CHAPTER XVI
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—Señor 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]
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:—
| £ | |
| 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, and to the railway bondholders, in £2,500,000, 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:—
| £ | |
| 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. | £ |
| 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. | £ |
| 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. | £ |
| Cattle | 156,000 |
| Hides and skins | 887,500 |
| Other matters | 76,700 |
| Total | £1,115,200 |
| ======= | |
| Manufactured Products. | £ |
| 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 £ sterling, with fractions omitted.[41]
| Country. | Exports. | Imports. |
| £ | £ | |
| 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 |
| ======= | ======= |
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, and reserves of £2,675,000; the Bank of London and Mexico, capital £2,150,000, reserve fund, £1,500,000; the Mexican Central Bank, capital £3,000,000; 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. 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 Compañia 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. The Mexican Chamber of Mines, founded in 1906, is a useful institution in connection with the mining industry.
| 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.
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, with a profit of £255,000 to its French owners; the Vera Cruz Industrial Company, profit £84,000; Atlixco Industrial Company, Puebla, French owners, profit £89,500; San Antonio Abad Company, State of Mexico, Spanish owners, profit 8 per cent. paid in 1907 upon its capital of £350,000; 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. Thus is shown how important for Mexico is her textile industry.[43]
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, 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, 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 résumé of the principal railway lines and their general conditions.
| 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 régime, 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. 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 2½ 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, 5¾ 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.
44 See my "Peru."
| 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 cañon 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, viâ 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.
| 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, 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.
45 See [p. 336].
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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.
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, viâ 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 viâ 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.