimated for the payment of taxes at $350,000, and that he occupies an important position in Chihuahua, owing 
 a part of his capital to business done with the Government. 
 
 26th. That the motive of the complaint which the Report presents respecting Mr. MuUer is, that the latter 
 refused to pay a tax decreed by the military chief of the State of Chihuahua, and fled from his house to avoid 
 paying it, and from the fear of suffering some evil by being considered affiUated with the conquered party ; that 
 he was captured by a subaltern of said chief, who only exacted from him the payment of the tax pending, which 
 does not appear to constitute a scandalous act that can be presented as an example of the insecurity that pre- 
 vails in Mexico. 
 
 27th. That the sum which Mr. MuUer came to this city to claim, for forced loans imposed on him in Chi- 
 huahua, which the Report calculates at $50,000, approximately, was, according to the testimony of the inter- 
 ested party himself, only $41,437 31, of which $555 06 were already paid; that $15,494 32 proceed from supplies 
 made to the revolutions of La Noria and Tuxtepec, the payment of which is not yet authorized by Congress ; 
 that $19,136 29 consist of credits against the State of Chihuahua, acknowledged and accepted by that State, 
 for which the Federal Government is not responsible, and $10,500 in a loan made voluntarily by Mr. MuUer, 
 together with five Mexican citizens, to General Naranjo, in Chihuahua, in April, 1877, of which sum $4,503 06 
 had been paid up to June 30th, 1877, and for the rest, general orders for payment had been given. 
 
 28th. That if the arrangement of the claims presented by Mr. MuUer has not been concluded, it has been 
 because he withdrew the vouchers of the same, and for the lack of legislative authorization to make fhe payment 
 of some of them. 
 
 29th. That the second case cited in the Report, that of the vessels " Dreadnaught " and "Montana," arrived 
 at Mazatlan in January and February, 1877, has not the character, either, which is given it, for the first consists 
 in that the vessel that was in view of Mazatlan, was put into that port by the Mexican gunboat " Democrata," 
 without its being known to a certainty whether it was at the petition of the captain or for fear that, being within 
 the territorial waters of Mexico, an attempt was being made to smuggle, for the investigation that was being made 
 on this point could not be concluded, because of the death of the Commander of the " Democrata," and although 
 the custom-house condemned thirty chests of tea and four of cinnamon to pay triple duties, this sentence was 
 revoked by the Federal Courts, which absolved the Captain from responsibility, and ordered his effects to be re- 
 turned to him. 
 
 ^oth That respecting the " Montana," she brought to Mazatlan 349 packages outside of her manifest, and 
 withont any consular document, which its Captain said were destined for Champerico and San Jose de Guate- 
 mala and the coasting or transit trade in Mexican ports not being authorized by Mexican laws, and the Captain 
 
304 
 
 of the vessel not being able to give security, that the goods would not be disembarked, the Administrator deter- 
 mined to store them in the custom-house until the vessel set sail, but the Captain of the " Montana " having 
 resisted this, the Administrator consigned the affair to the cognizance of the District Judge, who decided at last, 
 that the " Montana " had not incurred any responsibility by having brought said effects without being covered by 
 any document. 
 
 31st. That as soon as notice was had in this Department of what had occurred in Mazatlan with the paile- 
 bot " Montana," the return of the effects was ordered on February 8th, 1877, which could not take place 
 immediately on account of the interruption of the telegraphic line, and by the first telegram from this Depart- 
 ment on this subject having arrived erroneous. 
 
 32d. That with the object of preventing the repetition of similar acts, the Mexican Government modified 
 the fiscal laws of the country by the provisions of September 8th and December nth, 1877, and April i ith, 1878, 
 permitting in the most ample and liberal manner, that not only steamers but also sailing vessels could carry on 
 coasting and transit trade in Mexican ports without any requisite for this being required of them, which demon- 
 strates that the Mexican Government, far from placing obgtacles in the way of foreign commerce, does all it can 
 to grant it all the privileges compatible with its interests. 
 
 33d. That neither does the third case cited in the Report, that of the events occurred in Acapulcorin February, 
 1877, which comprises the damages claimed by Mr. Kastan and the imprisonment of Consul Sutter, appear 
 enough to demonstrate the insecurity in Mexico, inasmuch as the property which Mr. Kastan, considered to be 
 an active member of the party of General Diego Alvarez, in the State of Guerrero, and an associate of his, 
 alleges to have suffered damage, belonged, a short time before, to General Alvarez, who it was beUeved had 
 alienated them in semblance to Mr. Kastan in order to put it out of the way of the dangers he feared from the 
 political excitement of the moment, and that in spite of this the Mexican Government compromised itself to pay 
 $82,500, as indemnity for the injuries and damages claimed, and for the purchase of an estate that Mr. Kastan 
 could not easily enter into possession of 
 
 34th. That the imprisonment of Consul Sutter was owing, according to his own declaration, to the fact of his 
 having inflicted wounds on the head of a person inAcapulco, and notwithstanding this he was soon put at Uberty, 
 and the case was suspended. 
 
 35 th. That the United States Consuls having no diplomatic immunity, according to the treaties which bind 
 the two nations, having put Consul Sutter in .prison for a few days, in consequence of the wounds which he him- 
 self confesses to have inflicted on an individual in Acapulco, cannot be considered as an attempt nor as an 
 offense against the United States. 
 
 36th. That according to the principles of the law of nations, diplomatic claims ought not to be interposed, 
 except in extraordinary and truly grave cases, after having exhausted the resources which the laws of the country, 
 grant to foreigners and natives to sustain and defend their rights, or in case of denial of justice. 
 
 37 th. That notwithstanding the liberal character of the Mexican laws, issued since the independence, which 
 authorize foreigners to acquire real estate in the country, they have prohibited the acquisition of such estate in a 
 zone of 20 leagues on the frontiers, and five on the shores, and that according to these provisions the acquisition 
 made by Mr. Kastan of the " hacienda " of San Marcos, was not legitimate. 
 
 38th. That respecting the "hacienda" of San Marcos, it must be borne in mind that Mr. Kastan never 
 arrived at any quiet and pacific possession of it, for some of the inhabitants established on its territory, consider- 
 ing the lands they have been occupying as their own. 
 
 39th. That in spite of all the irregularities of the claims presented by Mr. Kastan, the Mexican Government 
 with the object of terminating them in a manner friendly towards the United States Government, celebrated a 
 contract with Mr. Kastan on September 4th, 1878, by virtue of which it bought of him the " hacienda " of San 
 Marcos, to divide it among those now populating it, and Mr. Kastan declared himself satisfied for all his claims 
 against Mexico by the sum of $82,500, the greater part of which has already been paid. 
 
 40th. That, therefore, no motive for censure appears against the Mexican Government for the events of 
 Acapulco, inasmuch as Mr. Kastan was indemnified in a manner satisfactory to him for the injuries of which he 
 
305 
 
 complained, and that the process instituted against Consul Sutter, for the wounds he inflicted on an individual in 
 Acapulco, was not carried to its termination, nor applied to him, therefore, the penalty to which he had made him- 
 self liable. 
 
 41st. That neither do the events which occurred in Matamoros in the latter part of 1876, which the Report 
 presents as the fourth case of insecurity in Mexico, constitute a reasonable foundation for accusation against this 
 country, in neither of the two incidents which the said events comprise, for, respecting the first of them, which 
 appears to be that of Mr. Sustendhal, it results that the latter is not an aged man, but a man in his prime; that, 
 for not havmg paid the tax imposed on him, he was apprehended and taken to the trenches, for there was the 
 armed force ; that there was then no firing going' on, and that, therefore, he was exposed to no danger, and that 
 he was set at liberty as soon as the United States Consul intervened in his favor. 
 
 « 
 
 42 d. That, respecting the claims of Messrs. Francisco Iturria Brothers and Frederick O'Boyle, it appears, 
 also, that they resisted paying a tax of a general character df creed by the Military Chief of the town of Mata- 
 moros, and that to compel the payment, they were dealt with according to the provisions established on imposing 
 the tax. 
 
 43d. That Messrs. Francisco Iturria Brothers and Frederick O'Boyle, presented their corresponding claims 
 before the Treasury Department, and did not furnish the necessary vouchers to enable a decision to be made re- 
 specting them. 
 
 44th. That the imposts decreed in Matamoros by the Military Chief of the place, which the Report presents 
 as an onerous exaction on the commerce of that port, came Jo be in reality lucrative operations for the merchants, 
 for they got a profit out of them of from 30 to 100 per cent. 
 
 45th. That notwithstanding that the loans imposed in Matamoros by the military authorities of that place, 
 served to oppose the revolution of Tuxtepec, on the triumph of the latter, the present government of the Repub- 
 lic has acknowledged all the amounts supplied in that city to the agents of the late government, and has 
 already paid considerable sums on account of said supplies, principally to United States citizens. 
 
 46th. That the fifth and last case presented by the Report, to demonstrate the insecurity which prevails in 
 Mexico, in reference to the murder of the United States citizen, Walter Henry, near Zaragoza, in the State of 
 Chihuahua, is unfortunately true, in that Walter Henry was assassinated, but it is altogether inacurate as regards 
 the charges of peculation and complicity in the murder formulated by the United States Consular Agent in Pied- 
 ras Negras, against the employees of that frontier custom-house. 
 
 47th. That from the most scrupulous investigations carried out respecting this incident by the Inspector, 
 Manuel Sevilla, by special commission of the Treasury Department, it appears that the foreign goods that Mr. 
 Henry carried with him, did not pass through the custom-house, nor through the city of Piedras Negras, it re- 
 maining, therefore, to be inferred that they were introduced clandestinely, and without the intervention or con- 
 nivance of the employees of that custom-house. 
 
 48th. That the same persons on whose testimony the United States Consular Agent in Piedras Negras 
 relied, to formulate his charges against the employees' of the custom-house, stated either that they had made those 
 charges, or that they did not believe them; and the only one who manifested to entertain any suspicions against 
 the employees, stated that he had no proof at all on which to found them. 
 
 49th. That there is a reasonable ground for suspicion that Mr. Walter Henry was assassinated, not by Mexi- 
 cans, but by United States citizens on Mexican territory, to avail themselves of the money he carried with him, 
 and which he took out of Piedras Negras. 
 
 50th. That, therefore, neither in the asseverations of a general character contained in the Report, respect- 
 ing insecurity in Mexico, nor in the five special cases presented by the latter to found the former, does there 
 appear any sufficient evidence to sustain them, and that, therefore, it is to be lamented that the United States 
 Representative should have given assent to the reports on which he based his conceptions, and, still more, that 
 he should have presented them in a form that must find a great echo in the public opinion of the civiUzed world, 
 and which cannot but contribute to strengthen and root the exaggerated ideas that are held abroad on the inse- 
 curity in Mexico, making difficult, consequently, the progress of the country, to the detriment of the United States 
 
 themselves. 
 
 39 
 
306 
 
 IV. TORPIDITY OF BUSINESS AND INCENTIVE TO CARRY ON CONTRABAND, BY REASON OF THE REVOLUTIONS. 
 
 1463. The Report states, in reference to this subject, what the consequences are of the revolutions that have 
 occurred in Mexico, enumerating among them the necessity the revolutionary chiefs are under to provide them- 
 selves with resources, and the exchange business which the latter enter into with the merchants of the ports and 
 frontier towns they occupy ; the increase that contraband takes by reason of this, the prejudicial consequences to 
 the revenue, and legitimate trade which result from this traffic, and the incentive which the high rates of the 
 port duty give to contraband, so that this part of the Report comes to be almost exclusively devoted to smug- 
 gling. 
 
 1464. To speak with order on this important subject, the following points will be here considered with due 
 separation : 
 
 1st. The contraband question in Mexico. 
 
 2d. Manner in which contraband effects commerce between Mexico and the United States. 
 
 3d. Summary of facts in reference to the contraband question in Mexico. 
 
 I. THE CONTRABAND QUESTION IN MEXICO. 
 
 1465. The grave and important question of contraband in Mexico, to which some references have already 
 been made in another part of this exposition (paragraphs 888, 889 and 890), is very complex. The Report says, 
 in reference to it, as follows : 
 
 " In order to give a still more exact idea of the evil commercial results which Mexico is suffering in conse- 
 quence of its revolutions, it becomes necessary to refer briefly to the last point mentioned, to wit : 3d, the 
 incentive and the facilities which revolution and diso.rder in business, give for carrying on contraband trade. 
 
 " One of the greatest necessities of a revolutionary chief is money, and one of the ways of providing him- 
 self with it, besides that of forced loans, is to gain possession of a port or a frontier town and negociate with the 
 merchants for funds, by means of the introduction of effects with a heavy discount of duty. It happens, also, 
 that in time of revolution, there supervenes a great interruption in the authority and vigilance of the Federal 
 Government over the custom-houses, and the employees in charge of them count upon better opportunities to 
 carry out contraband business with those merchants who are accustomed to practice it. The frequent occurrence 
 of civil disturbances in the country, disarranges in such a manner, the good administration of the custom-houses, 
 that the fulfillment of strict rules and the whole system of custom-house imposts is different, even m the intervals 
 in which peace reigns. The high rates of the tariff, occasioned partly by the bad state of the Treasury, is also 
 an incentive to smuggling. Probably no government in the world, in spite of the strictest vigilance, could avoid 
 this class of trade with a tariff containing the high imposts that are quoted in the preceding Ust. The result of 
 this is no other than what is natural to expect, contraband is carried to such an extreme on the frontier, and all 
 along the coast, that it almost makes the national Treasury bankrupt, and entirely unbalances commercial prices, 
 which are, on many articles, less than they are worth without paying duty, and even without estimating their first 
 cost. This fact has come to be so pubUc and notorious, that the Government has acknowledged it publicly, 
 and the merchants of legitimate trade have been forced to protest against it, asking the adoption of vigorous 
 measures to repress it, in such terms that they have come to threaten the Government to suspend their orders for 
 importations unless that illegal traffic is put an end to. 
 
 " The Minister of Finance, in an intendew he had on the 3d ultimo, with a commission of the Supreme 
 Court, which had applied to him for the payment of their salaries, made allusion ' to the scandalous contraband 
 which, besides ruining legitimate commerce, depressed the Treasury of its most important resources, saying that 
 this trade was carried on not only on the northern frontier, but also in some other points of the country.'" 
 
 1466. In order duly to examine this important subject, it becomes necessary to speak of the various aspects 
 the contraband question presents, the principal being the following : 
 
 A. Proportions contraband has assumed in Mexico. 
 
 B. Facilities Mexico affords for contraband. 
 
 C. Manner of carrying on contraband in Mexico. 
 
 D. Manner of remedying smuggling. 
 
 E. Difficulties which the reduction of import duties present. 
 
 1463. The Report considers the revolutions in Mexico as a cause of smuggling, and torpidity of business 
 
 1464. Points to be considered in relation to the contraband that is carried on in Mexico. 
 
 1465. Text of the observations of the Eeport on the contraband question in Mexico. 
 
 1466. The smuggling question considered under its various aspects. 
 
307 
 
 A. Proportions Contraband has Assumed in Mexico. 
 1407- The probable amount of smuggling in Mexico, and the statements respecting its existence and extent, 
 that have been made by the Government of the Republic, will here be spoken of. 
 
 a. Probable Amount of Smuggling in Mexico. 
 
 1468. The clandestine introduction of dutiable merchandise is effected in every country in the world, and 
 its greater or less amount depends upon the peculiar circumstances of each one. In Mexico this illegal trade 
 has assumed, in some periods and in some particular places, proportions that have placed the interest of legiti- 
 mate commerce and of the national funds in grave danger. Nevertheless its importance in time of peace has 
 been much exaggerated by the very merchants who have been injured by that fraudulent traffic; for although it 
 always has existed, its efifects have been noted in a serious manner, only when the country has been, by reason of 
 its political disturbances, unable to repress it, and it never has come to be a constant impediment to the develop- 
 ment of legal commerce. 
 
 1469. If smuggling really had in Mexico the proportions which the Report supposes, undoubtedly from 
 having given ear to the exaggerated ideas expressed on this point by some importer, it would not be possible for 
 legitimate commerce to have continued for a long time, and up to the present, to pursue its operations. Failures 
 would have been very frequent, and it would have been very difficult, if not impossible, to obtain credit in Europe 
 for Mexican mercantile enterprises ; whereas, on the contrary, the necessary capital has never failed for import- 
 ing the goods that can be consumed, precisely because European capitalists have, up to this time lost insignificant 
 sums of the credits opened for commercial enterprises. 
 
 1470. Our annual exportation amounts, on the average, to $28,000,000, the values being calculated ac- 
 cording to the prices in Mexican money that obtain in the country. In order to form as accurate an idea as 
 possible of the relation that exists between the importation of foreign goods and the extraction of national 
 products which serve to cover their amount, it is proper to take as a basis the detailed notice formed by the 
 Bureau of Adjustments of this Department of the exportation taken place during the fiscal year of 1877-8. 
 According to said notice the sum of the values of the articles exported was $28,757,474 22. 
 
 147 1. In the remission of our goods abroad a considerable sum is lost, principally from heavy depreciation 
 which silver has suffered, which in $28,757,474 22, to which the exportation of the last fiscal year amounted to, 
 it represents $20,487,705 29. On some other goods, such as dye-woods, some loss is also suffered. By this it 
 may be considered that the $28,757,474 22, the amount of the exportation, covers only $25,000,000 of the in- 
 voice value of foreign goods imported to Mexico. 
 
 1472. The import duties produced in the same year a little more than $12,000,000. By studying the picture 
 formed by the second official of the Bureau of Adjustment, of the proportion between the value of goods and 
 the duties on them, which important work was published in the Records of the Treasury, of September i6th, 
 1878, it appears that on an average those duties amount to 65 per cent., rather more than less, on the invoice 
 value ; these, consequently, amount to a matter of $18,500,000 00 
 
 If to this sum is added the sum of the invoice value of effects exempt from duty, 
 which, according to the notice lately formed by the same Bureau of Adjustments, 
 was 2,962,621 00 
 
 It results that the effects introduced legally amount to $2 1,462,62 1 00 
 
 1473. It is to be noticed, that the increase taken place in importation in the fiscal year last past, is certainly 
 due principally to the greater mercantile movement there generally is after the triumph of a revolution, and that 
 from this circumstance, probably, the notable difference arises between the results of importation during the last 
 year and those of the years preceding, which were only $8,549,824 on the average in each one of the years 
 elapsed from 1867 to 1877, and that consequently the importation of foreign goods falling in the present year 
 
 1467. The amount of contraband in Mexico will be spoken of and the statement made by the government respect- 
 ing it. 
 
 1468. Smnggling is carried on everywhere, and it is not as extensive in Mexico as the Report supposes. 
 
 1469. If coneraband were done on so large a scale legitimate commerce would not have been able to subsist 
 
 1470. Relation between the amount of export and import of foreign goods. 
 
 1471. Exportation was $28,575,474 33 in the year of 1877-8, which was able to pay for an importation of $35,000,000. 
 1473 The legal importation of goods in the year of 1877-8 can be estimated at $31,463,631. 
 
 1473 Possibility that in the present yeai the importation of foreign goods will decrease. 
 
308 
 
 to its normal amount, the value abroad of goods imported to Mexico should be much less even than the sum of 
 $21,462,621. 
 
 1474. It results, then, that there is remitted abroad at least a matter of $4,000,000 more than the amount of 
 foreign merchandise imported. This gave rise to very serious reflections. With very few exceptions, which only 
 comprise those countries whose production has increased by extraordinary causes with greater rapidity than the 
 importation of foreign goods, all nations import about the amount they export, Mexico is very far yet from being 
 able to be considered as one of those countries that obtain great advantages by reason of their greater exporta- 
 tion compared with the importation ; and the causes of the great difference noted ought consequently to be 
 diverse. 
 
 1475. It is known, that notwithstanding the heavy losses which some enterprises established in Mexico by 
 foreign capital have suffered, the amount of the fortunes that have been acquired here in a relatively short period 
 of time is much greater, and that of these a part have emigrated from the country. This has happened at all 
 times, and principally with mercantile enterprises, for numerous are the cases in which the founders of commer- 
 cial houses, and their successors, have retired in a few years to their respective countries with capital gained in 
 Mexico, transferring all their business and old dependents, ^jever to return, and it can be said, that until by means 
 of "laws which make it possible the working of our natural wealth on a great scale is faciUtated, that overplus of 
 capital which might be invested in lucrative enterprises in Mexico, will continue to be taken out without any direct 
 benefit to the nation. Nevertheless, during the last years it has been observed (and this is an indication which 
 causes the hope to be entertained that our sources of wealth may soon take their natural development), that the 
 emigration of capital has gradually diminished, until it has come to be insignificant compared with that of preced- 
 ing periods, and it can be assured that it represents the least part of the difference between exportation and 
 importation. 
 
 1476. It results from this, that the greater part of that difference, which, according to the data of the last 
 years, amounted at least to four millions, proceeds from the contraband carried on in Mexico, as in all countries, 
 even in those that have the greatest facility for the regular realization of their fiscal dues. On the other hand, 
 according to the reports which are as accurate as can be acquired on operations which, in many cases, remain 
 hidden, the total value of goods introduced clandestinely does not come to 15 per cent, on the total importation 
 of dutiable articles. This calculation has been made by respectable merchants, who can have no interest in un- 
 derrating the injuries caused by contraband. The sum of the invoice value of goods imported, either paying 
 duties or frustrating fiscal vigilance, is estimated at $22,000,000. Fifteen per cent, on this sum would amount to 
 $3,300,000, and the duties due and unreceived can be estimated a little more or less at the same sum, for smug- 
 gling is done principally in those articles which bear the highest rates. 
 
 b. Statement made by the Mexican Government Respecting the Existence and Extent of Smuggling. 
 
 1477. In reference to the extent to which contraband has obtained in Mexico, the Report refers to a con- 
 versation had by the Secretary of the Treasury September 3d, 1878, with a commission of the Supreme Court of 
 Justice, respecting the payment of the salaries of the same. This point having been touched upon in the Report, 
 it is thought proper to make an explication of what passed at that interview. 
 
 1478. The payment of the salaries of the magistrates of the Supreme Court of Justice, having been delayed 
 for some days, that tribunal determined to send a commission of two of its members, that they might be informed 
 by the Secretary of the Treasury respecting the cause of that delay. The two magistrates commissioned by the 
 Supreme Court, had a conference with the Secretary of the Treasury September 3d, 1878, in which they stated the 
 object of their commission. The Secretary of the Treasury stated the causes which had occasioned the delay in 
 the payment of the salaries of the Supreme Court of Justice, and the interview being terminated with this state- 
 ment, the commissioners gave account to the Supreme Court of the result of their commission, by means of a 
 report dated September 4th, 1878, which wbs pubUshed in "Za Libertad" of this capital, of the 5th of the same 
 month. That part of the statement of the magistrates, to which the Report addressed to Mr. Carlile Mason, 
 October 9th, 1878 refers to, is as follows: 
 
 1474. The dlfierence between the importation and exportation of Mexico cannot be the rapid increase of its produc- 
 tion. 
 
 1475. Emigration of capital gained in Mexico ynd gradual diminuiion of that emigration. 
 
 1476. The greater part of the difference between importation and exportation, mnst proceed from smuggling. 
 
 1477. Incident of the delay in the payment of the salaries of the Magistrates of the Supreme Court, to which the 
 Report refers. 
 
 1478. Report of the Magistrates respecting their interview with the, Secretary of the Treasury. 
 
309 
 
 ' In discharge of the commission which the Supreme Court of Justice was pleased to entrust to us, we yes- 
 terday afternoon approached the Minister of Finance, and stated to him, that whereas Art. 120 of the General 
 Constitution of the Republic says: 'The President of the Republic, the individuals of the Supreme Court of 
 Justice, the Deputies and other functionaries of the Federation, of popular nomination, shall receive a compensa- 
 tion for their services, which shall be decided by law, and paid by the Federal Treasury. This compensation is 
 not renunciable, and the law which increases or diminishes it cannot go into effect during the period in which a 
 functionary exercises his charge ;' and in copsideration that the month of August has passed, and the individuals 
 of the Supreme Court have not received the compensation which is accorded them by law, this respectable body 
 desired that the Minister of Finance would be pleased to tell them the reasons he had for not complying with 
 the provisions of the Constitution. 
 
 " The Minister replied that the Supreme Court ought to do him the justice to suppose that the failure of 
 payment was not occasioned by anything except a scarcity of funds in the National Treasury, which had not 
 permitted the payment of more than the first two weeks of August to the members of the JL,egislative body, and 
 something to the army, and, therefore, all the amount due the Executive had not been covered, and nothing of 
 that due judicial power. 
 
 " The Minister said that he would lay before the President all that the Commission had just communicated 
 to him, and that he was going to make an effort to cover the salaries of the first two weeks of August ; but he 
 could not but manifest that the extraordinary scarcity the treasury was suffering was from the following causes, 
 which it was not easy to destroy at once : First, that, as in the last months of the Administration of Sr. Lerdo, 
 the commerce of the Repubhc had refrained from sending orders to Europe, from the insecurity of the situation. 
 On the triumph of the Revolution of Tuxtepec, the past year, and peace being re-estabhshed, it had made truly 
 enormous orders, which had brought as a result a diminution in the demands the present year, for this reason 
 the fiscal receipts being less now than in the past year. The second cause was the season of the year, generally 
 bad for the pubhc finances ; and the third and principal cause was the scandalous contraband that was carried 
 on at the northern frontier, which, besides ruining legitimate commerce, deprived the Treasury of most import- 
 tant resources. That this was a grave evil, and that the efforts of one man could not remedy it, if they were not 
 seconded by the efforts of all the functionaries of the Federation and of the States. That while it endured it 
 was impossible to promptly meet the payments, dues, or to normalize • the operations pertaining to his ministry. 
 That we should so state to the Supreme Court, in order to disabuse its mind of any unfavorable impression it 
 may have had against him, by reason of this delay, which he felt for his own credit as in charge of th ■ Treas- 
 urer's office, and for the Administration in general. 
 
 "Such is substantally the result of the commission that we have discharged by enjoinder of this Supreme 
 Court, for whose confidence we are grateful. 
 
 " Mexico, Sept. 4th, 1878. " Ignacio Altamirano. 
 
 "Jose Maria Bautista." 
 
 " It is copy to which I certify. — Mexico, Sept. 4th, 1878. 
 
 " Enrique Landa, Secretary." 
 
 1479. Some inaccuracies having been found in the preceding report, this was rectified in the Diario Oficial 
 for September 5th, 1878, in the following terms: 
 
 " In the conference between the Secretary of the Treasury, and the Commissioners of the Court, he presented 
 three reasons, to explain the reduction in the income of the Treasury, which has caused the delay in the pay- 
 ments, and which reasons are well known. The fact is, that being as we are, in the bad season for the ports, in 
 which period importations always have diminished considerably, it is natural that the income should have 
 diminished in corresponding propor+ion. In the second place, he stated that in the last months of the adminis- 
 tration of Sr. Lerdo, the commerce of the Republic had refrained from sending orders to Europe, on account of 
 the insecurity of the situation; that the same commerce made large orders, on the triumph of the Plan of Tuxte- 
 pec, and peace being assured, and that, therefore, the goods now on hand in the warehouses of the merchants, 
 have occasioned a considerable reduction in orders, until the goods on hand are realized upon. In the third and 
 last place, he made allusion to the contraband, that has been introducing itself, not only along the northern fron- 
 tier but in other regions of the Republic. Respecting this last point, the Secretary of the "treasury was far from 
 giving the idea that he was the only person disposed to take measures against the development of smuggling, and 
 though neither do Messrs. Altamirano and Bautista say this, in their report. The Secretary of the Treasury 
 desires to state for greater perspicuity, that his thought, in that particular, is : that, whereas it is known that the 
 
 1479. Rectification of the Beport of the Magistrates of the Supreme Court, made in the Bimno Qfidal. 
 
310 
 
 great majority of society is injured by contraband, and is disposed to procure its extinction, the Executive hopes 
 that Congress, the Governors of the States,'the Judicial Power, &c., each one in its sphere, will help energetically 
 in so laudable a purpose, for the isolated efforts of that Department, nor those of the Governors, &c., would be 
 sufficiently efficacious for the object, for it is necessary, on this point, that every functionary and every good 
 citizen should join their efforts and direct them to the success of the said object." 
 
 1480. The Mexican Government has never denied that smuggling was carried on in the Republic, but, on the 
 contrary, has recognized this fact in its official documents. In fact, in the speech delivered by the President of 
 the United States of Mexico, September i6th, 1878, on opening the first period of sessions of the General Con- 
 gress, he made direct allusion to the spread of smuggling in Mexico, in the following terms : 
 
 "The beginning of the present fiscal year, by reason of the bad season in the ports, the large amount of 
 importations on hand from the previous year, and with some increase in contraband, which always had been done 
 in Mexico, and which no Government can entirely repress, has brought a decrease in the income of the Federal 
 Revenue, which has b£en the cause of some delay in the payments of the schedule pertaining to the months 
 transpired of the present year.'' 
 
 B. Facilities that Mexico *Presents for Smuggling. 
 
 1481. Everywhere, and even in nations best organized and governed, and where the import duties are low, 
 smuggUng is carried on. Mexico offers, unfortunately, special facilities for that traffic. The Report having 
 occupied itself, in a special manner, with the influence which the high rates of import duty and political disturb- 
 ances have on contraband carried on in Mexico, these two causes will be considered in a special manner, speak- 
 ing of the following points: 
 
 a. General facilities Mexico presents for contraband. 
 
 b. The high rates of duty as an incentive to contraband. 
 
 c. Influence of revolutions on contraband. 
 
 a. General Facilities Mexico presents for Contraband. 
 
 1482. The fact cannot be ignored that the situation of the Mexican RepubUc offers great faciUties for con- 
 traband. Its extensive and unpopulated costs, in which it is not easy to establish an effective vigilance ; its fron- 
 tiers also extensive and equally unpopulated, where the vigilance of the few fiscal employees disseminated in them 
 can be easily frustrated ; the immediate advantage which results to the towns where contraband is carried on of 
 being able to buy foreign goods at very low prices, when they have not the burden of import duties ; the incentive 
 of the great profits which the high rates of import duty collected in Mexico on some goods offer to smugglers ; 
 and the very revolutions and tumults which offer great opportunities, and frequently demoralize the employees, 
 and many other difficulties in the way of preventing it, are sufficient reasons why contraband has developed 
 greatly. 
 
 1483. When all these facilities are taken into account, it ought not to cause surprise that contraband has 
 assumed great proportions in Mexico. The consideration of the faciUty with which contraband can be done, deter- 
 mined the governments of Mexico to establish various restrictions for the interior commerce of foreign goods 
 with the object of being able to pursue the goods clandestinely introduced. This has caused, that Mexican cus- 
 tom-house legislation has generally had a restrictive character ; but, in spite of this, and often grave difficulties of 
 the Mexican revenue, which have been slightly sketched, the said legislation has been partially modified since 
 the year 1867, granting truly notable privileges to foreign commerce. In various paragraphs of this exposition, 
 some of these privileges have been set forth, many of which have been decreed overcoming obstacles and diffi- 
 culties of magnitude, and even with danger of occasioning grave disturbances. 
 
 1484. These very circumstances make it also more difficult, and to a certain point even dangerous, to make 
 modifications, especially of a radical character, in Mexican legislation respecting exterior commerce. Although 
 the present Administration has made some modifications of quotas, by virtue of the power granted to the Execu- 
 tive by the law of December 12th, 1872, it has not, however, believed itself authorized to make a radical reform 
 in the system of import duties, for considerations that will be made potent further on, and it has hmited itself up 
 to this time to all the data that may serve to work with the greatest certainty possible, and it has taken care, 
 meanwhile, that a more efficacious vigilance should be exercised to repress smuggling. 
 
 1480. Terms in which the President of the Republic spoke of contraband in his speech of September 16th, 1878 
 
 1481. Subject to be considered in speaking of the facilities which Mexico presents for contraband. 
 
 1482. The geographical situation of Mexico, and the lack of population, offer great facilities for contraband 
 
 1483. Necessity for the reason that fiscal legislation should not be as liberal as could be desired. 
 
 1484. Dangers and difficulties which radical reform of fiscal legislation presents in Mexico. 
 
311 
 
 b. The High Duties of Importation as an Incentive to Contraband. 
 
 1485. It cannot be denied that the high rates of import duty constitute a great incentive to smuggling, es- 
 pecially when these fall, as happens in Mexico, on articles of prime necessity. The ordinary cotton goods, the 
 duties on which amount to more than half of the total product of importation, because they are consumed by a 
 large portion of the inhabitants of the country, and come to be articles of prime necessity, pay for import duties 
 quotas that are equivalent to more than 100 per cent, of their value. The profit which the clandestine importa- 
 tion of these articles offers to the contrabandist, and the facilities he finds for making it, counting upon the good 
 will and sympathy of the inhabitants where he does his trade, are so great that the contraband effected with them 
 is considerable, and it really happens sometimes in those cases as the Report says, that is, that in some places 
 goods are sold for almost the value of the import duties. 
 
 i486. The Report presents, however, this circumstance as general, or as comprehending various or almost 
 aU articles imported to Mexico, when in reality it has only taken place on some occasions, and in certain places 
 respecting ordinary cotton goods, and one or two other articles of merchandise. 
 
 1487. At first sight it will appear that the remedy for this evil would be the reduction of import duties, but 
 this means presents in practice difficulties of a very serious character, in view of the peculiar situation Mexico is 
 in, which will be set forth further on. 
 
 1488. It is proper, however, to recollect that the incentive of the high duties is only one of the divers in- 
 ducements there are for carrying on contraband in Mexico, and that it only is so respecting those goods which, 
 besides paying high duties, are of little volume and of easy concealment. 
 
 c. Influence of the Revolutions on Contraband. 
 
 1489. The fact that the revolutions and political tumults are also one of the most powerful incentives for 
 contraband cannot be denied, not only because the necessity of procuring resources occasions considerable 
 reductions in the duties, but because it facilitates illegal traffic in various other ways. 
 
 1490. It is on the Pacific coast that smugghng has assumed its greatest proprotions, and where recourse has 
 been had to local disturbances to further it. In another part of this exposition (paragraph 1362), one of the most 
 common methods of doing it has already been indicated. When some contrabandist has expected a valuable 
 cargo, and has not been able to obtain the connivance of the employees of the custom-house, he has promoted a 
 tumult, by suborning the sargents and officials of the garrison, with the object of disembarking his goods in the 
 days of the disturbance, without its being any matter to him the turn political events may take afterwards. . In 
 order to demonstrate the relation which contraband holds to local distm-bances, it is thought proper to relate a 
 recent fact, for as the object of this exposition is to make known the true situation of Mexico, in all its phases, 
 no attempt is made in it to hide or disfigure any of the incidents, the knowledge of which may be necessary to 
 estimate this situation. 
 
 1491. In November, 187 1, the. port of Mazatlan was occupied by the forces pronounced for the Plan of La 
 Noria, and during that revolution goods were disembarked, the import duties on which amounted to $574,136 71, 
 some sums of coined silver being exported, the duties on which were. $8,185 ^8, according to data furnished by 
 the merchants themselves of that port ; the import duties appeared ostensibly paid to the revolutionary authori- 
 ties estabUshed in Mazatlan, though there are sufficient reasons for believing that they were not fully paid, or 
 that only an insignificant part of them were paid. The port of Mazatlan being recovered by General Racha in 
 May, 1872, it was ordered, according to the relative circulars of August 2Sth and October 30th, and to the decree 
 of November 24th, 187 1, to close said port to foreign commerce, and to the coasting trade, while it remained 
 occupied by the revolutionary forces, and suspend the payment of duties during that revolutionary state, because 
 the anterior payment was not considered legal ; the importers issued notes of hand at four months' sight, in case 
 they were not 'exempted from payment by the Federal Government. The importers before the conclusion of 
 the term, soUcited that they might not be obUged to make the payment ; but finally some agreed with the 
 Government to pay a third part of the duties, which was acceded to in equity, making this grace general. When 
 it came to the coUection of the third port, the majority of the importers interposed suits of relief, and some one 
 
 1485. Incentive which high rates of import duty offer for contraband. 
 
 1486. The conception of the Report is not accurate, respecting that all goods imported have this incentive. 
 
 1487. Difficulties in the way of a reduction of import duties. 
 
 1488. The incentive of the high duties is only so respecting certain merchandise. 
 1489 Influence of the revolutions on contraband. 
 
 1490. Disturbances provoked on the coasts of the Pacific for the purpose of carrying on smuggling. 
 
 149l! Events occurred in Mazatlan in November, 1871, during the revolution of La Noria. 
 
312 
 
 was effectively relieved by the District Court of Sinaloa, thus succeeding in evading all immediate payment. The 
 result of these doings was, that the Supreme Court of Justice revoked, May, 1873, the reliefs granted, and by 
 virtue of its decisions, steps were taken to require the total payment, or to receive the 33^ per cent, the said 
 third part from those who resisted. In October, 1873, after having resisted, some of the importers paid the 33^ 
 per cent., and others arranged the payment directly with the Executive, with the exception of one case only, 
 which resisted to the last to pay, and kept on with the affair in the Coiirts, having obtained a favorable decision 
 at the last instance. 
 
 1492. It will be immediately understood how many difficulties the Federal Treasury of Mexico has had to 
 contend with, and also legitimate commerce, on account of the contraband that has been carried on on the Pa- 
 cific coast, in the manner indicated, and what an influence must the revolutions have upon illegal traffic, for in 
 many cases the contrabandists are the true authors of the pohtical tumults. 
 
 C. Manner of Carrying on Contraband in Mexico. 
 
 1493. The most easy, and, therefore, the most common mode of smuggling in Mexico, is to introduce the 
 goods clandestinely through the United States frontier, and some through that of Guatemala. It is done, also, 
 by importing them clandestinely by the coasts, or else depositing them at certain convenient points on the 
 coasts, and afterwards carrying them to a port as goods already naturalized. 
 
 1495. Rarely, and in exceptional cases, has contraband been done in the few years past, with the cogni- 
 zance of the employees, and proceedings have always been taken with proper energy to repress the peculation 
 when it has become known. 
 
 D. Manner of Remedying Smuggling. 
 
 1496. In what has been said, up to this, respecting contraband, several of the means there are for avoiding 
 it have been suggested. Undonbtedly one of the most efficacious would be a considerable reduction in import 
 duties, enough to take away the great iucentive it now has in many cases ; but this measure presents many in- 
 conveniences and dangers, which appear when it is tried to be carried out, some of which will be indicated in 
 continuation. 
 
 1497. Another means to which great importance has been given formerly, is the vigilance of the fiscal agents 
 over merchandise in transit in Mexico, in order to be able to pursue that imported clandestinely. In this way 
 the Mexican Government meets with the painful alternative of either granting privileges to foreign commerce, so 
 that goods can travel freely in the interior of the country, without documents or ^ther requisites, which would 
 prove an efficacious mode of legalizing smuggling, for the goods being once introduced through the frontier, or 
 thtough some port, it could not be ascertained if they had paid the duties of importation, or of establishing 
 onerous restrictions on trade, for the purpose of ascertaining which goods have paid duties and which not and 
 these restrictions cannot but be a hindrance to the trade in foreign goods, and they present, therefore, some seri- 
 ous inconveniences. 
 
 1498. In fact, if it is established that every inerchandise coming from a port, or from the frontier, may 
 travel freely in the country, without document or other requisite, contraband operations are sanctioned and legal- 
 ized most absolutely and completely. And if, on the contrary, it is established that each custom-house must 
 keep an account of everything proceeding from them ; that foreign goods must travel with custom-house docu- 
 ment ; that the permits must be noted at the place of consumption, and returned to the place of procedure 
 obstacles are established of such magnitude for foreign commerce that it comes to be a veritable difficulty for its 
 enlargement, being, besides, in opposition to the modern system. To so.iie of these difficulties, ^till subsisting, 
 the Report refers, and presents them as great obstacles to foreign commerce, without recollecting that their prin- 
 cipal object is to prevent contraband. 
 
 1492. Difficulties the Mexican Government has to contend with, and legitimate commerce, for these reasons. 
 
 1493; Contraband is done in S.exico by the coasts, but with greater facility and frequency through the United States 
 frontier. 
 
 1494. In the ports the vigilance of the employees is frustrated, particularly in Vera Cruz. 
 
 1495. The cases of connivance of the employees are very rare, and every effort is made to repres speculation. 
 
 1496. A reduction in import duties as a means to avoid contraband, presents inconveniences. 
 
 1497. To remedy contraband, free transit in the country of foreign goods cannot be granted. 
 
 1498. Inconveniences presented by free transit, as well as by restrictions to remedy. 
 
313 
 
 E. Difficulties which the Reduction of Import Duties Present. 
 
 1499. The difficulties are very great which present themselves in proposing to make a considerable reduction 
 m the import duties on those articles which pay the highest, and particularly if similar articles are manufactured 
 m the country. These difficulties are of various kinds ; some spring from the pecuniary situation of the country; 
 others are caused by the foreiegn importers themselves ; and others proceed from the national manufacturers. 
 They will all be spoken of here, briefly and separately, in the following order : 
 
 a. Necessity that the reduction, as a remedy to contraband, should be large, and the consequent danger of 
 reducing the public rents. 
 
 b. Amount of duties caused by the ordinary cotton fabrics. 
 
 c. Experience has demonstrated, in Mexico, that the reduction of duties does not increase the revenue. 
 
 d. Danger of lessening the income during the term granted for the reduction to begin. 
 
 e. Difficulties which foreign importers oppose to the reduction of duties. 
 
 f. Difficulties which national industry presents to reduction of duties. 
 
 g. Reduction of duties decreed by the Mexican Government. 
 
 a. Necessity that the Reduction, as a Remedy for Contraband, Should be very large, and the Consequent 
 
 Danger of Reducing the Public Rents. 
 
 1500. It is clear that a medium reduction of import duties would not be efficacious for the object of avoid- 
 ing contraband, for it is natural to suppose that he does it now to gain 100 per cent., would do it equally to gain 
 75 or 80 per cent. For the reduction of duties, then, to accomphsh the end proposed, it would have to be to a 
 degree sufficient to take away the incentives to fraud, as, for example, 50 or 75 per cent., and in this case it offers 
 the danger of reducing considerably the income of the Federal Treasury, besides the prejudicial influence it 
 would have on the industry of the country. 
 
 1501. As the high rates of importation are not the only incentive for smuggling, but there are many other 
 facilities, from the circumstances of the country, which have been already indicated (paragraph 1482), the danger 
 would be run, in making a reduction of duties, even though this were 50 to 75 per cent, of not obtaining the end 
 proposed, because the reduction of duties would not cause to cease the other facilities of contraband, in which 
 case all the dangers of the reduction would be incurred without obtaining its advantages. 
 
 1502. If the Mexican Treasury had not the difficulties which oppress it; if it could for a time, and without 
 danger, do without a part of its income ; if it could make essays, without exposing itself to grave disturbances, 
 it might have already decreed a reduction on some of the articles of importation, and have known its practical 
 results ; but the satisfaction is so difficult, that the bad exit of an essay might seriously compromise the peace 
 and future of the Republic, and before this grave and transcending danger, it appears a temerity to essay means 
 in whose success a full trust cannot be placed. 
 
 b. Amount of Duties Caused by the Ordinary Cotton Fabrics. 
 
 1503. For the pilrpose of demonstrating the importance of the duties on ordinary cotton fabrics, most of 
 which are manufactured in the country now, such as coarse, unbleached cotton cloth, cotton prints, &c. ; and 
 which are those which appear most urgently to require the reduction, it is proper to state what has been the 
 invoice value, and the amount of duties caused by said articles in three fiscal years, according to the statements 
 formed by Section 5th of this Department, and the summary of which is as follows : 
 
 1499. Difficulties to reducing considerably the import duties on articles heaviest burdened. 
 
 1500. To remove tlie incentive to smuggling in the high duties, a reduction of 60 or 75 per cent, would be necessary. 
 
 1501. The reduction of ^50 or 75 per cent, would not be efficacious, in the existence of other facilities there are for con- 
 traband 
 
 1503. The financial situation does not permit essays which might compromise the peace and future of the country. 
 
 1503. Statement showing the importance of the duties caused by cotton fabrics. .; 
 
 40 
 
Cotton Textures Import^to the Be^nMo^cbwriag the thm^,. Tmrs- elap>«dfrom. 
 
 Jvls/ngt, 1872, to July ZOlh, 1875. 
 
 
 Germast. 
 
 Spain. 
 
 
 Invoice value. 
 
 Custom-house duties. 
 
 Invoice value. 
 
 Custom-lumBe dutieB. 
 
 Fiscal year of 1873-3 
 
 1749,685 85 
 
 1,316,665 37 
 
 175,378 07 
 
 $437,069 85 
 766,376 33 
 173,510 87 
 
 $11,898 33 
 
 33,434 79 
 
 1,548 18 
 
 $11,035 49 
 
 15,188 85 
 
 1,139 45 
 
 '■ 1873^ 
 
 " 1874^5 
 
 
 Totals 
 
 $3,141,634 39 
 
 $1,375,857 04 
 
 $36,881 34 
 
 $37,343 79 
 
 
 PIUlMOB. 
 
 . , , Enqlahd. 
 
 
 Invoice valne. 
 
 Ouefcom-houBe dntdes. 
 
 ' Invoice value. 
 
 Custom-lLouse duties. 
 
 Fiscal year of 1873-3 
 
 $354,719:15, 
 893,834 69 
 
 388,440 87 
 
 * $339,735 03 
 369,377 19 
 196,393 94 
 
 $3,533,889 37 , 
 4,144,700 39 
 4,713,513 36 
 
 , $3,456(348 70 
 
 " 1878-4 
 
 " 1874-5 
 
 3,980,567 99 
 3,399,683 41 
 
 Totals 
 
 $1,036,994 74 
 
 $705,405 76 
 
 $13,381,101 83 
 
 $8i786,500 10 
 
 
 
 
 United States. 
 
 South Ambrioa, 
 
 
 Invoice value. 
 
 CuBtom-house duties. 
 
 Invoice value. 
 
 Oustom-house duties. 
 
 
 $1,368,533 38 
 
 lv437,163 39 
 
 ' 1,568,343 93' 
 
 $1,345,100 41 
 1,339,565 98 
 1,606,676 73 
 
 $477,131 61 
 
 913,734,54 
 
 46,479 80 
 
 $386,319 65 
 
 "1 1673^ 
 
 " 1874-5 
 
 368;773 64 
 51,359 96 
 
 
 
 Totals 
 
 $*,359,037 59 
 
 $4,181,848 11 
 
 $1,407,885 95 
 
 $553,353 35 
 
 
 
 
 
 TOTALS. 
 
 
 Invoice value. 
 
 Custom-honse duties. 
 
 Fiscal year of 1873-3 
 
 $6,454,856 51 
 8,119,533 07 
 6,788,598 05 
 
 $4,625,399 13 
 
 " " 1873-4 
 
 5,576,649 57 
 
 " 1874^5 
 
 
 5,437,658 35 
 
 Totals 
 
 $31,363,976 63 
 
 • 
 
 $15,639,703 05 
 
 
 
 
 $7,130,992 21 
 
 $5,309,900 68 
 
 
 
 
 Seotiott 5. — Mexico, January 14tli, 1879. 
 
 J. M. Qabmbi^dia. 
 
 1504. The cottons comprehended in the preceding statement are those enumerated in the fractions from 4 
 to 7, 10, 19 and 20 j from 25 to 27; from 30 to 33; from 39 to 45; from 47 to 49; from 52 to 57, 61, 62 and 
 66, of the 1 8th Article of the Tariff of January ist, 1872. 
 
 1505. When it is taken into account that the total of the import duties in each one of the three years to 
 which the preceding statement refers, amounts tq only a little more than $9,000,000, on the average, and that the 
 duties on cotton fabrics, comprised in the statement^ amount, to $5,2,09,1900 68, on the. average, in each one of 
 the same three years, it will be seen that the fabrics alone represent nearly 57 per: cent, of the total importation, 
 and that, therefore, any jeduction in said duties, would involve serious consequences to the Treasury. This ob- 
 
 1504. Paragraphs of the existing tarifE imposing duties on cottons, mentioned in the foregoing table. 
 
 1505, Transcendental consequence of reducing import duties on cottons. 
 
<< it li it a 
 " (< <i (t 
 
 316 
 
 servation becomes more forcible, if , the duties on all the articles are considered, which our tariff comprises, 
 under the chapter on cottons, from fraction ist to the 66th, and whose products have been as foUows: 
 
 In the fiscal year of 1872-3 $4,992,003 53 
 
 1073-4 6,002,759 46 
 
 " " " " " I874-S 5,800,46817 
 
 ■■'^°*^1 $16,795,231 16 
 
 Average per year - $5,598,410 38 
 
 The total of import duties during the same period was as follows : 
 
 In the fiscal year of 1872-3 $8,128,346 01 
 
 ^^73-4 10,354,15885 
 
 1874—5 9,200,033 06 
 
 "^0*^1 $27,682,537 92 
 
 Average per year $9,227,512 64 
 
 The import duty on cottons, then, is equal to 601SJ per cent, on the total amount of import duty in 'the three 
 years stated. 
 
 c. Experience has Demonstrated in Mexico that Reduction of Import Duties does not Increase the Revenue. 
 
 1506. There is, besides, in Mexico, the antecedent, that when at one time the'import duties were reduced, 
 precisely for the purpose of preventing smuggling, by issuing the tariff of April 30th, 1842, with relatively low 
 duties, the result expected, was not obtained, for the income was less in the year following than in the year pre- 
 ceding, and the high duties had to be re-estabhshed in the tariff of September 26th, 1843. I'his precedent, which 
 cannot be forgotten, in treating of a question which greatly effects'theprincipiEtl -interests of the country, causes 
 us to fear greatly that reduction under present circumstances would not produce flie' desired result. 
 
 1507. The importance of this incident makes it opportune to state here what then took place, taking it from 
 the Treasury records of that period. Sr. Ignacio Trigueros said in his Record of the Treasury of January 31st, 
 1844, in reference to the tariff of April 30th, 1842, which lowered the import duties, as follows : 
 
 " These (the pending mercantile speculations) demanded incessantly of the Government relief in the duties 
 of the tariff, attributing to the high rate of these the failing state in which they 'found themselves, and asking for 
 the reform of the decree of March nth, 1837. 
 
 " The President recommended this delicate matter to the consideration and examination of a committee, 
 which, re-uniting as great a collection of information and interests as. could be found, should advise the modifica- 
 tions which the said tariff needed, and after a thorough discussion, presided by good faith and a sincere desire 
 of the truth, the result was, after some variations, that the project was received the decree of April 30th, 1842 ; 
 in. this, the import duties were fixed at 25 per cent. Those precautions and trammels which, without producing 
 much result, occasioned annoyance, delays and vexations to importers were taken away, the tariff was put in 
 harmony, as it appeared, with the requirements of trade; the terms of payment were amplified; the ba:sis of the 
 invoice prices for the collection of duties on effects not expressed in it was preserved, and privileges were granted 
 for the saving of the innocent, the latter being able to correct his invoice within the time provided for its presen- 
 tation ; finally, the Executive reserved powers to decide definitely on the doubts which might arise on the 
 points expressed in the additional Article 195. 
 
 "The deference of the President on making these concessions, and even the preservation of their force and 
 vigor, depended upon the use of this grace; if by it, under the incentive of . low duties, the firms had increased 
 their importations without diminishing the income of the Treasury, the larger amount of goods and their 
 reduction in price would facilitate their acquisition to the consumer ; but when the speculations undertaken did 
 not correspond to their hopes, nor reveal much difference, the reduction of income followed upon that of duties. 
 The lesson given by experience on this occasion, although it is not of such a nature as to contradict the axiom 
 that the reduction of duty increases the income of the Treasury; in consequence, however, of the supply which 
 was undoubtedly introduced clandestinely, there was no great or urgent lack suffered in the market, and this is 
 undoubtedly the cause that there were not the increased number of importations at the ports that were expected. 
 
 1506 Experience'has demonBtrated that in Mexico the. reduction of dutie»of importation diminishes the income. 
 1507' Fragment of the Treasury Record of December S6th, 1844, on the reduction of import duties. 
 
316 
 
 Perhaps, in time, contraband being banished, and therefore, this decree put in practice, its dispositions would have 
 moralized the provision, and have given society large profits ; but the deficit which the public funds suffered, 
 commenced immediately to claim new provisions. It became necessary to make new investigations, and to make 
 the commissions the same to the commanding revenue officers of the maritime custom-houses of the first class, 
 that they might support each other and have the corresponding stimulus, extension of time was granted, that it 
 might be carried into effect ; a multitude of rigorous provisions were decreed, and circumstances very notor- 
 ious occasioned the increase of duties on various cotton fabrics, in order to form, with the difference, a fund which 
 should serve to further the branches of industry and mining.'' 
 
 1508. In reference to the tariff of September 26th, 1843, which again raised the import duties, Sr. Trigueros 
 said in the Treasury record referred, to as follows : * 
 
 " Since the particular modifications which were made in the tariff were not sufficient to fill the needs which 
 experience had been discovering, it was necessary, on compelling them to make a general reform, by which the 
 payment of duties by invoice value was suppressed, making a more extensive nomenclature, and re-estabhshing 
 appraisements ; the additional article was suppressed, because of the compromises in which it might place the 
 Government, and because treating of points of fact, it is within the reach of malice to invest them with more or 
 less appearances of truth, attempting contraband by the most infamous and barefaced means, to present them in 
 case of necessity as a proof of innocence, which can, sometimes, only be properly judged of in a process of 
 law ; the prohibition on cottons was extended to the brown twilled fabrics and to the mixed and marbled, or 
 stamped, fabrics, in imitation of 'rebozos,' on account of the rascality with which they had begun to defeat both 
 prohibitions, which form a part of the foundations of our growing and peculiar industry ; and, lastly, the meaning 
 of some articles was fixed, whose dispositions appeared forgotten, or had an interpretation, perhaps, contrary to 
 their object, and new precautions have been estabfished for consular certificates. 
 
 " To all this, tends the Second Tariff, pubUshed October 5th, of the past year ; but notwithstanding the care- 
 ful attention, it is vety far from supposing that it is free from defects, because I lack exact notices of consump- 
 tion, and a.U the statistical facts which ought to be consulted, for the intricate combination with which true in- 
 dustry is indirectly forwarded, prohibiting what is made in the country, and does not need to be supplemented 
 by the entry of more ; taxing what might be about to be ptoduced and relieving prime materials. It is impossible 
 to determine exactly in so complicated a combination, which struggles with individual interest, so fruitful in eva- 
 sions, but though the President cannot flatter himself of having hit the nail on the head, he can of having put in 
 train the means for the future." 
 
 d. Danger of Reduction of the Income During the Time Granted for the Reduction. 
 
 1509. It must be borne in mind, besides, that, according to the practice adopted by the Mexican Govern- 
 ment, with the object of not prejudicing the importers who had paid the duties on their effects, a time must be 
 fixed of at least four months before said reduction of duties should commence to take effect, thus giving time to 
 those who had paid full duty to realize on their goods, before the reduction should occasion a large fall in the 
 price of these, and hence a heavy loss to the importers. 
 
 15 10. The necessary consequence of this grace would be that during the time it lasted, not a single piece of 
 cotton fabrics would be again imported, for nobody would wish to pay the high duties, when they could pay the 
 reduced ones by only deferring their importations for three or four months. The Federal Treasury would then 
 be deprived of one of its principal revenues for the term of three or four months, and its situation is so critical that 
 it is not considered prudent to expose it to the dangers that might result from that suspension. 
 
 e. Difficulties that Foreign Importers Oppose to the Reduction of Duties. 
 
 15 1 1. For reasons easy of comprehension, some importers of foreign goods in Mexico resist the reduction 
 of import duties. Various merchants of Chihuahua having sohcited, on May 29th, 1878, a reduction of 50 per 
 cent, in the duties on cotton fabrics, because otherwise they did not believe it possible to compete with the 
 clandestine importation carried on through the United States frontier, the general trade of the country was con- 
 sulted by the Treasury Department in acircular. No. 93, of July 20th, 1878, respecting the convenience of adopt- 
 ing that measure. 
 
 1508. Allusion made by the same Treasury Becord to the tariff of September 36th, 1843. 
 
 1509. In order not to prejudice importers, a term would have to be fixed for the reduction of duties. 
 
 1510. Diminution of the income of the Treasury during the grace conceded for the reduction of duties. 
 
 1511. Circular No. 97, of July 20th, 1878, consulted commerce on the convenience of a reduction of duty. 
 
317 
 
 IS 12. The inquiries addressed to the commerce of the country in the said circular, are as follows: 
 
 1st. Could a reduction be made in the quotas of import duty paid on 'manias' and common Indianas, 
 without ruining the manufactures of those articles in the country ? 
 " 2d. In this case, what is the reduction that can be made ? 
 
 3d. What 19 the quantity of ' manta ' 01 common Indiana produced from your manufactory annualy, and 
 what are the prices at which each one of those articles are sold ? 
 
 4th. What quantities of ' manta ' orcommon Indiana are produced annually from the other manufactories 
 in that State ? 
 
 " Sth. What influence on yonr industry is obtained by contraband from the norther frontier ? 
 " The President hopes you will be pleased to inform on these points, thus contributing to the clearing up 
 and correct resolution of this matter of general interest." 
 
 ^S^S- This circumstance caused many importers to believe that it was proposed to make an immediate re- 
 duction of the import duties on the said articles, and, being alarmed for this reason, they addressed an exposition 
 to the Treasury Department, August i6th, 1878, soliciting that this reduction might not be made, or in case of 
 Its being made, that a long grace might be given before it went into effect. 
 
 1514- This incident caused so much alarm that it made the Executive fear that, becoming spread among 
 the importers, it would determine these to suspend their orders for foreign goods, occasioning, thereby, to the 
 Treasury the inconvenience of a considerable reduction in the import duties, wherefore it esteemed it proper to 
 give the assurance, compatible with its duties and the situation of the country, that no radical changes would be 
 made right away in the fiscal legislation, which could injure legitimate estabHshed interests, and thus it did, by 
 means of a communication, dated August 24th, which was published in the Diario Oficial of the 28th of the same 
 month. 
 
 1515. This very incident determined the Treasury Department to enter into some consultations with the 
 principal merchants of this capital, from which resulted the suggestion of the importers to put a moderate tax on 
 the Mexican fabrics of cotton and of wool. The said importers manifested that, in consequence of the high 
 duties that foreign prints were paying, the manufacture of those stuffs in the country is extraordinarily lucrative, 
 wherefore the manufactories of prints were increasing considerably, and consequently their production ; that this 
 would cause, before long, a considerable reduction in the proceeds of the maritime custom houses, because the 
 introduction of foreign prints would diminish in proportion, and the Federal Treasury could not indemnify itself 
 for the sums it would cease to receive without taxing the national manufactures with the following quotas : 
 
 Woven domestic, gross weight 10 cents per ft. 
 
 Cotton yarn 6 
 
 Prints 20 " 
 
 or 10 cents per ft on the domestic and 10 cents on the 
 
 printing of each ft. 
 
 Woolen fabrics, cassimeres and cloth 15 " 
 
 Baize ■■ 10 "• " 
 
 Woolen yarn i S 
 
 1516. The Executive, desiring to hear the opinion of the merchants and of the manufacturers of the country 
 respecting this suggestion, addressed them with this object by means of a circular of this Department, No. 106, 
 of August 24th, 1878, which will be spoken of again further on, indicating the result it gave. 
 
 / Difficulties which National Industry presents to the Reduction of Duties. 
 
 15 1 7. The high rates of duty on ordinary cotton fabrics have constituted an important premium in favor of 
 the fabrication of those goods in the country, and this indirectly, as has just been indicated, has assumed great 
 
 1513. Text of the inquiries addressed to the commerce of the country in the circular of July 20th, 1878. 
 
 1513. Solicitude of some importers, that in case of the reduction being made it should not he done immediately. 
 
 1514. Communication of the Treasury Department assuring that the reduction of import duties should not be made 
 
 right away. 
 
 1515 Proposition of the principal importers of Mexico to tax Mexican cotton and woolen fabrics. 
 
 1516 Circular No. 106 of August 24th, 1878, consulting the opinion of the merchants and manufacturers of the 
 
 country. 
 
 1517 The sudden abatement of import duties would cause evils that ought to be avoided. 
 
318 
 
 proportions. It would not be prudent in any case to make a sudden reduction of those duties which would re- 
 dound to the grave injury of capital invested in that industry, for this would cause evils and disturbances that 
 ought to be avoided. . . . 
 
 15 18. But it happens frequently that he who has a lucrative business already established looks with suspicion 
 upon any measure that may somewhat reduce his profits, and is alarmed, or feigns to be so, when anything is 
 suggested in this direction, though it do not produce the result of ruining his industry, but only of reducing his 
 profits. Consequently as soon any reduction in the duties on ordinary cotton fabrics is projected, this would 
 have the most decided opposition on the part of the Mexican manufacturers, who count upon sufficient elements 
 to do it, and they would present the reduction of duties as wounding to the death national industry, affirming 
 that they could not compete with foreign goods, the price of these being once reduced by the abatement of 
 duties. 
 
 15 19. In consequence of the suggestion made by the importers of this capital with the motive that was 
 shortly stated (paragraph 1515), and the Executive desiring to obtain exact data respecting this suggestion, and 
 to hear the opinion of the country on the convenience or inconvenience of accepting it, addressed, by means of a 
 circulator of this Department, No. 106, of August 24th, 1878, the merchants, producers, business men and dis- 
 tinguished persons of the nation, asking them for data on* this subject, and their opinions respecting the same. 
 The text of this circular, which expresses exactly the idea of the Executive regarding the subject to which it refers, 
 is as follows : 
 
 '''■ Department of State for the Finances and Public Credit. Section \st, Circular \o6 : 
 
 " I enclose to you copies of some notes furnished to this Department, with the object of proving the pro- 
 priety of establishing a duty on national domestics (mantas), prints and yarn. 
 
 " The President of the Republic, desiring that these grave, economic questions should be attentively studied 
 before dictating any order respecting them, recommends that you will be pleased to give him your opinion, both 
 as regards the accuracy of the data comprised in the adjoining notes, as well as the convenience or inconvenience 
 of adopting the measures which are proposed in them. 
 
 "Mexico, August 24th, 1878. 
 
 "Romero.— To the " 
 
 1520. The desire of the Executive to inform its mind on so delicate a question, and to obtain accurate data, 
 which might serve it for a basis for its subsequent operations, expressed in terms so clear and precise as those of 
 the preceding circular, alarmed the national manufacturers beyond measure, many of whom tried to present the 
 conduct of the Executive as if it had already the preconcerted design of inter-taxing heavily the national fabrics 
 and prints, favoring, at the same time, foreign goods of this kind. 
 
 1521. If this was done when the importers proposed a quota of 50 cents per piece on national prints, it is 
 easily understood what would be the effisrts the national manufacturers would make the day it should be pro- 
 posed to reduce one-half, or perhaps more, the import duties which foreign prints now pay. 
 
 1522. After this, and under date of December 12th, 1878, the Executive presented to the Chamber of 
 Deputies through this Department, an invitation, in which was advised a revenue impost at the rate of five cents 
 for each piece of domestics, and every kind of national cotton fabrics, of 30 metres long and one metre wide, 
 and eight cents per piece of foreign cotton, and this moderate quota was received as a terrible exaction, which 
 demonstrates very clearly the feeling of the national manufacturers on this point, and shows the resistance that 
 would oppose the abatement of the duties on ordinary cotton fabrics. 
 
 g. deduction of Duties Decreed by the Mexican Government. 
 
 1523. Whenever the Executive has considered it advisable, it has, in exercise of the powers granted it by 
 the law of December 12th, 1872, lowered the import duties on articles which, by not being of large consumption, 
 whatever might be the result of the abatement, would not seriously affect the interests of the Treasury or of 
 national industry. 
 
 1518. The manufacturers of the country are opposed to the reduction of quotas, maintaining that they would not be 
 able to compete with the foreigner 
 
 1519 Text of the circular of August 34th, 1878, in which the idea was moved of taking national manufaclures. 
 
 1530. The manufacturers of the country were alarmed at the advice contained in the circular of August 34th, 1878. 
 
 1531. The resistance of the manufacturers would be greater if a reduction should be proprosed in the quotas of 
 prints. 
 
 1533. The moderate stamp duty on domestics and Indianashas been fought by the manufactuers. 
 
 1533. Reduction of quotas on articles which do not effect the interest of the Treasury or of oational' industry. 
 
319 
 
 1524- Mention has already been made of the reduction on tobacco from the United States, decreed June 
 1 2th, 1878, abating the duty from $1 25 to 16 cents per kilogramme, net. The import duty on cinnamon and 
 tea was also reduced considerably; reducing the first by the decree of April 12th, 1878, from $2 40 to $1 per 
 kilogramme, net ; and the second by the decree of May 28th, 1878, from $1 67 to 75 cents per kilogramme, net. 
 The quotas on linen pocket handkerchiefs and cotton ones were reduced considerably by the decree of July 30th, 
 1878. 
 
 1525. It is seen, then, that whenever there has not been insuperable difficulties, great reduction in import 
 duties have been made on some of the articles that were heaviest taxed. In other cases other goods have been 
 declared free of duty. If the result of these reductions should be satisfactory, it will serve as an incentive to 
 decree others, and to destroy the impression left of the essay made in the tariff of April 3ath, 1842, already 
 alluded to (paragraph 1506). 
 
 2. WAY IN WHICH CONTRABAND AFFECTS THE COMMERCIAL RELATIONS BETWEEN MEXICO AND THE UNITED 
 
 STATES. 
 
 1526. In reference to the manner in which the contraband carried on in Mexico affects the enlargement of 
 commerce with the United States, the Report says as follows : 
 
 " The effect can be seen at once, which this state of things must produce on the legitimate merchants and 
 on the morale of commerce in general, as well as the disadvantage under which it places honorable importers, 
 respecting the traders without conscience, who soon become expert in the art of entering into arrangements with 
 custom-house employees, or in deceiving these or frustrating the revenue guard. The friendship that binds me 
 to many of the Chicago merchants obliges me to-repeat here the opinion I have expressed, that they could not 
 successfully compete with this illicit traffic, 
 
 " What I have written may, to a certain degree, explain the ' astonishing fact,' to which Mr. Zamacona refers 
 in his speech, that, whilst the spirit of enterprise of the American merchants carries our trade to the distant 
 Indies and to AustraUa, and whilst it invades the republics of South America, Mexico is passed by unperceived. 
 This was for me, also, an inexplicable fact, until a more intimate knowledge of the condition, legislation and 
 mercantile practices of this country made me acquinted with the inconveniences, which I have partly explained." 
 
 1527. From the terms expressed in the Report, on treating of the question of contraband done in Mexico 
 it is deduced that it considers that evil as a serious obstacle to the estabhshment of an active commerce between 
 Mexico and the United States. This conception is wanting in accuracy, whether the trade in North American 
 goods be legal without exception, or whether clandestine introductions are made. Each of these two cases will 
 be specially considered. 
 
 A. Legal Trade of the United States with Mexico. 
 
 1528. In the case, which is to be hoped for, that the trade from the United States should be legal, it could 
 be proved that the greater part of the importations made to Mexico, according to law, consist precisely in those 
 articles which, by their high duties and httle bulk, offer the greatest facility and incentive to defraud the revenue. 
 If, then, European merchants can carry on a legal trade even on those goods, it is not conceived why the United 
 States merchants cannot do the same. Undoubtedly, contraband injures legal importation ; but it does not 
 influence this in so decided a manner, that it is an absolute impediment to legal trade, as the fact demonstrates 
 that in spite of smugghng, the ordinary cotton fabrics produce more than half of the revenue of the maritime 
 custom-houses. 
 
 I? 29. If the goods which offer the greatest incentive and most facilities for contraband, are imported legally 
 by European merchants, \vith more reason all the others, which, by having lower duties and being bulky, present 
 fewer incentives and facilities for smugghng, are imported in the same way; and if the European merchants can 
 make those operations with advantage, it cannot be comprehended why the United States merchants, cannot do 
 it equally as well. 
 
 1524. Reduction of import duties on various articles 
 
 1 "2'5 If the result of that reduction should be satisfactory, it will serve as an incentive to decree others. 
 
 1 "2fi Estimates of the Report on the manner in which contraband effects the commerce of Mexico with the United 
 
 States. . ■>*■ 
 
 1 fiPT The conception of the Report is inaccurate that American commerce cannot compete in Mexico with European. 
 
 1 "28 The contraband done in Mexico, is not an absolute impediment to legal trade. 
 
 1 '^1^ American merchants can carry on a legal trade with the same success as the Buiopeans. 
 
320 
 
 I530- The contraband carried on in Mexico should not be considered, then, as one of the causes which 
 prevent the growth of trade with the United States. These have, in all respects, greater natural elements than 
 the European nations for producing the principal articles of our consumption, at a low price. Hence, freight on 
 American goods ought to be less than on European, for the reason that the distance is much less. Regarding 
 the ordinary cotton goods, it cannot be understood, either, how it is, that the United States, producing cotton, 
 possessing skillful operatives and large capital, having made great advances in the manufacture of this kind of 
 goods, and the distance from Boston or New York to Vera Cruz being less than from this port to Liverpool or 
 Manchester, they cannot compete with English production, when the English have to carry the raw material from 
 the United States to Great Britain, paying sea freight for a long distance, and having to return, afterwards, the 
 manufactured cotton, passing again across the Atlantic, with the tax of new freight, insurance, &c. 
 
 1531. Examining all the special circumstances which pertain to the production of manufactured articles 
 and their consumption in Mexico, it is clearly seen that United States commerce must have a great increase in 
 Mexico, and that all that is needed is the special study by the' United States merchants of the circumstances of 
 this country; for once being known and properly appreciated by them, the small difficulties which present them- 
 selves to attain the development of that commerce would be easily overcome. 
 
 «> 
 
 B. Clandestine Introduction of Goods Proceeding from the United States. 
 
 1532. It cannot be supposed that the United States favor contraband in Mexico, nor that they desire to 
 compete in it with other nations ; but there are, unfortunately, some merchants residing on North American ter- 
 ritory who devote themselves to that illegal traffic, and improve every opportunity that present itself to do it. 
 
 1533. In the matter, then, of clandestine introductions, the vast extent of our unpopulated frontier presents 
 a much greater facility to frustrate the vigilance of the Mexican fiscal agents than the coasts which serve for com- 
 munication with the European nations, and which, also, the United States merchants can avail themselves of 
 The information given, at a very recent period, of a large quantity of goods introduced clandestinely through the 
 northern frontier, and the provisions which had to be enacted to repress that contraband, among which must be 
 mentioned, in the first place, the decree of August 8th, 1878, are a proof that not only do the North American 
 merchants compete with the European in illegal traffic, but that they improve every facility they have for doing it. 
 The Report itself acknowledges that such contraband has been carried on, and is carried on, on a large scale, on 
 our frontier with the United States. 
 
 1534. Morever, all the considerations that have just been set forth to demonstrate that the United States can 
 compete in Mexico with European contrabandists by carrjang on legal commerce, are applicable, and with greater 
 force, to the carrying on ot clandestine trade by North American merchants. 
 
 3. SUMMERY OF FACTS IN RELATION TO THE CONTRABAND QUESTION IN MEXICO. 
 
 1535. From what has been stated up to this point, with relation to the contraband .carried on in Mexico, 
 the following facts appear to be demonstrated : 
 
 I St. That in consequence of the great facilities Mexico presents for contraband, from the extended and 
 unpopulated character of its frontiers and coasts, this has always been done on a large scale, and greater in for- 
 mer periods than in the present. 
 
 2d. That the amount of smugghng done in Mexico can be estimated, approximately, at from $3,000,000 to 
 $4,000,000 per annum, which comes to represent a considerable part of the import duties collected in the 
 country. 
 
 3d. That the high rates of import duties recovered in Mexico is one of the principal incentives to the smug- 
 gling of certain goods, because it offers large profits. 
 
 4th. That the revolutions and tumults that Mexico has suffered are also another great incentive to contra- 
 band, and that the latter has come, in some cases, to promote disturbances on the Pacific coast, with no other 
 design than to favor the illegal importation of foreign goods. 
 
 1530. The smuggling done in Mexico is not the cause that prevents the growth of trade with the United States. 
 
 1531. The commerce between Mexico and the United States is susceptible of a great development. 
 1533. Consideration of the illegal traffic between the United States and Mexico. 
 
 1533. Contraband carried on on a large scale through our United States frontier. 
 
 1534. American merchants can compete in smuggling and in legitimate trade with the Europeans. 
 1585. Summary of facts in relation to the contraband question in Mexico. 
 
321 
 
 5 th. That in spite of the determination of the constituted governments to repress the contraband, occasioned 
 by the revolution in some cases, like that which occurred in Mazatlan in January, 1872, the payment of duties 
 could not be effected, and a considerable quantity of foreign goods entered without paying import duties, either 
 to the Federal Treasury or to the revolutionists of the Plan of La Noria. 
 
 6th. That one of the means that have been found to avoid contraband is the efficient vigilance Over foreign 
 goods in transit through the RepubUc, to be assured, whether they have paid or not their import dues ; but 
 that this measure has the inconvenience that it estabUshes onerous restrictions for interior commerce. 
 
 7th. That long periods having elapsed, from 1867 to date, in which the country has enjoyed peace, the in- 
 centive to contraband which disturbances offer has, therefore, during those periods, ceased to obtain. 
 
 8th. That the reduction of import duties on articles which now pay high, offers grave difficulties in practice, 
 above all, because it would paralyze for some months the operations of importation, and the state of the Mexican 
 treasury does not permit it to be exposed to that paralyzation. 
 
 9th. That for the abatement of duties to be effective, it would be necessary to remove all incentives to con- 
 traband, and for this the quotas of importation would have to be reduced to such a degree that the danger will be 
 run of obtaining less revenue from them than now, which is another danger of grave import for the country in the 
 difficult circumstances of its treasury, for it must be borne in mind that the import duties represent at present 
 two-thirds of the proceeds of the Federal rents. 
 
 loth. That a considerable reduction of import duties on articles of larger consumption in Mexico, and par- 
 ticularly on the ordinary cotton fabrics, would probably bring with it grave injuries to the manufacturers of 
 those articles, established in the country, which it is proper to avoid. 
 
 nth. That the national manufacturers of cotton fabrics, fearing this reduction and its consequences, resist 
 it decidedly, and their resistance presents grave difficulties to carrying it out. 
 
 12th. That by special circumstances the foreign importers in Mexico resist equally the reduction of import 
 duties on foreign goods, which constitutes another difficulty to carrying it out. 
 
 13th. That contraband, with all its conveniences, has not been sufficient to diminish foreign commerce in 
 Mexico, but this has gradually progressed, though slowly, and that, therefore, neither can it be contraband that 
 becomes in Mexico an obstacle for the development of its commerce with the United States ; above all, if it is 
 taken into account that the greater part of the contraband is done through our United States frontier. 
 
 14th. That, if the North American merchants who trade with Mexico carry on smuggling, they have more 
 facilities than the Europeans for carrying it out, from the circumstance of being able to make of the frontier 
 between the two countries a basis of their operations, and if they do not do it, there are many articles whose 
 duties are relatively low, and with which they could carry on a trade without fear of contraband. 
 
 15th. That legal importations of foreign goods paying high duty being made by European merchants, it is 
 not understood why United States merchants cannot do likewise. 
 
 1 6th That even though it were not possible for North American merchants to. carry on trade in those 
 goods there are many other articles, some of which are produced cheaply and of good quality, which have rela- 
 tively low duties, and respecting which contraband can be no hindrance. 
 
 1 7th That the United States has such advantageous conditions for commerce with Mexico over European 
 tions that they can compete easily with them, in the articles imported in contraband, and in legitimate trade 
 
 as well. 
 
 41 
 
322 
 
 1 8th. That the proximity of the United States to Mexico, the circumstance of producing prime materials, 
 and some manufactured articles, the perfection of their machinery and the accumulation of large capital, give to 
 the United States great advantages to make of Mexico the natural market for their manufactures. 
 
 19th. That, therefore, all the inconveniences mentioned in the Report, and especially those which refer to 
 the contraband carried on in Mexico, are not sufficient to impede the development of commerce between the two 
 countries, if there is any intention on the part of the United States to further that commerce. 
 
CONCLUSION. 
 
 1536. The Report, after having occupied itself with the three points into which it is divided, and which have 
 already been considered at length in this exposition, terminates by stating, that the citizens of the United States 
 will not come to enlarge their commerce with Mexico, except when this country modifies its fiscal legislation and 
 its habits, in the sense indicated by the Report. 
 
 1537- In reference to this subject, the Report says as follows : 
 
 "But commerce, like the human being that directs it, is susceptible to temptation, and, although it frequently 
 triumphs over difficulties, it prefers to accept better ofi"ers and less venturesome enterprises. Mexico is our natural 
 market, and the two countries ought to hold the most intimate commercial relations. Our merchants, however, 
 will continue seeking other markets beyond the Equator and on the other side of the world, unless that 
 Mexico be willing, ist, to make its legislation more liberal, and to re-establish its credit, so as to make possible 
 direct communication by means of a railway; 2d, to modify its tariff and interior regulations on commerce; and, 
 3d, to maintain a stable government that shall give security and protection to life and property. When this takes 
 place, an unexampled era of prosperity and development will shine upon this beautiful land, and the two repub- 
 lics will be bound in the indestructible ties of a social and mercantile reciprocity, which will not permit the inter- 
 ruption of peace between them or endanger their territorial integrity. At the same that I have set forth the 
 obstacles there are to a commerce on a large scale with this country, I ought to add that there still exists a field, 
 though limited, which American merchants and manufacturers can improve. The list of goods free of duty in 
 Mexico puts them in a position to import machinery and agricultural instruments, and in the extent of consump- 
 tion which these articles have, our importers can compete successfully -with the Europeans." 
 
 1538. The Report, however, not being able to ignore the fact, that in spite of the difficulties it mentions, for 
 the increase of commerce between Mexico and the United States, such commerce exists and is susceptible of 
 increase, even without changing the circumstances that now exist in this country, and which it presents as 
 obstacles to the increase of traffic, states that the list of free articles in our tariff puts the United States merchants 
 in a position to make lucrative importations to Mexico, and adds that there are other articles whose duties are 
 not so high as to impede their importation. 
 
 1539. In reference to this subject the Report says, as follows: 
 
 "A careful examination of the Mexican tariff will demonstrate the articles that can be introduced to advan- 
 tage, and even those which, from the high duties they are burdened with, are converted into articles of luxury for 
 this market, can be sold on a limited scale. And I consider it entirely practicable and safe for American manu- 
 facturers to combine their efforts in other branches, and to estabUsh warehouses in this city, for the exhibition 
 and sale of the products of their factories. 
 
 " In this way the merchants and local consumers would have a chance to judge, practically, of American 
 goods, introducing, gradually, their sale, until a permanent market is formed." 
 
 1540. Although a certain contradiction might be found between the final conceptions of the Report that 
 have just been inserted, and the absolute asseveration respecting the almost insuperable difficulties that exist 
 for the increase of commerce between Mexico and the United States, while the present circumstances and fiscal 
 legislation of the country subsist, it appears preferable not to take this explication, except as an exception to the 
 general rule estabhshed in the preceding passages. 
 
 1536. Necessary conditions, according to the Report, for the increase of commerce between Mexico and the United 
 
 States. 
 
 1537. Text of the Beport on this point. 
 
 1538 The Report recognizes that, to a certain extent, the American commerce can compete with the European in 
 
 Hexico. 
 
 1539. Passage of the Beport relative to this point. 
 
 1540 Character with which the explanations of the Report is considered on this same point. 
 
324 
 
 IS4I- Under this aspect the Report comes to agree substantially with various of the capital points sus- 
 tained in this exposition respecting that a great increase of the commerce between the two countries is possible, 
 even without necessity of radically and suddenly changing the present conditions of the nation, and without the 
 necessity of making radical modifications in the laws in force respecting import trade. 
 
 1542. It has been demonstrated in this work, that in spite of the poverty of its treasury, Mexico subsidizes 
 five lines of North American steamers, which put its ports in communication with those of the United States, 
 and which by themselves alone can make a commerce of importance. In spite of the sad experience Mexico has 
 had on account of the concessions made to citizens of the United States, and notwithstanding that none of these 
 have been realized, a considerable number have been granted to them for the building of railways in Mexico, 
 and particularly of lines for putting it in communication with the United States. Notwithstanding that, Mexico 
 inherited all the economic errors of the Spanish exclusive system, and that its peculiar circumstances do not 
 permit it to modify radically and in a liberal sense its fiscal legislation, it has made important reforms in it, and 
 is making it every day more liberal. Notwithstanding that mining has suffered burdens which are a great obsta- 
 cle to its development, important privileges have been granted it, and its products have not largely increased, as 
 was to be desired, neither have they decreased, compared with the years of greatest prosperity. Notwithstanding 
 that, unfortunately there are some cases of attempts against the life and property of persons living in Mexico, 
 they are not more frequent, nor are they of such a character, that they cause any real insecurity, wherefore they 
 have not sensibly afiected the exterior commerce of Mexico. Notwithstanding that smuggling always has been, 
 and still is, done in Mexico, this is not of such proportions that it is an absolute impediment to the carrying on 
 of legitimatetrade in this country. 
 
 1543. The grave questions that have been treated in this exposition, with all the conciseness that is compat- 
 ible with their importance, and with the necessity ^f presenting them clearly, demonstrate that the conceptions of 
 the Report are unfounded in estimating as ahnost insuperable the difficulties there are for the enlargement of 
 commerce between Mexico and the United States, and that this important object can be attained in benefit of 
 both countries, even without the necessity of carrying out aU the political, economic, social and mercantile re- 
 forms the. Report suggests, and many of which are undoubtedly very convenient for the progress of this country, 
 and wiU be reached before, in spite of the obstacles which now present themselves, if the great and constant 
 efforts of the country continue in improving its social, political and economic conditions, with a success which 
 cannot be despised, comparing the starting point with the state at which it has arrived. 
 
 1544. Commerce between Mexico and the United States has a great future. As long as there are in Mexico 
 towns not united by railways ; lands that are not worked with modem machines and agricultural instruments ; 
 mines that are not worked with machinery and processes of new invention ; inhabitants that are not comfortably 
 dressed, and houses that have not the conveniences of Ufej it is clear that this country oflfers a very extensive 
 field for the industry and commerce of the United States, where the spirit of enterprise of the neighboring re- 
 pubHc can be put in practice to convert the vast extent of Mexican territory into a great centre of consumption. 
 
 1545. Even though, as a general rule, a country cannot import more than its exports, for it would not have 
 wherewith to pay the excess of importations, Mexico may be considered to be an exception to this rule, for its 
 elements of wealth are such that, if there should come to be established a great consumption of foreign goods, 
 the importers would find the way of furthering the exportation of many articles that could be exported advanta- 
 geously, for the purpose of paying their importations with them. 
 
 1546. The belief that the United States can develop a great commerce with Mexico appears to be gaining 
 strength now in the United States. It is a motive of satisfaction to the Executive, and to the Mexican nation 
 in general, to note that the statesmen of the United States are beginning to fix their attention on the propriety 
 of enlarging their commerce with Mexico. The position of this country, the most immediate to the United 
 States of all those situated on the American continent, excepting only Canada, the circumstance of being able 
 to produce the tropical fruits and prime materials of great consumption in the United States, and the facility for 
 consuming here many of the North American manufactures, make it possible to establish between the two coun- 
 tries a reciprocal commerce of great magnitude, with positive profit to the inhabitants of both, and in the cause 
 of the civiUzation, the friendship and good relations between the two Republics. 
 
 1541. The Report substantially agrees that the commerce of both countries is susceptible of an increase. 
 
 1542. Condition of Mexico ; its efiorts to improve, socially it politically and economically. 
 
 1543. There are no insuperable difficulties to the enlargement of commerce between Mexico and the United States. 
 
 1544. Circumstances which offer a great future for the commerce between the two countries. 
 
 1545. Advantages which the elements of wealth of Mexico ofEer for the commerce of importation. 
 
 1546. The United States begin to fix upon the possibility of enlarging their commerce with Mexico. 
 
325 
 
 1547- The desire of promoting this result, by dissipating some of the errors and prejudices that prevail 
 abroad, and which contribute in a great measure to make it difficult, and have retarded it up to this time, and 
 the propriety of setting forth the difficulties with which Mexico is struggUng in order to attain that object, to the 
 end that their study and examination may contribute to overcome them, are powerful motives which have deter- 
 mined the Executive to prepare this exposition. It would remain fully sp,tisfied with its work, and it would con- 
 sider itself amply recompensed for the labors it has had to undertake to carry it through, if it could in any way 
 contribute to the reaUzation of the object indicated. 
 
 1548. It is proper to state that, without underrating at all the interest which Mexico has in preserving and 
 enlarging its commercial relations with various European nation with which it is now trading, that interest is 
 greater regarding the United States, and that neighboring nation being more interested than any of the European 
 nations in the material development of Mexico, because it would be the most favored by that development, 
 Mexico has reason to hope that the United States will contribute more efficaciously to attain that important 
 object than any of the European nations, which are situated at great distances and which never could obtain 
 the direct and immediate advantages which the United States would derive from the prosperity of Mexico. 
 
 1549. The Mexican Government believes, moreover, that the development of the elements of wealth of this 
 country being once obtained, it would facilitate the pacific and friendly solution of pending questions, and of those 
 that might arise in the future, between the two nations, and which might otherwise endanger their good relations 
 and their most important interests. 
 
 1550. Mexico considers, therefore, that it is its duty and of great public convenience to promote the enlarge- 
 ment of its commercial relations with the United States, as well because it hopes that that nation will contribute in 
 an efficacious manner to promote the development of the elements of wealth of this country, from its being an ob- 
 ject of mutual convenience to both nations, as that it believes that in this way questions and complications in the 
 future will be avoided which might endanger its dearest interests. 
 
 1551. In the course of this exposition it has been especially studied not to present any of the present con- 
 ditions of Mexico, whether favorable or adverse, under an aspect that is not entirely accurate. To the degree, 
 then, that it has not tried to conceal or dissimulate the evils this country is suffering, and which are an obstacle to 
 its material progress, neither has it attempted to exaggerate any of its favorable conditions for trade, for it has be- 
 lieved sincerity and good faith to be an essential requisite for this work to attain the object for which it is 
 intended. 
 
 J 552. It is possible that some error may have been incurred, from the questions touched upon in it having 
 been manifold, very complex and difficult ; but if this should have happened, it is to believed that such error is 
 not substantial, and at all events the Executive would be disposed to amend or rectify it as soon as it should be 
 shown; for in a work destined, among other things, to rectify the errors that prevail abroad respecting Mexico, it 
 would not be well to set forth errors, even though they should be of less magnitude Stad importance than those 
 which it has been endeavored to rectify. 
 
 1553. This statement of the ideas of the Executive, and of the object proposed upon undertaking this work, 
 being made, there remains nothing more except to express the hope that the ends which have been indicated may 
 be attained, and that the nation and its public men, persevering in the road of social reform and of progress which 
 they have pursued, and studying the various questions whose solution is convenient for the attainment of the said 
 ends, such solution may be facilitated, and that in a short time there may be brought about the realization of the 
 objects proposed. 
 
 Romero. 
 
 Mexico, January 15th, 1879. 
 
 To the Chief Officer in charge of the Office of the Department of Foreign Affairs. Present 
 
 1547. Motives which determined the Executive to prepare this exposition. 
 
 1548. No nation would obtain greater and more immediate advantages from the prosperity of Mexico than the United 
 
 States. 
 
 1549. The development of the elements of Mexico would be a guarantee for its relations with the United States. 
 
 1550. The enlargement of commerce between the two countries is of transcending public importance. 
 
 1551. Sincerity and accuracy of the statement contained in this exposition. 
 
 1553. This work may have some unsubstantial errors which the Executive would be disposed to rectify. 
 
 1553 The Executive desires that the results may be attained which have been referred to in tWs exposition.