Barbarous Mexico/Chapter 14
CHAPTER XIV
THE AMERICAN PARTNERS OF DIAZ
The United States is a partner in the slavery of Mexico. After freeing his black slaves Uncle Sam, at the end of half a century, has become a slaver again. Uncle Sam has gone to slave-driving in a foreign country.
No, I shall not charge this to Uncle Sam, the genial, liberty-loving fellow citizen of our childhood. I would rather say that Uncle Sam is dead and that another is masquerading in his place—a counterfeit Uncle Sam who has so far deceived the people into believing that he is the real one. It is that person whom I charge with being a slaver.
This is a strong statement, but I believe that the facts justify it. The United States is responsible in part for the extension of the system of slavery in Mexico; second, it is responsible as the determining force in the continuation of that slavery; third, it is responsible knowingly for these things.
When I say the United States I do not mean a few minor and irresponsible American officials. Nor do I mean the American nation—which, in my humble judgment, is unjustly charged with the crimes of some persons over whom, under conditions as they exist, it has no control. I use the term in its most literal and exact sense. I mean the organized power which officially represents this country at home and abroad. I mean the Federal Government and the Interests that control the Federal Government.
Adherents of a certain political cult in this country are wont to declare that chattel slavery was abolished in the United States because it ceased to be profitable. Without commenting on the truth or fallacy of this assertion, I aver that there are plenty of Americans who are prepared to prove that slavery is profitable in Mexico. Because it is considered profitable, these Americans have, in various ways, had a hand in the extension of the institution. Desiring to perpetuate Mexican slavery and considering General Diaz a necessary factor in that perpetuation, they have given him their undivided support. By their control of the press they have glorified his name, when otherwise his name should be by right a stench in the nostrils of the world. But they have gone much farther than this. By their control of the political machinery of their government, the United States government, they have held him in his place when otherwise he would have fallen. Most effectively has the police power of this country been used to destroy a movement of Mexicans for the abolition of Mexican slavery and to keep the chief slave-driver of Barbarous Mexico, Porfirio Diaz, upon his throne.
Still another step can we go in these generalizations. By making itself an indispensable factor in his continuation in the governmental power, through its business partnership, its press conspiracy and its police and military alliance, the United States has virtually reduced Diaz to a political dependency, and by so doing has virtually transformed Mexico into a slave colony of the United States.
As I have already suggested, these are generalizations, but if I did not believe that the facts set forth in this and the succeeding chapter fully justified each and every one of them, I would not make them.
Pardon me for again referring to the remarkable defense of Mexican slavery and Mexican despotism which
Americans of whatever class not only do not dare to do these things, but they do not care to do them. But what a difference when it comes to Mexico! Here slavery is sacred. Here autocracy is deified.
It will not do to deny the honesty of the comparison between Mexico and Russia or the Congo. For every worshipper of Diaz knows that he is an autocrat and a slave-driver and enough of them admit it to leave no ground for doubt that they know it.
What, then, is the reason for this strange diversion of attitude? Why do so many prostrate themselves before the Czar of Mexico and none prostrate themselves before the Czar of Russia? Why is America flooded with books hailing the Mexican autocrat as the greatest man of the age while it is impossible to buy a single book, regularly published and circulated, that seriously criticizes him?
The inference is inevitable that it is because Diaz is the Golden Calf in but another form, that Americans are profiting by Mexican slavery and are exerting themselves to maintain it.
But there are easily provable facts that carry us far beyond any mere inference, however logical it may be.
What is the most universal reply that has been made to my criticisms of Mexico and Mexico's ruler? That there are $900,000,000 of American capital invested in Mexico.
To the Powers that be in the United States the nine hundred million dollars of American capital form a conclusive argument against any criticism of President Diaz. They are an overwhelming defense of Mexican slavery.
"Hush! Hush!" the word goes about. "Why, we have nine hundred million dollars grinding out profits down there!" And the American publishers obediently hush.
In that $900,000,000 of American capital in Mexico is to be found the full explanation not only of the American defense of the Mexican government, but also of the political dependency of Diaz upon the Powers that Be in this country. Wherever capital flows capital controls the government. This doctrine is recognized everywhere and by all men who have as much as half an eye for the lessons that the world is writing. The last decade or two has proved it in every country where large aggregations of capital have gathered.
No wonder there is a growing anti-American sentiment in Mexico. The Mexican people are naturally patriotic. They have gone through tremendous trials to throw off the foreign yoke in past generations and they are unwilling to bend beneath the foreign yoke today. They want the opportunity of working out their own national destiny as a separate people. They look upon the United States as a great colossus which is about to seize them and bend them to its will.
And they are right. American capital in Mexico will not be denied. The partnership of Diaz and American capital has wrecked Mexico as a national entity. The United States government, as long as it represents American capital—and the most rampant hypocrite will hardly deny that it does today—will have a deciding voice in Mexican affairs. From the viewpoint of patriotic Mexicans the outlook is melancholy indeed.
Let us cast our eyes over Mexico and see what some of that $900,000,000 of American capital is doing there.
The Morgan-Guggenheim copper merger is in absolute control of the copper output of Mexico.
M. Guggenheim Sons own all the large smelters in Mexico, as well as vast mining properties. They occupy the same powerful position in the mining industry generally in Mexico as they occupy in the United States.
The Standard Oil company, under the name of the Waters-Pierce, with many subsidiary corporations, controls a vastly major portion of the crude oil flow of Mexico. It controls a still greater portion of the wholesale and retail trade in oil—ninety per cent of it, so its managers claim. At the present writing there is an oil war in Mexico caused by an attempt of the only other oil distributing concern in the country—controlled by the Pearsons—to force the Standard to buy it out at a favorable price. The situation predicts an early victory for the Standard, after which its monopoly will be complete.
Agents of the American Sugar Trust have just secured from the Federal and State governments concessions for the production of sugar beets and beet sugar so favorable as to insure it a complete monopoly of the Mexican sugar business within the next ten years.
The Inter-Continental Rubber company—in other words. The American Rubber Trust—is in possession of millions of acres of rubber lands, the best in Mexico.
The Wells-Fargo Express company, the property of the Southern Pacific Railroad, through its partnership with the government, holds an absolute monopoly of the express carrying business of Mexico. E. N. Brown, president of the National Railways of Mexico and a satellite of H. Clay Pierce and the late E. H. Harriman, is a member of the board of directors of the Banco Nacional, which is by far the largest financial institution in Mexico, a concern that has over fifty branches, in which all the chief members of the Diaz financial camarilla are interested and through which financial deals of the Mexican government are transacted.
Finally, the Southern Pacific Railroad and allied Harriman heirs, despite the much vaunted government railway merger, own outright or control by virtue of near ownership, three-fourths of the main line railway mileage of Mexico, which enables it today to impose as absolute a monopoly in restraint of trade as exists in the case of any railway combination in the United States.
These are merely some of the largest aggregations of American capital in Mexico. For example, the Harriman heirs own two and one-half millions acres of oil land in the Tampico country, and a number of other Americans own properties running into the millions of acres. Americans are involved in the combinations which control the flour and meat trades of Mexico. The purely trade interests are themselves considerable. Eighty per cent of Mexican exports come to the United States and sixty-six per cent of Mexican imports are sent to her by us, the American trade with Mexico totaling some $75,000,000 a year.
So you see how it is in Mexico. The Americanization of Mexico of which Wall Street boasts, is being accomplished and accomplished with a vengeance.
It were hardly worth while to pause at this juncture and discuss the question why Mexicans did not get in on the ground floor and control these industries. It is not, as numerous writers would have us believe, because Americans are the only intelligent people in the world and because God made Mexicans a stupid people and intended that they should be governed by their superiors. One very good reason why Diaz delivered his country into the hands of Americans was that Americans had more money to pay for special privileges. And Americans had more money because, while all Mexicans were becoming impoverished by the war for the overthrow of the foreigner, Maximilian, thousands of Americans were making fortunes by means of grafting army contracts involved in our Civil War.
Let me present an instance or two of the way in which Americans are contributing to the extension of slavery.
Take the Yaqui atrocities, for example. Vice-president Corral, who was then in control of the government of the state of Sonora, stirred up a Yaqui war because he saw an opportunity to get the Yaqui lands and sell them at a good price to American capitalists. The Yaqui country is rich in both mining and agricultural possibilities. American capitalists bought the lands while the Yaquis were still on them, then stimulated the war of extermination and finally instigated the scheme to deport them into slavery in Yucatan.
But American capital did not stop even there. It followed the Yaqui women and children away from their homes. It saw families dismembered, women forced into wifehood with Chinamen, men beaten to death. It saw these things, encouraged them and covered them up from the eyes of the world because of its interest in the price of sisal hemp, because it feared that with the passing of slave labor the price of sisal hemp would rise. The American Cordage Trust, a ramification of Standard Oil, absorbs over half the henequen export of Yucatan. The Standard Oil press declares there is no slavery in Mexico. Governor Fred N. Warner, of Michigan, publicly denied my expose of slavery in Yucatan. Governor Warner is interested in contracts involving the purchase annually of half a million dollars worth of sisal hemp from the slave kings of Yucatan.
Also, Americans work the slaves—buy them, drive them, lock them up at night, beat them, kill them, exactly as do other employers of labor in Mexico. And they admit that they do these things. In my possession are scores of admissions by American planters that they employ labor which is essentially slave labor. All over the tropical section of Mexico, on the plantations of rubber, sugar-cane, tropical fruits—everywhere—you will find Americans buying, beating, imprisoning, killing slaves.
Let me quote you just one interview I had with a well known and popular American of Diaz's metropolis, a man who for five years ran a large plantation near Santa Lucrecia
"When we needed a lot of enganchados," he told me, "all we had to do was to wire to one of the numerous enganchadores in Mexico, saying: 'We want so many men and so many women on such and such a day.' Sometimes we'd call for three or four hundred, but the enganchadores would never fail to deliver the full number on the dot. We paid fifty pesos apiece for them, rejecting those that didn't look good to us, and that was all there was to it. We always kept them as long as they lasted.
"It's healthier down there than it is right here in the city of Mexico," he told me. "If you have the means to take care of yourself you can keep as well there as you can anywhere on earth." Less than five minutes after making this statement he told me:
"Yes, I remember a lot of three hundred enganchados we received one Spring. In less than three months we buried more than half of them.
The hand of the American slave-driver of Mexico has been known to reach out for its victims even as far as his own home—the United States. During my travels in Mexico, in order to become better acquainted with the common people, I spent most of my traveling days in second or third class cars. Riding in a third class car between Tierra Blanca and Veracruz one night, I spied an American negro sitting in a corner.
"I wonder if they ever caught him down here?" I said to myself. "I'll find out."
Tom West, a free-born Kentucky negro of twenty-five, hesitated to admit that he had ever been a slave. But he confessed gradually.
"Ah was workin' in a brick yahd in Kaintucky at two dollahs a day," was the way Tom put it, "when anothah cullahd man come along an' tole me he knowed where Ah cud get three seventy-five a day. Ah said 'Ah'm with ye.' So he hands me one o' them book prospectuses an' the next day he tuk me to the office o' the company an' they said the same thing—three seventy-five American money, or seven an' a half Mex! So Ah come with eighty othah cullahd folks by way o' Tampa, Florida, and Veracruz, down here to a coffee and rubbah plantation at La Junta, near Santa Lucrecia, Oaxaca.
"Seven and a half a day! Huh! Seven an' a half! That's just what they paid me when they let me go—aftah two yeahs! Ah run away twict, but they ketched me and brung me back. Did they beat me? Naw. they beat lots o' othahs, but they nevah beat me. Ah yeh, they batted me a few times with a stick, but Ah wouldn't a let 'em beat me; no suh, not me!"
The plantation that caught Tom West, Kentuckian, was an American plantation. Some months after talking with Tom I happened to hold a conversation with a man who identified himself as Tom's master after I had told him Tom's story.
"Those niggers," this American told me, "were an experiment that didn't turn out very well. They must have been ours, for I don't know of anybody else down that way that had them at the time of which you speak. The seven and a half a day? Oh, the agents told 'em anything to get them. That was none of our business. We simply bought them and paid for them and then made them work out their purchase price before we gave them any money. Yes, we kept them under lock and key at night and had to guard them with guns in the daytime. When they tried to make a break we'd tie 'em up and give 'em a good dressing down with a club. The authorities? We chummed with the authorities. They were our friends."
The partnership of American capital with President Diaz not only puts at its disposal a system of slave labor, but also permits it to utilize the system of peonage and to beat the class of wage-laborers down to the lowest point of subsistence. Where slavery does not exist in Mexico you find peonage, a mild form of slavery, or you find cheap wage-labor. Diaz's rurales shot Colonel Greene's copper miners into submission and threats of imprisonment put an end to the great strike on an American-Mexican railroad. American capitalists boast of the fact that their Diaz "does not permit any foolishness on the part of these labor unions." In such facts as these are found the reason for their hysterical defense of him.
I shall briefly outline the railroad situation in Mexico, and tell the story of the railway merger.
Today the main lines of Mexican railroads aggregate 12,500 miles. Of this mileage the Southern Pacific company controls and will probably soon own 8,941 miles, or nearly three-fourths of the total. These lines consist of:
The Southern Pacific in Mexico, 950 miles; the Kansas City, Mexico and Orient, 279 miles; the Pan-American, 296 miles; the Mexican, 327 miles; the National Railways of Mexico, 7,089 miles.
Of these the Southern Pacific is the only one that is being operated openly as the property of the Harriman heirs. The Orient road is operated under the presidency of A. E. Stilwell, a Harriman ally, whose vice-president, George H. Ross, is a director of the Chicago & Alton road, a Harriman property which the Orient road has traffic agreements. Construction is still going on on both of these roads and they are drawing from the Diaz government about $20,000 of subsidy for every mile built, or nearly enough to build the road.
The Pan-American railroad was recently acquired by David H. Thompson, who is the nominal president. Thompson was the United States ambassador to Mexico, where he seems to have represented the Harriman interests first and the other American interests afterwards. After securing the road, he resigned the ambassadorship. It is a pretty generally accepted fact that Thompson was acting for Harriman in securing the road. Harriman men are associated with him as directors of the road. The especial purpose of Thompson's securing the road was to incorporate it as a part of Harriman's plan to make an all-rail route from the Arizona border to Central America.
The only control exercised by the Harriman interests over the "Mexican Railway," as far as the writer knows, is that involved in the pooling of interests, in both freight and passenger traffic, of the Mexican road and the National Railways of Mexico. It is the inside story of the Mexican merger—a story which I obtained from unimpeachable sources while working as a reporter of the Mexican Daily Herald in the Spring of 1909.
Briefly, the story is this: The consolidation under nominal government control of the two principal railroad systems in Mexico, the Mexican Central and the Mexican National, was brought about, not, as is officially given out, to provide against the absorption of the Mexican highways by foreign capitalists, but to provide for that very thing. It was a deal between E. H. Harriman, on the one hand, and the government financial camarilla, on the other, the victim in the case being Mexico. It was a sort of deferred sale of the Mexican railroads to Harriman, the members of the camarilla getting as their share of the loot millions and millions of dollars through the juggling of securities and stock in effecting the merger. On the whole, it constitutes perhaps the most colossal single piece of plundering carried out by the organized wreckers of the Mexican nation.
In this deal with Harriman, Limantour, Minister of Finance, was the chief manipulator, and Pablo Macedo, brother of Miguel Macedo, Sub-secretary of the Department of the Interior, was first lieutenant. As a reward for their part in the deal. Limatour and Macedo are said to have divided $9,000,000 gold profits between them, and Limantour was made president and Macedo vicepresident of the board of directors of the merged roads, which positions they still hold. The other members of the board of directors of the merged roads are Guiliermo de Landa y Escandon, governor of the Federal District of Mexico, Samuel Morse Felton, former president of the Mexican Central, who was Harriman's special emissary in Mexico to work on Diaz to secure his consent to the deal, E. N. Brown, former vice-president and general manager of the Mexican National lines, and Gabriel Mancera. Each of these four men is said to have made a personal fortune for himself out of the transaction.
The National Railways of Mexico, as they are officially known, have, in addition to a general board of directors, a New York board of directors. Note the Harriman timber to be found among these names: William H. Nichols, Ernest Thallmann, James N. Wallace, James Speyer, Bradley W. Palmer, H. Clay Pierce, Clay Arthur Pierce, Henry S. Priest, Eban Richards and H. C. P. Channan.
Whether the Mexican railroad steal was conceived in the brain of Limantour or of Harriman is not known, but Limantour seems to have attempted to bring about the merger originally without the aid of Harriman. Some four years ago Limantour and Don Pablo Martinez del Rio, owner of the Mexican Herald and manager of the Banco Nacional, went into the market and bought heavily of Mexican Central and Mexican National stock, after which they broached the merger scheme to Diaz. Diaz turned the proposition down pointblank and Limantour and del Rio both lost heavily, del Rio's losses so bearing down upon him that he died soon afterwards.
It was at this point that Limantour is supposed to have turned to Harriman, who immediately fell in with the scheme and carried it to an exceedingly successful termination for himself.
Harriman owned some Mexican Central stock, but fifty-one per cent of this property was in the personal possession of H. Clay Pierce. When the first rumblings of the 1907 panic were heard Pierce was persuaded to hypothecate his entire holdings to Harriman.
After getting control of from eighty to eighty-five per cent of the Mexican Central property Harriman sent Samuel Morse Felton, one of the ablest railroad manipulators in the United States, to talk Diaz over to the merger scheme. Where Limantour had failed Felton succeeded and the world was informed that the Mexican government had accomplished a great financial feat by securing the ownership and control of its railroad lines.
It was announced that the government had actually secured fifty-one per cent of the stock of the company. Also the government was put in nominal control of the situation.
But—in the deal Harriman succeeded in placing such heavy obligations upon the new company that his heirs are almost sure to foreclose in the course of time.
The Mexican Central and Mexican National systems are both cheaply built roads; their rolling stock is of very low grade. Their entire joint mileage at the time of the merger was 5,400 miles, and yet under the merger they were capitalized at $615,000,000 gold, or $112,000 per mile. Oceans of water there. The Mexican Central was 30 years old, yet had never paid a penny. The Mexican National was over 25 years old, yet it had paid less than two per cent. Yet in the over-capitalized merger we find that the company binds itself to pay four and one-half per cent on $225,000,000 worth of bonds and four per cent on $160,000,000 worth of bonds, or $16,525,000 interest a year, and pay it semi-annually!
Out of the merger deal Harriman is supposed to have received, in addition to merger stocks and bonds, a cash consideration and special secret concessions and subsidies for his west coast road. Harriman dictated the contract as to the payment of interest on those merger bonds and his successors will compel payment or foreclose. As long as Diaz remains in power, as long as the Mexican government is "good;" that is, as long as it continues in partnership with American capital, the matter can be arranged—if in no other way, by paying the deficiency out of the Mexican treasury. But the moment there is trouble it is expected that the government will be unable to pay and the railroad will become American in name as well as in fact.
Trouble! That word is an exceedingly significant one here. A Mexican revolution will probably mean trouble of this particular sort, for every revolution of the past in Mexico has seen the necessity of the government's repudiating all or a part of the national obligations for a time. Thus the final step in the complete Americanization of Mexico's railways will be one of the clubs held over the Mexican people to prevent them from overturning a government that is particularly favorable to American capital.
Trouble! Trouble will come, too, when Mexico attempts to kick over the traces of undue American "influence." The United States will intervene with an army, if necessary, to maintain Diaz or a successor who would continue the special partnership with American capital. In case of a serious revolution the United States will intervene on the plea of protecting American capital. American intervention will destroy the last hope of Mexico for an independent national existence. Mexican patriots cannot forget this, for it is daily paraded before them by the Diaz press itself. Thus the threat of an American army in Mexico is another of the American influences which keep Mexico from revolution against the autocracy of Diaz.
American capital is not at present in favor of political annexation of Mexico. This is because the slavery by which it profits can be maintained with greater safety under the Mexican flag than under the American flag. As long as Mexico can be controlled—in other words, as long as she can be held as a slave colony—she will not be annexed, for once she is annexed the protest of the American people will become so great that the slavery must of necessity be abolished or veiled under less brutal and downright forms. The annexation of Mexico will come only when she cannot be controlled by other means. Nevertheless, the threat of annexation is today held as a club over the Mexican people to prevent them from forcibly removing Diaz.
Do I guess when I prophesy that the United States will intervene in case of a revolution against Diaz? Hardly, for the United States has already intervened in that very cause. The United States has not waited for the revolution to assume a serious aspect, but has lent its powers most strenuously to stamping out its first evidences. President Taft and Attorney General Wickersham, at the behest of American capital, have already placed the United States government in the service of Diaz to aid in stamping out an incipient revolution with which, for justifiable grounds, our revolution of 1776 cannot for an instant be thought of in comparison. Attorney General Wickersham is credited with being a heavy stockholder in the National Railways of Mexico; Henry W. Taft, brother of the president, is general counsel for the same corporation. Thus it will be seen that these officials have a personal as well as a political interest in maintaining the system of Diaz.
Three times during the past two years the United States government has rushed an army to the Mexican border in order to crush a movement of Liberals which had risen against the autocrat of Mexico. Constantly during the past three years the American government, through its Secret Service, its Department of Justice, its Immigration officials, its border rangers, has maintained in the border states a reign of terror for Mexicans, in which it has lent itself unreservedly to the extermination of political refugees of Mexico who have sought safety from the long arm of Diaz upon the soil of the "land of the free and the home of the brave."