MEXICAN FINANCE, INDUSTRIES, AND RAILWAYS
Financial rise of Mexico--Tendencies toward restriction against
foreigners--National control of railways--Successful financial
administration--Favourable budgets--Good trade conditions--Foreign
liabilities--Character of exports and imports--Commerce with foreign
nations--Banks and currency--Principal industries--Manufacturing
conditions--Labour, water-power, and electric installations--Textile
industry, tobacco, iron and steel, paper, breweries, etc.--Railways--
The Mexican Railway--The Mexican Central Railway--The National
Railroad--The Interoceanic--Governmental consolidation--The Tehuantepec
Railway--Port of Salina Cruz--Other railway systems.
The rise of Mexico, within a few years, from the position of a poor and
somewhat discredited state to that of a nation with a regular budget
surplus, and a credit in European markets which provides her with loans
without other security than her good faith, has been very generally
acclaimed as the beginning of a new era in the Spanish-American world.
Previous to the year 1893 it had never happened in the history of
Mexico that the nation's income exceeded its expenditure. The country
had always spent more than it earned, and year after year its budget
showed heavy deficits, with an ever-menacing condition resulting
thereon. But that unfortunate state belongs now to past history, and
since the weathering of the storm of the silver crisis of 1894 Mexico
has had no relapse, and the budget has shown an unbroken and increasing
balance in favour of the Treasury. This satisfactory financial
condition is partly consequent upon the general world-march of commerce
and the era of progress which has dawned for the Spanish-American world
generally. It was time that such should occur! But, apart from these
general causes, or rather closely allied thereto, as regards Mexico,
has been the efficient political administration which the country has
enjoyed, and the able financial control of its resources and revenue.
The name of the presiding genius of the financial department of
Mexico's administration has become well known in financial circles
connected with Mexico--Senor Limautour--and this chapter would be
incomplete if it were not recorded. As Secretary of Hacienda, or
Department of Finance, this cautious and able statesman has been the
instrument for his country's financial progress, for the stability of
Mexico's internal government has, of course, impulsed the advent of
foreign capital into the country, in the form of investments in
railway, mining, and industrial enterprise.
Mexico's credit and prosperity thus satisfactorily established, the
country is enabled to move with a certain spirit of independence as
regards its foreign financial transactions. The last year or so have
shown a marked tendency on the part of the Government to consider their
position as regards foreign capitalists, and to act to the end of
obtaining greater benefits for the nation from the exploitation of the
country's resources, which has principally been carried on by foreign
capital. No one who views the matter disinterestedly will see cause for
complaint in this attitude. It is a poor philosophy which would permit
the mines, fields, and railways of a country to be drained of their
wealth only for the benefit of foreigners. On the other hand, of
course, railways and mines would never have been opened up without
foreign capital, and the distinction between national philosophy, and
ingratitude, must always be an important consideration for
Spanish-American countries.
Mexico, however, does not discourage foreign capital, but only seeks a
proper control of her natural wealth. In earlier years the country was
the happy hunting-ground of hordes of concession hunters, speculators,
and financial jugglers, whose main object was to get something for
nothing, and sell it for a round sum in Europe or America, and they
were often successful. At that time Mexico wanted her railways built at
any cost, but the situation has changed now, although not in a way to
discourage reputable investors. This tendency to restriction has shown
itself mainly in two directions: that of the recent consolidation of
the railway systems, whose integrity was menaced by the attempted
operations of certain American trusts and financial groups; and, later,
by commercial conditions unfavourable to traffic returns. This brought
about the decision of the State to acquire a controlling interest and
voice in the ownership of the main railway lines, and this has been
carried out by means of the purchase of stock in two of these lines,
the Mexican National and Mexican Central Railways. These railways are
two great arteries of travel, as elsewhere described, connecting the
City of Mexico with the United States. This action of the Mexican
Government, which is somewhat of a novel procedure, and an attempt to
carry out the problem of State co-operation with private enterprise, is
conceded to be advantageous to the interests of the two combined
companies to a large extent, whilst it secures to the country the
working of the lines in the interest of the country, and eliminates the
possible element of "rate-war" competition. On the other hand, it is to
be recollected that State ownership and working of railways is
generally disastrous, especially in North or South America, where State
enterprise tends to become a corrupt political machine. But it is far
from probable that this condition will be brought about in this
instance, and the operation will serve rather as an object lesson.
Another restrictive tendency is shown in the bringing forward,
recently, of a Bill for the enacting of a law that mining property
should only be acquirable by citizens of the Republic, and this,
although it has been shelved, is likely to be brought forward in future
years. Such matters are inevitable in the course of time, and the
policy of inducing foreign capital to enter a new country, which is
absolutely necessary to its well-being, has naturally to undergo some
modification when such a country reaches a certain stage of
development.
The present stable condition of Mexican Government finance is shown by
the budget statements for the fiscal year 1908-1909, as presented by
the Minister of Finance. The figures are as follows, in round
numbers:--
Mex. Dols.
Estimated normal revenue . . . . . . . 103,385,000
Estimated normal expenditure . . . . . 103,204,000
-----------
181,000
=======
As before stated, an annual surplus has been forthcoming since the year
1895, with some fluctuations. Out of these increasing surpluses large
sums have been spent upon important public works, which have been
elements for the commercial development of the country and its growing
trade. In addition to this, foreign loans have been contracted for the
completion of such public works. The loan of 1905, for the sum of 40
million dollars gold, was placed with bankers of London, New York,
Berlin, and Amsterdam, the bonds being purchased at 89 per cent. of
their nominal value, free of commission, carrying only 4 per cent.
interest. It is interesting to compare this operation with Mexico's
first loan, consummated in London in 1823, for 16 million _pesos_,
which was bought by the contracting firm at 50 per cent. But it is to
be recollected that the Holy Alliance was at work then, and that the
belief was rampant that Spain would recover her lost colonies![40]
[Footnote 40: See page 125.]
If the position of Mexico's treasury is satisfactory, that of the
general business of the nation is also upon an excellent footing, as
shown by the returns for imports and exports. Those for the financial
year ending June, 1907, are as follows:--
pounds sterling
Total imports . . . . . . . . . . . 23,336,300
Total exports . . . . . . . . . . . 24,801,800
----------
Balance in favour of exports . . . 1,465,500
=========
Whilst the figures quoted in these and the following tables for the
fiscal year of 1907 may be looked upon as showing the normal condition
and growth, the figures for 1908 have shown a considerable decrease,
amounting to more than a million sterling on the imports, and more than
half a million in the exports. In both cases, however, they are in
excess of the amounts for the year 1906. The principal decrease is in
the trade with the United States, and in fact, the fluctuation has been
brought about by the monetary stringency that has prevailed in Mexico
following upon the financial crisis in the United States, which has
affected business to a considerable extent. It must take a year or so
for these conditions to right themselves, but they are far from being
permanent.
It is to be recollected that Mexico is called upon to pay large sums
annually to the foreign holders of her National Debt, which calls for
2,400,000 pounds sterling, and to the railway bondholders, in 2,500,000
pounds sterling, and other amounts paid out as dividends by the banks
to various private enterprises, a total which, of course, largely
exceeds the trade balance due to exports, and which is covered by the
investment of foreign capital in the country.
The character and value of the imported articles for the year and sum
above given, which are instructive as showing the present wants of
Mexico, are shown in the following table, year 1906-1907:--
pounds sterling
Animal substances . . . . . . . . . 1,923,400
Vegetable substances . . . . . . . . 3,173,100
Mineral substances . . . . . . . . . 8,287,200
Textile products . . . . . . . . . . 2,650,000
Chemical products . . . . . . . . . 950,700
Wines and liquors . . . . . . . . . 729,600
Paper, etc. . . . . . . . . . . . . 602,700
Machinery, etc. . . . . . . . . . . 2,773,600
Vehicles . . . . . . . . . . . . . . 900,000
Arms, explosives . . . . . . . . . . 390,800
Miscellaneous . . . . . . . . . . . 955,400
---------
23,336,300
==========
The exports for the similar period, as detailed in the following table,
with their values, show the wide range of Mexican products which are
purchased by other countries. Fractions are omitted:
_Mineral Products_. pounds sterling
Mexican gold coin . . . . . . . . . 3,000
Foreign gold coin . . . . . . . . . 1,000
Gold bullion . . . . . . . . . . . . 1,890,600
Other gold . . . . . . . . . . . . . 492,800
Mexican silver coin . . . . . . . . 2,452,200
Foreign silver coin . . . . . . . . 16,800
Silver bullion . . . . . . . . . . . 6,319,100
Other silver . . . . . . . . . . . . 1,986,800
Copper . . . . . . . . . . . . . . . 2,801,800
Lead . . . . . . . . . . . . . . . . 364,500
Zinc . . . . . . . . . . . . . . . . 201,000
Antimony . . . . . . . . . . . . . . 142,700
Other mineral products . . . . . . . 119,300
---------
Total mineral products . . . . . . 16,246,000
==========
_Vegetable Products_. pounds sterling
_Henequen_ (hemp) . . . . . . . . . 3,144,000
Coffee . . . . . . . . . . . . . . . 723,700
India-rubber and _guayule_ . . . . . 667,900
Pease . . . . . . . . . . . . . . . 408,500
Ixtle fibre . . . . . . . . . . . . 381,300
Vanilla . . . . . . . . . . . . . . 266,200
Timber . . . . . . . . . . . . . . . 217,000
_Chicle_ (chewing gum) . . . . . . . 214,500
Tobacco, raw . . . . . . . . . . . . 189,500
Broom root . . . . . . . . . . . . . 183,100
Frijol beans . . . . . . . . . . . . 86,370
Dyewood . . . . . . . . . . . . . . 74,000
Fresh fruits . . . . . . . . . . . . 34,000
Mulberry wood . . . . . . . . . . . 9,500
_Guayule_, raw . . . . . . . . . . . 6,100
---------
With other vegetable products,
giving a total of . . . . . . . . . 7,181,000
=========
_Animal Products_. pounds sterling
Cattle . . . . . . . . . . . . . . . 156,000
Hides and skins . . . . . . . . . . 887,500
Other matters . . . . . . . . . . . 76,700
---------
Total . . . . . . . . . . . . . . . 1,115,200
=========
_Manufactured Products_. pounds sterling
Sugar . . . . . . . . . . . . . . . 116,400
Cotton seed, meat and cakes . . . . 84,630
Palmetto hats . . . . . . . . . . . 63,120
Tobacco . . . . . . . . . . . . . . 50,000
Tanned hides, &c. . . . . . . . . . 3,500
---------
With other matters making a total of 377,000
=======
By the foregoing it is seen that the export of precious metal is equal
approximately to half the total. Mexican silver coinage is exported
largely to the Orient, and silver bullion to Europe; whilst among
vegetable products the hemp exports take nearly half the total value.
Mexico's principal market for most of her staple food and textile
products is at home, so the export is small.
By far the greater part of Mexico's trade is done with her northern
neighbour, the United States, and the following table shows how the
various countries of the world rank in their commerce with the
Republic, according to the figures for the year 1906-1907, in pounds
sterling, with fractions omitted.[41]
Country. Exports. Imports.
pounds sterling pounds sterling
Great Britain . . . . . . . . . . . 3,187,000 2,360,000
Germany . . . . . . . . . . . . . . 2,011,000 2,450,000
France . . . . . . . . . . . . . . . 805,500 1,760,000
Belgium . . . . . . . . . . . . . . 538,000 300,000
Spain . . . . . . . . . . . . . . . 300,000 800,000
--------- ---------
With other countries, European total 6,850,000 8,330,000
United States . . . . . . . . . . . 17,581,000 14,638,000
Canada . . . . . . . . . . . . . . . 45,700 45,000
Central America . . . . . . . . . . 79,000 7,000
South America . . . . . . . . . . . 10,000 39,000
West Indies . . . . . . . . . . . . 237,000 19,000
---------- ----------
Sum Total . . . . . . . . . . . . . 24,800,000 23,336,000
========== ==========
[Footnote 41: Adduced from the "Mexican Year Book, 1908."]
Thus the commerce of Mexico is seen to be in a satisfactory and growing
condition, and it may be expected to develop steadily, as the large
unworked areas of minerals and agricultural land become opened up by
both native and foreign capital, towards which there is an increasing
tendency to investment.
_Banks and Currency_.--The chartered banks of Mexico are considered to
be solid institutions, and their past history has been a creditable
one. The leading banks are: the National Bank of Mexico, with a capital
of 3,200,000 pounds sterling, and reserves of 2,675,000 pounds
sterling; the Bank of London and Mexico, capital 2,150,000 pounds
sterling, reserve fund, 1,500,000 pounds sterling; the Mexican Central
Bank, capital 3,000,000 pounds sterling; and various other mortgage and
commerce banks, clearing house, &c.; whilst throughout the state
capitals are the respective chartered banks of such states, as the
banks of Chihuahua, Yucatan, Durango, Zacatecas, &c., &c. The total
capital of all Mexican banks is given as nearly 20,250,000 pounds
sterling. The currency of Mexico is now established on the gold basis.
Previous to the year 1905 a bimetallic system had always prevailed in
Mexico, a gold and silver currency; and as Mexico was one of the
largest producers of silver in the world she had naturally encouraged
the use of the white metal, whose coinage at the mint was free; whilst
the demand in the Orient for Mexican dollars was a stimulant to the
production of these. The fall in the price of silver was, to a certain
extent, beneficial rather than inimical to Mexican industry, as it had
the effect of stimulating home manufacture in a country whose raw
material and labour was paid for in silver. This would have been
permanently beneficial had the value remained constant, but the
continual fluctuation in the price had an unfavourable effect on
commerce, and a monetary commission decided that the gold basis should
be adopted, and this became law accordingly; the Mexican _peso_ or
dollar being of a value of half an American dollar, or equal to
approximately 2s. of British currency.
_Principal Industries_.--These have already been spoken of in the
chapters dealing with mining and agriculture. There are throughout the
country more than 150 metallurgical establishments, native and foreign,
which treat the mineral ores from the mines, either by amalgamation,
lixiviation, or smelting. The principal smelting works are those of the
American Smelting and Refining Company, of New York, with a copper
smelter at Aguascalientes of 2,000 tons daily capacity, and others at
Monterrey, Chihuahua, and Durango, well-equipped modern establishments;
the Compania Metalurgica Mexicana, also of New York, with a large plant
at San Luis Potosi, and other enterprises in various parts of the
country engaged in the production of gold and silver bullion, copper
matte, lead, zinc, &c. A good deal of ore is still exported,
nevertheless, in a crude state, amounting in 1907 to a value of
1,700,000 pounds sterling. The Mexican Chamber of Mines, founded in
1906, is a useful institution in connection with the mining industry.
[Illustration: BRITISH ENGINEERING WORK IN MEXICO: BUILDING A
BREAKWATER.]
The cheap labour and abundant raw material are conducive to Mexico's
development in manufacturing; and a further element is that of the
abundant waterpower which exists in certain sections of the country.
Several important hydraulic and hydro-electric generating stations
exist, among them being the Santa Gertrude's Jute Mills of Orizaba,
developing some 5,000 horse power, operated by British capital; the
Vera Cruz Light, Power and Traction Company, Ltd., also British; the
Atoyac Irrigation Company, native capital; the Anglo-Mexican Electric
Company of Puebla; the Puebla Tramway, Light and Power Company, a
Canadian enterprise of great extent and promise; the Mexican Light and
Power Company, also Canadian, which absorbed several existing native
and foreign enterprises. Connected with some of these important and
generally prosperous hydro-electric installations the name of a
well-known British firm[42] figures prominently; the builders of the
great valley drainage work and the re-constructors of the Tehuantepec
Railway and harbour works, and the Vera Cruz harbour works, and other
matters of magnitude. So if, as has been stated elsewhere, British
trade in Mexico is declining, it is at least satisfactory to show that
British capital and enterprise has established and profited by some of
the greatest engineering and public works Mexico has ever possessed;
which will always remain as monuments to British thoroughness. Other
hydro-electric stations are those of Guadalajara, at the famous falls
of Juanacatlan, operated by native capital; the Guanajuato Light and
Power Company, an American concern, with a transmission line 100 miles
long.
[Footnote 42: S. Pearson and Sons, Ltd., London.]
As to the _textile industry_, the cotton mills are amongst the foremost
in the world, and their large capacity and splendidly-built factories
are a source of surprise to the European or American traveller. A large
number of these mills are actuated hydraulically or hydro-electrically.
In 1907 there were 142 mills throughout the country in operation,
employing 33,000 operatives, with 694,000 spindles, and 23,500 looms.
Of these mills 35 are in Puebla, 12 in the Federal District, 11 in
Coahuila, 14 in Vera Cruz, and the balance in the other states, whether
upon the _mesa central_ or upon the Atlantic or Pacific slopes. Among
the most important of these industries may be named the Industrial
Company of Orizaba, whose output in 1907 reached a value of 850,000
pounds sterling, with a profit of 255,000 pounds sterling to its French
owners; the Vera Cruz Industrial Company, profit 84,000 pounds
sterling; Atlixco Industrial Company, Puebla, French owners, profit
89,500 pounds sterling; San Antonio Abad Company, State of Mexico,
Spanish owners, profit 8 per cent. paid in 1907 upon its capital of
350,000 pounds sterling; and numerous other lesser, but profitable
concerns, scattered about the Republic. The amount of cotton used by
the Mexican mills in 1907 was 36,700 metric tons, and the total value
of the output was 5,168,000 pounds sterling. Thus is shown how
important for Mexico is her textile industry.[43]
[Footnote 43: These figures of dividends are from the Mexican Year
Book, 1908.]
Other enterprises are the Santa Gertrude's _Jute Mills_, and the Aurora
Jute Mills; the San Ildenfonso _Woollen Factory_, the Mexico linen
factory, silk factory and others--all of which are dividend-paying
industries, of 7 to 12 per cent.
The _cigarette factories_ of Mexico are among the best-equipped and
largest in the world. The foremost of these are the "Buen Tono"
factory, with a daily output of four to five million cigarettes; and
the "Tabacalera," with a daily output of four million cigarettes. There
are in addition 480 other factories throughout the Republic, and others
for the manufacture of cheroots, cigars, snuffs, and cut tobacco. The
Mexican products cannot, however, compete with the Cuban brands in
favour as yet.
As to the _sugar mills_ there are more than 2,000 of different
magnitude in the country, the largest being in the States of Morelos,
Vera Cruz, and Sinaloa, and these are equipped with modern appliances.
The production of Mexican sugar for 1907 was 119,500 metric tons; of
molasses 68,300 tons; and of rum 567,090 hectolitres.
_Iron and Steel factories_ are represented mainly by those of
Monterrey, owning extensive coal and iron deposits, and operating with
a capital of 1,000,000 pounds sterling, founded in 1900. The rolling
plant produced in 1906 structural iron, steel rails, bar iron, and wire
to the amount of 24,500 metric tons. The company has suffered severe
drawbacks, and this output represents but a quarter of its capacity;
but it is expected that the enterprise will work its way on to
financial success. The Encarnacion Iron Works, in the State of Hidalgo,
which have been operating since 1850, produce bar iron of various
kinds; and the Apulco Foundry, in the same state, turns out pig-iron,
castings, and machinery. Other concerns are the San Miguel Iron Works,
in the same State, and the Comanja Iron Works, of Guanajuato. All these
four enterprises are owned by an Englishman.
Of _Paper Mills_ the San Rafael factories in the State of Mexico are
the leading enterprise. This is situated in a well-wooded and
well-watered region near the foot of the snow-capped mountains,
Ixtaccihuatl, and produces some 20,000 metric tons of paper per annum
in much variety, from the finest to the cheapest kinds. The company
owns large forest areas for pulp making; its capital is 700,000 pounds
sterling, and it paid a dividend in 1907 of 8 per cent., it is stated.
An industry which has very recently come into being is that of
extracting crude india-rubber from the _guayule_ shrub, which abounds
in a wild state over vast areas in the northern plains. There are more
than twenty factories engaged in this new industry, and, in addition,
quantities of the shrub are exported.
Other industries are the _soap works_ of La Laguna, manufacturing soap
and cotton-seed oil and cake from the products of this important
cotton-growing district. A _dynamite factory_ near the same region--at
La Tinaja--operates under a special concession from the Government. A
_cement works_ at Hidalgo, of 50,000 tons annual capacity, has been
started.
_Breweries_.--A number of breweries exist, as those in the capital, and
at Monterrey, Toluca, Orizaba, Chihuahua, Guadalajara, Cuernavaca, &c;,
and these generally produce good beer such as supplies the home demand
in general, and has largely killed imports of the foreign kinds. Of
flour mills 400 establishments supply flour, whilst the meat-packing
and cold-storage business is represented by the Mexican National
Packing Company, of British control, in Michoacan, the centre of a
livestock industry. This is the only modern establishment of its kind.
It was opened in 1908, and is an important enterprise.
The industrial census of 1902 gives a list of more than 5,500
manufactories, including sugar mills, distilleries, potteries, iron and
steel works, chemical factories, chocolate factories, ice factories,
paper mills, leather workers, and a host of others. Minor industries,
performed in cottages and homes, occupy a large number of people, such
as the making of hats, pottery, saddlery, linen-drawn work, and so
forth. Special franchises and exemption are given by the Government for
the establishing of new manufacturing industries, which are encouraged
by the Department of Fomento, and the field is not without attraction
for foreign capital.
_Railways_.--In the chapter dealing with the natural resources and
conditions of the various states, some details of the railway system
have been given. Mexico's railways have been the principal agency for
her development, both political and commercial, for, on the one hand,
they have rendered possible the swift suppression of revolutionary
menace, and, on the other, they have fulfilled their function as means
of communication for goods and passengers. No country has ever showed
the effects of the steadying influence of railways so markedly as
Mexico. The close communication with the United States, so rendered
possible, and with the Gulf seaboard, has also contributed to this end,
and the railways of Mexico may be looked upon as safeguards for
stability in a considerable degree. I will now give a brief _resume_ of
the principal railway lines and their general conditions.
[Illustration: THE MITLAC RAVINE: VIEW ON THE MEXICAN RAILWAY.]
The first line to put Mexico in touch with the outside world was the
Mexican Railway from Vera Cruz to the capital. This work, having been
much aided by the Maximilian _regime_, was completed under President
Lerdo, and inaugurated on January 1, 1873. The line is controlled by an
English corporation, and the great engineering difficulties which were
overcome, and the solidity of its construction, are such as are
scarcely surpassed by any railway in the world, conditions which
reflect credit upon its British constructors. The line is almost unique
from a scenic point of view, ascending, as it does, from the Gulf
Coast, among the stupendous mountain fastnesses of the Sierra Madre, to
gain the great elevation of the plateau and the Valley of Mexico. The
tropical regions passed through, and the rapid changes of climate
encountered, as the train ascends, must be experienced to be
understood, but the general character of the regions traversed has been
fully set forth in these pages. One of the most remarkable places, from
an engineering and scenic point of view, is the Maltrata summit, and
only in a few places in the world--on the transandine or transalpine
railways, or the Denver line--is it equalled. From the gained altitude
the passenger looks down upon the town, spread like a chess-board,
thousands of feet below, as the train plunges around dizzy _barrancas_,
over iron bridges spanning profound canyons, or along the curving
road-bed cut in the solid rock of the mountain side. The names of many
of the points passed _en route_ bring back memories of the Conquest,
and of those Homeric men who passed that way nearly four centuries ago,
as well as of the Toltec and Aztec periods. From tide-water at Vera
Cruz, the line crosses the coastal plain and plunges into a tropical
forest, whence it climbs to 2,713 feet at Cordova, 4,028 feet at
Orizaba, amid a delightful climate and surroundings, 5,151 feet at
Maltrata, 8,000 feet at Esperanza, and reaches its highest point at
Acocotla, near San Marcos, an elevation of 8,310 feet above sea-level.
This, of course, is not high in comparison with the transandine Oroya
railway of Peru,[44] which--the highest in the world--reaches 15,666
feet. The Vera Cruz line descends from the summit of the Sierra Madre
to the Valley and City of Mexico, past the plains of Otumba and San
Juan Teotihuacan, reaching the capital at an elevation of 7,348 feet
above sea-level. The length of the line from Vera Cruz to the City of
Mexico is 264 miles, and with its branches to Puebla and Pachuca, &c.,
321 miles--all of standard gauge. The total share capital for a line of
this mileage is heavy, the whole of the stock and shares reaching
7,820,780 pounds sterling. The general growth of Mexico's trade and the
careful management of the line are causing an improvement in its
financial condition. In January, 1902, a dividend of only 2-1/2 per
cent. was paid upon the first preference stock, and nothing upon the
second nor upon the ordinary shares, whilst an increase in the
following years, through 6 per cent. and 8 per cent., accrued to the
first, so that for the last half-year of 1907, 8 per cent.--its full
rate--was paid upon the first preference stock, 5-3/4 on the second,
and nothing on the ordinary shares. The returns at present are
suffering from the results consequent upon the late financial crisis in
the United States, which seriously affected Mexico.
[Footnote 44: See my "Peru."]
[Illustration: BRIDGES OVER THE ATOYAC RIVER: MEXICAN RAILWAY.]
The Mexican Central is the next line in importance. It is a noteworthy
feature of Mexico's relations in the middle of last century with its
neighbour--the United States, that President Lerdo discouraged the idea
of traversing the deserts of the great plateau with a railway, fearful
of American political and commercial machinations, as showed by his
famous axiom, which I have quoted elsewhere, relating to the
intervening desert. To the broader outlook of President Diaz this line
owes its being, upon a concession transferred to an Englishman, who was
associated with American capitalists. A company was formed, and the
railway--which was subsidised by the Government--was opened for traffic
from the City of Mexico to the United States frontier at El Paso on
March 22, 1884. To-day, with its numerous branches, one of which runs
eastwardly to the Gulf Coast at Tampico, and another, westwardly to
Guadalajara and beyond, with yet another to Cuernavaca, it is a large
system of 3,823 miles. The construction was inferior to that of the
Vera Cruz Railway, as it obeyed the cheaper and more rapid American
method rather than the more enduring British. It is a standard gauge
line. The route traversed by the main line of this railway adown the
_mesa central_, for 1,225 miles, passes through vast areas of dry and
treeless plains and among numerous squalid hamlets, and here the
unlovely side of Mexican life and travel is laid bare to the traveller.
Nevertheless, these conditions alternate with those of the handsome and
extensive cities of the plateau and with the great mining regions, all
of which--in point of interest and value--compensate for sterility
elsewhere. As for the branch line from San Luis Potosi to Tampico, it
passes through the same remarkable tropical zone as the Vera Cruz line.
The mountain scenery upon this route is impressive, with dense woods
and fertile valleys giving place to the great canyon of Tamasopo. The
same panoramic character attends it, of luxuriant tropical conditions
spread out 1,200 feet below the train, with rushing torrents, towering
cliffs, and strange and varied topographic changes. The branch which
runs westwardly towards the Pacific Ocean from the main line, passes
through Guadalajara and descends the Western Sierra Madre towards
Colima at Tuxpan. A short distance only remains to be constructed in
order to give a completed route to Manzanillo--the port upon the
Pacific coast, which will form the terminus of what will then
constitute a new transcontinental route from the Atlantic to the
Pacific. This is an exceedingly interesting journey, but a disastrous
flood in 1906 set back the construction work. The branch line from the
Mexican Central, which runs from the City of Mexico westwardly to the
Balsas river, is destined ultimately to reach the famous seaport of
Acapulco, on the Pacific Ocean. This port, indeed, is the best harbour
on the Pacific coast of North America, after San Francisco in
California. The line, however, is still far from reaching the coast.
Cuernavaca, which is passed by this line, is some 75 miles from the
capital, and the route lies through a scenic wonderland, reaching, at
the summit of the Sierra Madre, an elevation of 10,000 feet above
sea-level, and affording a magnificent view of the City and Valley of
Mexico 2,500 feet below. Beautiful and historic, Cuernavaca was a home
of Montezuma and a famous prehistoric centre until its capture by
Cortes, and every Mexican traveller marks it as one of his objective
points. The finances of the Mexican Central Railway have been in recent
years often in an unsatisfactory state, and the consolidation of the
line with the National Railway, under Government auspices, is expected
to bring about a more favourable condition.
The National Railroad similarly traverses the great plateau, from
Laredo, upon the United States border, to the City of Mexico. It was a
subsidised narrow-gauge line, built under American auspices, and was
opened for traffic in November, 1888. The inevitable widening of the
gauge to standard size took place, and was completed in November, 1903.
The length of the main line is 800 miles; the shortest route from the
United States border to the capital. The Interoceanic Railway, a
British company, which forms part of the consolidated system now, will
give it a line to Vera Cruz, whilst, _via_ the International Railway,
it has communication westwardly to the important city of Durango.
Another branch line runs to Matamoros, upon the Gulf of Mexico. The
line also traverses a portion of Texas.
The Interoceanic Railway is a main line from the capital to Vera Cruz,
passing through the town of Jalapa, amid a region famed for its beauty
and unique tropical surroundings; and the line was constructed and
operated by British interests. It embodies 736 miles of line. Its
original concession was designed for powers to run to Acapulco, on the
Pacific coast; hence the name of the railway; but it does not nearly
reach the coast, although it descends into and serves the fertile and
picturesque State of Morelos, connecting at Puente de Ixtla with the
Mexican Central Railway. From that point a branch line runs to Puebla,
the second or third important city of importance in Mexico; passing
near the famous town of Cholula, of Aztec and Toltec remembrance. The
Interoceanic is now merged into the new consolidation arrangement.
[Illustration: THE SEAPORT OF VERA CRUZ.]
The International Railway runs also from the United States border, at
Ciudad Porfirio Diaz, or Eagle Pass, across the great plateau to the
city of Durango, as before mentioned, passing through important
agricultural, manufacturing and coal-bearing regions.
The Hidalgo and North-Eastern is a narrow-gauge railway, 152 miles
long, from the City of Mexico into the State of Hidalgo, and forms a
part of the Mexican national system.
In the consolidation or fusion of the foregoing lines, that is to say,
the Mexican Central, National, International, and Interoceanic, the
Government has a dominating interest of 85 per cent. of the capital
stock, and the control of this great system and company, now termed the
"National Railways of Mexico," with an authorised capital of 615
million _pesos_, or 61,500,000 pounds sterling, will be mainly a State
affair; and any profits accruing from the enterprise after payment of
interest on bonds and dividends on preferred stock, will go to the
Mexican nation.
The Tehuantepec Railway is a very important line, in that it forms a
short transcontinental route across North America, from the Atlantic to
the Pacific Oceans; and it may be expected to compete with the Panama
Canal, in the carriage of passengers and freight. The distance from
ocean to ocean in an air line is only 125 miles, and the line itself is
only 192 miles long. This interesting route crosses the _divortia
aquarum_, or water parting, of the continent at an elevation of only
730 feet above sea-level, at the Chivela Pass. The isthmus of
Tehuantepec has been considered of geographical interest ever since the
expeditions of Cortes discovered it. Projects both for a canal and a
ship-railway have at different times during last century been brought
forward to traverse it. The existing railway line was built in 1894,
but its construction was faulty, and, moreover, the terminal ports,
Coatzacoalcos on the Gulf side, and Salina Cruz on the Pacific side,
were inadequate. In 1899 an English firm was called in by the Mexican
Government; contracts entered into for the re-construction of the line,
and the making of its terminal ports, all of which has been carried to
completion; a work of endurancy, solidity, and utility being the
result, which reflects credit on British methods generally and upon the
contracting engineers in particular. This is the same firm[45] which
carried out the great harbour works of Vera Cruz, and the drainage of
the Valley of Mexico, and it has earned an enviable reputation in
Mexico. The Tehuantepec Railway is 1,200 miles north of the Panama
Coast, and may be expected to take a good deal of the United States and
international transoceanic traffic, as it is nearest to the "axial
line" of the world's commerce of any American isthmusian route. The
railway is owned by the Mexican Government, but is worked by the
British contractors in conjunction therewith under a partnership
agreement. At Salina Cruz, the Pacific terminus, a fine harbour has
been constructed at considerable cost; and a dry dock capable of
holding vessels 600 feet long. The whole forms one of the most
important seaports on the American Pacific coast, and reflects credit
on its British constructors and on Mexican financial enterprise.
[Footnote 45: See p. 336.]
[Illustration: NEW PORT OF SALINA CRUZ, ON THE PACIFIC: THE GREAT DRY
DOCK. (See also p. 306.)]
The Mexican Southern Railway is a narrow-gauge railway, 228 miles long,
running from the city of Puebla to the city of Oaxaca, through the
fertile region of Tehuacan. It was built by a British firm[46] of
engineers, which later carried out an important part of the drainage
works of the Valley of Mexico. The company is British, and the
financial position of the enterprise, which had been one of difficulty
formerly, has, under re-construction and the growing prosperity of the
country, been enabled to double its earnings, and pay a dividend upon
its ordinary stock.
[Footnote 46: Read, Campbell & Co., London.]
The Vera Cruz and Pacific Railway runs from Cordoba, an important town
before mentioned, on the Mexican Railway to Vera Cruz, to Santa
Lucrecia, on the Tehuantepec Railway; and is of much importance, as it
links the general railway system of the Republic with the transisthmus
line. In addition to this, it has a branch line to Vera Cruz, and so
becomes a through route of travel from that port to the Pacific Ocean,
_via_ Tehuantepec. The road carried a Government subsidy and was
financed in the United States, but due to inefficient management and
the heavy work involved in construction, the company suspended payments
in 1903, and the Government, in view of the strategic importance of the
line, took the property off the hands of the company. The railway is
now operated under Government auspices as an individual concern. It is
standard gauge, its length being 201 miles for the Tehuantepec
connection, and 62 miles for the Vera Cruz branch.
The Vera Cruz (Mexico) Railways--not to be confounded with the Mexican
(Vera Cruz) Railway--is a narrow-gauge line 44 miles long, running from
the port of Vera Cruz along the coast to Alvarado--named after the
_Conquistador_--a port near the estuary of the Papaloapam river. This
navigable river, as elsewhere described, extends inland and gives
access to an important tropical region. A tributary of this river, the
San Juan, is navigable for small craft for a distance of 177 miles from
Alvarado, at San Juan Evangelista, whence a short railway line connects
with the Tehuantepec Railway, thus completing a through service of
travel. The railway company and its steamers form a British enterprise,
controlled by the constructors of the Tehuantepec Railway.
In the peninsula of Yucatan are the United Railways of Yucatan, giving
communication with the chief cities and ports of that region. The total
length of line embodied in the three divisions of this system is 373
miles; and there is a line from Merida to Peto, of 145 miles.
Returning now to the north of the Republic; the Rio Grande, Sierra
Madre, and Pacific Railway runs westwardly from Ciudad Juarez, or El
Paso, for a distance of 159 miles. It is an American enterprise, and
traverses some good agricultural and mineral regions, serving the
prosperous Mormon colonies founded by Americans in the State of
Chihuahua. It is designed some day to traverse the Sierra Madre and
reach the Pacific Ocean.
The Kansas City, Mexico and Orient is an important undertaking which,
when it is concluded, will give a transcontinental route, from the
railway system of the United States _via_ Chihuahua, to a port on the
Pacific Ocean--that of Topolobampo, on the Gulf of California. The
length of the Mexican portion of the line is 634 miles, of which 332
are constructed. It opens up a vast new region of Western Mexico, and
should be of growing importance, and of international service. It is an
American enterprise, with British and Mexican associations. Connected
with it is the Chihuahua and Pacific Railway.
The Sonora Railway runs from Nogales on the United States border, to
the port of Guaymas on the Gulf of California, as described elsewhere,
with a length of 265 miles. In connection with this railway, and with
the Southern Pacific Railway of the United States, railway building in
Western Mexico is projected by American capitalists, over routes
already surveyed, for a length of more than 4,000 miles, portions of
which are to be subsidised by the Mexican Government.
The Pan-American railway, as its name implies, is projected for the
purpose of uniting North and South America by rail, its ultimate
destination being Panama. At present the portion under construction is
for linking the general system of the Republic with the isolated system
of Yucatan, and thence to the frontier of Guatemala. The distance from
its starting-point at San Geronimo on the Tehuantepec line, to the
Panama Canal, is 1,650 miles; and the line is to form a link in the
great project of a rail route from New York to Buenos Ayres. It is an
American enterprise.
There are numerous other short lines throughout Mexico, serving mineral
and agricultural regions, whether under Mexican, British, American, or
other ownership, giving a total length of existing Mexico railways, of
14,180 miles. Thus it is shown that Mexico is covered with a network of
railways, connected with each other and with the system of the United
States, throughout the great length of her territory from north to
south, and crossing from the Gulf of Mexico to the Pacific Ocean--in
practically two instances--one completed and in operation, the other
nearing completion. The new railway laws of Mexico will prevent undue
competition and the duplicating of existing lines; and the Republic's
railways ought in the future to be of developing value, in view of the
considerable resources of the territory which they traverse, and of
their geographical importance.
In brief, the commercial and industrial life of Mexico is young but
full of promise, and has entered upon a course whose present
surroundings seem favourable and well founded.