A Study of Mexico/Chapter XI
The American railroad system in Mexico—Its influence in promoting internal order and good government—Remarkable illustration of the influence of the railroad in developing domestic industry—The kerosene-lamp a germ of civilization—Commercial supremacy of the Germans in Mexico—Mexican credit system—Trade advantages on the part of the United States—Inaptitude of Americans for cultivating foreign trade—American products most in demand in Mexico—Weakness of argument in opposition to the ratification of a commercial treaty—Adverse action of Congress—Reasons offered by the Committee of Ways and Means—Interest of the Protestant Church of the United States in the treaty—Conclusion.
The commercial relations of the United States with Mexico are, to all intents and purposes, comprised in and identical with the system of railroads which American capital and enterprise have introduced into the latter country. Their introduction has constituted the last and the greatest revolution that Mexico has experienced since the achievement of her independence; for, with the means which they have for the first time afforded the central Government for quick and ready communication between the remote portions of the republic, a stable government and a discontinuance of internal revolts and disturbances have for the first time become possible. Thus, to illustrate: Chihuahua, an important center of population, is distant a thousand miles or more from the city of Mexico; and between the two places, in addition, a somewhat formidable desert intervenes, of about a hundred miles in width, and over which the "Mexican Central Railroad" trains are obliged to carry a water-supply for their locomotives. Previous to 1883, if a revolution broke out in Chihuahua, the most ready method of communicating intelligence of the same to the central Government would have been to send a man on foot, probably an Indian runner. If the messenger averaged fifty miles a day, twenty days would have been consumed in reaching the city of Mexico, and from three to six weeks more, at the very least, would have been required to dispatch a corps of trained soldiers from the capital, or some intermediate point, to the scene of the disturbance. But before this the revolutionists would have had all the opportunity for levying forced loans or direct plunder, or the gratification of private animosities, that their hearts could desire. And it is altogether probable that, in a majority of such cases, political grievances were merely alleged as a pretext for and a defense of plunder; and it is a wonder how, under such circumstances, there could be any desire for or expectation of accumulation through production, and that universal barbarism did not prevail. But now, under the railroad and its accompanying telegraph system, if anybody makes a pronunciamiento at Chihuahua, the Executive at the city of Mexico knows all the particulars immediately; within a few days a trained regiment or battalion is on the spot, and all concerned are so summarily treated that it is safe to say that another similar lesson will not soon be required in that locality. The new railroad constructions were, therefore, absolutely essential to Mexico as a condition for a healthy national life, and the country could well afford to make great sacrifices to obtain and extend them, apart from any considerations affecting trade development.
But the American railroads in Mexico have, in addition, already done much to arouse the most stubbornly conservative people on the face of the globe from their lethargy, and in a manner that no other instrumentality probably could have effected. When the locomotive first appeared, it is said that the people of whole villages fled affrighted from their habitations, or organized processions with religious emblems and holy water, to exorcise and repel the monster, During the first year of the experience of the "Mexican Central," armed guards also were considered an essential accompaniment of every train, as had been the case on the "Vera Cruz Railroad" since its opening in 1873. But all this is now a matter of the past; and so impressed is the Government with the importance of keeping its railroad system safe and intact, that the Mexican Congress recently decreed instant execution, without any formal trial, to any one caught in the act of wrecking or robbing a train. That any improved methods of intercommunication between different people or countries—common roads, vessels, rail-roads, or vehicles, or the like—increase the production and exchange of commodities, is accepted as an economic axiom. But there could be no more striking and practical illustration of this law than a little recent experience on the line of the "Mexican National Railroad." The corn-crop, which is the main reliance of the people living along the present southern extension of this road for food, had for several years prior to 1885 failed by reason of drought; and, under ordinary circumstances, great suffering through starvation would inevitably have ensued. The natives, however, soon learned that with the rail-road had come a ready market, at from two and a half to three cents per pound, for the fiber known as ixtle the product of a species of agave, which grows in great abundance in the mountainous regions of their section of country, and which has recently come into extensive use in Europe and the United States for the manufacture of brushes, ladies' corsets, mats, cordage, etc. And so well have they improved their knowledge and opportunities, that the quantity of ixtle transported by the "Mexican National Railroad" has risen from 224,788 pounds in 1882 to 700,341 in 1883; to 3,498,407 in 1884; and 3,531,195 in the first seven months of 1885; while with the money proceeds the producers have been able to buy more corn from Texas than they would have obtained had their crops been successful, and have had, in addition, and probably for the first time in their lives, some surplus cash to expend for other purposes. What sort of things these poor Mexican people would buy if they could, was indicated to the writer by seeing in the hut of a laborer, on the line of the "Mexican Central Railroad"—a place destitute of almost every comfort, or article of furniture or convenience—a bright, new, small kerosene-lamp, than which nothing that fell under his observation in Mexico was more remarkable and interesting. Remarkable and interesting, because neither this man nor his father, possibly since the world to them began, had ever before known anything better than a blazing brand as a method for illumination at night, and had never had either the knowledge, the desire, or the means of obtaining anything superior. But at last, through contact with and employment on the American railroad, the desire, the opportunity, the means to purchase, and the knowledge of the simple mechanism of the lamp, had come to this humble, isolated Mexican peasant; and, out of the germ of progress thus spontaneously, as it were, developed by the wayside, may come influences more potent for civilization and the elevation of humanity in Mexico than all that church and state have been able to effect within the last three centuries.
The projection and extension of the American system of railroads into Mexico commanded the almost universal approval of the people of the United States. It was regarded as a measure in the interest of civilization, and as likely to be mutually and largely beneficial to the people of both nations. But for the United States and Mexico to maintain their present tariff restrictions on the international trade of the two countries is to simply neutralize in a great degree the effect of the railways, and create conditions so antagonistic to the idea which a railway represents that the investment of a large amount of money in their construction by citizens of the United States, under existing circumstances, would seem almost akin to dementia. For it must be obvious that these restrictions produce exactly the same result as if, after the railways had been completed, an earthquake had thrown up a ridge directly across the lines, so steep and precipitous on the northern side as to add from thirty to forty per cent to the cost of all merchandise passing from the United States into Mexico, and so much more difficult of ascent on the southern side as to add some ninety per cent to the cost of all goods passing from Mexico into the United States. And, if such a physical calamity had actually occurred, the stockholders might reasonably doubt whether the lines were worth operating. But, at the same time, if there are any who expect that trade would immediately and largely increase between the two countries if all tariff restrictions were mutually abolished, they are certain to be disappointed. A large proportion of the people of Mexico—possibly nine tenths—will for the present buy nothing imported, whether there is a high tariff or no tariff—not because they do not want to, but because they are so poor that they can not buy under any circumstances; while the limited wealthy class will buy what they want of foreign products, irrespective of high duties.
Again, the internal trade or distribution of merchandise in Mexico is, furthermore, largely in the hands of the Germans, who learn the language and conform to the customs and prejudices of the country much more readily than the Americans or English. They will work longer than an American or Englishman for a smaller price, and they naturally prefer the products of their own countries; and German manufactures have been especially popular, "because they are as cheap as they are poor"; and the advantage of paying more for what will last longer is something very difficult to impress upon the ordinary Mexican. In fact, cheapness in the eyes of the German merchant is the first essential in respect to the merchandise in which he proposes to deal, quality being regarded as of secondary importance.
Another matter which practically works against the extension of trade with the United States is, that American houses will not sell their goods on the long credits demanded by Mexican purchasers. A gentleman conversant, through long residence in Mexico, thus writes in respect to this matter: "It is a serious mistake to look upon Mexican credit as something to be let alone. I can say with confidence, after diligent investigation, that mercantile credit in Mexico will average up as satisfactory as in the United States. Among the large mercantile houses in the interior of Mexico, as well as the importers, and the large sugar, grain, cotton, and cattle raisers, the moral sense in a square business dealing is as keen and as just and responsible as among the general run of customers in the United States. They are slow, but pay their bills, make few business compromises, and still fewer failures. From actual inspection of books of large houses in Mexico, exhibiting accounts of a series of years, I found that eighty-five to ninety per cent of long-credit sales were paid in full. Not one American business man in five hundred will succeed in Mexico, for the sole reason that he attempts to force his own ways and methods upon a people whose habits and ways are the antipodes of his own. Our manners are not in accord with the extreme politeness and consideration to be found in Mexico. Business is largely done on the basis of feeling and sentiment, and established acquaintance. Neither has time nor money the transcendent value that it has with us." It is also interesting to note here that for these, or some other reasons, there are comparatively few Jews in Mexico, and that as a race they do not seem to fancy the country, either as a place of residence or for the transaction of business.
Consul-General Sutton, of Matamoros, tells the following story illustrative of the good faith in a mercantile transaction of the rancheros of Northern Mexico, the particulars of which were detailed to him by the parties concerned: "A German house in interior Mexico contracted for the purchase of two hundred mule-colts, to be delivered a year following; and payment, at the rate of twenty dollars a pair, was made in advance. A year elapsed, and the mules were not delivered. The head of the house would not, however, allow any message of inquiry or reminder to be sent, but remained quiet. A year after the stipulated time, the rancheros came in with the mules. There had been a disease and a drought, which had killed the colts the first year, and this was the reason assigned for not coming according to agreement. They sent no word, because it was so far, and they did not remember the name." When the firm counted the mules, they found that three had been brought for each pair stipulated and paid for; which was the way the rancheros quietly settled for their unavoidable breach of contract.
But, notwithstanding all these obstacles to the extension of trade, the advantages from commercial intercourse with Mexico are all on the side of the United States. Commerce, in establishing a course between any two points, always follows the lines of least resistance. And to-day, through the establishment of railway lines, which furnish ample, rapid, and comparatively cheap facilities for transportation between the interior of Mexico and such great commercial and manufacturing centers as Chicago, Cincinnati, St. Louis, and Kansas City, the easiest movement for the commerce of Mexico is by and through the United States. One demonstration of this is to be found in the fact that the "Mexican Central Railroad" now carries considerable freight that comes to New York by European steamers, and is thence transported, in bond, by rail directly through to Mexico; to which it may be added that some $300,000 of this freight, during the past year, is understood to have been English agricultural machinery, which has been bought in preference to the world-wide famous American farm machinery and implements, and carried past, as it were, the very doors of the American competing factories!
For such a singular result there are two explanations. One is, that not only in Mexico, but in all the Central and South American countries, the English and the German merchants take special pains, not only to adapt their merchandise to the peculiar tastes bf the people with whom they wish to deal, but also to cultivate their good-will. The representatives of the United States, as a general rule, do neither.
A quick witted American merchant, who has had abundant opportunities for observation in Central and South America, recently wrote to the author in respect to this matter as follows: "My experiences lead me to the conclusion that Americans are not fitted for doing an export trade in foreign countries, except, may be, English-speaking countries. The characteristic of our people to carry with them everywhere their home habits, customs, ideas, affinities, etc., dominates every movement they make in foreign countries, and we utterly refuse to consider ourselves other than proprietors of the house where we are only the guests. Such an attitude as this blocks the way at once to successful mercantile movements on our part, and gives rise to prejudice and aversion on the part of the people whose patronage we want." Sir Spencer St. John, the British minister in Mexico, in a recent (1885) report to Lord Rosebury, British Secretary of Foreign Affairs, also says: "In the course of a very long experience I have noted that the average English commercial man of the present day is unfit to compete with the thrifty and industrious German. The former is bent on the pursuit of pleasure, while the latter gives himself no leisure until his future is assured. In fact, the Germans are our most active competitors in every mercantile transaction. There can be no doubt that up to the present time the English commercial community have shown the utmost apathy and indifference to the trade of this country, and have left to the Germans, French, and Spaniards the management of a commerce a fair share of which would fall to them if they would show the same qualities of thrift and industry which have distinguished their competitors." Another explanation is that our European competitors in foreign trade recognize at the outset, and at all times, that trade, especially when involving radical innovations on old-time precedents and usages, is not of spontaneous growth, but has got to be cultivated; that it is a system in which product is to be given for product, and service for service, and therefore, from its very nature, can not be a "one-sided business." Accordingly, the German and English merchants in Mexico take in exchange for such wares as they desire to sell, and at a certain price, whatever the Mexicans have to offer of their products. The American merchant, on the other hand, finding that the commercial policy of his country is based on the assumption that such a system of exchanges is not desirable, and that its existing laws make reciprocal trade difficult, does not seem even to attempt it. And in connection with this subject it may be stated, that during recent years German merchants have bought merchandise in New York, which American manufacturers have acquired particular advantages in producing, shipped the same to Hamburg, and, after re-exporting to Mexico, sold them at cheaper rates than any American engaged in direct trade could afford to offer! How such a result, which on its face seems so mysterious and paradoxical, is accomplished, may be best explained by example. Thus, the German, who has become thoroughly conversant with Mexican methods of doing business, could sell say $3,000 worth of American cottons, furniture, sewing-machines, and the like, at cost, or possibly even less than cost, because his system of selling is to exchange them for $3,000 worth of Mexican products, which he can afterward sell, it may be, at $5,000, or a sum which would give him a fair return for all his risks and for long credits, and also reimburse him for all the expenses of extended transportation. And the Mexicans are contented with their share of the transaction, because nothing better is offered to them. Hence also an explanation of what may seem to be paradoxical: that although the import and export trade of the United States with Mexico is larger than that of any other nation, there are comparatively few American dealers or distributors of merchandise permanently established in Mexico. Thus, for example, while the consumption of American imports in the district of Guaymas, on the Pacific coast of Mexico, was for the year 1885 (according to consular returns) over sixty-five per cent of the total importations, or $1,490,450 out of an aggregate of $2,041,940, there were at the same time but three American importing mercantile firms whose sales amounted to $100,000 per annum—the great bulk of the business being in the hands of Mexican, German, and Spanish houses. As showing also how the trade in this district has increased within recent years to the benefit of the United States, it may be also mentioned that, while in 1870 the imports from the United States were only $203,600, out of a total of $1,003,600, they were, for 1885 (as above stated), $1,490,450, out of a total of $2,041,940. It is also the judgment of those well qualified to express an opinion, that, as one effect of the recent discourteous refusal of the United States to negotiate a commercial reciprocity treaty, the number of American firms or agencies doing business permanently in Mexico will notably diminish.
That the ratification of the contemplated treaty for commercial reciprocity between the United States and Mexico would have increased to some extent, and perhaps considerably, the volume of American exports, can not be doubted. Thus, for example, there are no articles of which Mexico stands in greater need than wagons and carts, barbed fence-wire, and petroleum and its derivatives for warming and lighting. In respect to the two first named, the existing Mexican tariff is almost prohibitory, and, as a consequence, it is asserted that there is not a respectable vehicle in any of the frontier towns of Mexico; and no means, in the absence of wood, of supplying a pressing and increasing need for fencing on the great haciendas; while the cost of all petroleum products is so much enhanced as to greatly restrict their consumption for illumination and almost entirely preclude their use for warming, and this in a country destitute in great part of any cheap natural supply of either wood or coal. The removal of all duties on the import of merely these few articles into Mexico, as was provided in the proposed treaty, and their consequent very great cheapening, would therefore have been a boon to the people of Mexico, which they would not have failed to take advantage of to the utmost extent of their ability; and, for meeting any demand thus created, the manufacturers of the United States would have nothing to fear from any foreign competitors.
On the other hand, the arguments that have thus far proved most potent in preventing the ratification of such a treaty, on the part of the United States, have been based on the assumption that the free importation of Mexican raw sugars and unmanufactured tobacco would prove injurious to the American sugar and tobacco interests. But the entire fallacy, or rather utter absurdity, of such assumptions would seem to be demonstrated: First, in respect to sugar, by the fact that, with unrefined sugar selling in Mexico for a much higher price (from twelve to twenty-four cents retail) than the same article in the United States, there have not yet been sufficient inducements for them to fully supply the domestic demand of the country for sugar from its undoubtedly great natural resources—five and a half dollars’ worth of sugar having been exported from the United States into Mexico, in 1883, for every one dollar's worth imported during the same year from Mexico into the United States; and, secondly in respect to tobacco, by the testimony, based on careful investigation, of some of the best manufacturing authorities in the United States, that, while the best grades of tobacco for cigar purposes can now be raised in the United States at from ten to fifteen cents per pound, the cost of Mexican tobacco of a corresponding quality ranges from twenty-five to fifty cents per pound. It is difficult to see, therefore, what valid objections from merely trade considerations can be offered to the consummation of such a measure on the part of the United States, or to affirm which of the two countries would be the greatest gainer from the adoption of such a policy. Nay, more, it would be difficult for any one to show wherein anything of commercial or industrial disadvantage could accrue to the United States, even if it were to allow every domestic product of Mexico to be imported into her territory free of all import taxes or restrictions—articles subject to internal revenue taxes in the United States being manifestly excepted—without asking any like concessions from Mexico in return. Such a proposition may at first seem preposterous, but let us reason a little about it. In the first place, it is exactly the policy which Great Britain now offers to Mexico. Can the United States afford to bid less for the trade of the American Continent than her great commercial rival?
Again, Mexico wants, or is likely to want, everything which the United States especially desires to sell, and the only drawback to a great extension of trade between the two countries is the lack of ability on the part of Mexico to pay for what she wants. And this inability at the present time is very great. Apart from the precious metals, the quantity and value of domestic merchandise which Mexico can export to pay for such foreign products as she may desire, as already pointed out, are comparatively small, and consist almost exclusively of the most crude natural products. For the year 1883 nearly eleven twelfths of all her exports (other than the precious metals) consisted of the ixtle and heniquen fibers; woods, mainly dye and ornamental; coffee, hides and skins, vanilla, horse-hair, catechu, dye-stuffs (indigo, orchil, and cochineal), and sarsaparilla. What Mexico would sell to the United States, if all tariff restrictions were removed from her exports, would be such crude materials as have been specified—all articles of prime necessity to the American manufacturer. Reduced to terms of labor, the exchanges would substantially be the product of twelve hours' hand-labor in Mexico for one hour's labor with machinery in the United States.
The Committee of Ways and Means of the Forty-ninth United States Congress (first session) reported, however, adversely to the ratification of the proposed commercial treaty with Mexico, and in consequence of this action, and its sanction by the United States House of Representatives, all negotiations in respect to the treaty have terminated. The reasons presented as having led the committee (almost unanimously) to these conclusions were mainly four: First, because Mexico is so poor; second, because "the American citizen living in Mexico, and pursuing the peaceful avocations of industry and commerce, is without adequate protection to life and property"; third, because "permanent and desirable commercial relations with a government and people so estranged from us in sentiment are without promise of substantial and successful results"; and, fourth, because the trade which the United States would offer to Mexico under the treaty would be more valuable than the corresponding trade which Mexico would offer to the United States.
The first of these reasons is economic; the second political; the third, having due regard to its meaning, may be well termed "Mongolian"; while the fourth is simply absurd. Reviewing them briefly and in order, it may be said, in respect to the first that poor countries are the very ones with which it is especially desirable that the United States should cultivate trade; for, if the volume of trade be small, the profit of such trade is large—as is always the case where the results of rude or hand labor are exchanged for machinery product. And it is in virtue of the carrying out of this policy—i. e., trading with ruder and even barbarous nations—that Great Britain has, more than from almost any other one cause, attained her present commercial supremacy. Again, if the facts constituting the basis for the second reason are as alleged, commercial isolation and restriction are no remedy for them. Commercial intimacy between nations is always productive of political good-fellowship, as isolation and restriction are of enmity; and for promoting amity with Mexico the modern drummer is likely to prove, for the present, a far better missionary than either the diplomatist or the soldier; and, as for the third, one might think that a precedent had been borrowed by the committee from China, where commercial intercourse with the United States itself, in common with Europe, was, until very recently, combated on the ground that the inhabitants of these countries were "foreign devils," with whom the enlightened Chinese ought not to be brought in contact.
In respect to the fourth reason, the language of the report of the committee reads as follows: "We open to Mexico a trade with sixty million people. We receive, in return, the advantage of trading, to a limited extent, with a comparatively small, heterogeneous population of ten million. We offer them a trade more valuable than that of any other nation of the globe." To this it may be rejoined that the ratification of a commercial treaty between any two countries does not involve, or carry with it, the slightest obligation on the part of the people of such countries to trade. That is a matter in which private self-interest is exclusively determinate, and government, except through the exercise of absolute and despotic power, absolutely powerless. AH that a free government can legitimately effect, in ratifying a commercial treaty of reciprocity with another country, is to remove obstacles which have come to stand in the way of the people of the two contracting countries following their own natural instincts and desires for bettering their material condition. Trade, as respects individuals and nations alike, can not long be continued unless it is mutually advantageous to all that are parties to it; and there is no possible contingency in which the people of Mexico would profit more, in the sense of satisfying their wants and desires, from trading with the United States, than the people of the United States would profit from trading with Mexico, unless the American people have less shrewdness and discernment in respect to trade than the Mexicans, and are not likely to profit by experience. Were an individual merchant, having warehouses filled to overflowing with all manner of cheap and desirable goods, and greatly desirous of custom, to adopt the policy which the committee assumed to be desirable in respect to nations similarly situated, he would advertise that he did not consider it expedient to trade with people living in small towns, or comparatively poor districts, irrespective of their means of payment, or the profits that might accrue on the transactions. It has also been forcibly pointed out, by Hon. Abram Hewitt (in a minority report in favor of the ratification of the treaty), that Mexico, being rudely rebuffed in her desire to strengthen her commercial relations with the United States, may, while preserving its political autonomy, nevertheless contract such trade relations with England or Germany as to practically occupy the position of a colony to one or both of these countries, so far as its trade and commerce are concerned; "and that hence, in rejecting the Mexican reciprocity treaty, the United States practically rejects the Monroe doctrine, by turning that country, with its resources and possibilities of development," over to some European nationality.
One other point, bearing on this subject, may be also worthy of consideration by no small part of the American people. Twenty years ago, the attempt to advocate or expound any form of religious belief in Mexico other and different from that held by the Roman Catholic Church would have been attended with imminent deadly peril; and, under such circumstances, Protestantism had not attained any considerable foothold in that country. Then, the permission to send missionaries freely and safely into Mexico would have been regarded by the various Protestant sects of the United States as a great privilege, and the prospect of obtaining it would undoubtedly have seemed to them to warrant the putting forth of great effort, the large expenditure of money, and an earnest appeal to their Government for good offices and friendly intervention. But now that the Mexican Government, without foreign intervention or agency, and at great risk and cost to itself, has proclaimed, established, and maintained, through all its territory, the great principle of freedom of religious belief, utterance, and worship for all—and this valued privilege has come to the Protestant sects in the United States without effort and without cost—they regard the matter with indifference; do not seem to even care to acquaint themselves with the facts in the case; and exhibit no evidence of reciprocal kindly feeling or sympathy toward Mexico for her enlightened and liberal policy. It would not, therefore, be surprising, but rather in accord with ordinary human nature, if, hereafter, when the representatives of the American Protestant churches visit Mexico, preaching the universal brotherhood of man, and love and charity to one's neighbors, and, in virtue of their character as missionaries, claiming (at least indirectly) a higher religious culture and elevation for their countrymen than that of the Mexicans, if the latter should turn round and satirically ask how all such professions comport with the recent (1886) narrow, extraordinary, and almost insulting assertion of the House of Representatives of the United States (through the indorsement of the report of their committee), "that to speak of permanent and desirable commercial relations" with the Government and people of Mexico "is without hope of success or promise of substantial and permanent results."
Such, then, in conclusion, are the views of the writer respecting Mexico, its Government, and its people, and the present and future relations of the United States to Mexico. If he has offered anything, in the way of fact or argument, which may induce a belief, by the people of the former, that the subject is worthy of a larger and more kindly consideration on their part than it has hitherto received, he will feel that his investigations have not been wholly unsatisfactory.