A Study of Mexico/Chapter IX

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A Study of Mexico  (1887)  by David Ames Wells
Chapter IX

CHAPTER IX.


The Federal budget — Receipts and expenditures—Principal sources of national revenue — Foreign commerce — Coinage of the Mexican mints— Imports and exports — The United States the largest customer for Mexican products — Silver monometallism in Mexico—Its inconveniences and abandonment— Introduction of paper money — Sanitary conditions of Mexico — Terrible mortality of the cities of Mexico and Vera Cruz.

The Federal budget, in respect to expenditures for the fiscal year 1886-'87, as reported by President Diaz to the Mexican Chamber of Deputies, was as follows:

Congress. $1,052,144
Executive Department. 49,251
Judiciary. 434,892
Ministry of Foreign Affairs. 419,828
Ministry of Interior. 3,539,364
Ministry of Justice. 1,333,696
Ministry of Public Works. 4,711,771
Ministry of Finance. 12,004,270
Ministry of War and Navy. 12,464,500
 Total. $36,009,716

The estimates of receipts were uncertain. It was hoped, if business recovered, that they would reach $33,000,000; and the Government promised to try and restrict the national expenditures to this amount.

The following are the reported receipts and expenditures of the republic for the years 1880-'81 to 1883-84 inclusive:


YEARS.


Receipts.


Expenditures.


1880-'81

$26,550,000

$24,900,000
1881-'82  30,400,000  30,590,000
1882-’83  32,850,000  37,580,000
1883-’84

 37.620.000

 42,760,000

As for the sources of national revenue, the customs are understood to yield about one half; taxes on sales and stamps, some $5,000,000; post-offices and telegraph lines, $650,000; lotteries, $800,000; while the receipts from taxes levied by the States (mainly on sales also) amount to from $8,000,000 to $10,000,000, or about one half the receipts from customs.

In respect to the foreign commerce of Mexico, a report on the "Commercial Relations of the United States," issued by the United States Department of State in 1883, says: "Owing to the system, or, rather, to the lack of system, in regard to the collection and publication of customs returns by the national Government, it is impossible for our consuls in Mexico to supply any trust-worthy statistics concerning the foreign commerce of the republic." Mr. Garden, Consul for Great Britain, in a report to his Government in 1883, on the trade and commerce of Mexico, says, in reference to the difficulties encountered in investigating this subject: "Since 1874 no attempt has been made to do more than estimate the value of imports by that of customs receipts; which, seeing the constant alterations of and additions to the tariff, and the fluctuations in the quantities of goods introduced free of duty, can necessarily only afford a very imperfect basis for calculation." In respect to exports the information is much more satisfactory. An approximative estimate of the results for 1880 was as follows:

Exports $32,663,554
Imports  24,003,372
 Total $56,666,926[1]

The precious metals—coin, bullion, and ores—always constitute the great bulk of what Mexico exports; and the proportion of agricultural products or other merchandise exported is surprisingly small. Thus, out of the total value of exports for 1884, estimated by Consul-General Sutton at $39,716,000, nearly three fourths, or $28,452,000, were credited to the precious metals, and only $11,264,000 to all other commodities; and of these last the largest proportion always consists of articles produced near the seaboard, or near the line of the "City of Mexico and Vera Cruz Railroad." During recent years, and since the construction of the so-called American railroads, the increase in the exports from Mexico, of products other than the precious metals, has, however, been very notable, and is apparently progressive. But the fact that the exports of Mexico always largely exceed her imports, that the great bulk of the exports are always the precious metals, and that the excess of imports does not represent payment for interest to any extent on any national foreign indebtedness, naturally creates a suspicion that the whole (export) transaction is something abnormal; which may find an explanation in the existence of a class of wealthy absentee landlords, or proprietors, who, living permanently in Paris or Spain, draw rents, tolls, and profits from their Mexican properties, and invest or expend the same in other, or foreign countries. The bulk of the coinage of Mexico—both of silver and of gold—is exported almost as soon as it leaves the mints. Thus, although the average annual coinage of the Mexican mints from 1876 to 1880 was $22,524,694, and since then has been larger ($25,610,000 in 1881-'82), the amount of coin in actual circulation in the country is believed to have never been in excess of $15,000,000 or $20,000,000. Much of the Mexican coined silver has, as is well known, been heretofore in large demand to meet the world's requirements for trade with China; but what has come back to Mexico for it in exchange is somewhat of a commercial puzzle.

The present annual value of the total import trade of Mexico is probably not in excess of $35,000,000, of which the United States already controls a large proportion. Thus, for the year 1883, the returned value of all merchandise exported from the United States to Mexico was $16,587,630; of which $14,370,992 was "domestic" and $2,216,638 "foreign" merchandise. This was, however, a year of very active railroad construction, with an abnormal employment of Mexican labor, and large disbursements of American capital in the country. Since then there has been a marked falling off in exports from the United States (less than $13,000,000 in 1884), which has been attributed partly to the withholding of orders in anticipation of the ratification of a commercial treaty between the two countries, and partly to the great depression of business consequent on the large decline in the price of silver.[2] Although, according to the above figures, the United States appears to take the lead of all other nations in respect to the import trade of Mexico, it is claimed by the English consular officials that, if the necessary figures were obtainable, it would be demonstrated that the real exports of England and France to Mexico are larger than they are reported. "All that the United States exports to Mexico is of necessity sent direct, as it would be unreasonable to suppose that any American goods would be sent via Europe, and thus figure in the indirect trade of other countries. On the other hand, it is certain that all the indirect trade through the United States is European, and it is probable that a fair share of it consists of English and French merchandise; and this is especially the case when so much material for the construction of new railways is being imported from England through the Texan ports and sent by rail across the frontier."—Report of Consul Garden, 1883. In regard to the exports from Mexico there is less difference of opinion, and it seems to be agreed that the United States and England are the chief consumers of Mexican products, and that Germany, France, and Spain hold a subordinate place as buyers from Mexico. For the year 1884-'85 the value of Mexican exports—precious metals and merchandise—has been estimated as high as $45,600,000; of which $25,053,000, or 55 per cent, went to the United States; $15,367,000, or 32.9 per cent, to England; 4.8 per cent to France; 3 per cent to Germany, and 2.6 per cent to Spain. It therefore follows, if these figures are correct, that the United States buys more of Mexican merchandise than all the other nations of the world together. Excluding the exports of the precious metals, the proportion of exports in favor of the United States would undoubtedly be much greater.

In a report to the State Department (May, 1884), ex-Consul-General Strother thus briefly sums up the obstacles (heretofore noticed more in detail) which stand in the way of the future development of the commerce of Mexico. He says: "Topographically considered, Mexico labors under many serious disadvantages to commerce, whether external or internal. Her coasts on both oceans are broad belts of intolerable heat, disease, and aridity, and, except a few small seaport towns. are nearly uninhabited. On the whole extent of her coast-line there are but two natural harbors available for first-class modem merchant-vessels—those of Anton Lizado on the Gulf, and Acapulco on the Pacific, All the other so-called seaports now used by commerce are open roadsteads, dangerous in rough weather, and only approachable in lighters, or are located on rivers, the entrances to which are closed to ocean traders by shallows or sand-bars. The natural obstructions and difficulties in the way of inland traffic are scarcely less observable. Mexico is entirely wanting in navigable rivers and lakes. Her fertile districts, capital cities, and centers of population are separated from each other by long distances, arid districts, immense chains of mountains, and vast barrancas washed out by her rapidly descending water-courses. These difficulties were partially overcome by the Spaniards, who constructed a noble system of highways and bridges extending between the principal cities of the viceroyalty, but from the nature of the soil they were immensely expensive to construct and difficult to maintain. During the long and ruinous wars for independence, and the civil wars which followed, these highways went rapidly to destruction; and, notwithstanding recent repairs and reconstructions, the general condition of Mexican highways is not encouraging to either commerce or travel. But all these natural and accidental disadvantages combined may be regarded as nothing in comparison with the crushing and suffocating influences brought to bear on Mexican commerce, foreign and domestic, by the exclusive policy imposed by the mother-country during the three centuries of Mexico's colonial vassalage; and, secondly, by the system of internal and interstate duties and custom-houses, inherited from Old Spain, which still practically vexes the internal commerce of the republic."

Silver Monometallism.—Until within a very recent period, Mexico has furnished to the world a most curious and interesting example of a some-what populous country conducting its exchanges almost exclusively by means of a monometallic, silver currency; no other form of money, with the exception of a small copper coinage, having been used or recognized. The results were most instructive. The bulk and weight of the silver currency constituted a most serious embarrassment to commerce and all money transactions. Thus, if one proposed to trade, even to a retail extent, or go on a journey, a bag of coin had to be carried. If it were proposed to pay out a hundred dollars, the weight of the bag would be five and a half pounds; if two hundred dollars, eleven pounds; if five hundred, twenty-seven pounds. About the doors of the principal banking-houses were to be seen groups of professional porters {cargadores) who gained a livelihood by carrying loads of coin in ixtle bags from one part of the city to another. Where collections or payments were to be large, and the distance to be traversed considerable, regular organizations of armed men, and suitably equipped animals—known as "conductas"—were permanently maintained; and severe and bloody fights with bandits were of common occurrence. At the great cotton-mill at Querétaro, as already noted, the organization of a conducta—men, arms, and horses—for making collections, was as much an essential of the business as the looms and the spindles. "It was obviously impossible to carry even a moderate amount of such money with any concealment, or to carry it at all with any comfort; and the unavoidable exhibition of it, held in laps, chinking in trunks or boxes, standing in bags, and poured out in streams at the banks and commercial houses, was one of the features of life in Mexico," and undoubtedly constituted a standing temptation for robbery. This state of affairs continued until 1880. The Government, the banks, the merchants, the railroad offices, and private individuals transacted all their business in silver coin; and all promises to pay, notes, bonds, mortgages, etc., were drawn up with the invariable provision, "payable in hard dollars (pesos fuertes), to the exclusion of all paper money existing, or that may be hereafter created." The only bank-notes issued at that date were large bills of the "Bank of London, Mexico, and South America"—21 branch of which, unchartered, was established in Mexico in 1864. Their circulation was extremely limited; small traders and the people at large declining to accept them. Since then, the "Monte de Piedad" (the national pawnbroking establishment), a "national" bank, and various banks of foreign incorporators, have issued notes; and the practice thus initiated has rapidly extended to all sections of the republic. The basis of issue of all the regularly chartered banks is understood to be substantially the same as that of the "Banco Nacional Mexicano" (Mexican National Bank), which is authorized to issue three millions of paper for every million of coin or bullion in its coffers, which notes are legal tender from individuals to the Government, but not from the Government to individuals, or between individuals. This bank is chartered for thirty years, and is exempted from taxation during that period. Its present circulation has been reported at over $5,000,000. The possibilities, if not probabilities, therefore, now are, that a flood of paper will ultimately drive silver out of circulation in Mexico; and that neither popular traditions nor prejudices, nor the adverse influence of the mints (which in Mexico are private establishments), nor its great silver-mining interests (at present the most important business interest of Mexico), can have any effect in checking the paper currency movement.


RELATION OF THE SANITARY CONDITION OF MEXICO TO ITS COMMERCIAL DEVELOPMENT.

The sanitary condition of every country constitutes an important element in determining its commercial development, and Mexico especially illustrates the truth of this proposition. The coast-lands of the republic are hot and unhealthy. The more elevated portions, where nine tenths of the people live, are claimed to be unsurpassed in salubrity. Strangers from northern latitudes, and accustomed to the ordinary levels of human residence, are liable, on coming to the Mexican plateau, to a process of acclimation, which, although often very trying, is rarely attended with any very serious consequences. Horse-dealers from Texas state that they lose from twelve to twenty per cent of the horses brought to the city of Mexico for sale, solely from the climatic influences contingent on its great altitude. The sanitary conditions of the two chief commercial centers of the republic, namely, the city of Mexico and of Vera Cruz, are, however, so extraordinary and so obstructive to national progress that any review of the country would be imperfect that neglected to notice them. The evil in the case of the former is local and not climatic, and is due to the circumstance that the site of the city is "a bowl in the mountains," so that drainage from it is now, and always has been, very difficult. And, as years have passed, and the population living within the bowl has multiplied, the evil has continually increased, until Lake Tezcoco, which borders the city, and on which Cortes built and floated war-galleys, has been nearly filled up with drainage deposits which have been carried into, it through an elaborate system of city sewers. If these sewers ever had fall enough to drain them, they have, as the result of the filling up of this lake, little or none now, and the result is that they have become in effect an immense system of cess-pools; while the soil, on which from 250,000 to 300,000 people live, has become permeated with stagnant water and filth inexpressible. And were it not for the extreme dryness and rarefaction of the air, which, as before pointed out, prevent the putrefaction of animal substances, and seem to hinder the propagation of the germs of disease, the city must long ago have been visited with plague, and perhaps have been rendered absolutely uninhabitable. And, even under existing circumstances, the average duration of life in the city of Mexico is estimated to be but 26.4 years. Typhoid fever prevails all the year round, and is especially virulent at the end of the dry season, when the heat is the greatest. And, surprising as it may seem, with a climate of perpetual spring and an elevation of 7,500 feet above the sea-level, lung and malarial diseases hold a prominent place among the causes of death. According to the reports of the Board of Health of the Mexican capital for April and May of the present year (1886), thirty-three per cent of the weekly mortality at that season was to be referred to typhoid and other forms of gastric fever, and twenty per cent to consumption and pneumonia. In the year 1877, when a typhus epidemic prevailed, the city's mortality was reported to have been as high as 53.2 per thousand as compared with an average death-rate of 24.6 in Paris for the same year. "A distinguished member of the medical faculty of Mexico has lately published a report, in which he demonstrates, by comparative statistical tables, that the annual mortality of the city is increasing to such an extent as already to counterbalance the natural movement of the population, and, if not checked in time, as threatening the race."[3]—"United States Consular Reports," No. 3, 1881, p. 18.

This condition of affairs is not due, as some might infer, to any improvidence or want of enterprise on the part of the Mexicans, for the evil has long been recognized, and at present especially interests the Government. But the difficulties in the way of applying an efficacious remedy are very great, and engineers are not fully agreed as to the best method for attaining the desired result. "For such is the nature of the plain upon which Mexico is built, such the conformation of the land and the contour of the mountains about it, that a vast system of tunneling and canalization would be necessary to create a fall sufficient to drain the valley; and, before the city can be drained, the valley must be." It is said that one celebrated American engineer, whose advice was recently asked by the Government, reported that, if a thorough drainage could be effected, the city, through a consequent shrinkage of soil, would probably tumble down. And, finally, the existing condition of the national and municipal finances is such, that it is not easy for the authorities to determine how the money necessary to meet the contingent great expenditures—estimated at about $9,000,000, or a sum equivalent to more than one third of the entire annual revenue of the General Government—is to be provided.

It ought not to be inferred that there is special danger to travelers, or tourists, visiting the Mexican capital, and residing there during the winter months or early spring; for experience shows that, with ordinary precautions in respect to location, diet, exercise, and exposure, health can be maintained there as easily as in most of the cities of Italy at the same seasons. One serious draw-back to the visitation of Mexico by English-speaking foreigners, intent on either business or pleasure, is the absence of any suitable public pro vision for the care or comfort of any such who may happen to fall victims to accident or disease. This condition of things is greatly aggravated in case of contagious diseases, when the authorities, on notification by the landlord of any hotel or boarding-house, "immediately remove the patient to a public pest-house, where with scores or hundreds of uncongenial companions, suffering from all kinds of loathsome diseases, he is placed in the hands of nurses whose language he probably can not speak or understand, and to whose food and manners he can not, especially in such a trying hour, become accustomed; and where he is prohibited any little delicacies that might be sent him, and where he lies down alone, to suffer and perhaps to die."[4] In the city of Mexico the further continuance of such painful experiences has in a great degree been prevented by the founding and establishment by private contributions during the present year (1886), of a small but suitable and conveniently located hospital, with provision for ten free beds, and two furnished rooms for rental; and these arrangements it is proposed to enlarge as rapidly as further contributions for the purpose will permit. It may be further noted that this enterprise was the outcome of a meeting of Americans and others on the anniversary of the birthday of Washington in 1886; was greatly stimulated by the generosity of a "Raymond Excursion" party which happened to participate; is now under the charge of a committee, of which the Rev. John W. Butler, of the Methodist Episcopal mission, is secretary; and is a matter which strongly commends itself to the sympathy and aid of the North American and English people. At Vera Cruz, the local name of which is "El Vomito" (a term doubtless originating from the continued prevalence in the town of yellow fever), the sanitary conditions are much worse than in the city of Mexico; and the causes of the evil, being mainly climatic, are probably not removable. The statistics of mortality at this place, gathered and published by the United States Department of State, are simply appalling. Thus, the population of Vera Cruz in 1869 was returned at 13492. The number of deaths occurring during the ten years ending September, 1880, was 12,219. The average duration of life in Vera Cruz for this period was, therefore, about eleven years! Other calculations indicate the average annual death-rate of this place to be about ninety per thousand, as compared with the annual average for all the leading cities of the United States for the year 1880, of 22.28 per thousand.

The writer feels that he would be guilty of a grave omission, in this connection, if he failed to quote and also to indorse the words with which the United States consul, who gathered and communicated these facts, thus concludes his official report, October, 1880: "With these awful facts before me, I leave it to the common judgment and high ideas that our law-makers have of justice to say whether or not the salary of the consul who, for eleven years, has lived in such an atmosphere, ought or ought not to be placed at least back to where it was when he was sent here."

[Note.—No more striking illustration of the popular "craze" for public office can be found than in the circumstance that, although an appointment to the United States consulate at Vera Cruz (salary in 1884, $3,000) is equivalent to investing in a lottery of death, in which the chances to an unacclimated person for drawing a capital prize are probably as great as one to seven or eight, no lack of applicants for the place is ever experienced. Thus, the consul whose appeal for an increase of salary is above noticed was appointed from Illinois, and resigned in 1882. His successor, appointed from Nebraska, died of yellow fever a fortnight after arrival at his post; and since then there have been two appointments, one from Nebraska and one from New Jersey.]

  1. Since this date the aggregate of the exports and imports of Mexico has without doubt very considerably increased.
  2. How greatly the depreciation of silver affects the business interests of a country like Mexico, which not only uses a silver currency almost exclusively, but also relies on silver as one of its chief exports (i. e. for the payment of imports), is shown by the circumstance that the Directors of the "Vera Cruz and City of Mexico Railroad" reported at their annual meeting in London, on the 25th of May, 1886, that the loss of the company in exchange for the half-year ending December 31, 1885, was; £29,641; on the gross earnings for the same period, of £302,134. They further add: "The average rate of exchange fell during the half-year from 41-46d. per dollar, at which it stood at the end of June 1865, to 40-45d., and since the beginning of the current half-year (1886) the rate has further fallen, and at the present time is 38-76d. On equal remittances made a year previously, when the average rate was 42-39d, the loss would have been only £21,669, and thus an additional burden of £7,972 has been imposed on the shareholders."
  3. Under the title of the "Great Necropolis," one of the prominent Mexican newspapers, the "Correo del Lunes," recently said: "Undisguised terror is caused by these processions of the dead which daily defile through the streets of Mexico. To be alive here is getting to be a startling phenomenon. It may be a very short time, unless energetic remedial measures are adopted, before the capital will have to be moved to another location."
  4. Circular of Mexican Hospital Committee.