great depression of business consequent on the large decline in the price of silver.[1]
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 held out to Mexican capital and labor, in the way of profit, to tempt
- ↑ 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 42-39, the loss would have been only £21,669, and thus an additional burden of £7,972 has been imposed on the shareholders."
