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I
The
Railroads of Mexico
By
FRED WILBUR POWELL, PH. D.
1921
THE STRATFORD CO., Publishers
BOSTON
Oopjright, 1921
The STRATFORD 00., Pnbliiheri
Boiton, Mass.
The Alpine Preis, Boston, Mais., U. S. A.
CONTENTS
CHAPTER PAGE
I. Introduction v
PART I
n. The Diaz Policy of Encouragement . . . 1
m. The Permanent Way and Structures ... 7
IV. The Equipment Situation . . . . . 19
V. Operation Under Difficulties . . . .25
VI. Service . 43
I vn. The Claims of Investors 63
: vm. The Outlook 69
] PART II
I. IX. Mexican Topography .83
X. Before the Railroads 91
XI. Railroads Introduced 99
xn. The Original Diaz Policy 109
xm. Early American Attitude Toward Mexican
J Railroad Investments . . . . . 115
XIV. Influx of American Capital 123
XV. Mexican Central 127
XVI. Mexican National 133
xvn. Mexican International 137
xvm. Interoceanic 139
XIX. Mexican Southern 145
XX. Tehuantepec 149
XXI. Tehuantepec Connections, North and South . 153
xxn. Western Sierra Madre Projects .... 157
xxm. Southern Pacific 161
ui
4-v o o \ 5
J
CONTENTS
PART III
CHAPTER PAGE
XXV. Relations With the Government .... 167
XXVI. Results, Political and Economic .... 189
Bibliography 197
Index 223
IV
INTRODUCTION
CHAPTER I
MEXICO'S centennial year, 1910, marked the end of nor-
mal conditions throughout the country. Porfirio Diaz,
who had brought order out of chaos, was an old man. The
voices of discontent were no longer quiet, and the world was
asking with renewed interest the question, ** After Diaz,
what?" Hardly had the great anniversary celebration been
concluded when insurrection broke out in the north, and a
reign of disorder set in which has continued with varying
degrees of violence until the present.
When the power that maintains public order breaks down,
property interests suffer; and railroads are peculiarly liable
to loss and destruction. The regularly constituted govern-
ment avails itself of its right to take over the lines for military
use; equipment is seized for the transportation of troops,
munitions, and supplies ; and the service essential to the main-
tenance of commerce and industry is disorganized if not
brought to a complete -standstill. Revenues fall off, outlays
for construction and maintenance are curtailed, and the re-
turn to investors is suspended.
More serious still is the effect of the activities of the forces
of rebellion and disorder. Bridges are destroyed and tracks
are torn up to prevent the movement of trains ; equipment is
seized and buildings are burned. All varieties of railroad
property are destroyed, sometimes purely for the sake of des-
truction. Employees are killed, driven from their posts, and
INTRODUCTION
impressed into military service. Industrial operations are
suspended, and the flow of traffic is stopped. Thus the great
organism which is essential to economic development and
national stability becomes incapable of function if not wholly
paralyzed.
This in general terms is what has occurred in Mexico within
the last ten years. To present an orderly statement of the
progress of the disaster is impossible under existing con-
ditions; for the facilities for obtaining information have
broken down. To measure it in terms of statistics is also im-
possible; for while fragmentary data have been assembled,
they have not always been published, and publication has
been long delayed. Reports, official and unofficial, are in
hopeless disagreement. Under the circumstances the most
that can be done is to set forth the results of a study of all
available information which will contribute to the evidence
necessary to an understanding of the situation and to a con-
sideration of its remedy.
Part I of this study is mainly concerned with the present
and with the period following the Diaz regime. It is addressed
to those who already know something of the historical aspects
of transportation in Mexico; its purpose being to set forth
some of the facts upon which may be based an answer to the
question ''What is the matter with Mexico to-day f
There is an abundance of fragmentary materials on the
transportation history of Mexico. Much of it is in English ; for
most of the financing and construction and, until recent years,
much of the operation of Mexican railroads have been in
American or British hands. No attempt has yet been made,
however, to assemble those materials and to present the result
in a detailed, systematic treatise. That is a task for the fu-
ture. Yet it is possible to give a brief summary account of
vi
INTRODUCTION
the development of that great system of land transportation
which so rapidly brought Mexico out of a long period of eco-
nomic stagnation ; and that is the purpose of Part II. In Part
III are presented certain background considerations and con-
clusions. The bibliography, while far from complete, is per-
haps the most extensive list yet to appear.
vu
PART I
CHAPTER n
THE DIAZ POLICY OF ENCOURAGEMENT
MEXICAN railroad development was the result of foreign
capital and enterprise, attracted by national franchises
or *' concessions'' and encouraged by subsidies. This policy
was adopted by President Diaz in 1880 after the failure of an
attempt to promote railroad building by Mexicans under
state concessions. It was continued by his successor, Manuel
Gonzales, during the years 1880-1884, and taken up with re-
newed zeal at the beginning of the long Diaz regime which
continued from 1884 to 1911.
In 1876 when Diaz first assumed control, the Mexican rail-
way, British built, was in operation between the Capital City
and the port of Vera Cruz. There was also a small number of
lines under state concessions, but the total extent of track in
the country was only 416 miles. In 1880, at the end of Diaz'
first term, the number of miles had increased to 674. From
1884 to 1910 the system developed from 3682 to 15,360 miles,
of which 3025 miles represented small local lines constructed
under state concessions.^
The result of the Diaz policy in terms of foreign investment
can only be stated in general terms and for years for which
estimates are available. A careful estimate of American capi-
tal in Mexico was made in 1902 by United States Consul
Andrew D. Barlow :
^'Five hundred million dollars gold is in round figures the
American capital invested in Mexico. . . . This amount has
^ Gonzales Roa, "El problema ferrocarrilero,*' 30 (1915).
[I]
THE RAILROADS OF MEXICO
practically all been invested in the past quarter of a century,
and about one-half of it has been invested within the past five
years. . . . More American capital is invested in the railroads
of Mexico than in any other single line — about 70 per cent of
the total. In this line American capital dominates. All of the
important railroads in Mexico (except the Interoceanie, . . .
the Mexican Railway, . . . and the National Tehuantepec
Railway . . . )> ^'^e owned by American capital. . . .
''Since the construction of the Mexican Central by Ameri-
cans, some twenty years ago. United States capital has always
been the strongest factor in Mexican railroads, and at present
it constitutes about 80 per cent of the total capital invested
in railroads in this country.''*
In 1907 it was estimated by the United States Bureau of
Manufactures that ''American investments in Mexico aggre-
gate probably more than $750,000,000.'' By use of Barlow's
total of 1902 as a base, the new figure was arrived at by esti-
mating that "the increase since that time has probably aver-
aged over 50 millions annually." "About half of this," it
was declared, "has been invested since 1898. About two-
thirds of this total is invested in railroads. Of the total in-
vestments in Mexican railways 80 per cent belongs to Ameri-
cans."*
A third estimate from an official source was that made in
1912 by Marion Letcher, United States Consul at Chihuahua.
This gave ,the total of American investments as $1,057,770,000
and the total of British investments as $321,303,000. The
capital invested in railroad shares was declared to be : Ameri-
can $235,464,000, British $81,238,000, and Mexican $125,-
* n. S. Department of State, Oommeroial relations, 1902-3 : I, 433-5.
* U. S. Department of Commerce and Labor, Commercial America, 1907:44.
THE DIAZ POLICY OF ENCOURAGEMENT
440,000; in railroad bonds: American $408,926,000, British
$87,680,000, and Mexican $12,275,000/
A New York financial journal in 1913 presented estimates
of foreign capital in Mexico which it had obtained from weU-
informed sources. Estimates of American investments ranged
from $600,000,000 to $1,000,000,000. One gave the source of
foreign capital as follows: United States, $1,000,000,000;
Great Britian, $320,000,000 ; Prance, $143,000,000 ; other for-
eign countries, $118,000,000. These figure substantially agree
with those prepared about the same time by a British financial
writer who was familiar with Mexican conditions: United
States, £211,554,000 ; Great Britian, £64,260,720 ; Prance, £28,-
698,000.'^
These estimates measure roughly the stake of foreigners
in Mexico. They show the grounds for concern in the United
States, particularly, as to the condition and prospects of
Mexican railroads. But great as is the interest of foreigners,
the interest of the Mexican people is greater. With them it
is not a question of possible loss of invested surplus ; their con-
cern is the prevention of the demoralization of their whole
economic system. Their slogan, ** Mexico for the Mexcians",
need not carry with it any menace to the interests of foreign
investors as such; for no intelligent or responsible Mexican
can hope to see his country prosper without foreign capital.
This fact was recognized by Diaz; and while he pursued a
policy of encouragement, he also took good care that the terms
of all concessions to foreigners should be such as to protect the
present and future interests of the country. He furthered
development, but not exploitation. "When in 1899 he was in-
*U. S. "OonBtdar Reports," July 18, 1912:316.
" ''New York Jonrnal of Commerce,** February 15, 1913; Martin, Invest
ments in Mexico, "Financial Review of Reviews,*' no. 89:21 (1913).
[3]
THE RAILROADS OF MEXICO
duced by Limantour to adopt the more restrictive policy em-
bodied in the general railroad law, it was because he had been
led to believe that the time had come to build and operate
railroads as parts of a comprehensive system, serving all sec-
tions of the country to the mutual benefit of the people and the
investors. When during 1902-9 Limantour put through his
plan for national control of the bulk of the railroad mileage
of the country through share ownership, it was not because of
hostility to foreign capital as such It was because of the pro-
fessed fear that one or the other of the two great trunk lines
would pass into the control of an American system and be
operated in a spirit of exploitation within the limits of their
underlying concessions.
Limantour, himself a man of foreign blood, favored the in-
vestment of foreign capital in Mexico, although he preferred
to have it come from Europe so as to prevent the financial
domination of Mexico by the capitalists of the United States.
That his anti- American attitude was not shared by his chief
is indicated by the fact that Diaz himself was induced in 1905
to favor the construction of the Southern Pacific line from
Guaymas to a connection with the City of Mexico at Guadala-
jara.*
Limantour 's nationalization plan involved the formation of
a new corporation, the National Railways of Mexico, in which
the government should own a majority of the shares. This
plan was carried out in 1909; and in 1910 the new corpora-
tion controlled the following standard lines:
Mexican Central Railway; American, British, and Ger-
man capital.
•Diaz Dufoo, *' Limantour, »» 129-37 (1910); Gonzales Roa, 20-9, 36-40
(1915). The latter criticises the restrictive policy of Limantour as one which
retarded the development of railroads, a result which, he says, "the Constitu-
tional Government of Mr. Madero attempted to remedy.'* — p. 40.
[4]
THE DIAZ POLICY OF ENCOURAGEMENT
National Railroad of Mexico; American, British, and
Mexican capital.
Mexican International Railroad; American capitaL
Pan-American Railroad; American capital.
Vera Cruz and Isthmus Railroad; American and Mexi-
can capital.
It also controlled the following narrow-gauge lines:
National Railroad of Mexico, Morelia Branch ; American,
British, and German capital.
Hidalgo and Northeastern Railroad; Mexican capital.
Michoacan and Pacific Railway ; British capital.
Interoceanic Railway ; British capital.
Mexican Southern Railway; British capital.
The system included 6212 miles of standard-gauge line and
1545 miles of narrow-gauge line. With yards and sidings the
total trackage was 8392 miles. It touched the Texas frontier
at Juarez, Piedras Negras, Nuevo Laredo, and Matamoros;
the Gulf coast at Tampico and Vera Cruz; the Pacific coast
at Manzanillo ; and the Guatemala frontier at Suchiate, on
the river of that name.'
At the same time the government controlled the Tehuan-
tepec National railway through a partnership agreement with
S. Pearson and Son, Ltd., entered into in 1902. This standard-
gauge line of 220 miles, extending from Salina Cruz on the
Pacific to Puerto Mexico on the Gulf, served to connect the
Pan-American railroad and the Vera Cruz and Isthmus rail-
road.
Among the larger independent railroads were the follow-
ing:
Southern Pacific Railroad of Mexico ; American capital.
7 The Texas-Mexican, Laredo to Oorpns Cfhristi, 162 miles, is here omitted,
since it is wholly in the state of Texas.
[s]
THE RAILROADS OP MEXICO
Mexico North Western Railway; British and Canadian
capital.
Mexican Railway; British capital.
Kansas City, Mexico, and Orient Railway; American,
British, and Dutch capital.
Mexican Northern Railway; American capital.
Nacozari Railway; American capital.
Parral and Durango Railroad; American capital. Part
narrow gauge.
United Railways of Yucatan; Mexican capital. Mostly
narrow gauge.
Coahuila and Zacatecas Railway; British capital. Nar-
row gauge.
The total extension of all such lines, excluding those built
under state concessions, was 3883 miles. The national gov-
ernment exercised direct control over more than half of the
railroad mileage of the country and over two-thirds of the
lines of primary importance. This was the situation at thf
outbreak of the long period of revolution and banditry.'
' Mexican year book, 1911:168.
CHAPTER m
THE PERMANENT WAY AND STRUCTURES
AS set forth in the general railroad law of 1899 or in sub-
sequent declarations, it was the policy of the Diaz gov-
ernment to favor the construction of railroads projected along
eight general routes, all of national importance. Before the
end of the Diaz regime three of these routes had been opened,
— hy the Vera Cruz and Isthmus, the Pan-American, and the
Mexican Pacific extension of the old Mexican Central; and
plans for the development of the other routes were in various
stages of progress. These routes were :
From the city of Chihuahua to a port in Sonora or north-
em Sinaloa,
From the City of Mexico to a port in Guerrero,
From Guadalajara to Mazatlan,
From the Tehuantepec line to Campeche, and
From the City of Mexico to Tampico.
In the years since 1910 railroad construction has been at-
tended with great difficulty, due to military operations, ac-
tivities of bandits, shortage of materials, and lack of funds.
Indeed, after 1914 the new mileage was negligible ; and it was
not until 1919 that really serious efforts at construction were
resumed. Nevertheless, taken as a whole, the record of con-
struction during the last decade is not unimpressive; and
some of the plans for additional construction are worthy of
attention.
Those plans contemplate the completion of the parts of the
Diaz program that are unfinished and the construction of new
[7]
THE RAILROADS OP MEXICO
lines which are designed either to link up isolated parts of the
national system, to open up new territory, or to facilitate the
movement of military forces in the restoration and mainte-
nance of order.
Railroad communication between the central plateau of
northern Mexico and the west coast is still barred by the
western Sierra Madre range, despite the efforts of several
groups of promoters extending over a period of forty years. In
the early eighties three lines were projected through that
range; but of these the Texas, Topolobampo, and Pacific had
only a paper existence, and the Sinaloa and Durango is repre-
sented to-day only by the unimportant line from the port of
Altata to Culiacan, now known as the Occidental railway. The
Mexican International was projected as a line to the port of
Mazatlan ; but it reached no further than Tepehuanes, where
work was stopped in 1902.
In the meantime two other projects had been launched;
the Rio Grande, Sierra Madre, and Pacific and the Chihuahua
and Pacific. These in 1909 passed from American to Canadian
control under the name of the Mexico North Western, and
through connections were established between Juarez and
Chihuahua by 1912.
Before the Chihuahua and Pacific passed from the control
of its original owners, it had granted trackage rights over that
parts of its line from Chihuahua to Minaca and surrendered
its franchise across the mountains to the Kansas City, Mexico,
and Orient railway, which was forced into receivership in 1912
before any attempt had been made to pierce the mountain
barrier. In 1919 the Mexican government announced that
work would soon be resumed, under military protection, on
that part of the route between Falomir and the Rio Grande.
In the last years of Diaz rule, a short line was begun from
[8]
THE PERMANENT WAY AND STRUCTURES
Durango to Llano-Grande to open up a rich timber region and
also with the idea of ultimately extending westward to
Mazatlan. This line was completed in 1913, and in 1919 a
further extension of some thirty miles to El Salto was con-
structed ; but no attempt has been made to cross the range to
Mazatlan, nor is such an attempt likely for many years.
The Sierra Madre range also blocks the way between the City
of Mexico and the port of Acapulco, although a railroad over
that route has been the dream of promoters for three-quarters
of a century. Acapulco was the western goal of the pioneer
Mexican railway which stopped at the City of Mexico, of the
Interoceanic railway which reached the Amacusac river in
Morelos, and of the Mexico, Cuernavaca, and Pacific which
halted at the Balsas river in eastern Guerrero in 1899. In
1912 the project was revived and work was begun on a line
from Acapulco up the coast toward Zihuatenejos, but sus-
pended after the completion of three miles because of the
activity of bandits.
Better results have been obtained over the route between
the City of Mexico and Mazatlan. In 1905 Southern Pacific
interests obtained a concession for a railroad from Guadalajara
to Mazatlan and also to Guaymas, the southern terminus of
the Sonora railway. Construction was pushed with vigor until
1912, when the disturbed condition of the country made fur-
ther work impossible on the final section through the Sierra
Madre between Orendain and LaQuemada. This is an ex-
tremely difficult route, and it is possible that the route from
Orendain to San Marcos, on the Pacific extension of the Mexi-
can Central, will be chosen instead.
A direct line from the Rio Grande at Matamoros through
Tampico and across the eastern Sierra Madre to the City of
Mexico was the aim of Count Telfener, whose New York, Texas,
[9]
THE RAILROADS OP MEXICO
and Mexico project received some prominence in the eighties.
It was also the desire of President Diaz, who in 1904 urged the
construction of a railroad from the Capital to Tampico. With
the development of the rich oil fields in the Tampico-Tuxpam
district, the need for better railroad connections became more
urgent, and in 1912 work was begun on a line from Tampico
to San Francisco, on the Interoceanic railway, with a branch
to Honey. Such a line would effect connections with two rail-
roads running out of the City of Mexico, but there is no im-
mediate likelihood of the construction of the branch to Honey.
In 1914 work was supended after some twenty miles had been
built, and little progress has been made since that time.
This completes the record of actual accomplishment upon
the more important routes included in the Diaz program.
There are other lines, however, which should receive attention.
In 1919 a line was under construction in Coahuila, between
Cuatro Cienegas and Sierra Mojada to connect the old Mexi-
can International with the Mexican Northern. From Sierra
Mojada a further extension is planned to a connection with
the Mexico North Western and the Kansas City, Mexico, and
Orient at Chihuahua, but the diflSculty of the route makes the
construction of such a line a remote possibility. In 1919 also
the Mexican government ordered the resumption of work —
begun in 1911 and suspended in 1913 — ^upon another line in
Coahuila, designed to connect Allende, on the Mexican Inter-
national, with a projected branch of the Kansas City, Mexico,
and Orient.
After ten years of intermittent construction a line was
opened in 1919 between Canitas, on the Mexican Central, and
the city of Durango, putting that city in more direct communi-
cation with Capital and opening a region rich in minerals. In
1918-19 work was begun on an extension of the Mexican Inter-
[10]
THE PERMANENT WAY AND STRUCTURES
national from Tepehuanes to Guanacevi. The ultimate goal is
El Oro, where a connection would be made with the Pairal
branch of the Mexican Central. The Pacific extension of the
Mexican Central was connected with the Morelia branch of the
old Mexican National by a line built from Penjamo to Aguno
in 1910-14.
In 1911 the Mexican Southern opened a branch from Oaxaca
to Taviche and in 1912, a branch from Oaxaca to Tlacolula.
In 1913 the Vera Cruz and Isthmus completed a branch from
Burro to San Andres Tuxtla and another branch from Tres
Valles to Cerro Colorado, both in the state of Vera Cruz. In
1917 the state of Coahuila began the construction of a short
line from Saltillo towards the east, with the immediate pur-
pose of opening mineral lands. This was under construction
in 1919. Work was also completed in 1920 on a short line from
LaCapilla, on the Pacific extension of the Mexican Central, to
Chapala on the northern shore of the lake of that name.
In 1920 the reported railroad mileage in the entire country
was 16,726, excluding purely local lines under state juris-
diction.^
The railroads of Mexico were constructed under competitive
conditions, with the result that parallel lines were laid down in
regions which could not produce enough traffic to make profit-
able operation possible. One of the arguments advanced in
favor of the formation of the great merger and the organiza-
tion of the National Railways of Mexico was that under the
new company such unnecessary and wasteful lines might be
suppressed.
The first step in this direction was taken in 1910-11 when
operation was suspended on three branch lines aggregating
forty-five miles. In 1911-12 one of these branches, twelve
iDe la Huexta, *'Informe presidenoial/* Sept. 1, 1920:51.
["]
THE RAILROADS OF MEXICO
miles in length, was taken up ; and operations were suspended
on 131 miles' of the old Mexican International. The lines not
in operation during that year aggregated 164 miles; and a
total trackage of 289 miles was scheduled for abandonment.
During 1912-13 a total trackage of 111 miles was taken up,
and fifty-eight miles were reported not in operation. No
changes were reported during the following year, and the
reports for subsequent years give no information on the sub-
ject.
Under normal conditions it is the practice of railroad com-
panies everywhere to improve their physical properties and
thus make possible more economical operation and a larger
net revenue. Tracks are relaid with heavier rails, new side
and passing tracks are built, permanent ballast is placed in
the track, grades and curves are reduced, and narrow-gauge
track is relaid at standard width. Bridges, trestles, and cul-
verts are replaced by more permanent types of structures, and
stations and shops are built and enlarged. Provision for work
of this nature is generally made out of capital funds. Such
work is impossible in times of disorder. Thus it is not sur-
prising to find in the annual report of the National Railways
of Mexico for 1914-15 the statement :
**As the Company was losing its control over its property,
being gradually deprived of its source of revenues, and its
financial situation becoming extremely difficult, it is logical
to imagine that for the short period [six weeks] of operation
under review, there would not perhaps be any important work
of betterment, addition or replacement to report. ..."
In the four preceding years such work has been carried on to
the extent of 13,700,000 pesos. Over half of this amount was
expended in 1910-11 ; in 1913-14 the outlay was less than a
[12]
THE PERMANENT WAY AND STRUCTURES
million pesos. In 1911-12 the Interoceanie completed its
Metepec-San Lorenzo deviation, eliminating heavy grades and
sharp curves. The record of the last half-dozen years is one,
not of betterments, but rather of attempts at maintenance and
rehabilitation.
Mexico is a country in which railroad property is subject
to rapid deterioration through action of the elements, except
in the arid sections of the north. There are occasional
torrential rains which cause landslides, wash out or soften the
roadway, and carry away bridges. Steel bridges and rails are
less liable to rust than in the United States, but bridge timbers,
piles, and ties wear out rapidly. On the Mexican railway
extensive use has been made of steel ties. Ties of Mexican oak
are laid when they can be obtained, but pine ties are in general
use throughout the country. They are soft and are easily cut
by the rails ; they crack in the dry seasons and decay rapidly in
the rainy months. In their natural state they wiU last from
eighteen months to two years, and when ''treated" they will
last from four to six years.
It is obvious that when the work of maintenance is neglected,
as it has been during the recent years of political upheaval, a
great part of the trackage must be renewed. One of the offi-
cers of the National Railways of Mexico has estimated that at
least half of the lines must be renewed, and his estimate has
no reference to the damage suffered through violence.
When one considers the extent to which the permanent way
deteriorates in Mexico through natural causes and the known
fact that ordinary maintenance work has been generally sus-
pended, it would appear that the actual destruction of track
through the activity of rebels and bandits has been less than
the amount indicated by the press reports. However, few lines
have escaped such destruction. On the Kansas City, Mexico,
THE RAILROADS OF MEXICO
and Orient, the road between Marquez and San Sostenes has
been practically destroyed. Miles of track on the Mexican rail-
way have been torn up, necessitating extensive renewals. Con-
siderable track has been destroyed on the Southern Pacific,
particularly on that part of the line between Acaponeta and
Tepic. The Mexico North Western has suffered relatively more
damage than any other railroad in Mexico.
An American engineer thus described the methods of track
destruction observed by him in Coahuila in 1913 :
**Up to the past six months track destruction has been
accomplished either by the use of a wrecking crane, which
lifted sections of rails and ties bodily and piled them up ready
for burning, or by the slower process of the claw-bar, wrench
and pick. But a Constitutionalist expert devised a new
system. . . .
**A trench is dug between two ties, through which a heavy
chain is passed around two opposite rails and made fast in
the center of the track . To this one end of a heavy steel cable
is hooked, the other end being made fast to the coupling on the
engine pilot. At the signal the engineer starts his locomotive
slowly backward. . . . The rails are torn loose from the spikes
that hold them to the ties and are dragged closely together
in the center of the roadbed. The ties are loosened from the
ballast and dragged into piles, while in many cases the rails
are badly bent and twisted by the force applied. A gang of
men follows the engine, piling ties on top of the rails and leav-
ing others beneath them. These are then saturated with oil
and a match applied. In a short time the ties are consumed
and the rails are left lying on the ground twisted and con-
torted into all sorts of shapes, and of no further use until they
have been re-rolled/'*
•Weeks, How Mexican rebels destroy railways and bridges, "Scientific
American," (n. s.) OIX, 209 (1918).
[14]
THE PERMANENT WAY AND STRUCTURES
Another witness has declared that on the line of the old
Mexican Central, **In some places the rebels have even taken
scrapers and scraped away the roadbed.'
Bridges and trestles are the most vulnerable parts of a line
of railroad; for, unlike a track, they can be destroyed with
little difficulty, and once destroyed, they are difficult to replace.
All accounts agree as to the large number of bridges destroyed
in Mexico. Says a Vice-President of the Southern Pacific :
**The normal method of procedure included the burning of
all wooden bridges in the theatre of operations. The smaller
the band, the greater seems its conception of the importance
of preventing pursuit by destroying railway bridges. The
topography and climatology of Mexico are such that provision
must be made for adequate drainage in cases of sudden and
severe rainfall. The greater part of these openings are as yet
bridged by wooden structures. Traffic, can, therefore, easily
be tied up and operations nullified by a few bridge burners.
The Southern Pacific of Mexico alone has found 300 bridges
burned in the last three years."*
On the lines of the National Railways, according to the
annual report for 1915-16, **it is estimated that from thirty-
five to forty per cent of the bridges have been destroyed. Out
of these sixty per cent were due to the war and forty per cent
to lack of adequate maintenance. ' ' In the annual report of the
Southern Pacific company for 1911-12 we are told:
**0n the main line from Empalme to Tepic, twenty-three
wooden trestles, having a total length of 2,985 lineal feet, and
on the Corral-Tonichi Branch, four wooden trestles, having a
s n. S. Senate Oommittee on Foreign Relations, Hearings ... to investi-
icate whether any interests in the United States have been or are now engaged
in inoitinic rebellion in Ouba or Mexico. 854 (1918).
*Hine, Wartime railroading in Mexico, * 'Railway Age Gazette,'* rv, 722
(1914).
[IS]
THE RAILROADS OF MEXICO
total length of 240 lineal feet, were destroyed by the insur-
reetos between February 14th and June 30th, 1912."
All of the bridges on the Nacozari railroad have been des-
troyed.
Like bridges, stations and other buildings are easily des-
troyed; and all reports coming out of Mexico agree that the
destruction has been widespread. Says one press report:
** Hardly a station has not been burned between Monterey
and Mexico City.'' An American reporter who entered
Mexico at Piedras Negras late in 1915 and traveled by rail
southward through San Luis Potosi wrote: ** Every station
was gone, and every freight shed, and most of the miserable
little section houses which had sheltered a poor family. Tele-
graph wires were down. Water tanks had been blasted to
pieces; one that we passed standing full 200 feet, and right
side up, from its ruined foundations." Tanks have been
riddled with bullets and shops have been destroyed.
In the year 1912-13 the Interoceanic reported the loss or
damage of fifteen stations. The annual report of the National
Railways of Mexico for 1915-16 says:
**The buildings, signals, water and fuel stations, and other
similar structures have also suffered considerably because of
the war, especially on the San Luis Potosi, Aguascalientes and
Northern divisions, and along the lines of the Interoceanic
and Mexican Southern Railways."
Information as to the extent to which railroad property has
been restored or replaced is quite as difficult to obtain as in-
formation as to the extent of destruction, and for similar
reasons. Unofficial statements are incomplete and in conflict
with each other and also with the* official reports, which are
admittedly no more than careful estimates. Unquestionably
[i6]
THE PERMANENT WAY AND STRUCTURES
some of the optimistic statements as to work done include
work that is in progress as well as work that is proposed.
In general, it may be said that, although many lines have
been out of service for considerable periods, the work of re-
pair of roadway, superstructures, and bridges has closely
followed destruction. In some cases this work has been done
by the companies themselves ; in others the military authorities
have done such work as was necessary to make possible the
movement of troop trains. Thus metal bridges have been
replaced by wooden bridges, trestles have been restored, and
rails have been relaid. In some places this has had to be done
several times, as the conflicting forces alternately came into
control. The Southern Pacific rebuilt one bridge nine times,
five times in a single month. Work of this nature, done under
limitations both of time and of materials, is likely to be inferior
and temporary in character ; and we learn of the loss through
floods of wooden bridges which had been built as substitutes
for the steel structures that were destroyed.
The main line of the old Mexican National, all accounts
agree, is in good condition. The same seems to be true of the
lines from Matamoros to Monterey, from Paredon to Saltillo,
from Tampico to San Luis Potosi, from Mexico to Toluca, and
from Mexico to Irapuato, Guadalajara, ancf Aguascalientes.
The lines of the Mexican railway, the Vera Cruz (Mexico)
railway, the Mexican Southern, the United Railways of
Yucatan, the Tehuantepec, and a part of the Southern Pacific
are reported to be in good or fair condition. This list is not
inclusive. A work program of the National Railways appeared
in the annual report for 1915-16 under the title ** Estimate of
[17]
THE RAILROADS OF MEXICO
the probable cost of repairing and reconstructing the proper-
ties. ' ' A summary of totals follows :
Tracks 27,393,617 pesos
Bridges 8,558,048
Buildings 3,922,000
Equipment 9,000,000
99
>>
Total 48,873,665
These figures will have to be considerably increased on
account of the rise in prices and the wear and tear of sub-
sequent years. In 1919 a commissioner was appointed to pre-
pare a new official estimate. His report, made public in
February 1921, estimated that immediate reconstruction needs
of the railroads under government operation would call for
an outlay of 15,000,000 pesos. In view of the figures given
above this would seem to be an understatement. Annual main-
tenance requirements were estimated at 14,000,000 pesos.*
To restore the Mexican railway to its former condition it
has been estimated than an outlay of £2,000,000 will be re-
quired.* The Southern Pacific estimated that on December
31, 1919 the value in pesos of property destroyed since 1910
was 4,898,700. As early at 1913 the damage wrought to the
property of the Mexico North Western was estimated at
£1,000,000. A recent estimate of the cost of restoring the
Tehuantepec line is $15,000,000.
The Fall sub-committee of the United States senate com-
mittee on foreign relations estimated that the damage to Ameri-
can railroad property in Mexico amounts to $112,000,000.
» "El Excelsior," February 14, 1921.
< In 1920 the Mexican government agreed to pay 200,000 pesos monthly
on account of damage claims to this road.
[18]
CHAPTER IV
THE EQUIPMENT SITUATION
STATEMENTS, official and unofficial, as to the destruc-
tion of railroad equipment are in hopeless conflict and
confusion. It is known that all lines have suffered, but the
evidence is fragmentary and misleading. From the annual
reports of the National Eailways of Mexico it would appear
that the number of cars of all varieties lost, destroyed, or
condemned in the years 1911-17 was about 9250. In other
words, over 40 per cent of the rolling stock owned on June
30, 1911, or purchased within the next six years, was out of
service. The loss of locomotives was several hundred.
This estimate is presented for what it is worth. It is
based upon figures which, in the light of subsequent returns,
would appear to understate the loss. Conservative as it cer-
tainly is, it shows a most serious shrinkage in facilities. It
agrees roughly with the recent estimates of representatives
of the National Railways, which places the loss in cars alone
at 10,000. Similar estimates for the controlled and inde-
pendent lines would be equally impressive.
Lack of data makes it impossible to present estimates
of the losses of the controlled lines, but some significant facts
are available. On the Interoceanic there were 1304 cars in
1911 and 1102 in 1917: on the Mexican Southern the num-
ber of cars shrunk from 335 to 274 in that period. The
equipment figures of the Vera Cruz and Isthmus and the
Pan-American railroads are lumped in the official reports.
They show that in 1913 there was a total of 695 cars and
[19]
THE RAILROABS OF MEXICO
thirty-five locomotives. The corresponding figures for 1917
were 548 and twenty. There has been enough shifting about
of the equipment of the lines operated by the government to
make the figures for subsequent years of no value. Little
can be said of the equipment of the independent lines, most
of which are located in regions where the disturbance has
been greatest ; but that the losses have been heavy, both from
destruction and seizure, is certain. Some of the equipment
of the Mexican railway, especially sleeping cars, has been
taken and distributed over the government lines.
American railroads also have suffered loss of their equip-
ment in Mexico. In 1916 it was reported that the Southern
Pacific system had 1,200 freight cars lost ** somewhere in
Mexico." Late in 1920 it was announced that the Mexican
government had agreed to pay $388,000 (and had made an
initial payment of $120,000) for 468 American cars delivered
prior to January 1, 1918 and interest thereon to January 1,
1921 amounting to $98,000.
As to the methods employed in the destruction of rolling
stock, a description is hardly necessary. The following ac-
count is perhaps exceptional, but it is presented as a perti-
nent piece of evidence :
''Among the worst of the innumerable acts of vandalism
committed by the different warring factions in Mexico, the
destruction wrought on the property of the National Rail-
ways in Monterey by Carrancistas on the eve of their recent
evacuation of the city probably caps the climax. When the
near approach of the Villa forces made it apparent to the
Carranza followers that they would have to abandon the
town, it was decided to celebrate their coming departure
with an orgy of anarchy. Locomotives were sent out to
gather up all the box cars of the adjacent divisions of the
[20]
THE EQUIPMENT SITUATION
railway and bring them to Monterey for the purpose of mak-
ing a bonfire of them. These ears — more than 600 in number
— ^were hauled into town and lined up on the extensive divi-
sion terminal tracks. On the last night the Carrancista offi-
cers gave an elaborate ball in the handsome passenger station
of the National Eailways, which ended with a mock ceremony
in which the torch was applied to the costly passenger station
and to the 600 box cars. Within a few hours all of this
property was in ruins. "^
As to the condition of the rolling stock that has escaped
destruction, all accounts agree that it is poor. ''The remain-
ing rolling stock is generally in poor condition and a good
part of it — ^principally the locomotives — can hardly continue
in service unless properly repaired/' says the annual report
of the National Railways for 1915-16. Again, ''Much of the
equipment [recovered from the military chiefs] had to be
submitted to costly and important repairs, not only because
of rough handling received in the campaign, but of the
defacements and mutilations, so to speak, to which much of
it had been subjected to adapt them for dwelling purposes.
For instance^ many of the box cars had windows cut in them,
the seats of many passenger cars were missing, and in their
stead were constructed grotesque wooden partitions to trans-
form them into special or ambulance cars, etc.'' As a bit
of detailed description, the following is presented from the
account of an American reporter :
"Our car was a wonder. Every seat had been stripped
clean of its upholstery, the patriots having taken it to use
for saddle cloths or for dresses for their women. Some of
the seats had been removed altogether. Every window was
kicked out. It was especially interesting to nervous people
1 "Railway A^e Gazette," LVIH. 857 (1915).
[21]
THE RAILROADS OF MEXICO
to note that the bell rope was gone. . . . There were no
lamps in the cars/'
Efforts have been made to replace lost equipment and to
*^.*^repair such equipment as is capable of repair. This has been
difficult on account of the rise in prices of materials and the
embargo on shipments from the United States, both caused
by the European war. The shops of the National Railways
at Piedraj Negras, Monterey, Aguascalientes, and Mexico
City have been busy on repairs to rolling stock; and some
locomotives have been repaired under contract at shops in
the United States.
Except during the years 1910-11 purchases of new equip-
\ ment by the National Railways during the revolutionary
period were small. In that year 3888 cars and twenty loco-
motives were acquired at a cost of over 7,000,000 pesos. Dur-
ing the next five years less than 800 cars were added, at a
cost of about 1,375,000 pesos. Late in 1916, 560 cars and
twenty locomotives were bought. Information as to more re-
cent activity is fragmentary. ** Within the last six months,''
said the Mexican News Bureau under date of November,
1917, ''there have been purchased 600 freight cars, 80 pas-
senger cars and 60 locomotives. Three thousand cars are now
under repair in the company's own shops, which when com-
pleted will bring the equipment practically to the same point
as in 1913 — in fact, it is already larger, so far as regards
locomotives and passenger coaches, but a trifle less in regard
to freight cars." It is known that in that year the Delaware,
Lackawanna, and Western railroad sold to Mexican agents a
large number of wooden passenger cars. In a message sub-
mitted by President Carranza in September, 1917, is this
statement :
**Por all the work of the railways we have 364 locomotives,
[22]
THE EQUIPMENT SITUATION
including some which belong to private individuals. This
number represents approximately 50 per cent of what was
used by the former National Railways at the beginning of
1913. Materials have been ordered from the United States
and are already beginning to be received, with which 270
locomotives will be repaired. There will also be repaired an-
other 190 locomotives withia a short time, these being loco-
motives which at all times have been in use but which are in
poor condition, due to hard service. Contracts have also
been made with the great locomotive shops of Houston and
Kingsville for the periodical repair of locomotives in groups
of five with the object of pushing ahead the work of repair
which cannot be done so quickly in the Mexican shops, and
thus there will be obtained a monthly increase in the number
of locomotives in use. The number of cars at present in use
for commercial traffic is 13,326. The number in 1912 was
19,523. This makes an appreciable difference, owing to the
number of cars destroyed during the revolutionary period,
but there remain approximately 3,000 cars which may be
reconstructed, and up to date there have been repaired 800
of these.""
In 1919 representatives of the national lines were again in
the American market negotiating for passenger and freight
cars. That the need was pressing is evident from the figures
given in the presidential message of September, 1919. At
that time the national system had 443 locomotives, 10,780
freight cars, and 417 passenger, express, and baggage cars.*
In 1920 there were 512 locomotives in service, 103 under
repair, and 326 awaiting materials for repair ; 489 passenger.
« "El Universal," Sept. 8, 1917.
.* Oarranza, "Informe presidencial," Sept. 1, 1010:78-9.
[23]
THE RAILROADS OF MEXICO
express, and baggage ears, and 13,256 freight cars/
This means that there is need in Mexico for a great variety
and amount of railroad materials and supplies' for repairs
and also for equipment at a time when the world is passing
through a period of economic readjustment which is char-
acterized by an urgent demand for the depleted stock of
goods.
According to one estimate there is now a shortage of
240,000 cars on the railroads of the United States, and
235,000 in addition will be required for replacements in the
next three years. Another estimate is 100,000 freight cars,
4000 passenger cars, and 2000 locomotives for immediate
use. Either estimate is sufficiently large to indicate the extent
of the competition which the railroads to Mexico must meet.
They may be able to obtain some equipment from European
sources, but it would seem as if they must place chief reliance
upon the possibility of obtaining second-hand equipment
from the United States. In any event, they must face the
fact that railroad equipment has tripled in price within the
last six years.
* De la Huerta, "Informe presidencial, ' * Sept. 1, 1920:51.
•For an estimate, see "Railway Age," LXVI, 1874-5 (1910).
[24]
CHAPTER V
OPERATION UNDER DIFPICULTIES
ARTICLE 145 of the general railroad law provides :
**The Nation shall have the following rights:
**1. A reduction of fifty per cent in the maximum rates,
provided for by the law of concession, for Federal army men
and employees, agents and commissioners, traveling on offi-
cial business. . . .
**3. For the transportation of military forces or of the
police, of siege trains, ammunition, equipment, provisions,
horses, mules, and any other object or article destined for
the public service, a rebate of fifty per cent in the same maxi-
mum rate shall be granted.
**4. Whenever the Government needs special trains for the
transportation of troops and freight, the cost of said trains
shall only be fifty per cent of the average value per kilometer
of the proceeds, respectively, of passenger and freight trains
in the previous years according to the local tariflE.
*'5. The transmission of telegraph messages, and in gen-
eral any other services done for the Federal Government,
shall cost half of the maximum rate for each service as deter-
mined by the concession. . . .
**11. In the event of war or of extraordinary circum-
stance, the Executive may take measures to render unserv-
iceable either the whole or part of the line, also the bridges,
telegraph lines and signals forming part of the road.
**12. In case the Executive orders the suspension of the
service, for the sake of the country's defence of the public
[25]
THE RAILROADS OF MEXICO
peace, it may also order that all the rolling stock and any
other material shall be removed. In such cases the War
Department will determine the places to which said material
is to be taken. "^
While it is known that the various factions that have been
in control of the government of Mexico within the last ten
years have taken full advantage of these sections of the law,
detailed information on the subject has not been given out.
The Southern Pacific in its annual report for 1919 showed
a cumulative claim of 8,947,000 pesos against the government
**for service, rental of road and equipment and for material
furnished or confiscated by military authorities.''
Military service not only jeopardizes the physical property
of railroad companies, it diverts equipment from its normal
use, thus preventing the carrying on of ordinary commercial
business ; it congests the terminals, stations, and right of way
both with military materials and with ordinary traffic which
cannot be moved; it overworks and demoralizes the per-
sonnel ; and it reduces the operating revenues. Even when
military activities are confined to the operation of troop cars
or trains and to the suppression of scattered groups of ban-
dits and insurrectos, there is much loss, particularly through
the diversion of equipment. In June, 1917, a period of com-
parative quiet, there were forty-three locomotives, fifty-one
passenger cars, and 453 freight cars in the control of the
military authorities.*
During the greater part of the presidency of Victoriano
Huerta the railroads were operated through their own organ-
izations, but subject to the direction of the government.
Upon the outbreak of hostilities with the United States,
1 Ley sobre ferrocarriles, "Diario Oflcial," May 13, 1899; Mexican year
book, 1908:658.
« ••£! Pueblo," June 12, 1917.
[26]
OPERATION UNDER DIFFICULTIES
April 21, 1914, Huerta assumed control of and commenced
to operate the National Railways of Mexico and the Mexican
railway, to the extent that those lines were within his juris-
diction. This was a regular procedure under the provision
of the general railroad law:
' * The Nation will have the following rights : . . .
* * 10. The Federal authorities are entitled in case, in their
opinion, the interests of the country require it, to make
requisition on the railroads, their personnel and all their
operating material and to use them as they may consider
advisable. In this case the Nation shall indemnify the rail-
road companies. ..."
When, after Huerta 's resignation, the ''Constitutionalist"
forces under Carranza entered the Capital on August 14,
1914, the property of the National Railways was seized, in-
cluding the general offices of the company. Then followed a
period of confusion, which has been described in the follow-
ing official terms :
**The Board of Directors, which was elected on the 13th
of October, 1914, and on assuming charge, counted firmly
upon the fact that the Constitutionalist Government was
going to effect immediate delivery of the lines and properties
of the Company, which it had taken over by virtue of the
necessities of the war, because, in fact, information to the
effect that such were the Government's intentions had
reached the Directors. Unfortunately hostilities began in a
new campaign. . . . Shortly afterwards, we were confronted
with an ^embarrassing situation, as every military chief who
entered or left the city had more or less troublesome demands
to make."
The Mexican railway was taken over on November 18,
1914. The reason for this action was declared to be, ''After
[27]
THE RAILROADS OF MEXICO
the Capital of the Republic was evacuated and the Constitu-
tionalist Government was established in the Port of Vera
Cruz, the General Manager of the Mexican Railway ordered
the suspension of all traffic and laid oflf all the employees in
the zone occupied by the Constitutionalist forces, that is,
from Ometusoo to Vera Cruz." The statement continues,
** Confronted by the urgency of operating this line and those
of such regions as might be regained, for commercial and
military purposes the Citizen First Chief of the Constitu-
tionalist Army Entrusted with the Executive Power of the
Union, issued at Vera Cruz on December 4, 1914, the Decree
of Seizure of the Railway, Telegraph, and Telephone lines of
the Republic, based on Section X of Article 145 of the Rail-
way Law. . . .
''The lines in the territory controlled by the Constitu-
tionalist Forces were: that part of the Mexican Railway
between Apizaco and Vera Cruz; that of the Interoceanic
Railway from said port to Perote; the Vera Cruz and
Isthmus Railway; the Pan-American Railway; the Tehuan-
tepec National Railway; the United Railways of Yucatan,
and small branch railways with terminals at the various
ports with the exception of the Guaymas Railway. . . . The
military requirements did not necessitate the seizure of the
Tehuantepec Railway.'"
The preamble shows that the decree was issued as a tem-
porary measure, and such it must be under the terms of the
law. Its declared purpose was to meet ''the requirements of
the present campaign and of the public service," and its
contents was as follows:
"The Constitutionalist Government assumes from this date
the direction, management and administration of all the rail-
s National Railways, Annual report, 1915-16 :14-15; "Chronicle," XOIX,
1678 (1914), O. 229 (1915).
[28]
OPERATION UNDER DIFFICULTIES
way lines, their way stations, terminal stations and other de-
pendencies, whether they belong to them or to any companies
or concerns connected with the same, as well as all the tele-
graph, telephone or other lines of communication, whatsoever
their nature, situated in territory controlled by this Gov-
ernment/'*
Notwithstanding its general terms, this decree was not
immediately put into effect with reference to all the lines
within the territory then controlled, as appears from the
exceptions noted in a preceding paragraph and also from
action taken subsequently and to be considered later in the
course of this discussion.
To operate the lines to be taken over by the government
the ''Direction General of the Constitutionalist Railways of
Mexico'' was created, reporting to Carranza as ''Citizen
First Chief of the Constitutionalist Army Entrusted with the
Executive Power of the Union.""
Meanwhile the control of the Capital passed temporarily
to the forces of the opposition (Zapata), and the National
Railways were subjected to further embarrassment :
"About the middle of January last [1915] there was taken
out of our building at Bolivar Street, as well as of the sta-
tions of Colonia and Buenavista, practically the whole of the
furniture and fixtures. We figure that the value of the
extracted outfit is over one hundred thousand pesos. . . .
In those days officials and employees of the Company were
prevented access to the offices. There were also taken away
books, documents and papers which are indispensable to
all the departments, and especially to the Accounting
*• "Godiflcacion de los decretos del 0. Venustiano Carranza, sobierno pro-
visional de la Republica Mexicana," 126 (1915): National Railways, Annual
report, 1915-16:31.
(^National Railways, Annual report, 1915-16:14.
[29]
THE RAILROADS OF MEXICO
m
Department, this being the reason why the accounts have not
been kept up to date, and for inability to close same af the
date of the occupation of our properties." '
During the first seven months of 1915 the decree was made
applicable to other lines: ''The branches from Apizaco to
Pueblo, and from Ometusco to Pachuca (Mexican Railway)
and a part of the Mexican Railway." This increased the
extent of lines operated by the government to about 2300
miles.
'*The lines forming that system, beside the commercial
service . . . carried on the transportation of troops and of
all kinds of foodstuffs, and of war material for the armies in
the field, which were extending the Government's control,
or for the forces putting down banditti in the regions already
conquered. On the other hand, the lines running through
the centre of the Republic and through the North, were
assigned exclusively for campaign purposes, under immediate
charge of the Respective Chiefs.'"
In August, 1915, the Constitutionalist forces effected final
occupation of the City of Mexico, and on September 1st the
Mexican railway was returned to its owners, in view of the
fact that communications were about to be reestablished be-
tween Vera Cruz and the City of Mexico over the line of the
Interoceanic railway.®
On September 28 the Constitutionalist railways were trans-
ferred from a military to a civil status by a decree which
reads :
''Management of the commercial traffic throughout the
Republic is intrusted exclusively to the General Direction of
the Railways ... in accordance with regulations approved
•Ibid., 1914-15:8.
T Ibid., 1915-16:15.
• Ibid., 15, 20.
[30]
OPERATION UNDER DIFFICULTIES
by the First Chieftancy. Proceed, therefore, to order that
civil and military authorities shall no longer intervene in
said service beyond furnishing the moral and material co-
operation which the Direction may require to facilitate ful-
fillment of the said regulations."
In more specific terms, this involved the lines of the
National Railways and their subsidiaries, having a total
extent of 10,932 miles/
The reason for this transfer of authority was the difficulty
which the Direction General had encountered in the task of
restoring the lines to normal operation, — a matter of im-
mediate urgency in view of the extraordinary scarcity of
commodities due to military activities. The nature of these
difficulties as officially described was as follows :
'*The campaign had placed in the hands of the * Military
Chiefs' the greater part of the rolling stock, not only such
as was assigned for the military service, in keeping with the
requirements of the military conflict, but also such as had
been taken from the enemy and which was considered spoils
of war. Most of these Military Chiefs used this rolling stock
not only to transport troops and their provisions, but as bar-
racks and permanent dwellings for the soldiers and their
families, and frequently for freight transportation within
their jurisdiction for personal profit. These exceptional con-
ditions of comfort and profit for the masters of the situation
became a formidable obstruction to the reopening and nor-
malization of traffic and added to the other difficulties of
reconstructing the track, bridges, buildings, equipment, and
so forth, and to the general reorganization of the railway
service.
''Many of the efforts of the Direction General of the Con-
•Ibid., 81, 45; • 'Chronicle," 01, 1597.
[31]
THE RAILROADS OP MEXICO
stitutionalist Railways of Mexico, therefore, had to be de-
voted to recovering the rolling stock which was not legiti-
mately employed in military work and to devise and enforce
regulations for the discipline of the personnel. Much of the
equipment thus recovered before placing it in the public
service had to be submitted to costly and important repairs.
. . . The personnel in charge of the train movements, besides
being entirely under the orders of the Military Chiefs, was
incompetent. The officers and principal employees had mili-
tary ranks and many of them — simple brakemen or firemen
— ^had become superintendents or train-masters, for merit in
the military campaign, but in no sense because of their rail-
road efficiency.
**In short, the poor condition of the tracks and of the equip-
ment, the lack of efficiency and discipline on the part of the
personnel, the constant and unwarranted meddlings of the
military element in the railways — especially in the northern
part of the Republic — and the depredations of the bandits
not yet suppressed, frequently produced accidents most ex-
pensive in loss of life and money, and very serious obstacles
to the normalization of commercial traffic. . . .
''The chaos of the month of August [1915] did not permit,
in the limited lines newly opened for operation, assurance
that any train would reach its destination, much less at a
fixed day or hour. Two months thereafter, the 15th of
October, for instance, among other improvements, daily pas-
senger service between Mexico City and Laredo was resumed
— 1,300 kilometers (800 miles), and the trains ran with safety
and regularity.
**In order to improve the condition of the people who were
suflEering from the extraordinary scarcity of commodities, the
military authorities — directly or through provosts or special
[32]
OPERATION UNDER DIFFICULTIES
governing bodies — committed the error of trying to regulate
commerce by stipulating certain fixed prices on merchandise
and restricting its withdrawal outside the limit of their re-
spective jurisdiction. This mistake, besides producing re-
sults quite contrary to those sought, gave rise — since the dis-
tribution of empty cars among the interested parties could
not be made subject to definite and equitable laws — to the
occurrence that the speculators proceeded to extend their
corrupting action to the railway personnel and even to the
authorities themselves. To give an idea of the margin exist-
ing to warrant their practices from their point of view, it
will suffice to point out that the arrival of one carload of
com at Mexico City, in view of the distortion of prices due
to transportation difficulties, frequently meant a profit of
from fifteen to twenty thousand pesos. ''*°
Various additional decrees were issued from time to time
to strengthen the authority of the Direction General. Two
of these were designed to give force to regulations for the
distribution of empty cars; another declared railroad and
military services to be incompatible, thereby eliminating
members of the army from railroad interference or control ;
another created a reserve corps for revolutionary railroad
employees who had rendered service to the Constitutionalist
Government, thereby providing for a ** civilian railroad
personnel."
Military service was organized under two classifications:
**that of the Railroad Protection Forces, to escort passenger
trains ; and that of Military Transportation, for service in the
field."
The government again took over the operation of the
Mexican railway on April 3, 1917; and during the same
^^ National Railways, Annual report, 1915-16:16*17.
[33]
THE RAILROADS OF MEXICO
month it also seized the Vera Cniz (Mexico) railway, the
Vera Cruz Terminal, and the Tehuantepec National railway.
The seizure of the Tehuantepec line made necessary the disso-
lution of the partnership between the government and the
Pearson interests, and this was eflEected on January 19, 1918.
This line then took the name of ''National Railway of
Tehuantepec."" It was reported, after the fall of Carranza,
that Congress would be asked to cancel the Pearson settle-
ment and thus revive the old arrangement.
In 1917 it was rumored that the Constitutionalist railways
would be soon turned over to the Ministry of Communica-
tions, action which would result in returning the various
lines to their original status. This was not done, however.
Instead, in June of that year the operation of the Vera Cruz
and Isthmus, the Vera Cruz (Mexico), the National Tehuan-
tepec, and the Pan-American lines was consolidated under a
single management, subject to the Direction General of the
Constitutionalist railways ; and the operation of the lines of
the National Railways of Mexico and their subsidiaries (ex-
cept the Vera Cruz and Isthmus and the Pan-American) was
continued by the Constitutionalist railways.
EflEective January 1, 1919, the name ''Constitutionalist"
was abandoned, and the government-operated lines became
known as National Railways of Mexico and Southeastern
Lines in Mexico.^*
From time to time the owners of the Mexican railway
urged the government to surrender the property, but the
reply was that it would not be "convenient" to do so. In
October, 1919, press reports indicated the possibility of the
return of the National Railways of Mexico to the share-
holders, but they only served to bring out the declaration
11 "Diario Oficial," VIII, 197, H15 (1918),
i» Ibid., X, 855.
[34]
OPERATION UNDER DIFFICULTIES
that **The railway lines will not be returned to their former
owners until the service has been entirely normalized."^*
The Mexican railway, however, was returned to its owners
on June 18, 1920.
Because of its isolation, Yucatan was able to exercise a
considerable degree of independence of the central govern-
ment under Huerta. In 1914 the state government in con-
junction with the Compania de Fomento del Sureste assumed
the direct operation of the United Railways of Yucatan,
which became known as the *' Constitutionalist Railways of
Yucatan." In 1919 the national government was attempting
to obtain the majority of the share capital of this company.
In Sonora state operation was attempted with less success :
*'0n March 5, 1913, the state of Sonora revolted against
the newly established Huerta government, and seized that
part of the Southern Pacific of Mexico lying north of
Empalme. For six weeks the officials of the road were
powerless. Operation was carried on from Hermosillo, the
capital of the state of Sonora, by the state officials, with
six locomotives and other equipment forcibly seized. . . .
Six weeks of such operation gave the state officials their fill.
Outgo so exceeded income that the road was unconditionally
returned to its owners.''^*
The Southern Pacific Railroad of Mexico is the longest
line that has been left in the control of its owners. The
incomplete Kansas City, Mexico, and Orient is in the hands
of a receiver. The other independently operated lines are
generally those which serve some particular industry — ^lum-
ber or mining — and the most important of them are in the
northern states. Such are: the Mexico North Western (con-
i» "El Excelsior," Nov. 12, 1919.
^^Hine, Wartime railroadine: in Mexico, "Railway Age Oazette," LV, 703
(1914).
[35]
THE RAILROADS OF MEXICO
trolling a large lumber company), the Mexican Northern
(leased and operated by the American Metals company), the
Nacozari (owned by the Phelps-Dodge mining interests), the
Parral and Durango, the Coahuila and Zacatecas (owned by
the Mazapil Copper company), and the Potosi and Rio Verde
and the Mexican Mineral (both owned by the American Cam-
pania Metalurgica Mexicana) .
The Mexican government in 1918 ordered the Southern
Pacific to reopen its branch from Navojoa to Alamos in
Sonora, which had been partially destroyed by revolution-
ists, and threatened to take over the line if its order were
not carried out. No action was taken by either party. The
Mexico North Western was also threatened with seizure be-
cause of failure to operate over a line on which the bridges
have been destroyed.
Railroad directors are unlikely to exaggerate when re-
porting to their shareholders conditions which adversely
aflEect their property and income. It is proper, therefore, to
make liberal use of the statements made in their annual
reports.
In the report of the National Railways for 1911-12 condi-
tions were thus described:
** Unfortunately, as the shareholders know, a state of revo-
lution has continued in the Republic, principally in the
northern part of the country and in the States of Morelos
and Guerrero, which has been the cause of attacks upon and
damage to transportation lines, resulting in the interruption
and suspension of traffic for a greater or less time.'' The
situation in 1912-13 was similar :
**The conditions which have prevailed throughout the
country have aflEected principally the railway lines. In addi-
tion to the damage done to your physical properties, the
[36]
OPERATION UNDER DIFFICULTIES
disturbances and interruptions had a marked effect on
the gross earnings of the company, while at the same time
the constant reconstruction work made necessary to keep the
lines in operation increased materially the ordinary oper-
ating expenses."
In the course of an interview published in March, 1913,
the president of the National Railways said:
* * The fact that our line all the way from the capital to El
Paso is open after more or less interruption for a year is
significant. The other main line northward from Mexico City,
namely to Laredo, was to have been opened this afternoon.
It is expected that the Eagle Pass route will be ready for
operation its entire length shortly. Most of the line is ready
now. South of Mexico City railroad traffic has not been
resumed on all our lines. The Cuemavaca division will be
ready for operation soon. Most of the Interoceanic Railway
is already open. . . . Our losses in earnings have not been so
much from destruction of property as from the necessity of
using circuitous routes in order to keep traffic moving. . . .
The local traffic at Mexico is excellent. The closing of the
northern gateways temporarily has interrupted the movement
of foreign business, but that is not large in proportion to the
local. Business in Mexico has by no means stopped because
of the various revolutions. In spite of all the traffic we moved
during the periods of greatest trouble there is now a con-
siderable accumulation of loaded freight cars at the principal
centres in the recently disturbed districts.""
The next annual report, that for 1913-14, gave a less favor-
able picture :
''Owing to the revolutionary conditions, at times whole
districts and sometimes whole divisions were taken from our
18 ''Ohromcle," XLVI, 790.
[37]
THE RAILBOADS OP MEXICO
control. We lost the earnings from them and frequently could
not communicate with our division oflScers as to rigid economic
administration when we were still liable for expenses. The
very best was done that could be done under the circumstances.
It is doubtful if a set of operating officers were ever called upon
to face such extraordinary conditions in the operation of a
railway, as were your officers in the year under review. . . .
** Disturbed conditions throughout the country were worse
than during the previous year, and sadly interrupted our
construction and improvement work, and also our general
operations. At times various divisions of our railway lines
were entirely out of our control, and, owing to changes in
the management at Mexico City, and in division officers,
caused by reasons beyond our control, the records which were
made covering these interruptions are not available, and, as a
consequence no detailed report can be made now. . . .
**Our general offices in Mexico City have been occupied
twice since August 1914 by forces in the employ of different
Governments appointed to operate the railways. We thereby
lost control of many of our records, and at this time they are
not all available."
Whole divisions have been out of operation for long periods,
notably the Cuemavaca division, the Coahuila and Pacific
division, the line from Juarez to Chihuahua and the line
from Guadalajara to the Pacific coast. Tampico has been
repeatedly cut off from the interior, and this has meant the
shutting off of the supply of fuel oil needed for locomotives.
At times all four of the northern gateways into Texas have
been closed.
The Interoceanic report for 1910-11 said :
**The company's business suffered through the political
disturbances in Mexico, which commenced toward the end of
[38]
OPERATION UNDER DIFFICULTIES
the year 1910; certain sections of the line had to be closed
for some time and there was considerable falling off in the
volume of traflSc through the Port of Vera Cruz.'' During
the next year the experience was the same :
* * Our business has to some extent been adversely affected by
the unsettled condition of affairs in Mexico, although the
actual damage to property has not been great. The disturb-
ances caused suspension of traflSc on portions of the line for
considerable periods and increased the cost of operating. . . .
* * On account of the unsettled state of the country there was
a large decrease in revenue from imported goods. . . .
**This portion of the system [Mexican Southern] suffered
severely from the revolutionary disturbances, which caused
the complete suspension of traffic on numerous occasions."
In 1912-13 the report said :
**The results of the year's workings have again been ad-
versely affected by the continuation of revolutionary disturb-
ances, in consequence of which certain sections of the line,
representing 14 per cent of the total mileage, had to be closed
to traffic for practically the whole twelve months. . . .
'*The disturbed condition of Mexico is accountable for the
decrease of 80,431 tons, or 7.95 per cent in the amount of
goods carried. . . .
**The traffic of this [Mexican Southern] railway was also
adversely affected by the revolutionary disturbances, and
consequently the net profits of that line were. . . . less than
the rental."
The reports of the Mexico North Western give similar
testimony :
''At the end of 1910 political disturbances occurred in
Mexico which subsequently developed into a serious condition
of affairs, but except for interference with the operation of the
[39]
THE RAILBOADS OF MEXICO
railway to prevent the movement of troops, very little trouble
has been caused to this company.'' Conditions in 1911 are
thus described :
** Political disturbances continued during the greater part
of the year, although there was a temporary cessation for a
few months after the victory of the revolutionists headed by
Francisco Madero, who was then elected President of the
Republic. The company suffered little physical loss or dam-
ages from these troubles, although a serious loss of revenue
resulted, due to the interference with the operations of the
railway and lumber business. . . . The interruptions to rail-
way traffic were frequent, and lasted in many cases for days
at a time.''
The fact that neither the Mexico North Western nor the
Interoceanic has issued any reports for succeeding years is of
itself sufficient evidence that conditions became worse rather
than better. As to the experience of the Southern Pacific of
Mexico in 1910-11, we have this report :
* * The revolutionary movement in tiie Republic of Mexico. . .
did not extend to the Company's lines in the State of Sinaloa
until April, 1911. The bridges and trestles then destroyed
were replaced, but during the month of May the interruption
from this cause became so frequent that the traffic over the
line was practically suspended. . . . The bridges and struct-
ures destroyed were replaced and traffic was resumed on the
13th day of June following."
In 1912-13 the situation was described as follows :
The Southern Pacific Railroad Company of Mexico during
the year continued to suffer from revolutionary disturbances.
Not only were structures and equipment destroyed, but busi-
ness was practically suspended and development of prospective
[4o]
OPERATION UNDER DIFFICTJLTIES
traffic retarded. ' ' Similar statements appear in the reports for
the three succeeding years:
The Southern Pacific experience was further described in
October, 1914 by a vice-president :
**In the 20 months since February, 1912 when the second
of recent Mexican revolutions was started, the Southern Pacific
of Mexico has been in full operation only six months. During
the other fourteen months from 10 per cent to 80 per cent of
the mileage has been out of commission at various times and in
various places. At first the officials, who are all Americans,
and the employees who are nearly 90 per cent Mexicans,
strained every nerve to crib bridges and to resume traffic.
As time wore on, however^ all reserve energy has naturally
been dissipated, the abnormal has become the normal, and the
exceptional has lapsed into the routine. A train despatcher
is not startled if his wire suddenly goes down before the
orders are completed. He knows from experience that the
wire may not come up until perhaps tomorrow, next week, or
mayhap next month or next year. Occasionally the attacking
band will take possession of the locomotive and bum some or
all of the cars in the train. Usually, however, in the course
of a week or two the wire comes up and a conductor asks for
running orders from an office many miles from where last
located. . . .
*'In May, 1912, after operation of the Sinaloa division had
been suspended for over three weeks, it was deemed advisable
to move all obtainable equipment north to Empalme, Sonora,
near Guaymas. . . . Regular traffic was not resumed for
several weeks. Meantime a cruiser train was put on.
Passengers rode in the caboose. No cars were left at stations,
but freight offered was loaded in empties in the train. After
cruising all day, the train tied wherever night overtook it.
[41]
THE RAILROADS OF MEXICO
The danger of encountering a hole instead of a bridge pre-
cludes much night running in times like these. "^*
Early in 1920 the Mexican press was giving attention to
the possibility of the resumption of operation on the line
south of Acapometa.
The operation of the Kansas City, Mexico, and Orient has
been irregular for years, and this can be said also of many
other lines. The Mexican Northern was inactive from April
1913 to January 1915. During 1917 the Vera Cruz and
Isthmus was out of operation, and the only connection be-
tween the National Railways and the Tehuantepec line was
by boat from Vera Cruz to Puerto Mexico.
Enough has been said to indicate that railroading in Mexico
has been a hazardous pursuit for a decade. Within the last
few years there has been considerable improvement, but
conditions are still far from normal. Indeed, we were recently
told by a former United States consul- general **In all Mexico
there is just one railroad line that is open. It runs from
Laredo, Tex. to Mexico City." This statement may be subject
to exception, but equally extreme are the statements of those
who would have us believe that at their best conditions of
operation in Mexico to-day are other than chaotic.
^ * Hine, as above, 702-3.
[43]
CHAPTER VI
SERVICE
IN normal times the railroads of Mexico gave satisfactory-
freight service; now they give such service as they can.
Shipments in less than car lots are not desired, and such traflSfc
is generally handled through the express or parcel post services
and at high rates.
Various causes have contributed to this result. The use
of roundabout routes is often necessary, and the movement of
trains is generally confined to daylight hours. The condition
of the roadway and bridges is such as to reduce speed and
to cause frequent accidents. A disorganized railroad per-
sonnel has also been in part responsible for poor service and
for train wrecks. But the greatest cause is lack of motive
power and rolling stock. In addition to the large amount of
equipment destroyed, there were in 1919 about 5000 cars laid
up for repairs as well as several hundred locomotives. Repairs
have been delayed on account of the diflSculty of obtaining
materials from the United States, although vigorous attempts
have been made to do all that could be done in the shops
within the country.
Shortage of equipment has given rise to a system of graft
in connection with the obtaining of cars and the forwarding of
cars that have been received and presented for shipment. Of
this system there are reports from enough different sources to
give them credibility. The following will serve as samples :
''Gratification to railroad employees and Government offi-
cials in order to be permitted to operate has now become a
[43]
THE RAILROADS OF MEXICO
fixed expense. This is necessary in order that these people
may live, for while the Government collects all freight and
taxes in gold, all railroad and Government employees are paid
in *fiat' paper money, and the business interests must make up
the difference/
**Take the Carranza run railways for instance. The mer-
chant who wants to ship a carload must first pay the superin-
tendent of the road up to six thousand bilimbiques before he
will be able to get a car. Then the yard master must be tipped
about two hundred bilimbiques to move the car. Then the
agent of the merchant must follow up the road — the trains
run only in daylight these days — and watch for the car on
the sidings. If it has been cut out, he must pay another local
patriot to get the car attached to another train. And so he
follows it on to its destination. Thus the merchant through
tips and graft pays the railroad more than ever before."*
That these statements are not exaggerated is evident from
the testimony of Mexicans themselves :
**Some of the most detestable abuses committed on our rail-
road lines can be prevented by the Department of Communi-
cations issuing strict injunctions to the railroad men under
no circumstances whatsoever to change the order in which
freight cars shall be furnished to merchants. . . . The regu-
lative circular should be made applicable to engine drivers and
to all other employees of the railroads, who, when not given
gratuities or tips, abandon the trains on the road. ... It is
absolutely necessary that the merchants . . . should strictly
abstain from offering tips. ... %
'* There are two marked defects in the railroad service at
^ Memorandum submitted on behalf of forty-five companies to the American-
Mexican Commission, September, 1916:15-16.
' Whitney, What's the matter with Mexico? 150-51 (1916).
[44]
SERVICE
present. The want of efficiency on the part of the employees
to improve the service and the want of impartiality in the
distribution of cars. . . .
''A great many thefts are now being committed in the rail-
road transportation of merchandise from one city to another
in the Eepublic, and in order io be able to obtain empty cars
it is necessary to deal out undue gratuities. . . . Such pro-
ceedings are highly immoral. ... It is absolutely necessary
therefore to moralize the personnel of the railroads and to
recommend that merchants refrain from offering gratuities
in order to be served preferentially in the transportation of
their merchandise. ...
** Merchants are compelled to give gratuities, to pay tips,
and to perform other immoral acts of criminal complicity;
otherwise they cannot get their goods transported to their
destination. Merchants on a small scale, who are unable to
pay such gratuities, ship their goods by express and thereby
suffer a loss of at least 50 per cent, of which they are arbi-
trarily robbed. . . . Merchants make no complaint for fear of
being persecuted. . . . The functionaries now in charge of
our National lines are altogether lacking in competence and
are absolutely void of honesty and patriotism.'"
In this connection it must be borne in mind that the element
of graft is not wholly absent in other countries ; and there is
evidence that when a car is once obtained and presented for
shipment the payment of gratuities to keep it in motion is be-
coming less and less necessary.
One of the reasons for the scarcity of cars in Mexico has been
the refusal of the companies in the United States to allow their
equipment to go over the border. Thus when in the summer
» First National Congress of Merchants, Summary of transactions and pro-
ceedings. 1917:69. 101. 103.
[45]
THE RAILROADS OF MEXICO
of 1914 arrangements were made between the National Rail-
ways of Mexico and the Texas and Pacific, the International
and Great Northern, and the St. Louis, Iron Mountain, and
Southern for an interchange of traffic, it was required that all
freight in both directions be transferred in the International
and Great Northern yards at Laredo. Late in 1915 arrange-
ments were made with the Southern Pacific for through ser-
vice through Eagle Pass and with the above mentioned com-
panies for through service to Laredo. Six months later, how-
ever, the American lines were refusing to permit freight cars
to cross into Mexico on account of heavy losses of equipment.
It was not until January 1, 1921 that free interchange of cars
over the international boundary was reestablished.
In the course of an interview published in June, 1917, in a
Mexican newspaper, the general manager of the Constitutional-
ist Railways said :
** Neither the Government nor the Contitutionalist Railways
can solve the problem in this economic crisis. The only re-
course is that agriculturists, men interested in industries, and
business men shall acquire on their own account a sufficient
amount of rolling stock to haul away their products under
terms providing that such rolling stock shall be the property
of the Government lines after they shall have paid for it.*'*
The charge has been made by Americans interested in
corporations in Mexico that railroad officers have adopted the
policy of refusing cars to American corporations with the
idea of forcing them to bring cars for their use from north of
the border, but certainly not all American corporations have
been coerced in this manner.
On their own initiative several American corporations have
purchased cars in the United States which had been discarded
* **B1 Pueblo," June 12, 1917,
[46]
SERVICE
because they were too small to conform to the standards con-
sidered necessary for economical operation. Some of these
cars were obtained from the New York, New Haven, and Hart-
ford The American Smelting and Refining company and
the American Metals company each have several hundred
cars and many locomotives. Smaller companies like the
Cusihuirichic Mining company and the Tezuitlan Copper
company also own their own railroad equipment; and many
other industrial concerns, haciendados, and even commercial
houses have adopted the practice. There are now ninety-
eight locomotives and 2446 freight cars held in private owner-
ship.*^ In 1919 it was announced that the operation of private
equipment would be prohibited as soon as the railroads obtain
an adequate supply, but there is no immediate prospect of
such action.
The contracts between the railroad and the owners of private
equipment are of two sorts, differing mainly in the provisions
as to ownership at the expiration of the agreement. They
generally provide that the railroad shall bear the cost of labor,
fuel, and water, and all operating expenses, and that the
owners shall keep the equipment in repair and pay the regular
transportation charges. The term is two years. All contracts
contain provisions to the effect that engines shall be used to
full capacity, and that if the number of loaded cars presented
for shipment is not sufficient to tax the hauling capacity of the
locomotive to within 15 per cent of its limit, the railroad
officers may attach other cars, charging therefor rates 25 per
cent in excess of the regular tariff. This is a measure of
economy, and it is of advantage to the small shipper in that
it makes it possible to move his products.
These contracts put heavy burdens upon the owners of
■De la Huerta, "Informe presidencial, " Sept. 1. 1920:51.
[47]
THE RAILROADS OP MEXICO
equipment in the form of wages of extra personnel, interest
on the investment, and repairs, but they provide the only
means of moving freight without delay. The advantage to
the railroads in the form of full rates for partial service and
extra rates for full service is obvious.
There is another type of contract under which private in-
dividuals repair cars at their own expense, receiving in return
a reimbursement to the amount of half their outlay and an
exclusive right to the use of the cars thus repaired for one
year, during which time they pay full freight charges.
The unsatisfactory nature of railroad service was one of the
topics of discussion at the First National Congress of Mer-
chants held in Mexico City in July, 1917, and the following
resolutions set forth the opinion of responsible Mexicans as
to the situation and its remedy:
** Resolved: that the First National Congress of Merchants
shall ask the Government to endeavor that the following
measures be instituted. . . for the purpose of remedying the
shortage of rolling stock and of reducing freight charges : —
**I. — Measures for remedying the shortage of rolling stock.
**lst. To urge shippers to load cars to their full capac-
ity.
**2nd. To urge consignors and consignees to employ the
least possible time in loading and unloading cars, for
which purpose the railroad should establish a service
through which due notice shall be sent the consignee of
the arrival of cars, the party interested having previously
given his address.
**3rd. To urge the railroads to have local freight cars
(with the exception of cars loaded to their full capacity)
loaded to their full cubic capacity ; for which purpose they
should appoint inspectors to see that their orders are
carried out. [^g]
SERVICE
**4th. Cars repaired at the expense of private parties
shall be handled by the railroads themselves.
**5th. Private car owners wishing to avoid the expense
of hauling empty cars should permit the railroads to
handle their cars.
II. Measures tending to reduce freight charges,
1st. To allow 10 per cent discount on freight in excess
* of the minimum weight or on any excess over the mini-
mum in cars loaded to full capacity, when those cars are
loaded within their capacity with a weight greater than
the minimum fixed by the circulars.
* * 2nd. Express rates on the car loads should be modified
so as to make them more equitable, those now in force
being relatively high.
**3rd. To abolish as immoral the surcharge of 25 per
cent on freight charges, which certain railroads have
established for the preferential granting of cars.
**4th. Freight charges should be applicable to 'doc-
umentary express shipments if goods are not delivered to
the consignee within five days from the date on which
they are due to arrive at their destination, according to the
passenger schedule, cases of force majeure being of course
excepted.
**5th. To abolish the system of embargo such as is now
in use on the Mexican Railway under which shippers are
forbidden to ship goods by freight, and compelled to have
their goods receipted and forwarded by express.
**6th. The * Railroad rules and regulations' on car
traffic, establishing a preference in the assignment of
cars for cattle, fruit, and articles of prime necessity, and
in general of things which easily decay, should be strictly
observed. If this were done many shippers could avoid
[491
THE RAILROADS OP MEXICO
. . . forwarding their goods by express, as they would
have a right to preference in regard to cars and traffic.
**7th. The circular relative to special freight trains
should be amended, so as to provide that the railroad may
require a minimum of 250 tons from each consignor to
each consignee as a perequisite to the furnishing of
special train service ; and the existing rate for such ser-
vice — $2.00 per kilometer per locomotive in case the roll-
ing stock is the property of the company and $1.00 per
kilometer per locomotive in case it is private property —
should be revoked.
**8th. To prohibit the operation of private shipping
companies within the railroads; express companies ex-
cepted.'
**9th. To ask the National Railways to make such
preparation as may be necessary so that, as soon as they
again receive control of their lines, they may reestablish
through service with the United States and thus give
the public the benefit of through rates.
* * 10th. To revoke, if it has not already been done, the
order under which the railroads shall take posssesssion
of all cars belonging to private concerns.
**llth. To call through the Department of Industry
and Commerce a meeting of railroad representatives,
whereat shall be present delegates from the Congress of
Merchants and experts to be appointed by the Department,
* This would seem to substantiate the report that two forwarding companies
had been organized by persons high in government circles, which were operating
in harmony with the railroad administration. It is said that when a prospective
shipper applied to the railroad for cars, his application was likely to be unsuc-
cessful. A representative of one of these companies would then offer to furnish
the needed equipment. If the products were of a perishable nature or if the
shipper were in urgent need of money, there was no alternative but to accent
the onerous terms. By this method the companies profited not only through their
service charges, but also through their control over the merchandise itself.
[so]
SERVICE
to consider what methods will be most beneficial to the
interests of all parties concerned. . . .
** Resolved: that the First National Congress submit: —
**lst. That the Executive of the Union instruct the Man-
agement of the Constitutionalist Railways that, as long as
the rolling stock controlled by them is inadequate for their
own needs, they shall accept privately-owned cars, and pro-
vide for the purchase thereof by reserving for that purpose
10 per cent of the amounts collected for freight.
**2nd. To order the strict enforcement of existing regu-
lations relative to the receipt, shipment, and re-shipment of
merchandise; to the order in which the cars shall be fur-
nished ; to the aggregate number of kilometers to be covered
daily; and also to order that freight rates shall be in con-
formity with the regular tariff.
**3rd. That it grant legal capacity to the Chambers of
Commerce already established, and to the delegations from
the said Chambers; and that it authorizes them to see to it
that the railroad rules and regulations are strictly complied
with, especially regarding the following points :
**A. — the receipt and re-shipment of merchandise at sta-
tions in such a manner that the available rolling stock may
furnish full service ;
'*B. — The furnishing of cars strictly according to the order
of registration of application ;
'*C. — The aggregate number of kilometers or the minimum
kilometrage to be covered daily ; especially under the regu-
lations ;
''D. — The forwarding of small freight shipments without
delay ;
<<E. — The reporting to the Department of Industry and
Commerce of all derelictions of railroad employees.
[SI]
THE RAILROADS OP MEXICO
<<
4th. That the RaUroad Management be ordered to abol-
ish the additional charge for hauling empty cars, also the
requirement that freight payments be made in advance."^
United States consuls are required to prepare annual state-
ments of economic conditions in their districts, and in their
reports for 1918 we find the following information as to rail-
road service :
*'The railroad traffic on this [Southern Pacific] road from
Nogales, Ariz., via Hermosillo and Guaymas, State of Sonora,
and San Bias, Culiacan, Mazatlan, Rosario, and Acaponeta
has been very satisfactory, both in the matter of passenger
and freight service in so far as the regularity of trains was
concerned with the exception of one delay of a few days
during the late summer when a bridge was washed out. The
restoration of sleeping and dining car service is under con-
sideration by the railway officials. . . .
** Goods intended for this [Matamoros] consular district
are sent by rail to the most convenient port in the United
States, where they are received by the consignee and taken
across the border, usually in drays ; or they may be sent by
steamship to Galveston, Tex., and thence by rail to the bor-
der port through which they are taken to Mexico. The St.
Louis, Brownsville and Mexico Railroad connects Browns-
ville with Houston and Galveston. The Mexican National
Railway, which connects Matamoros with Tampico via Mon-
terey, is not deemed a practicable route at present for goods
consigned to this district from the United States. . . .
**The lack of adequate rolling stock and the bad condition
of the available motive power has made it impossible to meet
the demands in railway traffic, and this has been one of the
chief impediments to economic progress in the district.
>>8
"^ First National Ooncrress, as above, 140-2.
8 "Commerce Reports," 1919, sup. 32c, 12, 15, 22.
[52]
SERVICE
** There was no interchange of ears between Mexican and
American railways during 1918 ; consequently, it was neces-
sary to transfer freight, at an added cost, either at El Paso,
Tex., or at Ciudad Juarez. Only upon furnishing the Ameri-
can railroad company with a large bond could a car be
brought into this state. Passenger and freight trains were
run in this [Chihuahua] district only during the daytime,
greatly delaying transportation. . . .
**The Mexican National Railways, operated by the Govern-
ment, afford daily passenger service south from the interna-
tional border at this point, through Chihuahua, the capital
of the state, to Mexico City, although most people prefer to
make the journey by way of Laredo or Eagle Pass, Tex. The
other railroad running from this city [Juarez] is the Mexico
Northwestern, operated by a Canadian corporation and pri-
marily built to transport to the United States lumber pro-
duced at Pearson. The company carries a few passengers
by a mixed train once or twice a week. This railroad origi-
nally extended beyond the lumber mill and thence to
Chihuahua City, but through travel to the latter point has
been discontinued in recent years and is not likely to be
resumed until more capital is available and conditions are
safer. . . .
'*The Southern Pacific de Mexico Railroad is the only line
of any consequence operating in Nogales. This road runs tri-
weekly trains from Nogales to Guaymas, a distance of 245
miles. The same system operates a branch line running
tri-weekly trains from Nogales to Naco via Cananea, a dis-
tance of 120 miles. The Nacozari Railroad runs trains from
Agua Prieta to Pilares, Sonora, a distance of 65 miles. These
are the only railroads in the district. The property of both
[53]
THE RAILROADS OP MEXICO
these companies has greatly deteriorated, owing to the fact
that they have been compelled on several occasions to with-
draw all trains and practically abandon their roadbed. All
of the bridges on these two railways have been destroyed,
and all rolling stock, the roadbed, terminals, and buildings
will have to be renewed at an early period if the roads are
to continue to operate. . . .
** Transportation facilities in this [Piedras Negras] dis-
trict, as well as in all northern Mexico, have been hampered
by the lack of motive power, thus greatly reducing commer-
cial activity in the Republic. It has been possible for busi-
ness to be kept in operation only by the running of privately
owned trains, of which there are about 27 in Mexico.
**The freight rates have been increased, the revenues being
collected on a Mexican gold basis, but as no part thereof is
devoted to a sinking fund for the payment of interest on
bonds, capital, and improvements, the revenue from the rail-
roads has been used in the payment of the general Govern-
ment expenses, leaving nothing over the operating expenses
for the improvement of the roadbeds or the rolling stock.
As a consequence, rolling stock, tracks, and bridges are in
urgent need of improvement and repairs.
'*At the present time there are 421 engines in the service
of the Mexican railroads, not including privately owned en-
gines being operated under the supervision of the Railroad
Management, making them a part of the system. It is due
to these privately owned locomotives that it is possible to
handle the major part of the freight. . . .
'*The most serious obstacle to be overcome in the resump-
tion of trade is the lack of transportation facilities, as there
has been no upkeep of railway lines and equipment. At the
end of 1918 there were actually but three passenger and two
[54]
SERVICE
freight locomotives on the San Luis Potosi division of the
line from Mexico City to the United States border, a distance
of 375 miles, extending from Gonzales to Saltillo. For re-
liable service shippers are dependent on private trains. From
the American border to San Luis Potosi, a distance of 475
miles, freight coming by private trains takes about ten days.
By the regular Government service it takes from one to
three months. But even the private trains are irregular and
infrequent. Shippers by private trains pay the regular Gov-
ernment rate and 50 per cent additional. As freight is not
received on private trains in less than carload lots, shippers
of smaller quantities who require regular, quick service must
ship by express or pay insurance. Freight insured against
loss reaches San Luis Potosi from the American border in a
week's time; by express the time is about the same. There
are special express trains leaving New Laredo for Mexican
points twice a week.*
Better conditions were reported in 1919 :
**The salient factor of industrial progress in Mexico was
the sufficient restraint of banditry throughout the Republic
to permit a general return to industry, except in limited
areas. In no part of the country did the outlaws extend
their operations, their depredations being limited to raids.
Railway lines previously in regular operation have been
maintained, subject to less and less interruption, and regular
service'has been resumed on lines where service had been sus-
pended or subject to frequent interruption. . . .
**The most important railway line upon which service was
maintained with regularity throughout the year 1919 was
that from Mexico City to New Laredo, passing through the
important cities of Queretaro, San Luis Potosi, Saltillo, ^tnd
• Ibid., 1919, SUP. 82a, 3-4, 6, R, 10, 16.
» »
[55]
THE RAILROADS OF MEXICO
Monterey. Trains were attacked by bandits on this line,
generally in one locality, in the northern part of the State
of San Luis Potosi and the southern part of the State of
Coahuila. But these attacks resulted in nothing more than
the delay of trains. Bandits did not occupy the line, nor even
remain to follow up their attacks. Passenger trains on this
part of the line are protected by guards, and run only in
daytime. Interference with traffic on this line has steadily
diminished.
** Train service on the line from Tampico to San Luis
Potosi, which had been entirely suspended during the revo-
lutionary troubles until the latter part of 1917, was resumed
by degrees in 1918, two trains a week running half the dis-
tance a day and making the entire run in two days. Through-
out 1919 there were trains daily making the run in twelve
hours. Although this line was subject to bandit attacks of
a serious nature, communication was steadily maintained
and traffic was as heavy as the rolling stock available could
handle. The bandits along this line were kept back suffi-
ciently to permit a general resumption of agricultural pur-
suits within easy reach of the railroad. The lines westward
to Guadalajara from Mexico City and points farther north
connecting with San Luis Potosi and Aguascalientes, were
generally free from interruption. One of the lines between
Mexico City and Vera Cruz was in continuous operation, sub-
ject to infrequent attacks.
**The most important railway line to be seriously inter-
fered with by bandits during 1919 was the line from Mexico
City to Ciudad Juarez, opposite El Paso, passing through
Aguascalientes, Zacatecas, Torreon, and Chihuahua, with
rcOnnection to Durango. During the year protection was
^feadily extended to the territory served by this line, so that
[56]
SERVICE
by the close of the year a through service of passenger trains
was organized from Mexico City to Ciudad Juarez. This
service is now (March, 1920) in regular operation, but its
success has been set back recently by one of the worst attacks
yet made by bandits. . . .
* * Commerce and industry were seriously retarded through-
out 1919 by deterioration and lack of upkeep of railroad
equipment, and, in the north, by damages from floods. . . .
**The railways [in Yucatan] remained under the indirect
control of the Comision Reguladora subject to the final liqui-
dation of that institution. The trackage and equipment re-
ceived reasonable maintenance, considerable new equipment
was added, a storage battery electric car service was estab-
lished between Progreso and Merida, but no extensions were
planned or made. . . .
**Saltillo is important as a railroad center. It has two
direct connections with the United States, one via Paredon,
Anhelo, Reata, and Monclova to Eagle Pass, Tex., the other
via Monterey to Laredo, Tex. Both of these lines have daily
trains both ways, the Laredo connection operating Pullmans
and having through trains to Mexico City.
**From Saltillo westward a tri-weekly train connects with
Torreon and Gomez Palacio over what used to be the Coa-
huila and Pacifico Railway. This road is in rather bad condi-
tion. This line brings cotton to Saltillo from the Laguna
district, handling also the vineyard products of the Parras
section, and the wheat, com, and beans around General
Cepeda.
**A line via Paredon, Sauceda, Brisa, Venus, and San
Pedro Colonia connects Monterey with the Laguna district,
passing through a section of comparatively unimportant cul-
tivation. There are daily trains on this road which usually
[57]
THE RAILROADS OF MEXICO
connect with the Saltillo-Eagle Pass train at Paredon. This
was the old Mexican Central line. The line from Beata to
Sauceda via Trevino, running through a valley between
mountain ranges, is in use for freight traffic only. There is
a line from Saltillo to Arteaga. All of the above lines belong
to the Mexican National Railways. Tie renewals are the
repairs most needed.
**From Saltillo southward the Coahuila and Zacatecas, be-
longing to the Mazapil Copper Co., runs to Concepcion del
Oro in Zacatecas, with a branch at Avalos westward to the
mining town of San Pedro Ocampo. There are daily trains
on this line and it is in good condition. The Coahuila and
Zacatecas has completely equipped shops and roundhouse at
Saltillo. . . .
** There are four railways running out of Vera Cruz, two
of which are trunk lines to Mexico City, one a short line to
Alvarado, and the fourth running to the Isthmus of Tehuan-
tepec. The only one of these operating with any sort of
regularity is the road to Mexico City.''^°
Early in 1919 the general manager of the National Rail-
ways issued a statement which gave information as to traffic
conditions on the lines controlled by the government :
**To pretend that railroad service in Mexico is given with
the accommodation of former days would be a statement de-
void of reflection. Many passenger coaches are lacking in
the usual interior equipment; in some the window glass is
broken, in many the seats are worn out, and it is impossible
to get prompt repairs. Coaches which have been used in the
military service are in a dilapidated condition. Train sched-
ules are difficult to maintain, as precautions have to be taken
10 Ibid., 1920. SUP. 35a, 1-2, 16, 22, 24.
[S8]
SERVICE
against rebel bands. Generally speaking, however, the serv-
ice is normal and accidents are not frequent.
'*0n the Interoceanic we have not been able to control the
situation. The rebels have frequently torn up the rails and
attacked the trains. They have been very bad between
Puebla and Jalapa, destroying the road, thus requiring
guards of 100 or more soldiers to protect each repair gang.
Often we find newly repaired track again destroyed before
a train can be gotten over it.
**The Mexican Central from Mexico City to La Colorada
in Zacatecas may be said to be open. North of the latter
point repairs of the road have been made only as the military
situation would permit work to be done. Between Torreoil
and Chihuahua City and north of the latter place there have
been frequent interruptions of that line by Villa rebels.
*'0n the Mexican Central gulf line, which runs from Mon-
terey to Tampico, the roadbed is in bad condition, and repair
work has been effected only with great difficulty. That is
on account of the scarcity of laborers and danger from rebels
which infest that section. A tri-weekly service is main-
tained, however. Also tri-weekly trains are run each way
between San Luis Potosi and Tampico. ''^^
Of passenger service there is little to be said. One through
train a day in either direction is the rule. Night service is
offered on but few lines because of the risk and also because
of the shortage of sleeping cars. Some cars of British make
are available and some Pullmans ; and these are used on the
Mexican railway and on the main lines of the old Mexican
National and Mexican Central. Pullman service was resumed
between Torreon and Juarez on January 1, 1920, after sev-
eral years' suspension. Through Pullman service between
11 "Railway Age," LXVI, 470 (1919).
[59]
THE RAILROADS OP MEXICO
Tampico and the City of Mexico was reestablished December
1, 1920.
Ordinary passenger equipment is scarce, and there have
been times when box cars and even steel gondola cars have
been used in passenger service.
Train wrecks have been frequent in Mexico during the last
few years. The substitution of Mexican engineers for trained
Americans and other foreigners introduced an element of
risk ; and the demoralization of personnel as the result of the
long period of unrest has increased the number of wrecks
that are due to simple carelessness. Military operation has
also been productive of wrecks. The poor condition of tracks
and locomotives and the temporary nature of many of the
bridges also tend to increase the hazard of normal railroad
operation.
The activity of bandits is not a new feature in Mexico.
There have always been train hold-ups, as there have been
in the United States. In Mexico, however, the traveler runs
a risk of losing his life as well as his valuables. On February
7, 1914, at Madera on the line of the Mexico North "Western,
a freight train was held up by bandits, and the crew com-
pelled to back it into a tunnel where it was set on fire. An
approaching passenger train collided with the burning cars,
and the death of the passengers and the destruction of the
tunnel was the result. On September 24, 1915, a Southern
Pacific passenger train was burned at Torres by a band of
Yaqui Indians, and eighty passengers who were forced to
remain in the cars were killed.
For the protection of trains, detachments of troops are now
stationed along the lines, and regular trains are preceded by
exploring *' trains in the nature of a convoy. In many cases
[60]
<<
SERVICE
special troop cars are attached to regular trains. Even these
precautions are not always sufficient. On May 27, 1918, ban-
dits wrecked a passenger train at Las Olas and killed the
train guard and several passengers. On August 10, 1918,
twenty-six passengers and forty soldiers were killed by ban-
dits at Consuelo.
Early in 1919 a Mexican cabinet minister gave out a state-
ment calculated to reassure those who had read dispatches
telling of attacks on railroad trains. In this he said :
**I am aware that many persons in the United States are
misinformed about the real conditions in Mexico. They hear
that a train has been blown up or a bridge has been burned.
Perhaps life has been lost.
**Take the railroad from Mexico City to Vera Cruz, the
line from San Luis to Tampico, or that on the Isthmus of
Tehuantepec, to Salina Cruz. These railroads cross a country
densely wooded. Two or three men can approach to within
ten or fifteen yards of the railroad track with no one aware
of their presence. They can easily reach, place a bomb, and
the train when it passes is blown up.
**"When the people of the United States read of this they
think Mexico is not settled and pass judgment on the whole
country. They do not know that those bandits or train
wreckers exist mainly due to topographical conditions. In
rugged mountains and in practically trackless forest they
have their hiding places and it is almost impossible to pick
up their trail once they have disappeared. They are in small
groups, and eventually must succumb to the law."^*
There is no doubt that the Mexican government has ex-
erted itself to avert this danger. It has constructed block
houses along the line of the Mexican railway and on sections
i« Ibid., LXVI, 518 (1919).
[61]
THE RAILROADS OF MEXICO
of the Interoceanic and the Vera Cruz and Isthmus. It has
also obtained armored ears from American shops and eon-
verted steel gondola cars to military use, but the outrages
continue. Indeed, despite the censorship, Mexican news-
papers reported seventy-two Tailroad attacks and suspen-
sions in eighteen states between April 10 and July 31, 1919."
^* n. S. Senate Oommittee on Foreifm Relations, Hearin«:8 before a sub-
committee on the matter of outraffos on citizens of the United States in Mexico,
715-25 (1919).
[62]
CHAPTER Vn
THE CLAIMS OP INVESTORS
SOMETHING has been said in earlier chapters as to the
claims of railroad corporations against the Mexican gov-
ernment on account of destruction or seizure of property.
There are also intercorporate claims which need not be con-
sidered here. It remains to consider the claims of security
holders against the corporations themselves; claims which
the corporations can pay only as they may be able to recover
from the government. These claims are of two sorts. Secured
creditors — ^holders of receivers' certificates, bonds or deben-
tures, and secured notes — ^have preferred claims to the
amount of the principal of their holdings and of the arrears
of interest thereon; claims which in some cases are guaran-
teed by the Mexican government. Holders of unsecured
notes or certificates of indebtedness and of income bonds
have claims which are next in rank. And shareholders have
claims to any surplus, whether applied to betterments or dis-
tributed in the form of dividends. In the pages that follow
are set forth some of the salient facts as to the claims of
investors, the principal sums involved, and the extent to
which interest and dividend-payments have been made.
The outstanding share capital of the National Railways of
Mexico on June 30, 1919, amounted to 448,148,917 pesos, of
which 149,606,933 pesos was represented by common shares,
57,662,000 pesos by first preferred shares, and 240,879,983
pesos by second preferred shares. Dividends were paid on
the first preferred shares through 1913. The secured debt,
[63]
THE RAILROADS OF MEXICO
direct and assumed, was 474,415,556 pesos, distributed as
follows :
Bonds : Pesos
Prior Lien 4y2S 169,608,230
General 4s (guaranteed principal
and interest by Mexican gov-
ernment) 101,497,150
N. R. R. Prior Lien 4y2S 46,000,000
N. R. R. First Consolidated 4s 49,480,000
M. Int. R. R. Prior Lien 4s 11,700,000
M. Int. R. R. First Consolidated 4s 8,413,000
V. C. and P. R. R. First 4y2S 14,000,000
P.-A. R. R. First 5s 4,006,000
P.-A. R. R. General 5s 2,968,000
M. C. Ry. Equipment and Collateral 5s 900,000
M. C. Ry. Car and Locomotive
Rental Notes 1,324,913
Secured Notes :
Two-yr. 6% (due June 1, 1915) 53,460,000
Three-yr. 6% (due Jan. 1, 1917) 4,920,650
Series B, 6% (due Jan. 1, 1917) 3,019,504
Series C, 6% (due Jan. 1, 1917) 1,626,109
Three-mo. 6% (due June 1, 1915) 1,492,000
The company was also liable for the payment of principal
and interest charges on the securities of the old Mexican
Central railway which had not been presented for conver-
sion, of which there were outstanding on June 30, 1919, a
total of 3,056,845 pesos. It was further liable to the amount
of 651,200 pesos, representing shares of the Mexican Central,
Mexican National, and Mexican International still in the
hands of the public.
According to the balance sheet as of June 30, 1919, the
[64]
THE CLAEMS OF INVESTORS
company was indebted for interest on bonds and notes
95,481,000 pesos, for secured notes payable 64,518,263 pesos
(as above), for unsecured notes 2,806,000 pesos, and for ac-
counts payable 16,025,552 pesos. The five issues of secured
notes represent obligations incurred in 1913 and 1914 to pro-
vide for interest charges prior to October 1, 1914, while the
unsecured notes were issued in connection with the purchase
of Pan-American railroad notes.
The finances of two of the subsidiary companies, the
Michoacan and Pacific and the Interoceanic, are reported
separately. The Michoacan and Pacific railway, a leased line
of the National Railways, has a share capital of £60,000. It
also has a funded debt of £75,100, of which £15,100 are Prior
Lien Debenture 6s and £60,000 Registered Debenture 6s.
Interest on the former was last paid in July, 1903, and on
the latter in July, 1914. The amount of interest due on
December 31, 1916, was £50,865.
The National Railways of Mexico controls the Interoceanic
railway through ownership of about £2,500,000 of its capital
issues. The share capital of the Interoceanic amounts to
£4,100,000, of which £1,700,000 is ordinary stock, £1,400,000
non-cumulative first preference 5 per cent stock, and £1,000,-
000, non-cumulative second preference 4 per cent stock. The
secured debt is £2,919,459, represented by £1,150,000 Deben-
ture 4s, £1,300,000 Second Debenture 4y2S, and £469,459
Series **B" Debenture 7s. Dividends were paid on the first
preference shares in 1913 and on the second preference
shares in November, 1912. No interest has been paid since
1913 on the Debenture 7s, which are contingent upon earn-
ings. Deferred warrants, bearing 5 per cent interest, have
been issued in lieu of interest payments on the Debenture
4^s since 1914 and on the Debenture 4s since 1915 under
[65]
THE RAILROABS OF MEXICO
a moratorium granted by the debenture holders and extend-
ing to May 29, 1922. As of June 30, 1918, the company had
an unfavorable balance **net revenue account" to the extent
of £1,034,801.
The Interoceanic railway controls the Mexican Eastern
railway through ownership of its entire capital stock of
£10,000. Interest payments due since June 15, 1914, on the
outstanding £400,000 debentures have been made in the form
of 5 per cent certificates of indebtedness, under a mora-
torium agreement that was last extended to May 29, 1922.
The Mexican Southern railway, operated by the Inter-
oceanic under a lease, has a share capital of £1,000,000, on
which dividends were paid in 1913. There is also an issue of
£861,775 Debenture 4s, on which 5 per cent certificates have
been issued since 1915 in lieu of interest. As no rentals were
received after June 30, 1914, the moratorium was extended
to April 27, 1920. Further information is lacking.
, Both the National Railways and the Interoceanic are inter-
ested in the Vera Cruz Terminal Company. Control of the
Vera Cruz Terminal is represented by shares to the amount
of £90 held by the Mexican, Interoceanic, Vera Cruz and
Isthmus, and Vera Cruz (Mexico) railways and the Mexican
government. There are £1,080,000 in bonds outstanding, of
which £992,500 are Debenture 4^s, and £87,500, Second
Debenture 5s. Interest is guaranteed by the four railroads
using the property, but no payments have been made since
July 15, 1915.
Many of the smaller independent railroads in Mexico are
owned by mining interests, and their finances if reported
have no general interest. Information as to the more im-
portant of the independent companies is given below :
The Southern Pacific Railroad of Mexico has no bonded
[66]
THE CLAEMS OF INVESTORS
debt. Its entire capital stock, $75,000,000, is owned by the
Southern Pacific company, to which it was indebted for ad-
vances, largely for construction, and for accrued interest
thereon to December 31, 1919, to the amount of $77,089,563.
The Mexico North Western railway has a share capital of
$25,000,000, upon which no dividends have ever been paid.
Its outstanding bonds amount to £8,021,000, divided into
three classes : Prior Lien 5s, £1,671,000 ; First 5s, £5,600,000,
and Cumulative Convertible Income 6s, £750,000. The In-
come bonds were issued July 1, 1912, and no interest has
been paid on them. The Prior Lien bonds, issued in 1913 and
1914, have been in default as to interest since September 1,
1914 ; and the interest on the First 5s has been unpaid since
March, 1913. Receivers' certificates to the amount of $400,-
000 were outstanding at the end of 1920.
The Mexican railway has three classes of shares outstand-
ing, the total being £5,820,760. They are as follows: ordi-
nary, £2,254,720: first preference 8%, £2,554,100; and second
preference 6%, £1,011,960. No dividends have been paid
since 1915. The funded debt amounts to £2,480,700, of which
£2,000,000 are Perpetual Debentures, and £477,400 Second
Debentures. Interest payments since 1914 have been de-
ferred under moratoria which have been extended respec-
tively to January 1, 1922, and April 1, 1922. The amount of
deferred interest certificates outstanding on January 1, 1920,
was £805,820.
That part of the Kansas City, Mexico, and Orient railway
located in Mexico was placed in the hands of receivers in
March, 1912, as an incident to the receivership of the line
in the United States. It was not included in the unsuccessful
plan of reorganization of the latter in 1913, and no informa-
tion has been made public as to its finances.
[67]
THE RAILROADS OF MEXICO
The Mexican Northern railway has a share capital of
$3,000,000, the latest dividend on which was paid in 1913.
Its bonded debt is $677,000. Interest payments have been
regularly made, but the sinking fund has not been operative
since 1913.
The Parral and Durango railroad's share capital is $1,000,-
000, and it has outstanding $574,000 in General 6 per cent
bonds. No dividends have been paid on the shares and no
reports have been made public since 1915. Under an agree-
ment with the bondholders, sinking fund payments on the
bonds were suspended for a five-year period ending January
1, 1921, the term of the bonds being extending correspond-
ingly.
The share capital of the United Railways of Yucatan is
23,000,000 pesos. There is outstanding £825,000 First 5s,
interest on which was paid through April 1, 1917. The latest
dividend on the shares was paid in 1912.
[68]
CHAPTER Vm
THE OUTLOOK
MEXICO'S railroad problem, important as it is, can
hardly be solved until after the restoration of approxi-
mate economic stability in Europe ; and the methods to be ap-
plied to its solution must necessarily depend upon the inter-
national situation, diplomatic and financial, then existing. To
prophesy or even to anticipate would be futile. It is possible,
however, to present some aspects of the situation in Mexico
itself which must be considered when the time shall have
arrived for decision.
In the case of the railroads which have been taken over by
the government for military reasons under Article 145, Sec-
tion 10, of the general railroad law of 1899, the shareholders'
interest is protected by the provision in that section to the
effect that **In this case the Nation shall indemnify the rail-
road companies. If no agreement is reached as to the amount
of the indemnification, the latter shall be based on the average
gross earnings in the last five years, plus ten per cent, all ex-
penses being paid by the company." In the case of the rail-
roads which have suffered loss or damage, the shareholders
stand to recover through acts of appropriation passed by the
Mexican congress. Such an act, providing 15,000,000 pesos,
was passed on May 31, 1911. Furthermore, the shareholders'
interest is being conserved to some extent on the railroads
under government operation by the practice of appropriating
revenues for the purpose of rehabilitation.
The bondholder is likewise concerned in the work of
[69]
THE RAILROADS OF MEXICO
rehabilitation, since his equity it thereby conserved. He stiU
has his lien, which is enforceable in the Mexican courts. The
secured noteholder has the same rights in the American courts,
as the collateral behind his notes is in the custody of American
trustees ; but as the collateral in question consists of notes of
the Mexican government, his security is as good as the promise
of that government to pay.
All holders of railroad securities are vitally interested in the
attitude of the Mexican government and in the loan of
$150,000,000 which that government has long been desirous of
obtaining in New York or London '*to rehabilitate the Con-
stitutionalist Railways completely and to construct new
branches in districts needing them for proper development."^
They wish to know of the plans of that government in the
matter of returning to their owners lines no longer needed for
military operation. In view of the acquisition by the nation
of the full title to the Tehuantepec line, they may well be con-
cerned as to the future of the lines which are now being oper-
ated by the government on a provisional basis.
If it is fair to judge the attitude of a government by its
acts, the investor had good grounds for the belief that the
Carranza government was disposed to enforce the laws in a
spirit hostile to foreign interests. Thus Article 31 of the
railroad law provides :
' * A concession shall lapse for any of the following reasons : —
'*2. — The total or partial interruption of the public
service of the road, save in the case of fortuitous circum-
stances of force majeur. . . .
''3. — ^Failure to construct in a year the number of
kilometers required by the concession or to complete the
line within the period of time allowed by said concession. ' '
^ "Mexican Review/' April, 1918; * •Economist/* LXXXVIH, 209 (1919).
[70]
THE OUTLOOK
Despite the protection afforded by the law in its definition
of ''force majeur'', threats were made to seize Mexico North
Western and the Alamos branch of the Southern Pacific for
failure to resume operation on lines which had been injured
by forces which the government itself could not control. And
in July 1918 the government declared its intention of for-
feiting the concession of the Southern Pacific for failure to
complete the construction of its line to Guadalajara and
Mexico City.
There was also cause for concern in the proposed revision
of the railroad laws and regulations as recommended by the
commission appointed for that purpose by the Secretary of
Communications and Public Works in 1917. The recommenda-
tions of this commission have not yet been published, but
according to report it was proposed **to withdraw every kind
of subvention hitherto enjoyed by the railroads under long-
existent guarantees, and at the same time to impose certain
new regulations and restrictions framed entirely in favor of
the National Treasury and the travelling public, but destined
to act prejudicially to the companies."* Upon one point the
investor may be confident : that his property will not be ''com-
mandeered in the interest of the common good,'' if the Mexi-
can constitution means what it says. • Article 27 along with its
drastic provisions declares :
"Private property shall not be expropriated except for
reasons of public utility and by means of indemnification.''
The attitude of the Mexican people is no less important ; and
to the extent that it was expressed before the downfall of
Carranza it was hostile to the interest of the foreign investor.
Thus at a meeting of railroad employees held in Mexico City
on October 17, 1914, it was proposed that all members of the
« ••Economist," LXXXV, 528.
[71]
/"
THE RAILROADS OF MEXICO
Union of Railway Employees contribute one day's wages each
month to a fund to be used to purchase the shares held by
foreigners. That such contribution would be inadequate was
acknowledged, and it was further proposed **to obtain addi-
tions from other sources/' not specified, in order '*to put the
plan in effect at the earliest possible time."* That the only
way to obtain suflBcient funds to make this possible would be
to borrow from foreign interests does not seem to have occurred
to the men who would thus easily effect the complete **Mexi-
canization" of the railroads in the country.
A further suggestion along this line has been made by
Fernando Gonzales Roa, who has been a member of the board
of directors of the National Railways since October 1914.
**The independence of our railroad system depends, as it is
only logical to suppose, upon our political situation. We must
always keep in mind the great interests of the North Ameri-
cans, and we must never take our eyes off them. If we take
from our Northern neighbors methods, examples, railroad
employees, tools, machines and capital, we shall fatally weaken
our railroad organization.
**A11 our hopes and our strength must be directed toward
the substituting of our own elements for those of foreign
countries, gradually and judicially but with insistence and
firmness. Perseverance in this attitude is the thing that
should be the basis of our National policy. We have seen that
nearly all of our resources have been pledged through trustee
companies. The board of directors itself at times has had no
further function than merely to validate the orders of the
executive, an oflBce for a long time held by an American serving
as an agent for financial interests rather than as a functionary
of a national enterprise. The reorganization of the system
• "Ohronicle,** XOIX, 1800 (1914).
[72]
THE OUTLOOK
with a new administration policy, therefore, will be difficult,
and the management of the National Lines will meet at every
step with obstacles and be subjected to grave responsibilities
through lack of precedents and perhaps through lack of
support. . . . This difficult problem we can solve only through
prudence, patriotism, and above all integrity."*
The foreign investor can have no just basis of complaint
against a policy of **Mexicanization" that is characterized by
prudence, patriotism, and integrity. It is no concern of his
that this policy means the supplanting of foreign employees
by Mexicans, so long as his interests as shareholder or as cred-
itor are not jeopardized. Nor need he fear the assumption
of sole proprietorship by the nation so long as he can count
upon just compensation. Certainly, the time is far distant
when Mexico can be independent of foreign capital; though
it may well be that the foreign investor's relation to the
railroads of the country will be limited to that of a secured
creditor, whether of the railroad companies or of the nation
itself.
The situation is one of great importance to the United
States. The world war has seriously affected the creditor
countries of Europe, and the resumption of peace has brought
with it a demand for all available capital. The United States
now has the world's greatest credit capacity, and American
capital does not need to seek investment in Mexico. Instead,
Mexico must bid for American capital in competition with
other countries, as it did without success in 1919.
But it is necessary to bear in mind that nothing is so craven
as capital. Capital seeks the protection that goes with a stable
government; it requires the preservation of public order,
which none but a stable government can secure, and it demands
« Gonzales Boa, "El problema ferrocarrilero," 822-4 (1915)
[73]
THE RAILROADS OF MEXICO
equitable treatment at the hands of the executive, the legisla-
tive, and the judicial branches of government. ** Prudence,
patriotism, and above all integrity'', upon the part of the
Mexican government will give rise to a situation in which
these requirements can be met.
From time to time statements, apparently authoritative,
were made by representatives of the Carranza government
which indicated a change of attitude toward foreigners who
had already invested in Mexico, but they were not followed by
performance. Early in 1920 such a statement was given out
at the Mexican consulate in London, only to be repudiated
after the English press made a demand for substantial
guarantees. Said the London Times :
'*The question of financial assistance to Mexico is largely
bound up with politics. Before serious steps can be taken to
put her house in order effective guarantees will be required
from the Government of which General Carranza is the head
that it is willing and able to establish and maintain a form of
government that will safeguard the interests of the for-
eigner. . . .
** Since the default of Mexico, six years ago, the affairs of
most foreign companies operating there have got into a deplor-
able state. The railways have been 'nationalized' by the primi-
tive process of Government confiscation of the properties and
the revenues, and such information as can be gathered leaves
too much ground for fearing that the physical condition of
the lines has suffered badly from neglect, as well as from
damage inflicted wantonly or from alleged 'military needs'. . .
''It may be taken as reasonably certain that if any financial
assistance is to be given to Mexico it will be subject to an
undertaking, backed by effective guarantees, that not only
will interest arrears and current obligations on the External
[74]
THE OUTLOOK
debt be honored, but that the railways be returned to their
rightful owners, plus compensation for the damage inflicted.'''
In view of the acknowledged importance of the Mexican
problem, it may seem surprising that so little constructive
thought has been given to the question of financial rehabilita-
tion of the railroads, but the attention of the world has been
fiixed upon an issue of greater importance. After that issue
was determined by the signing of the armistice, the situation
was changed; and early in 1919 a refinancing plan was put
forth by the late T. W. Osterheld, long a student of Mexican
affairs. This plan, which was concerned only with the National
system, was as follows :
* * The general outline of the plan is to have the Government
of Mexico transfer by contract to the National Railways of
Mexico, or if it should be thought advisable, to a separate
commission ... oil, mining, and agricultural lands of a
value great enough to return an income both from the initial
payment made on rights granted and from the subsequent
royalties from the said rights, and to take care of the interest
and to create a sinking fund for all of the debts of the Govern-
ment of Mexico and of the subsidiary states, and such bonds
of the National Railways of Mexico as it may be deemed advis-
able under the circumstances to take care of.
** Under the terms of the transfer agreement the entire
income from these rights should go to the Government of
Mexico except so much thereof as may be necessary to pay
interest or create a sinking fund on all Gt>vemment and
State debts, and to put the National Railways of Mexico in
first-class condition as to rolling stock and roadbed, and to
finance extensions of the said Railways or its branches which
will be necessary to give first class service to all those who
s "London Times." Jan. 8. 1920.
[75]
THE RAILROADS OF MEXICO
invest their money in the rights granted in the properties
turned over to the Railways by the Government, and to pay
interest on such bonds of the said Railways as it shall be
deemed advisable under the circumstances. . . .
** Rights will be granted in these oil, mining, and agricul-
tural lands, to holders of any of the securities covered by this
plan, which rights may be paid for by them partly in cash
and partly in bonds of the Mexican Government or of the
National Railways of Mexico, or any of the subsidiary-
States ... in proportions, and at prices deemed advisable
under the circumstances by the commission and the Mexican
Government.
**The management of this plan shall be . . . under the
direction of the bankers to be selected subject to the approval
of the Government of Mexico, and a fixed fee and expenses
shall be paid to the said bankers by the National Railways of
Mexico in return for the benefits to be received by the Rail-
ways by reason of increased business and facilities. In return
for the benefits which the National Railways of Mexico would
receive from the transfer agreement of all properties, the
National Railways of Mexico would have to agree to waive any
and all claims which it had or might have against the Mexican
Government by reason of damage through the recent revolu-
tion, or the taking over of the property by the Government. . .
**The commission tentatively is to consist of five bankers,
acceptable to the Mexican Government as managers of both
the granting of the rights and the carrying out of the terms
under which the rights are granted, and five members
appointed by the Government of Mexico, these ten to appoint
one member as chairman."*
* Osterheld, The debt of the United States of Mexico and of the National
Railways of Mexico, as of 1919. 82p.; "Annalist," XIU, 316-7 (1919).
[76]
THE OUTLOOK
That this plan is seriously defective is apparent even after
a superficial examination. Its scope is both too wide and too
narrow; for while it includes not only the finances of the
national lines but those of the nation and states as well, it
ignores the independent lines altogether. It also leaves out
of consideration, unless by implication, the complex inter-
corporate relationships of the national lines themselves.
It assumes that the nation is possessed of ample oil, mineral,
and agricultural lands; but the public lands of Mexico are
not extensive. True, under the constitution of 1917, the
nation assumes the title to subsurface wealth not already in
private ownership ; but to involve this unexploited wealth in
any scheme of financial rehabilitation would only tend to
jeopardize the subsurface rights now legitimately in private
ownership. Unexploited deposits of oil or of minerals require
capital for their development and additional capital to pro-
vide means of transportation of the output to a market.. To
create a demand for capital at a time when the railroads so
urgently need funds for rehabilitation would certainly post-
pone the time when the existing economic system can be re-
stored to a productive basis, and it would add immensely to
the cost.
The plan also assumes that a contractual relationship be-
tween the government and the railroad is desirable; but this
is debatable, and there is one piece of concrete evidence — ^the
Tehuantepec partnership — ^which may be cited in opposition.
Mexican railroads already have claims for compensation for
the use and destruction of their facilities, and these claims
have all the validity of a contract, but these they are now
asked to forego. Thus far they have shown no willingness to
do so.
Another assumption that is questionable is that order is
somehow to be restored immediately, whereas it is certain to be
[77]
THE RAILROADS OF MEXICO
a long and arduous undertaking to reestablish the authority
of the most efl&eient government over so extensive and so
rugged a country as Mexico.
It is the persistence of disorder that makes the financial
problem difficult; for Mexico's heaviest liability is its habit
^of disorder and its consequent lack of good will among the
financial interests of the world. Its debt, measured by the
standard of nations of the old world, is small ; and measured
by the resources of the country it is relatively insignificant.
Mexico is the world's second largest producer of silver, while
its potential oil production cannot even be estimated ; and the
demand for these two commodities to-day is world wide.
But before a bankrupt nation's debts may be paid, funds must
be accumulated. This can be done only through the restora-
tion of conditions favorable to normal economic activity,
which is contingent upon the rehabilitation of the facilities
for production and distribution.
To start the process it is necessary to resort to further
borrowing for immediate requirements, but before responding
to requests for loans, creditors must receive assurance that
their loans will contribute to the remedying of the existing
situation and not to its complexity.
The first requirement is evidence of good faith upon the
part of the government ; and this can be given by the present
government of Mexico by immediately restoring to their
corporate owners all those railroads which are now held by the
government. The next step is the adjustment of claims, which
will necessitate an independent audit of accounts and an in-
ventory of the physical property of the claimants. "With the
information obtained through the audit and otherwise
obtainable, terms of settlement between the government and
the railroad corporations could be formulated and deter-
[78]
THE OUTLOOK
mined; and upon the security of their acknowledged claims
the railroads could raise some of the funds for the physical
rehabilitation which the inventory showed to be necessary.
To raise all the funds needed for this purpose would be un-
necessary; for the greatest need of Mexican railroads to-day
is motive power and rolling stock. Given assurance of reason-
able safety, such equipment could be obtained upon the in-
stalment plan, i. e., the ** car trust '* basis.
The acknowledged claims of the government, however,
would have little or no value as collateral, and to give them
such value, the government would need to back them up with
guarantees of a substantial order. The nation already possesses
assets which are available for this purpose. It owns 50.2 per
cent of the stock of the National Railways of Mexico, repre-
senting control of a property which under proper conditions
could be made to produce bountifully without exploiting the
interests of the people (which are amply protected by the
terms of the underlying concessions). It also owns outright
the Tehuantepec line, which has no superior in Latin America
and few elsewhere. These it could pledge as security of its
obligations to its railroad claimants.
If this plan were carried out, the railroads would have a
chance to show what they could do toward settling inter-
corporate claims and meeting the requirements of their
secured creditors. Dividends need not be considered here,
since the concern of the shareholders is not the immediate
return upon their holdings but the restoration and develop-
ment of the productive capacity of the properties in which they
are interested.
The question arises as to the possibility of raising additional
capital for Mexican railroads at a time when, with few excep-
tions, the countries of the world are clamoring for help.
[79]
TBE RAHROABS OF MEXICO
Devastated and prostrate Europe has first claim in the name
of humanity; but since the great need of the present is in-
creased production it would be folly to exhaust the surplus
of creditor countries through loans to countries whose pro-
ducing capacity is but little above the needs of their own
peoples. If the world is to be restored to a stable basis, it will
be through increasing the production of the undeveloped and
underdeveloped parts of it ; and therein lies Mexico's claim. It
is a claim that will be honored only when there is evidence that
wise counsels prevail in the government, and when the interests
of native and foreign investors are dealt with in a spirit of
fairness and impartiality
Distrust of foreigners has always been a characteristic of
Mexicans. There have been too many incidents in the history of
the United States which have tended to justify this attitude ;
but without them it is certain that the Mexican mind would
have sometimes clashed with the best-intentioned Anglo-Saxon.
Xn their dealings with foreign capitalists, which means British
and American capitalists, they have learned to play the interest
of one against the interest of the other. The end of the world
war finds Great Britain with a reduced lending capacity, and
with a disposition to advance sums primarily for imperial
benefit. It is undesirable that the United States should be
the sole reliance of Mexico in matters of finance. It is ex-
tremely desirable that Latin American interests should be
more closely knit together. Argentine, Brazil, Chili, and
Cuba have all profited from the events of the last seven years ;
and they should be given an opportunity to participate in the
refinancing of a country with which they are related by ties
of blood. Financially their help might be small, but sentimen-
tally it would be great ; and he who would disregard sentiment
in matters of international relations has much to learn.
[80]
PART II
CHAPTER IX
MEXICAN TOPOGRAPHY
LAND transportation cannot be considered apart from
topographical characteristics; hence any discussion of
the railroads of Mexico must be prefaced with a description
of the natural features of the country which facilitate or
retard the efforts of the engineer. This is a subject, how-
ever, which has been left in comparative neglect by writers
whose treatment of less important matters has been most
ample. Humboldt is an exception, but he wrote at a time
when much remained to be learned. Others have given us
various fragments of information to the effect that Mexico
is a country of exceedingly rugged surface, with massive
mountains of abrupt ascent enclosing a plateau of great alti-
tude, and with a few rivers of irregular flow cutting their
way through to the sea; but Herbert M. Wilson alone has
adequately described the country as a whole. From his
description the following extended quotation is presented :
**A study of the topography of Mexico is a study of her
Sierra Madre. Of these mother mountains there are two,
the Sierra Madre of the East, and the Sierra Madre of the
West, and between them lies a great, elevated and irregularly
eroded plain, the central basin of Mexico. At the southern
extremity of the peninsula these features unite and terminate
in a giant group of volcanoes, among which are the highest
mountains on the North American continent. . . .
**Both the topographic and geologic features of Mexico are
an extension of the Cordilleran systems of the United States.
[83]
THE RAHROABS OF MEXICO
The ranges of the Rocky Mountains continue across the Rio
Grande as the Sierra Madre of the East, and find their ulti-
mate terminus in the neighborhood of Tampico, midway of
the eastern Mexican coast. The Sierra Nevada of California
and the Basin Ranges of Arizona, after merging and almost
disappearing in the deserts about Mojave and Yuma, gain
magnitude as they continue in the Sierra Madre of the West
to the Rio Lerma, near San Bias, midway of the Pacific
Coast. Between the two great Sierra Madres is the southern
extension of the Cordilleran Plateau of the United States.
These two mountain systems unite in Southern Mexico in
the group of gigantic volcanoes which extends from the
Pacific Ocean to the Gulf of Mexico. . . .
**The general level of the basin region is between four and
six thousand feet in altitude, and . . . the sierras which rib
it are from two to four thousand feet higher. The summits
of the Sierra Madre of the West attain altitudes of ten thou-
sand to twelve thousand feet ; those of the Sierra Madre of
the East reach altitudes of seven thousand to nine thousand
feet; and farther south the valleys are seven thousand to
eight thousand feet in altitude, while the higher summits
tower to elevations of fourteen thousand to eighteen thou-
sand feet. South of these is the deep trough of the Rio de
las Balsas, but little above sea level ; and south of this again,
near Oaxaca, the mountain summits attain altitudes of ten
thousand to twelve thousand feet. ...
** Central Mexico . . . is a great basin or depression ribbed
with many irregularly disposed and disconnected mountain
ranges, buttes and isolated ridges which are separated by
broad valleys and plains. Many of these plains are the beds
of ancient lakes . . . and have no drainage outlet to the sea.
The basin-like character of this central region is accentuated
[84]
MEXICAN TOPOGRAPHY
by the mighty barrier of the Sierra Madre which towers
above it on the west; and by the lesser and more discon-
nected Sierra Madre of the Bast; and by the gigantic vol-
canic cones which dominate'it on the south. . . .
**The basin valleys of Mexico, near the northern borders
of the Republic . . . have their least altitude and greatest
area. Like the neighboring portions of the United States,
this region consists of vast desert plains relieved by narrow
mountain ridges or the rugged outlines of faulted mesa
edges, cut by the many canons and barrancas which mark
the drainage lines of the country. . . . Southward the plains
of the Basin region diminish in area, while its desert moun-
tains increase in number and altitude. Toward the geo-
graphic centre of Mexico the plains have dwindled to large
intra-montaine valleys, until finally, in the neighborhood of
Zacatecas and Queretaro they are but narrow valleys separ-
ating giant mountain ranges.
** Toward the northern boundary of Mexico the Sierra
Madre mountains of the East attain their least height and
are entirely devoid of cordilleran aspect, consisting of iso-
lated ranges and lost mountains, and merging near the
neighborhood of the Rio Grande into the desert plains and
mesas of western Texas and southern New Mexico. South-
ward near Monterey they begin to lose their disconnected
character and to form a more united and conspicuous moun-
tain mass, and but one hundred and fifty miles further south,
below Victoria, they unite in a superb elevated mass where
culminate all the topographic characteristics of the west. To
the north the cordilleran type is lost in isolated cerros, the
peculiar forms of which are typified by *la Silla' or *the
Saddle ' near Monterey, which is by far the most conspicuous
feature in a mixture of desert plain and jagged hills. The
[85]
THE RAILROAI>S OF MEXICO
general character of these desert sierras is bold and
striking. . . .
''To the eastward is an extensive and rugged decline which
slopes for fifty miles and terminates in the coastal plain of
the Gulf of Mexico, over a mile vertically below. To the
south the Sierra Madre of the Bast continues to rise in
stupendous mountain masses which culminate in the volcanic
cones of Orizaba and Popocatepetl. To the west are the
vast arid deserts of the central basin region, glistening with
huge patches of dazzling white, the dried and alkali-incrusted
beds of ancient lakes, bristling with a scanty growth of sage
brush and cactus, and mottled with rugged mountain
forms. . . .
''The Sierra Madre of the West, like those of the east and
the central basin region, are least conspicuous, and attain
the least altitude near the northern border of Mexico. Along
the international boundary the hills are disconnected and
without regular system, the highest summits rarely reaching
six thousand feet in altitude; thence southward these hills
mass together in most irregular and confusing manner, in-
creasing in height and number until in northern Durango
and Sinaloa they have assumed cordilleran proportion and
height.
"Of this system of mountains there is known less, perhaps,
than of any other on our continent. . . . Parts of its area
are to-day considered inaccessible, and constitute the great
topographic terra incogmia of North America. These moun-
tains are much higher and more extensive in area than are
the Sierra Madre of the East, and culminate midway of the
length of Mexico in summits exceeding eleven thousand feet
in altitude ; Frailcitos, near Batopilas, is 9,900 feet in height ;
La Cuesta Blanca, east of Culiacan, is 11,200 feet in height ;
[86]
MEXICAN TOPOGRAPHY
and La Cumbre Pinal attains an altitude exceeding 12,000
feet. As they increase in height the crests of the Sierra
Madre gradually approach the coast until in the neighbor-
hood of San Bias rugged mountain faces rise sheer above the
ocean to altitudes of two to seven thousand feet. In this
neighborhood the mountain groups lose all apparent regu-
larity, and are connected together by passes at different ele-
vations, and have no longer a uniform direction. Still farther
south the whole system is interrupted by the deep gorge of
the Rio Lerma, the valley of which forms the northern base
of the volcanic scarp. This stream drains Lake Chapala, the
largest body of water in the Republic, and its ultimate source
is in the Valley of Toluca, within a few miles of the city
of Mexico. . . .
**The line of volcanic peaks in which the two Sierra Madres
terminate and which forms the southern rim of the Basin
region, may be likened to the apex of the letter V, the two
arms of which correspond to the general outline of the Mexi-
can Cordillera, and here these mountains extend in unbroken
mass from sea to sea, terminating precipitately to the south
in great escarpments facing the coast and the Valley of the
Rio de las Balsas. . . .
** South of the Rio Balsas is a narrow and precipitous
mountain range attaining altitudes of ten to twelve thousand
feet and separating the Valley of the Balsas from the Pacific
Coast. This range of mountains is fairly homogeneous and
continuous to its culmination in Oaxaca, near the Isthmus
of Tehuantepec, whence a northern spur connects it around
the head of Balsas Valley with the volcanic scarp. At the
Isthmus of Tehuantepec this mountain mass falls suddenly to
within a few hundred feet of the level of the sea, beyond
which the great Antillean system rapidly assumes cordilleran
[87]
THE RAILROADS OF MEXICO
proportions, culminating in a summit exceeding fourteen
thousand feet in altitude on the boundary line between
Mexico and Guatamela. . . .
**The Coastal Plain at the base of the western Sierra Madre
in Sonora is much wider than farther south. It is broken by
rugged and precipitous mountain ridges separated by broad
deserts, and these are traversed by the boulder-strewn paths
and dry washes of the streams which drain the western
cordilleran slopes."^
We have here an excellent physiographical sketch of Mexico
in bold outline which in itself is sufficient to indicate the
obstacles to railroad construction. The difficulties appear
even more striking when a specific engineering problem is
presented, as in the following paragraph, which has to do
with the location of the line of the Mexican Central through
the Tamasapo canon between San Luis Potosi and Tampico :
**This canyon is eighteen miles long with perpendicular
cliffs many hundred feet high on both sides. When the first
surveys were made, the canyon was devoid of roads or trails,
and indescribably gloomy and picturesque. The sun hardly
ever penetrated to its rocky bed where the engineers camped
and where a sudden rain, in a few hours and without previous
warning, might create a torrent that would fill the bottom of
the canyon from side to side many feet deep and carry away
every vestige of the camp outfit and survey already accom-
plished. At night, the noise of the rocks, becoming detached
from the cliff above and falling into the canyon, made sleep
a succession of nightmares. When the actual location was
made it was found that, in order to obtain proper grades, the
road would have to intersect the cliffs at about half their
^ Wilson, Topography of Mexico, American Geographical Society, ' 'Bul-
letin," XXIX, 249-56; hypsometric map facing p. 249. See also Hill, Geographic
and geologic features and their relation to the mineral products of Mexico,
Amencan Institute of Mining Engineers, "Transactions," 1901 ;XXXTT, 168-78.
[88]
MEXICAN TOPOGRAPHY
heights. The difl&culties then began in earnest. All camp
comforts had to be abandoned, and night would find the
engineers camping on the cliffs, near the last stake, swinging
their hammocks over rocks and precipices and securing what
little rest they could under the circumstances. The roadbed
as now finished is nearly all carved out of the solid rock;
the total track curvature is 12,248 degrees, and in the aggre-
gate only about one-fifth of distance is on tangents."*
Even to-day there is but a single line of railroad directly
connecting the central plateau of Mexico with the Pacific
coast, although a project was launched in the early fifties
and several attempts to construct such a line through the
intervening range have been made within the last forty
years. To go by rail from Guaymas to Chihuahua, 275 miles
distant, it is necessary to travel over a thousand miles. Rail
communication between Mazatlan and Durango, 135 miles
apart, is possible only over ^ route that extends nearly two
thousand miles.
It has been the practice of railroad builders in all unde-
veloped countries to follow the routes used by packers and
wagoners which had their beginning in the trails of the
natives, who generally sought the easiest ascents and the
lowest altitudes. Therefore, before considering the begin-
ning of the railroad system of Mexico, it is necessary to
give some attention to pre-existing systems of transportation.
* Schmidt, An engineer's reminiscences of Mexican railway building, "Engi-
neering Magazine," XLV, 684-5 (1918).
[89]
CHAPTER X
BEFORE THE RAILROADS
BEFORE the coming of the railroad, inland transpor-
tation in all countries has been limited to waterways,
trails, and highways. In Mexico, however, because of the
peculiar topographical conditions, inland water transporta-
tion has always been insignificant, and such it will continue
to be. Old Mexico was pre-eminently a country of trails and
primitive roads; and its transportation agencies were the
Indian porter, the pack animal, and the two-wheeled cart.
This is also true of Modem Mexico in those parts of the
country which have not yet been reached by the extending
lines of railroads. True, many highways have been con-
structed, one of the most notable examples — ^from Vera Cruz
to the City of Mexico — Shaving been laid down by the Span-
iards ; but despite the attempts of the government — as indi-
cated by the many references to highway development in
the ofl&cial reports — ^Mexico's land transportation needs to-
day are largely served by trails and dirt roads and by rail-
roads.*
^ "Oontinnons payed highways, as American eni^lneers understand the term,
do not exist in the Republic of Mexico, except for a few short stretches in the
immediate yicinity of some of the larger towns. Engineers who have been over
the roads from Mexico City to Toluca on the west and Ouernavaca to the south
— consnicuously the best roads running to the capital — ^will remember them as
distinctly second-rate highways. This unimproved condition of the roads exists
throughout all rural Mexico, although even the smaller towns are usually well
paved with cobblestones, while the asphalted city streets compare favorably with
the boulevards of the United States and Europe." — ^Borden and Henderson,
Boads between Vera Oruz and Mexico City, "Engineering Record," LXIX, 576
(1914).
"The automobile road between Iguala and the capital, Ohilpancingo, con-
structed a few years ago, has, through neglect and the lack of repair, deteriorated
and is at present useless. There are no highways in the State, and the narrow
trails leading through the mountains afford the only means of traveling from
[91]
THE RAILROADS OP MEXICO
For this situation there are two explanations. One has
been well expressed by Professor Bernard Moses, who says :
''We have to take account of the fact the Spaniards ac-
quired from the Moors, during their long association with
them in the Peninsula, an indifference to roads suited to
vehicles with wheels, and that the colonists who went out
from Spain, in the sixteenth century carried this indifference
to the New World. Settlements were made and cities grew
to importance, with no other means of communicating with
the world at large than that offered by the Indian trail or
the mule path.
''This was not a matter of great moment so long as Spain's
colonial restrictions on trade were maintained. A few
Indians or a few donkeys would carry at a single trip all
that any town received from Spain in the course of a year ;
and the colonists were thus thrown back upon their immedi-
ate efforts for the satisfaction of their wants ; and the king,
by prohibiting their trade with the colonies, emphasized their
isolation, and indicated the uselessness of means of com-
munication. This restrictive policy of Spain with regard to
her colonies tended to place the European settlers on the
economic basis of the Indians.'"
The other reason lies in the fact that deterioration from
natural causes is so rapid in Mexico that the maintenance of
a highway requires constant vigilance and heavy outlays of
one town to another. Since these trails are not considered safe at present there
is no regular overland mail service." — Consul Edwards (Acapulco), U. S.
"Oommerce Reports," 1916, Sup. 32a. 3.
"Automobiles, even in normal times, are not marketable here, the condi-
tion of the streets and hii^hways throui^hout this district beine unfavorable." —
Consul Canada (Vera Cruz). Ibid., 27.
'Moses, The railway revolution in Mexico, 7-8 (1895). "When one has
traveled in old Spain, one can imajrine that the colonists did not brine over
very enlii^htened ideas on the subject; and as the Mexicans were not allowed to
hold intercourse with any other country, it is easy to explain why Mexico is all
but impossible for carriages." — Tylor, Anahuac, 76 (1861).
[92]
BEFORE THE RAILROADS
money; in fact, there is little difference in cost of upkeep
between a highway and a railroad.
Early Mexican travel books contain many references to
the inadequate transportation facilities. Albert M. Gilliam,
an American who visited Mexico in 1843 and 1844, thus de-
scribed the typical Mexican wagon:
''Without exception, the Mexican-constructed wagon has
but two wheels, and is manufactured, generally, without the
use of iron. The hub is a single cut from a tree, about
twenty-eight inches in length and fifteen in diameter. There
are but four spokes to a wheel, four inches through ; while
the felloes are twelve inches thick and as many broad. The
whole is made of the heavy, strong wood of the country, and,
from its solidity, is difficult to break. The body of the wagon
is about equally balanced over the axletree, the front resting
upon the tongue. . . . The body is never planked, but
thatched with straw, as also the sharp roof to it.
''From eight to twelve oxen are at a time yoked by the
horns, and not with a bow over the neck; while the driver
carries a stout pole, from ten to fifteen feet in length, having
a sharp metal spur affixed to the smaller end, by the cruel
use of which they prick and goad the animals along. It is
true that there are some lighter wagons used in the cities,
which have two sets of shafts, so that the whole weight of
the body of the wagon rests upon the backs of the horses.
However, as transportation is carried on the back of mules,
they have had but little use of wagons in Mexico.*'*
An English traveler, Charles Lempriere, who was in
Mexico in 1861 and 1862, gave a similar report :
"The conveyance of all kinds of merchandise throughout
the Republic of Mexico is effected by pack-mules and oxen.
* Gilliam, Travels over the table lands and Cordilleras of Mexico, 205.
[93]
THE RAILROADS OF MEXICO
With this system, and the bad state of the roads generally,
it will be easily understood that transportation is not only
slow but costly, and forms one of the chief obstacles in the
way of the development of the great resources of the country.
The average distance performed by mules and wagons is
from fifteen to eighteen miles per day/'*
As to the more primitive transportation agencies, we have
ihlH Htatoment made by a writer of the present generation:
** Until the railroads, Mexico was the paradise of the
'packer.' From prehistoric days down, the human back was
the corner-stone of commerce ; and it did not disappear from
the edifice even when the Conquest introduced beasts of
burden. Even the interior trade with Durango, Chihuahua,
and New Mexico occupied 60,000 pack-mules. From Vera
Cruz to the capital, over wonderful and costly roads . . .
more than $20,000 worth a year was 'packed.' Indeed, every-
thing of the enormous imported luxury of New Spain came
by the same painful process. Even the cacao of Guayaquil
and the copper of Coquimbo were shipped to Acapulco, and
thence crossed the mountains by muleback clear to Vera
Cruz — at $2 a carga of 81 pounds. As for human loads —
and the Indians still carry their own burdens mostly, instead
of employing quadrupeds — the individual achievement is
almost as startling as the aggregate. ... To this day it is
a common thing to see a Mexican Indian carrying a back-
load of 150 pounds twenty miles to market.'"'
The principal trade routes in pre-railroad Mexico were
as follows: Vera Cruz to Mexico, via Jalapa; Vera Cruz to
Mexico, via Orizaba ; Tampico to Mexico, via Pachuca or via
San Luis Potosi, Guanajunato, and Queretaro ; Natchitoches
* Lampriere, Notes in Mexico, 204.
8 Liunmis, The awakeninf: of a nation, 80 (1898),
[94]
BEFORE THE RAILROADS
to Mexico, via San Antonio, Presidio de Rio Grande (or
Piedras Negras), or via Laredo, Monterey, Saltillo, and San
Luis Potosi; Santa Fe to Mexico, via Paso del Norte (or El
Paso), Chihuahua, Durango, Zacatecas, and Guanajuato;
Mazatlan to Mexico, via Durango ; San Bias to Mexico, via
Guadalajara and Queretaro; Acapulco to Mexico, via Chil-
pancingo and Cuernavaca; and Mexico to Guatamela, via
Oaxaca.* These routes indicate the location of the passes
through the mountains which encircle the great central
table-land.
Early travelers in Mexico proceeded upon the backs of
animals or in some instances in a heavy four-wheeled car-
riage (volant e),"" Litters (lit eras) borne by mules were also
available for travelers on the two highways between Vera
Cruz and Mexico, and their use continued long after the
introduction of stages.® One of the best contemporary de-
scriptions is here reproduced :
*'The Mexican littera is a kind of oblong box, about a foot
deep, three feet wide, and six feet long, — ^unfortunately more
frequently shorter than longer. Two long poles passing
down and fastened to the sides, project fore and aft, and
serve as shafts for two mules, to whose pack-saddle the ends
are attached by straps. In short, — a long box instead of an
upright one, — a recumbent and supine position, instead of a
sitting one, and two four-footed porters instead of two biped
ones — are the main points of difference between the littera
and the sedan chair. It is furnished with a leather awning
• Humboldt. New Spain, 11, 7-8, III, 492, IV, 1-2 (1811) ; Folsom, Mexico
in 1842, 108-26; Castro, The republic of Mexico in 1882:210-33. See also
Borden and Henderson, as above, 577-8, as to modem hi^rhway conditions.
"" Poinsett, Notes on Mexico, 18 (1824) ; Bullock, Six months in Mexico,
249 (1824).
Ohappe D'Auteroche, Voyage to California, 27 (1778); Bullock, 486;
Ward, Mexico in 1827, II, 264; Forbes, A trip to Mexico, 40-1 (1851).
[95]
THE RAILROADS OF MEXICO
and cotton curtains, and ordinarily with a well-worn mat-
tress, through which you may feel the rough boards upon
which you recline/"
The first stage line was established between Vera Cruz and
the City of Mexico over the Jalapa route in 1830 by three
men from New England whose names have not come down to
us. Their coaches, of the ''Concord'* type, were built in the
United States, and their drivers were Americans. In 1833
the business was purchased by Manuel Escandon, who after
a number of years sold it to Anselmo Zurutuza, a Spaniard.
Ujider Zurutuza a vast system was developed, and stages or
diligencies were put in service in all the populated centers of
the country. Upon the advent of the railroads the business
fell off, but until the Madero revolution there were still many
stage lines in Mexico. ^° A composite description of the early
diligence follows :
''The body of the carriage . . . rests upon two broad
leather straps, fastened before and behind to wooden pro-
jections rising from the bed. They are very strong, and the
whole contrivance, admirably adapted for Mexican roads. . . .
The Diligence has three seats, and three persons sit upon
each seat, those in the middle row having a leather strap
for their backs^ moveable for the convenience of the passen-
gers behind them. The doors are like ordinary carriage
doors in England, and the seats placed across the vehicle.
The rain and dust are kept out by means of leather curtains
rolled up at the pleasure of the passenger. "^^
The body is quite independent of the wheels and axles.
(II
* Latrobe. The rambler in Mexico. 294-5 (1836).
^^ Kelley, History of the settlement of Orejcon, 37n (1868); Macedo, "Iia
eyolucion mercantil," 194 (1905); Thompson, Recollections of Mexico. 10-1
(1846): Forbes. 44-7.
^1 Forbes, 45.
[96]
BEFORE THE RAILROADS
and is so placed that when the vehicle turns over the upper
part immediately separates itself from the lower. "^*
''Four seats are on the top, while the cochero and his
assistant occupy the box. . . . Two stout mules occupy the
shafts ; then four abreast in splinter bars ; and in front of all
a pair, or sometimes three more.''^*
Upon one point all early accounts agree ; that traveling in
Mexico was attended by great risk and discomfort. An Eng-
lish traveler who went in a diligence from Vera Cruz to
Mexico before the opening of the railroad, gave a vivid de-
scription of the trip, from which the following excerpt is
presented :
''I have travelled on rough roads in my time, but on such
a road as this never. My companion refused for a time to
award the premium to our thoroughfare ; but, just while we
were discussing the question and recounting our experience
of bone-smashing highways, we reached a pass where the
road consisted of a series of steps, nearly a foot in depth,
down which steps we went at a swinging trot, holding on
for our lives, in terror lest the next jerk should fairly wrench
our arms out of their sockets, while we could plainly hear the
inside passengers howling for mercy, as they were shot up
against the roof which knocked them back into their seats.
Aching all over, we reached level ground again, and Mr.
Christy withdrew his claims, and agreed that no road any-
where else could possibly be so bad as a Mexican road; a
decision which later experiences only served to confirm.
*'Our start, every time we changed horses, was a sight
to see. Nine half -broken horses and mules, in a furious state
of excitement, were harnessed to our unwieldy machine ; the
helpers let go, and off they went, kicking, plunging, rearing.
IS Hill, Travels in Peru and Mexico. 11. 210 (1860).
!• Lempriere, 63.
m
THE RAILROADS OF MEXICO
biting, and screaming, into ruts and water-courses that were
like the trenches they make for gaspipes in London streets,
with their wheels on one side on a stone wall, and in a pit
on the other, and Black Sam leaning back with his feet on
the board, waiting with perfect tranquillity until the animals
had got rid of their superfluous energy and he could hold
them in. We were always just going to have some frightful
accident, and always just missed it.
>914
i*Tylor, 87.
[98]
CHAPTER XI
EAILEOADS INTRODUCED
IN considering the introduction of railroads into Mexico it
is well to bear in mind that the first important railroad
company in the United States — the Baltimore and Ohio — ^was
*" chartered in 1827, and that the experiments which demon-
strated the practicability of Stephenson's locomotive were
conducted in England in 1829. During the next few years
many projects were started in the United States; but it is
somewhat surprising that as early as 1833 the feasibility of a
line from Vera Cruz to the City of Mexico was being con-
sidered. That such is the fact we know from the narrative of
Hall Jackson Kelly, the eccentric Boston schoolmaster and
engineer, who in that year crossed Mexico en route to Oregon.
** While exploring the country between Vera Cruz and the
City of Mexico, I became satisfied of the feasibility of a rail-
road route between one and the other of these places. Desirous
of seeing Mexico benefited with the same kind of institutions
as those effecting such great things for my native New Eng-
land, I planned and advised that improvement — especially
would I have internal improvements commenced without the
least possible delay, in a country where the common people
were but little in advance of the heathen ; where most of the
roads were in a state of nature, and the earth bore but few
marks and evidence of civilization dwelling there.
''The improvement suggested by me was a topic of frequent
conversation with [James S.] Wilcox, the American consul,
and with other enterprising foreigners. It was one of the
[99]
J ■^ \
THE RAILROADS OF MEXICO
subjects of a communication to President Santa Anna, describ-
ing, according to my apprehension, what would be the utility
of railroads.''^
Santa Anna, it appears, was opposed to the idea, '* giving
as his reason the harm that would accrue to the raisers of
mules and the owners of wagons as well as to the muleteers
and drivers who carried on the wretched traflSe between the
capital and the coast/'*
Yet four years later, August 22, 1837, under the adminis-
tration of President Bustamante, a concession was granted to
Francisco Arillaga, a merchant of Vera Cruz, for a railroad
from Vera Cruz to the City of Mexico with a branch to Puebla.'
Under this concession a preliminary survey was made, but
nothing further was done and the concession was forfeited.*
On May 31, 1842, General Santa Anna, again in the presi-
dency, issued a decree ** imposing on the creditors of the high-
way from Perote to Vera Cruz the obligation of constructing
a railroad from the city of Vera Cruz to the Rio de San Juan''
in the state of Vera Cruz. This decree re-established a tax
{de averia) of two per cent in excess of the import duties at
Vera Cruz (originally established for highway repairs), and
dedicated the proceeds to the repair of the Perote highway
and to the construction of the projected railroad. The rail-
road work was intrusted to Joseph Faure, under whose direc-
tion about three miles of track were laid. A section of this
line, from Vera Cruz to El Molino, was opened in 1850, and a
^ Kelley, Narrative of events and difficulties in the colonization of Oregon,
74-6, 89-92 (1852).
s Macedo, "La evolucion mercantil," 196 (1905).
* Secretaria de Fomento, "Leffislacion sobre f errocarriles : coleccion de
leyes, decretos. dispociones, resolnciones y documentos sobre caminos de fierro
(hereinafter cited as Fomento," Legislacion) , I, no. 2.
;: ^ *• Baz and Gallo, History of the Mexican railway, 18-4 (1876).
RAILROADS INTRODUCED
further section in 1851 when the government took over the
project. The line was completed to Tejeria in 1857/
On October 31, 1853, a concession was issued to Juan Laurie
Rickards for a railroad from Vera Cruz to Mexico via Puebla,
and on November 28, 1853, a concession was issued to the same
person for a railroad from Mexico to a port on the Pacific.
These concessions were declared forfeited on August 2, 1855."
A concession for a railroad from San Juan to Acapulco was
issued on the same day to Mosso Brothers. Work was begun
in 1856 between Mexico and Guadalupe Hidalgo under the
supervision of Robert B. Gorsuch of New York, and the line,
three miles in length, was opened in 1857.^
On February 24, 1856, a concession was issued to Francisco
Havarez for a railroad from Chilpancingo to Acapulco or
another point on the Pacific; and on August 2 of the same
year a concession was granted to Albert C. Ramsey for a
railroad from Anton Lizardo (between Vera Cruz and Al-
varado on the Gulf coast) to Acapulco on the Pacific.®
The Mosso Brothers in 1857 sold the Guadalupe Hidalgo line
to Antonio Escandon (brother of Manuel Escandon) who also
purchased the Vera Cruz-San Juan line from the govern-
ment; and on August 31 of that year Escandon received a
concession for a railroad from Vera Cruz to Acapulco. The
revolution of 1857 then made further construction impossible.
8 Fomento, "Legislacion," I, nos. 4, 6, 7, 9, 10, 15, 18, 19, 23, 28, 31, 32,
41; Baz and Gallo, 14; Macedo, 196-7; Ferguson's Anecdotical «:uide to Mexico,
23-4 (1876); Romero, Railways in Mexico, "International Review," XIII, 480n
(1883).
• Fomento, "Legislacion," I, nos. 36, 37, 39, 40, 46; Secretaria de
Fomento, "Memoria," 1857; 20.
T Fomento, "Legislacion," I, no. 47; Secretaria de Fomento, "Memoria,"
1857; 21; Baz and Gallo, 14; Ferguson, 24; Shepard, The land of the Aztecs,
67-9 (1859).
B Fomento, "Legislacion," I, nos. 49, 51; Secretaria de Fomento,
"Memoria," 1857:20.
[lOl]
THE RAILROADS OF MEXICO
In 1858 under the direction of Captain Andrew Talcott, a
careful survey was made of the Orizaba route, while M. Alma-
zan, a Mexican engineer, surveyed the Jalapa route. Captain
Talcott, a graduate of West Point, was assisted by a party
recruited in New York, his chief assistants being Robert B.
Gtorsuch, and M. E. Lyons of Reading, Pa.*
On April 5, 1861, after the re-establishment of constitutional
government, Escandon received another concession for a rail-
road from Vera Cruz to Acapulco or any other port on the
Pacific, and in view of the fact that the Orizaba route had
been chosen, he was now required to build a branch to
Puebla.'*^
The French invaders on October 23, 1862 entered into a con-
tract with M. E. Lyons, the American director of Escandon 's
line, for construction from Tejeria to Chiquihuite, and on
September 8, 1863 a contract was entered into for the exten-
sion of the line to Soledad.
Escandon on August 19, 1864 transferred his concession to
the Imperial Mexican railway company, which was registered
in London in September of that year. Work was resumed in
February, 1865 at both ends of the line by Smith, Knight, and
company, who soon transferred the contract to another English
firm, Crawley and company. Two sections were completed:
from Vera Cruz to Paso del Macho — 47^ miles — and from
Mexico to Apizaco — 86^A miles — ^by the end of the Maximilian
regime, and some preliminary work was done in the inter-
vening section."
11
* Fomento, "Legislacion," I, uos. 57, 58; Secretaria de Fomento,
"Memoria," 1857:22-3; Baz and Gallo, 14; Ferguson, 24; Low, Review of
the report of Oaptain Andrew Talcott, Amer. Soc. of Civil Engineers, "Pro-
ceedings," XLI, 2569-2634 (1915); The Mexican Railway, "Engineering
News," LXXIV, 1016 (1915).
^0 Fomento, "Legislacion," I, no. 74; Baz and Gallo, 14; Ferguson, 24.
i^Fomento, "Legislacion," I, nos. 101, 105, 107, 121, 146; The Im-
perial Mexican railway, "Merchants' Magazine," LV, 20-4 (1866).
[102]
RAILROADS INTRODUCED
Upon the restoration of the Republic the company's con-
cession was exempted from forfeiture by a decree of November
27, 1867, upon condition that construction work be con-
tinued, and the concession was again confirmed on November
11, 1868. The name of the company was then changed to ' 'Mexi-
can railway'' {Ferrocarril Mexicano), and work was continued
under the direction of English engineers. The branch from
Apizaco to Puebla was completed in 1869. At the Vera Cruz
end of the line, work was completed from Paso del Macho to
Atoyac in 1870, to Fortin in 1871, and to Orizaba in 1872.
The railheads of the two sections met near Maltrata, Dec-
ember 20, 1872 ; and on January 1, 1873, the entire line was
formally inaugurated by President Lerdo de Tejada.**
Meanwhile two additional concessions for a railroad from
the Gulf to the Pacific had been issued. On December 8, 1866,
a concession was granted to Numa Dousdebes, Julius Ziegler,
and Ramon Zangroniz for the construction of a railroad from
Puebla to the Pacific, passing through Atlixco, Matamoros
Izucar, and Valle de Atoyac, Zangroniz having already re-
ceived a concession for a line from Puebla to Vera Cruz via
Jalapa on December 24, 1865.** On December 14, 1870, Rene
Masson and Felix Wyatt received a concession for a line in
three sections, from Vera Cruz to the Tehuantpec line, from
Anton Lizardo to Cuemavaca, and from Cuernavaca to
Acapulco.**
The Mexican of the last generation had vivid recollections
of the war with the United States, and in consequence a reluc-
tance to give support to projects that might facilitate invasion
i«Fomento, "Legislacion," I, nos. 174, 188, 203, 204, 219, 220, H,
nos. 229, 231, 233, 245, 257, 258; Baz and Oallo, 15-6; Ferguson, 25; Janvier,
Mexican guide, 340-3; U. S. Foreign relations, 1877:426-9.
i» Fomento, "Legislacion," I, nos. 137-9, 179.
i*Ibid., no. 227.
[103]
THE RAILROADS OF MEXICO
from the north. The need for railroads was acknowledged,
but only such projects were favored as would open up com-
munication between the Gulf and the Pacific ocean, or would
contribute to the development of the interior. It was obvious,
however, that a line from the American border to a point on the
remote northwest coast of Mexico would carry with it no
menace to Mexico, and on July 15, 1854 a concession was
granted to Alejandro Jose Atocha for a railroad and telegraph
line from Presidio del Norte (or Piedras Negras) to Guaymas.^"
On November 23 of the same year J. B. Moore and company also
received a concession for a railroad from the northern frontier
to a point on the west coast between Altata and Manzanillo.
This was forfeited in 1857.^' The state of Chihuahua on
August 27, 1859 granted to General Angel Trias, as represent-
ative of James Whiting, president of the American-Mexican
company of New York, a concession for a railroad from
Presidio del Norte via Villa del Paso (or Juarez) to Guaymas,
and the state of Sonora on March 17, 1861, granted a like
concession.^'' These state grants were supplemented by a
national concession of April 15, 1865. On August 6, 1866
the national congress declared this concession void, but the
action was not final ; for on November 7, 1871 the concession-
naire was asked to show cause why work should not be carried
out, and it was not until January 14, 1873, that forfeiture
was finally declared.*'
Meanwhile, in 1868, the '* Mexico and United States railway
company*' was incorporated by the Mexican congress, the in-
iBFomento, "LegrisUcion," I, no. 42; Secretaiia de Fomento^ "Memoria,"
1857:20.
leFoxnento, "Legislacion," I, nos. 44, 56; Secretaria de Fomenta,
"Memoria/* 1857:20.
iTFomento, "Legislacion,*' I, nos. 65, 72.
18 Ibid., nos. 116, 154, H, no8. 244, 259.
[104]
RAILROADS INTRODUCED
corporators being three Mexicans and the following Ameri-
cans: Columbus C. Douglass, Jesse Hoyt, Cyrus H. Mc-
Cormick, Anson Bangs, A. H. Barney, and William B. Ogden.
This company was to build a railroad from Presidio del Norte
to the Pacific at a point between Guaymas and Mazatlan and
also from Mexico to a point on that line. Beyond this nothing
is known of the project, which is remarkable only as the first
organized movement to establish direct railroad communication
between the Capital of Mexico and the northern boundary/'
On January 14, 1869, another concession for a railroad over
the Guaymas route was granted to a company represented by
Julius A. Skilton, United States consul general in Mexico,
and this was declared void on January 14, 1873.*"
The second American attempt to obtain a concession through
the heart of Mexico was made by General William S. Rose-
crans, who in 1868 became United States minister to Mexico.
While in Mexico, Rosecrans sought to allay the fears of the
authorities and to induce them to give their support to projects
for lines extending through the country ; and he attempted to
obtain from the United States congress a charter for a company
to further the economic development of Mexico. He also pub-
lished a pamphlet in 1870 — ** Manifest destiny; the Monroe
doctrine, and our relations with Mexico *' — in which he em-
phasized the need for a policy of ''Complete political, com-
mercial and industrial fraternity among the republics of the
New World.""
As a result on December 10, 1870, a concession was granted
to a company formed in Rosecrans' interest by Anthony D.
^* Act of the government of Mexico incorporating the Mexico and United
States railway company. U. S., 40 cong. 2 sess., S. misc. doc. 104.
•oFomento, "Legislacion," I, no. 194, 11, no. 259.
'1 Bosecrans, Memorial to the congress of the United States, 10 p. (1868t) ;
and Manifest destiny, 23 p.
[105]
THE RAILROADS OP MEXICO
Richards, James Smith, and Joseph Brennan for a line from
a point on the Gulf between Teealutla (in the state of Vera
Cruz) and Tampico to a point on the Pacific coast between
Zacatula (Guerrero) and San Bias. Provision was made for
branch lines which should touch Pachuca, Queretaro, Morelia,
and Guadalajara. This concession was amended in 1872 and
declared void in 1873,"
Edward Lee Plumb, United States charge d' affaires prior
to the appointment of Rosecrans, was also an advocate of rail-
road development.** As the representative of the Inter-
national railroad of Texas (International and Great Northern)
he applied on September 26, 1872, for a concession for a rail-
road from Mexico to the Pacific and to the Rio Grande. Under
date of May 29, 1873, he entered into a contract with the
Secretary of Fomento for the construction of such a line.
This was disapproved on November 11, 1873, by the Mexican
congress which, however, authorized the government to make a
contract with any other petitioner.'*
During this period there were many others in the field seek-
ing concessions. In April, 1872, we are told, ** A large number
of Americans were at this time in Mexico City, inquiring into
railway and other interests in the Republic.*'*'' Among them
was Robert B. Gorsuch, and also James Sullivan representing
s 3 Fomento, * 'Legislation,*' I, nos. 225, 256, 276; Appleton's annual
cyclopedia, 1872:532-3; Biva Palacio, "Historia de la administracion de Don
Sebastian Lerdo de Tejada," 104-12, 187, 227-49, 804 (1875). See also
Fomento, "Legislacion," I, no. 247, ' 'Concession of December 28, 1871,
awarding to General W. Rosecrans the right to establish a line of interoceanie
communication from a point on the Gulf of Mexico to another on the Pacific
ocean." Biva Palacio makes no reference to such a concession.
ssU. S. Foreign relations, 1868:11, 890.
s« Fomento, "Legislacion," 11, nos. 254, 275, 280; Biva Palacio, 104-12,
252-7, 277-333; Appleton's annual cyclopedia, 1872; 582-3; U. S. Foreign
relations, 1873-4 :673-89. 1874: 723-4; Foster, Trade with Mexico, 10 (1878).
'B Appleton's annual cyclopedia, 1872:582.
[106]
RAILROADS INTRODUCED
Rosecrans' Union Contract company of Pennsylvania. These
men, as well as representatives of the ** Mexican company,
Limited'', desired concessions for a line from Mexico to the
Pacific ocean and the Rio Grande. These were the* companies
indirectly referred to in the resolution of November 11, 1873,
in which congress refused to approve the first contract with
Plumb.
On November 20, 1873, a contract was made with the
Mexican company. Limited. The route specified in this con-
tract was from Mexico to the Pacific ocean and to the Rio
Grande **and from a point on the line of the Vera Cruz rail-
road to the said ocean." The additional clause, in conjunc-
tion with the similarity of name, would seem to indicate that
the concessionnaires represented English interests who were
connected, if not identical, with those who were interested in
the Mexican railway from Mexico to Vera Cruz; and such
was the fact. United States Minister John W. Poster de-
scribed the company as one ''claiming to be Mexican in its
organization and interests, but which in fact is composed
of six Mexicans and eight foreigners.'' This concession was
forfeited. May 4, 1874, because of failure of the promoters to
raise capital in Europe."
Before this action had been taken, a contract for the con-
struction of an international and interoceanie railroad was
made by the Mexican government with Angel G. D. Lascurian,
Stephen Benecke, and Sebastian Camacho, representing the
same interests, and this was approved on January 17, 1874.*^
'•Fomento, "Lesrislacion," 11, nos. 282, 294; U. S. Foreign relations,
1874:718-9, 728-6, 751-2, 766; Macedo, 200-1; This company, commonly known
as "The Fourteen," was made up of Antonio Mier y Oelis, Pedro del Valle,
Esteban Benecke, Angel Lascurian, Ouillermo Barron, Miguel Bui, Oayetano
Bubio, Miguel Lizardi, Pio Mermejillo, David Fergusson, Sebastian Oamacho,
Oarlos Felix, Manuel Mendoza Oortina, and J. M. Landa. — Biva Palacio, 819.
The foreign names had obviously been "Mexicanized."
'^Fomento, "Legislacion," II, no. 288.
[107]
THE RAILROADS OF MEXICO
This was followed, on December 5, 1874, by a concession
which was granted to Sebastian Camacho, Jose Antonio
Mendizabal, and company for a railroad from Mexico to Leon
in the state of Guanajuato, passing through Queretaro, Celaya,
Salamanca, and Guanajuato.*** This company, ''representing a
mixed Mexican and English interest'', took the name ''Cen-
tral Railroad of Mexico'', and to it was granted the exclusive
lottery privilege for the entire republic. The financial backers
of this project, which was none other than the Mexican com-
pany. Limited, in a new guise, were Barron, Forbes, and
company, an English firm resident in Mexico.**
Plumb also renewed his efforts, and on December 12, 1874,
he entered into a second contract for a line from Leon to the
Rio Grande, passing through Lagos, Aguascalientes, Zacatecas,
Durango, San Luis Potosi, Saltillo, and Monterey; and this
was approved on June 5, 1875.*®
The Guaymas project now reappeared. On June 17, 1875,
David Boyle Blair, "the representative of a joint American
and English interest", received a concession for a railroad
from Guaymas to the northern frontier of Sonora in the direc-
tion of Tuscon, Arizona. This concession was amended on
November 3 of the same year.'
SI
» 8 Ibid., nos. 298, 299, 804, 824.
«»U. S. Foreign relations, 1875-6:853, 950; 1877:429; 1879:775, 781-2;
Biya Palacio, 442-4.
•oPomento, "Legislation,*' II, nos. 300, 313; Riva Palacio,451-3; U. S.
Foreign relations, 1875-6:858, 898, 927-86.
s^Fomento, "Legislacion,** II, nos. 315, 328; U. S. Foreign relations
1875-6:854-893.
[io8]
CHAPTER Xn
THE ORIGINAL DIAZ POLICY
IN 1876 Lerdo de Tejada, who succeeded Juarez in the
presidency in 1872, was forced from office through a
revolution, and Porfirio Diaz became provisional president.
He at once attacked the railroad policy of his predecessor
as unduly influenced by foreign interests. In his revolution-
ary program, issued on March 21, 1876, he objected par-
ticularly to the '* Central'' railroad concession upon the
ground that it had been granted in the interest of the Mexi-
can railway company and the English creditors of the gov-
ernment. On September 26, 1876, he issued a decree nulli-
fying any contract made by his predecessor ''which may re-
sult in any burden to the nation." The ''Central" conces-
sionnaires thereupon lost their concession through arbitrary
forfeiture on December 26, 1876, and this involved the loss
of the amount expended on the road and the return of the
proceeds of the lottery. In view of these circumstances,
Edward Lee Plumb abandoned his project and left the
country.^
The Diaz government on June 19, 1877, transferred the
Guaymas concession, originally granted to David Boyle Blair,
to Sebastian Camacho, representing Robert R. Symon, an
Englishman, and David Ferguson, an American. The con-
cessionnaires on October 17 of the same year entered into a
contract with the Secretary of Fomento, the new agreement
1 U. S. Foreign relations, 1877:886-7, 892-8; 1879:774-81; U. S. Message
of the president communicating . . . information in relation to the construction
of railroads in Mexico, 1-10 (1879); Fomento, "Legislacion," II, nos. 326-7.
[109]
THE RAILROADS OP MEXICO
providing that the northern terminus of the line might be
located in either Sonora or Chihuahua ; but when this came
up for approval of congress in 1878 it was defeated. This
action, however, did not aflfect the concession in the form in
which it had been originally granted to Blair.*
On November 12, 1877, the Secretary of Fomento entered
into a contract with William J. Palmer, James Sullivan, and
company for the construction of a railroad from the Ameri-
can border to Mexico with a branch to San Bias or Man-
zanillo, with a provision that the line to the Pacific should
be completed before the one to the frontier was commenced.*
What followed may be stated in the words of John W.
Poster, United States Minister :
''Notwithstanding this provision the charter was defeated
in Congress by a decided majority; after which the Lower
House voted almost unanimously to confer upon the Execu-
tive, authority to contract for a line to the Pacific only. The
reasons given for this action were the bad policy and danger
to the country of conferring such privileges upon an American
company, and of extending railroad connections to the
United States. The arguments presented by the principal
speaker, Hon. Alfredo Chavero, one of the most experienced
and influential men in the Republic, were that 'It was very
poor policy, very injudicious to establish within our country a
powerful American company,' that 'it is a natural law of
history that border nations are enemies,' that 'nations of the
North generally invade the nations of the South,' hence, 'we
should always fear the United States'; and he closed with
the following appeal, 'You, the Deputies of the States, would
'Fomento, "Legislacion," II, nos. 849-50, 859; U. S. Foreign relations,
1879:789-90; Message of the president, as above, 16-7; "Railroad Gazette,"
XI, 147-8 (1879).
•Fomento, "Legislaoion," n, no. 863.
THE ORIGINAL DIAZ POLICY
you exchange your poor but beautiful liberty of the present
for the rich subjection which the railroad could give yout
Go and propose to the lion of the desert to exchange his cave
of rocks for a golden cage, and the lion of the desert will
answer you with a roar of liberty.' . . .
** After the defeat of the American charter referred to, the
Congress conferred upon the Executive the power to make
contracts with the Governors of States, or other authorities,
for the construction of railroads within their respective
limits. Under this authority the Federal Government has
made thirteen different contracts and charters, and pledged
Government subsidies thereto. These charters cover the
most important and valuable portions of the route to the
frontier of the United States."*
The record as given thus far shows that except for a desire
to protect the interests of the nation from exploitation at the
hands of foreigners, the government had no railroad policy.
In fact, such a consistent attitude was not to be expected
in view of the frequent changes of government that preceded
the advent of Diaz, and the internal disorder and external
distrust that characterized the early years of the Diaz regime.
By the end of Diaz' first term, however, the situation was
changed, and the country entered upon a period of active
railroad development.
Several events contributed to the change. One was the
belated recognition of the Diaz government by the United
States, thus removing the grounds for prejudice against
* n. S. Foreiirn relations, 1878:640. See also 650-2, 1879:776-7, 838,
and Message of the president, as above, 10-6; Fomento, "Legislacion," II,
nos. 872, 374, 383, HI, nos. 489-90, 502.
No. 424, under date of December 6, 1878, is worthy of passing notice.
It is a project for a "contract entered into between the United Mexican States
and the creditors of the Republic for the construction of a railroad from the
Oity of Mexico to the Pacific, and for the adjustment of the national debt and
the payment of interest thereon.*' — Foreign relations, 1879:767-70. This was
rejected by congress. — Macedo, 200-1.
[Ill]
THE RAILROADS OF MEXICO
Americans seeking concessions in Mexico. Another was the
publication of a report on ** Trade with Mexico," written by
the American Minister in 1878 in the form of a letter to
Carlisle Mason of Chicago, president of the Manufacturers'
Association of the Northwest.
This association had recently entertained the Mexican
Minister at a banquet, to which Foster himself had been
invited. Foster could not attend, but when he learned of
the optimistic nature of the discussion and the resolution
on the matter of trade relations between the two countries,
he prepared a letter setting forth the results of his observa-
tions. This letter and its consequences can be best described
in his own words :
**In the letter I discussed especially the impediments to
such freer relations, which I found in the revolutionary char-
acter of the country, the want of protection to American
citizens and capital, and the opposition manifested to rail-
road connection with the United States.
'*My letter was sent to the Department of State, with the
request that, if approved by the Secretary of State, it be
forwarded to the Association, which was done. It was pub-
lished in full in the Chicago papers, was reproduced in the
annual volume of diplomatic correspondence,*' and by reso-
lution of Congress it was printed as a public document.* It
thus had a wide circulation in the United States and was
commended or criticized according to the views entertained
as to the Mexican policy of our government.
**It reached Mexico at a time when the political excitement
against the United States was at its height, and the criticism
B n. S. Foreign relations, 1878:686-54.
* It was also published by the association under the title "Trade with
Mexico — correspondence between the Manufacturers' Association and Hon.
John W. Poster," Ohicago, 1878. 44 p.
[112]
THE ORIGINAL DIAZ POLICY
of the press was almost universally unfavorable. So much
importance was attached to it by the government that Senor
Matias Romero was employed to write a refutation, sections
of which appeared daily for several weeks in the 'Official
Journal/ and it was printed in book form, filling three hun-
dred and fifty double-column full folio pages/ It was an
able document, abounding in valuable statistics, but lost
much of its usefulness for the purpose of its compilation by
its prolixity/
The preparation and publication of this letter of Foster's,
far from being '*a diplomatic mistake'', as some critics have
charged, was extremely fortunate ; for it brought matters to
an issue, and the discussion that followed served to bring
out all the essential facts and arguments in the case.
"^ Secretaria de Hacienda, "Exposicion de 15 de Enero 1879, sobre la
condicion actual de Mexico, y el aumento del comercio con los Estados Unidos;
rectificando el informe dirigido por el Honorable John W. Foster el 9 Octobre,
1878 al Oarlile Mason de Ohicago.'* Mexico, 1879, 849 p. Also in "Memoria>"
1878-9:415-678. English version, New York, 1880, 325 p.
"Foster, Diplomatic memoirs, I, 115 (1909).
["3]
CHAPTER Xm
EARLY AMERICAN ATTITUpE TOWARD MEXICAN
RAILROAD INVESTMENTS
WHEN in 1825 Joel Poinsett was sent to Mexico as the
first United States minister he was instructed to ob-
tain the co-operation of the Mexican government in the con-
struction of an international highway from St. Louis to
Mexico via Santa Fe. Thus improved overland communica-
tions, which would facilitate intercourse and trade between
the two countries, early became the policy of the American
government.
Half a century later, when the period of railroad building
was at its height in the West, it seemed as if this policy could
be made eflfective. It was a time when men of energy and
daring were active in the movement that was soon to result
in the elimination of the western frontier, and the removal
of **The Great American Deserf from the map of the United
States. These men had pushed lines of railroad out into un-
inhabited regions in which soon appeared flourishing towns
and growing crops. With the gains resulting from one ven-
ture they embarked upon the next. Others like them were
attracted to the pursuit of immediate wealth through the
construction of railroads. It was a period in which optimism
held sway, and fortunes were made through extensive rather
than intensive development. At such a time, with such men,
it was only natural that attention should have been directed
to Mexico.
Nor were railroad promoters and builders alone in their
["5]
THE RAILROADS OF MEXICO
interest in Mexico. The merchants of St. Louis and Chicago,
who had profited from the opening up of the territory to
the west, were active in encouraging the extension of lines
which would put them in touch with new markets beyond the
Rio Grande. The Chicago banquet, to which reference has
been made, is evidence of such interest, which was so great
as to impel John W. Foster to issue a word of warning.
Foster's letter is a statement of facts and tendencies as he
saw them, unrelieved by any touch of faith in the statesman-
like capacity of the men in control in Mexico. In later years
he admitted that his picture had been overdrawn. However,
it failed to counteract the spirit of enterprise that prompted
the railroad invasion of Mexico. When he pointed out the
ungenerous terms of the concessions that were proposed and
the hostility of the legislative authority, he failed to discour-
age promoters who were not without experience with legis-
latures and whose hope was to sell out their concessions or
their railroads before the objectionable terms should become
embarrassing. His contrast between the proposed subsidies
and the revenues of the Mexican treasury was equally un-
convincing to those who had witnessed the great internal
development which had resulted from the introduction of
railroads in the United States.
Within three years after the Foster episode American in-
terests had obtained concessions providing for the construc-
tion of five railroads aggregating over 2500 miles and sub-
sidies amounting to $32,000,000. Again counsels of prudence
were urged, this time by F. E. Prendergast, who said :
''Unless Mexican revenues increase at a prodigious rate,
it looks as if she were incurring obligations which it may be
difficult to fulfill. . . .
*'To those accustomed to the rapid progress of our West-
ern States, it might appear that the opening up by railroads
[ii6]
ATTITUDE TOWARD MEXICAN RAILROAD INVESTMENTS
of a great productive region, already possessing a consider-
able population, must result in the rapid development of a
large and profitable business. But it is not a parallel case.
**The country to be opened up is old, and its population
widely different from the energetic and enterprising races
to whom that rapid progress is due. We are told of the vast
resources and extent of Mexico, the business that must spring
up, the favors granted by the government to projected rail-
roads, and people point to the great capitalists whose names
head the subscription lists, and whose fortunes are largely
due to successful railroad management. . . .
**We believe in the ultimate development of Mexico, but
we dread to see our citizens investing vast sums in schemes
rather because, like Colonel Sellers, they think there must be
millions in them, than from any careful consideration of their
probable returns."^
During the year in which this article appeared, John Bige-
low visited Mexico at the request of Samuel J. Tilden, who
had become attracted by the idea of railroad promotion in
that country. Upon his return he published the results of
his observations in an article which was quite as pessimistic
as the conclusions of Foster and Prendergast, which he re-
stated and elaborated in convincing terms.
He admitted there was much wealth in Mexico, but he
added, *'the temptation to embark in railway enterprises in
Mexico which have intoxicated many of the coolest heads in
Wall Street and Threadneedle Street can hardly be said to
have opened the purse of a single Mexican.'' He called
attention to the lack of public lands in the country which
could be offered as an inducement to immigration or as
grants in aid of railroad construction. Subsidies, he pointed
^Prendergast, Railroads in Mexico, "Harpers' Magazine," LXIII, 276-81
(1881).
["7]
THE RAILROADS OF MEXICO
out, were payable not in money but in revenue bonds whose
yield was contingent upon the activity of foreign commerce,
and they were coupled with such conditions as to make them of
doubtful advantage. He declared:
**0n general principles subsidies do not form the founda-
tion on which to construct a sound railway system, but it is
no doubt a wise policy for Mexico to make use of them to
get roads built through her territory by foreign capital for
one-third their actual cost. In oflfering subsidies, therefore,
at the rate of six to eight thousand dollars a kilometer, she
takes no risks ; the more miles built at that rate in her terri-
tory the better for her. The risk is with the capitalist who
places his money where the business that is to make his in-
vestment profitable is yet to be developed ; where he is liable
to have competing lines constructed faster than they can be
needed ; where, in case the government should become finan-
cially embarrassed, it would naturally begin its economies
by suspending its subsidies, and in case of war, appropriate
the road to its own uses at unremunerative rates. . . .
*'It is feared by many that the Mexican government has
already incurred more obligations of this sort than she has
any fair prospect of being able to make good. If we do not
share this opinion entirely, it is because we expect that the
greater portion of the grants already issued will be forfeited.
. . . There remains to be paid as subsidies under existing
and still valid charters about ninety millions of dollars. Tms
is a large liability for a government whose annual revenues
are esteemed eminently prosperous when they reach twenty
millions a year.''
His general conclusion, therefore, was, ''There are so many
elements of uncertainty to be reckoned with in these invest-
ments, especially if made under the auspices and in the
[ii8]
ATTITUDE TOWARD MEXICAN RAILROAD INVESTMENTS
special interest of foreigners, that while they would unques-
tionably prove highly advantageous to Mexico, and might
ultimately prove highly remunerative to stockholders, they
should be caviare to all who have not money to invest which
they can aflford to lose."*
Those in favor of American investments in Mexican rail-
roads were also active in presenting optimistic statements.
Matias Romero, remembered as Mexico's ablest minister to
the United States, replied to Bigelow as he had done to
Foster.* And Joseph Nimmo, a statistician at Washington,
ably served as a propagandist in the interest of American
railroad promoters ; perhaps his most remarkable production
was the pamphlet '* Commerce between the United States
and Mexico," which was issued as a government document.
The financial press, always interested in new ventures, gave
liberal attention to the various projects. Thus the pros-
pective investor was amply supplied with the facts and argu-
ments that were needed as a basis for decision.
The early eighties were years of optimism, and American
capital flowed in increasing currents into Mexican railroads.
The source of these funds was generally the larger financial
interests, however ; for it does not appear that the securities
were generally taken by small investors. For such an exten-
sive distribution, time is needed ; and before the necessary
time had elapsed, it became apparent that original estimates
were inadequate and that too much reliance had been placed
upon subsidies. In 1885 the Mexican government found it
necessary to suspend the payment of subsidies, and although
'Bigelow, The railway invasion of Mexico, "Harpers' Mazazine," LXV,
745-57 (1882).
* Romero, Railways in Mexico, "International Review," Xm, 477-506
(1882).
[IIP]
THE RAILROADS OF MEXICO
it made a partial resumption of payments a year later/ the
American investor had become dubious about the possibility
of obtaining great returns from money placed in a country
where uncertainty was the general rule. Solomon GriflSn
reflected the general opinion when he said:
*'Too much has been expected in Mexico and the United
States from the introduction of railroads. The generous
government concessions to the new lines were held to be a
sort of patent plaster to draw Mexico into the front rank of
progress. The result has been generally disappointing, but
it is not in the least a surprise to any thoughtful person who
is at all conversant with the local conditions. ... It is clear
that railroads are going to have a profitable career here, but
it will have to be on a reasonable business basis.'"
The field, therefore, was left to the interests already com-
mitted to the venture and to investors in Europe who were
able and willing to place their funds with a view to a slow
development and deferred returns.
Before proceeding to trace the actual construction of rail-
roads in Mexico by Americans, it will be well to give some
facts as to the extension of American railroads to the Mexi-
can border. The Southern Pacific was completed eastward to
Yuma, Arizona, in 1877, and to Deming, New Mexico, and
El Paso in 1881. The Atchison, Topeka, and Santa Fe con-
nected with the Southern Pacific at Deming in 1881. It ob-
tained trackage rights over the line of the Southern Pacific
from Deming to Benson, Arizona, and built a branch from
Benson to Nogales, Arizona, which was reached in 1882.
From Rincon, New Mexico, it built a line to El Paso, which
A "Ohronicle,** XL, 752-3 (1885), XLIH, 88-90 (1886).
B Griffin, Mexico of today, 46 (1886).
[120]
ATTITUDE TOWARD MEXICAN RAILROAD INVESTMENTS
was reached in 1881. The Texas and Pacific in 1882 eflfected
a junction kt Sierra Blanca, Texas, with the Southern Pacific,
which had been pushed eastward from El Paso. The Inter-
national and Great Northern was built to Laredo in 1882.
The Galveston, Houston, and San Antonio in 1883 connected
with the Southern Pacific, and also extended a branch from
Spoflford, Texas, to Eagle Pass the same year. These lines
were all of standard gauge. The Texas-Mexican, a narrow-
gauge line, was opened between Corpus Christi, Texas, and
Laredo in 1881. The Chicago, Rock Island, and Pacific
reached El Paso in 1900.
[121]
CHAPTER XIV
INFLUX OP AMEEICAN CAPITAL
THE first American railroad in Mexico was built not with
any idea of a ** railroad invasion of Mexico" but as an
incident in the attempt of Boston capitalists to extend the
Atchison, Topeka, and Santa Fe to the Pacific coast and thus
break the territorial monopoly of Collis P. Huntington and his
associates in the Southern Pacific railroad. As the line of the
Atchison was pushed westward it had come into conflict with
William J. Palmer's Denver and Rio Grande project, with the
result that by 1878 it was determined that while Palmer
would be unable to build toward the Mexican border, the At-
chison could not build into western Colorado. This meant
that the future extension of the Atchison would be toward the
southwest. !f' %
To Sebastian Camacho and his associates this situation pre-
sented an opportunity to obtain funds with which to utilize
the Blair concession for a railroad from Guaymas to El Paso,
with a branch to the Arizona border. This concession they
offered to share with the Atchison interests, who in 1879 in-
corporated the Sonora railway company (Ferrocarril de
Sonora) under an amendment to the Massachusetts laws
passed for this particular purpose.^
Construction work was begun at Guaymas in 1880, and in
1882 the line was completed to the Arizona border at Nogales.
In the meantime the Atchison had reached El Paso and Dem-
ing, at the latter point connecting with the Southern Pacific,
^ L. Mass. 1879, c. 274.
[123]
THE RAILROADS OF MEXICO
which was being built toward the east. From Deming to
Nogales the Atchison had planned to build a line of its own ;
but, instead, it accepted a ''satisfactory proposal'' made by
Huntington for the joint use of the Southern Pacific track
between Deming and Benson, and built the short connecting
line from Benson to Nogales in 1881-2. This was more satis-
factory to Huntington than to the Atchison interests, who at
that time suffered the first of a series of defeats at the hands
of that dominating figure among American railroad builders.
On September 14, 1880 the concession was amended so as to
provide for a cash subsidy instead of a land grant;* but it
still provided that the main line should run to El Paso. When,
therefore, construction was continued to the north of Hermo-
sillo instead of up the valley of the Sonora river, the Mexican
government ordered the work stopped. This order was re-
voked, however, in view of the great difficulty of the El Paso
route. In 1881 the Atchison acquired complete control of the
Sonora.*
Before the Sonora was open to Nogales, an attempt was made
to obtain a further modification in the terms of the concession,
so as to extend to six years the time within which the El Paso
line should be built. This was accomplished in 1883,* but the
line was never built.
The leading spirit in the Sonora project was Thomas
Nickerson, and Daniel B. Robinson was in charge of con-
struction. These men were experienced railroad builders,
well qualified to meet the difficulties that constantly arise in
pioneer enterprises. In Mexico, however, they found diffi-
culties new to them. Under the terms of their concession they
• Pomento, "Legislacion," m, no. 517, IV, no. 766.
• A. T. and S. P., Report, 1880.
*Ibid., 1888; "Chronicle," XXXVH, 128 (1888).
[124]
INFLUX OF AMERICAN CAPITAL
were compelled to begin work at Guaymas, and so they had to
ship most of their rails and equipment around Cape Horn.
Native labor was employed, but the supply was limited, and
an adequate working force was recruited with difSculty.
Skilled laborers and mechanics were brought in from the
United States, as well as many negroes. '*Not all the negroes
had characters, ' ' wrote Cy Warman. ' ' Many of them had two
names and a razor, and when they distributed themselves among
the natives on the night that followed pay day, thoughtful
men slept in cellars. Idle Mexicans, jealous of the Americans,
created or incited a riot at every opportunity."*
As a revenue-producer the Sonora was a disappointment,
and as an outlet to the Pacific ocean it proved less valuable to
the Atchison than the line which was soon extended to San
Francisco under terms dictated by the Southern Pacific
interests. Aside from its record as the first American railroad
in Mexico, the sole importance of the Sonora is that it later
served as the nucleus of the Southern Pacific Railroad of
Mexico.
* Warman, The story of the railroad, 214.
t"5]
CHAPTER XV
MEXICAN CENTRAL
THE year 1880 is memorable not only for the beginning of
railroad construction in Mexico by Americans ; it marked
the change of the attitude of the Mexican government toward
Americans as concessionnaires, as well as the organization of
the Mexican Central railway company (FerrocarrU Central
Mexicano) under the laws of Massachusetts. The incorpora-
tors represented the same interests as those behind the Atchi-
son and Sonora projects, and Thomas Nickerson was the first
president. On April 3, 1880, the Mexican government trans-
ferred to Robert R. Symon, agent of the company, the forfeited
concession for a railroad from Mexico to Leon, originally
granted to the Mexican Company, Ltd. (Camacho-Mendi-
zabal) interests in 1874.^ With the idea of bringing into har-
mony the various contracts that had been entered into between
the national and state governments and of facilitating the
construction of through lines, the Mexican congress on June
1, 1880, authorized the president to modify these contracts."
By this means unification of gauge was made possible.
When the transfer of the Mexico-Leon concession was made
to Symon, it was with the understanding that it should be
amended so as to provide for a line to extend to Paso del
Norte (or Jaurez), Laredo, and Guadalajara. The Palmer-
Sullivan interests now attempted to outbid the Mexican Cen-
tral for favor and to obtain a concession that would give them
^ Fomento, "Legislacion," III, nos. 470, 475, 500.
' Ibid., no. 495.
[127]
THE RAILROADS OF MEXICO
this privilege. Another competitor appeared in the person of
Nathaniel S. Reneau, who claimed to represent a Washington
company backed by Jay Gould, Russell Sage, Thomas A. Scott,
and others. Southern Pacific interests, led by CoUis P. Hunt-
ington, were also active. Meanwhile the Mexican Central
interests purchased a Guanajuato state concession, thus extend-
ing their right from Leon to Celaya. By this means they
obtained an advantage; for while under the general law of
June 1, 1880, the president could transfer state concessions
to whomever he might wish, he was bound not to grant a con-
cession that would parallel a route for which a concession was
already in force. They had a further advantage in the support
of Ramon Guzman, a leading banker and owner of the local
traction lines in the City of Mexico, and of Sebastian Camacho,
whose influence is evident from the number of concessions that
he had already obtained from the Mexican government. To
secure their existing concessions they began work on the line
between Mexico and Celaya.
On September 8, 1880, Diaz awarded to the Mexican Central
the desired concession for the construction of a line from
Mexico to Leon and from Leon to Paso del Norte, uniting the
cities of Queretaro, Celaya, Salamanca, Irapuato, Guanajuato,
Silao, Aguascalientes, Zacatecas, Chihuahua, and Guadalajara,
and this was confirmed by congress on November 8.*
The Mexican Central then took over concessions from the
states of Chihuahua, Aguascalientes, and San Luis Potosi, and
on July 6, 1881,* received a concession for a line extending to
Tampico. By an act of April 12, 1883, these concessions were
consolidated.
Construction work was carried on in four divisions, and
• Ibid., m, no8. 511, 588.
* Ibid., rV., no. 682.
[128]
MEXICAN CENTRAL
track-laying was begun on September 15, 1880. The track
was opened to operation from Mexico to San Juan del Rio in
1881 ; to Lagos in 1882. At the northern end of the line work
was begun in 1881, and regular trains were in operation as far
as Chihuahua by the end of 1882. The entire line was corn-
completed on March 8, 1884.'
Construction of the Tampico line was begun in 1881, but
progress was slow, and it was not completed until 1890.' The
Guadalajara line was begun in 1884 and completed to Irapuato
in 1888. Work was also begun at San Bias on a line to Guad-
alajara in 1882, but this part of the project was abandoned.
Contrary to general practice the Mexican Central handled its
construction work without the aid of a construction company.''
In 1905 the idea of a Pacific extension was revived, and in
1908 a line known as the Mexican Pacific was opened between
Manzanillo and Tuxpan ( J ft l is oo ), connecting with main line
through Guadalajara. V,/4/i "^^r^aa-w^
The system was also extended through a series of mergers.
In 1901 it took over the Monterey and Mexican Gulf, which
had been opened in 1891 between Venadito or Reata, on the
Mexican International, through Monterey to Tampico. In
1902 it absorbed the Mexico, Cuemavaca, and Pacific, which
in 1899 had abandoned, at the Balsas river, the attempt to
extend a line from Mexico to Acapulco. In 1905 it acquired
^ Brandt, Railway invasion of Mexico, Ms., 78-100 ; Bradford, Railroad
building in Mexico, Association of Engineering Societies, "Journal," IV, 845-50
(1885).
< Garden, Report on the Tampico branch of the Mexican Oentral railway,
London, 1897, 10 p.
f "Ohronicle," XXXV, 516 (1882).
•Archiv fttr Eisenbahnwesen," XXXII, 1569-72 (1909); "Engineering
News," LVn, 376-7 (1907); Martin, Railways of Mexico, "Railway News,'^
LXXXVI, 47980, 582-8, 616-7 (1906).
[129]
THE RAILROADS OF MEXICO
the Coahuila and Pacific, extending from Saltillo to Toireon,
which had been completed in 1903. In 1905, also, it purchased
a controlling interest in the Mexican National Construction
company, which owned a line from Ojocaliente to Zacatecas
and another from Manzanillo to Colima. It was this Manzan-
illo-Colima line which formed the basis for the extension to
the Pacific coast.
The Mexican Central was Mexico's greatest railroad. It
spread over the country from the Capital to the northern
border and from the Pacific to the Gulf. There were few cities
of importance which it did not touch. It was heavily capital-
ized, however, and it failed to develop traflSc to the extent that
its promoters had expected, and it eventually passed out of
Boston control. Mr. Clarence "W. Barron, who was familiar
with the project from the beginning, records the failure of the
Atchison group as follows :
''When a generation ago the Boston people ploughed the
railroad line from Atchison to Santa Fe and across the great
American desert into California they had great hopes of traflSc
from the Mexican Central line they built from El Paso to
connect with the City of Mexico, a thousand miles distant.
They believed it would be a great feeder to the Atchison.
**In this they were disappointed, but they still had the
courage to build a branch to Tampico, hoping therefrom to
make a new port for the development of the interior of
Mexico. . . .
**For years the Atchison folders printed the Mexican lines
almost as their own. Today on the Atchison folders connec-
tions north even into Canada may be traced, but Mexico is a
foreign country upon which the railroads need not waste paper
in maps or timetables. A thumbnail comer in the Santa Fe
map shows Mexico and on it from Mexico City to the Eio
[130]
MEXICAN CENTRAL
Grande on the coast is a wilderness broken only by the harbor
of Tampico.
' ' To all American lines meeting at El Paso the business in
and out of Mexico has been for more than thirty years a dis-
appointment."'
In 1906 the Mexican government obtained an option on the
controlling shares held by H. Clay Pierce, and in 1909 the
Mexican Central became a part of the government system of
railways.
> Barron, The Mexican problem, 22 (1917).
The Atchison group was also interested in the Sinaloa and Dnrango rail-
road company, incorporated in Massachusetts in March, 1881, to operate under
a concession obtained by Robert B. Symon on August 16, 1880. — Fomento,
"Legislacion," III, no. 506. This concession was extended on September 26,
1881. — Ibid., IV, no. 728. Construction was begun in 1882 at Altata and
continued to Culiacan, where it stopped in 1883. The Occidental railway
company, organized in London, bought the property in 1892. — Poor's Manual,
1892:1120.
[131]
"■>.._,^
CHAPTER XVI
MEXICAN NATIONAL
WITHIN the week in which the Mexican Central received
its concession, Diaz, with the idea that there was
room enough in Mexico for more than one longitudinal line,
also granted a concession to the Palmer-Sullivan interests
operating under the name of the ** Mexican National Con-
struction company" (Compania constructora Nacional Mexi-
cana).^ The date of this concession was September 13, 1880.
General Palmer, the head of this enterprise and the builder
of the Denver and Rio Grande railroad, was an advocate of
narrow-gauge railroads, particularly as a means of reaching
mines in a rugged country. The name chosen for his Col-
orado line indicates his plan to extend to the Mexican border,
— ^a plan which was frustrated by the Atchison interests, who
obtained possession of the Raton pass after a contest that is
memorable in American railroad history.
The route covered by the Mexican National concession was
from Mexico through Toluca, Acambaro, Celaya, San Luis
Potosi, Saltillo, and Monterey to Laredo, and from Mexico
through Acambaro, Morelia, Zamora, Guadalajara, and
Colima to the port of Manzanillo. By subsequent purchases
of state concessions, the route was extended from Monterey
to Matamoros, from San Luis Potosi to Lagos and Zacatecas,
from Zacatecas to Guadalupe Hidalgo, and from Mexico to
El Salto. The Texas-Mexican was also acquired in 1883.*
1 Fomento, "Legislacion," m, noB. 508, 512.
* Ibid., n, nos. 894, 407, 428, HI, nos. 484, 487, 497, 508, 518, 528-4,
548, 560.
[133]
THE RAILROADS OF MEXICO
Work of construction was carried on simultaneously at
different points, and as sections were completed they were
taken over by the operating company, the Mexican National
railway (Ferrocarril Nacional Mexicano), incorporated in
Colorado, with General Palmer as president. The line from
Laredo was opened to Monterey in 1882 and extended to
Saltillo in 1883. From Mexico the line was >open to Toluca
in 1880, and through Acambro and Celaya to San Miguel
de AUende in 1883. Work between Saltillo and San Miguel
was not begun until 1886, and the main line from Mexico to
Laredo was not completed until September 28, 1888. The
line from Monterey to Matamoros was finished in 1905.
On the Pacific line work was also carried on from both
ends. The section from Acambaro was carried through
Morelia to Patzcuaro in 1886, and stopped at Uruapan. From
Manzanillo the line was built as far as Colima by 1889, after
which the project was abandoned.*
Financial difficulties attended the construction of this sys-
tem; and in 1882 arrangements were made with Mattheson
and company of London which resulted in bringing in Eng-
lish and French capital.* In 1887 the Construction com-
pany's concessions were consolidated.'
In 1887 the Mexican National railway company was re-
organized as the Mexican National railroad company, and
control passed to the English holders of the bonds of the
original company. It was the new company that completed
the main line.' Title to the unfinished Manzanillo-Colima
* Brandt, Railway invasion of Mexico, Ms., 103-12; Bigelow, Railway
invasion of Mexico, "Harpers' Magazine," LXY, 763-6 (1882).
* ••Chronicle," XXXV, 108 (1882).
«Ibid., XXXVI, 81 (1888).
«Ibid., XUn, 108, 698, XLTV, 869, 681, XLVH, 464 (1886-8).
[134]
MEXICAN NATIONAL
line and to a short line between Zaeatecas and Ojocaliente
was retained by the Construction company/
In 1901 the work of converting the main line to standard
gauge was begun, but the financial condition of the com-
pany was such that in 1902 there was a second reorgani-
zation, and the control passed to an American company, the
National Railroad company of Mexico, incorporated in Utah.
The new company continued the work of reconstruction,
which was completed in 1903/
In 1900 the Mexican National leased the ICchoacan and
Pacific {Ferrocarril Michoacan y Pacifico), extending from
Moravatia to Acampo with a branch to Anguagueo, which
had been built in the early nineties by the Michoacan Rail-
way and Mining company. In 1901 it acquired a controlling
interest in the Mexican International. In 1903 it acquired
control of the Interoceanic, but only under terms by which
the Mexican government acquired control of the National
itself. In 1906 the Hidalgo and Northeastern (Ferrocarril
Hidalgo y Nordeste), extending from Mexico to Tortugas
with branches to Pachuca and Irolo, was taken into the
system.
The Mexican National in 1909 was merged in the National
Railways of Mexico.
T)id., XLVn, 709 (1888).
•Ibid., LXXIII, 784-5, 1112, LXXIV, 650, LXXV, 981, 1147, LXXVI.
694, LXXVn, 1747 (1901-8); Martin, Railways of Mexico, "Railway News,"
LXXXV, 990-1 (1906).
[135]
CHAPTEE XVn
MEXICAN INTERNATIONAL
ON June 7, 1881, General John B. Frisbie, representing
CoUis P. Huntington and the Southern Pacific inter-
ests, acquired from the Mexican government in the name of
the International Construction company, a concession for a
railroad from Piedras Negras to Durango and from Durango
through Zacatecas and Guanajuato to Mexico, with a branch
through Nieves (Zacatecas) to a point on the Pacific coast
between Mazatlan and Zihuatanejos (Guerrero), and another
branch through San Luis Potosi to a point on the Gulf coast
between Matamoros and Vera Cruz. This concession, when
approved, was transferred to Huntington, acting for the
construction company which was organized in Connecticut
in March, 1881. Further concessions were obtained on
November 4, 1881 and April 21, 1882. None of these con-
cessions contained any provision for a subsidy, and their
terms were correspondingly liberal.^
On April 26, 1882, the company was reorganized as the
International Railroad company {Ferrocarril Internacional
Mexicano) and a charter was obtained from the Connecticut
legislature under date of April 26, 1882.*
Construction work was begun in earnest after the com-
pletion of the line of the Galveston, Houston, and San
Antonio to Eagle Pass in 1883. In January, 1884, the track
was laid as far as Monclova. The line was slowly extended.
^Fomento, "LegiBlacion," IV, nos. 657, 672, 759, V, no. 822.
« Conn. Special acts, IX, 668-72.
[137]
THE BAILROABS OP MEXICO
reaching Torreon in 1888, thus connecting with the Mexican
Central. On October 1, 1892, the line was opened to Durango.
From Durango construction continued parallel to the west-
em Sierra Madre as far as Tepehuanas, which was reached
in 1902.
In the meantime, Huntington, the leading spirit in the
project, died, and control passed to the Mexican National
in 1901.' _
The fact that this railroad was built without government
aid accounts for the length of time required for its construc-
tion. It provided an outlet for the extensive coal deposits
of Coahuila, and it contributed to the upbuilding of Mexico's
iron smelting industry.
In 1910 the National Railways of Mexico, already in con-
trol of the Mexican National, acquired from the Southern
Pacific company a large block of Mexican International
shares, and the International as a company ceased to exist.
•Brandt, Railway invasion of Mexico, Ms. 112-5; "Chronicle,*' XLVI,
75, 820 (1888), LXXIII. 533, (1901); Mexican International Railroad. Annual
report, 1892; 3-5; Bigelow, Railway invasion of Mexico, "Harpers' Magazine^'*
LXV, 753-5 (1882); Martin, Railways of Mexico, "Railway News," LXXXV,
952-3, (1906); U. S. Department of War, Monograph on Mexico, 165-6 (1914).
[138]
CHAPTER XVm
INTEROCEANIC
THE high rates charged by the Mexican railway in con-
junction with its indifferent service finally had its
natural result in the construction of the competing Inter-
oceanic railway through Jalapa. This was not accomplished
until after many persons had made attempts to construct
segments of lines which should ultimately be connected into
a great system. This is not surprising to one who recalls the
efforts of the Mexican railway interests to pre-empt the con-
cession for the first line from the Valley of Mexico toward the
northern border and to interest men high in government favor
in their enterprises.
The early history of the Interoceanic project is a narrative
of petty concessions and of the construction of petty lines ; of
small corporations, which failing in their purpose, consol-
idated with others of like nature, which failed in turn. Little
of this appears in the materials that are readily available. The
facts are buried in the oflScial documents and reports, and
there they are presented with little regard to their inter-
relationships.
The earliest of these concessions dates from April 16, 1878.
This was granted to the state of Morelos for a railroad from
Mexico to Morelos and Cuemavaca and from one of those
points to the Amacusac river. On October 5, 1878, this con-
cession was transferred to the Mexico and Morelos railway
company, the head of which was Manuel Mendoza Cortina.*
^ Fomento, "Legislacion,** 11, no. 898; Secretaria de Fomento, "Memoria,"
1877-82, m, 654-5.
[139]
THE RAILROADS OF MEXICO
On November 27, 1880, the national government entered
into a contract with the state of Morelos for the construction
of a railroad from Los Reyes on the Morelos line to a connec-
tion with the Mexican railway at Irolo. This concession was
transferred to Delfin Sanchez, who completed the line in 1882.
Under a concession granted to Sanchez on December 23, 1881,
a line from Los Reyes to Mexico was completed, also in 1882 ;
and through communications were established between the
Capital City and Irolo. In the meantime, a line had been ex-
tended from Irolo Calpulalpam (Tlaxcala) under a concession
granted on January 21, 1882 to Francisco Arteaga for a rail-
road from Irolo to Puebla and thence to Matamoros Izucar
and a connection with either the Acapulco or Morelos lines.
This concession also was transferred to Delfin Sanchez on
February 21, 1882.*
On July 9, 1880, the national government entered into a con-
tract with the state of Guerrero for a line from Acapulco to
Mexico through Chilpancingo and Iguala, and this concession
was transferred to Sanchez on February 12, 1881. The Sanchez
projects were united October 19, 1882, under the name of the
United Morelos, Irolo, and Acapulco railways.*
Under date of September 6, 1880, the states of Puebla and
Vera Cruz entered into a contract with the national govern-
ment for a railroad from Jalapa to San Andres Chalchicomula.
This was then transferred to Ramon Zangroniz, who on Dec-
ember 11, 1880, also received a concession for a railroad from
Jalapa to a port on the Gulf. An extension to the westward
was provided for on June 27, 1881, when Francisco M. Prida,
representing the same interests, received a national concession
« Fomento, ••Legislacion," III, nos. 581, 538, IV, nos. 769, 782, 802, V.
no. 807; Secretaria de Pomento, ••Memoria," 1877-82, m, 673-8.
« Fomento. "Legislacion." Ill, nos. 501, 525, V, nos. 819, 888, 893;
Secretaria de Fomento, "Memoria," 1877-82, in, 655, 690-1.
[140]
INTEROCEANIC
for a railroad from San Andres Chalchicomula to a point on
the line of the Morelos railway. On November 21, 1881, the
three concessions were consolidated, and the National Inter-
oceanic railway company, was organized by Zangroniz and
Prida. On October 23, 1882, this company was consolidated
with the United Morelos, Irolo, and Acapulco railways under
the name of the Acapulco, Morelos, Irolo, and Vera Cruz
Interoceanic railway.* This consolidated company in 1886
purchased from the national government the national railway
of San Martin Texemelucan, extending from Puebla to San
Martin in the direction of Irolo."
Provision for another section of the line was made on Sept-
ember 14, 1880, when the state of Puebla entered into a con-
tract with the national government for the construction of a
railroad from Puebla eastward to a junction with the Mexican
railway at San Marcos, and on September 30 of that year the
state legislature authorized the transfer of the concession to
Luis Garcia Feruel and Jacobo Ortiz BorbaUa.'
As early as 1881 the Jalapa route between Mexico and Vera
Cruz was surveyed under the direction of Arthur M. Welling-
ton, the celebrated American engineer,^ but sufficient capital
could be raised only for operations on a small scale. A com-
pany was * organized in France to take up the project, but
nothing was accomplished.®
* Fomento, "Legislacion," III, nos. 504, 509, 519, 551, IV, nos. 676, 749;
Secretaria de Fomento, "Memoria," 1877-82, III, 681-2.
B Secretaria de Fomento, "Memoria," 1877-82, III, 767-8; Poor's Manual,
1889:76.
•Fomento, "Legislacion," HI, nos. 515, 520, 521, 537; Secretaria de
Fomento, "Memoria," 1877-82, III, 694-5.
f Wellington, The American line from Vera Omz to the Oity of Mexico
via Jalapa, Amer. Soc. of Oivil Engineers, "Transactions," 1886 :XV, 791-848.
> U. S. Consular reports, XXXI, 90 (1889).
[MI]
THE RAILROADS OP MEXICO
On February 13, 1883 the several concessions were consol-
idated in one which was granted to Arteaga/ At that time
255 miles had been constructed. The new concessions, were
amended on July 3, 1886/'
In 1888 the **Interoceanic Railway of Mexico (Acapulco to
Vera Cruz)'' {FerrocarrU Interocecmico) was chartered in
England, and the new company took over the uncompleted
sections between Mexico and Puebla, via Irolo and San Mar-
tin ; Puebla and Jalapa, via San Marcos ; and Jalapa and Vera
Cruz ; and options on the lines between Los Arcos and Mata-
moros Izucar and Mexico and Amacusac via Yautepec, which
were purchased a few years later/ ^
In the interest of the company, Arteaga on July 1, 1889
obtained a concession for a railroad from Matamoros Izucar
to Acapulco to join the Interoceanic at some convenient
point."
The line between Mexico and Vera Cruz was opened in 1891,
and the other parts of the system were reconstructed and com-
pleted. In 1903 the Matamoras and Morelos branches were
connected by a line extending from Atencingo and Cuautla;
but the system has not been extended in the direction of
Acapulco beyond Puente de Ixtle on the Amacusac river."
In 1902 the Interoceanic acquired the San Marcos and Nautla
railway, extending from San Marcos to Tezuitlan, and organ-
ized the subsidiary Mexican Eastern railway company {Ferro-
• Dublah, "Legislacion Mexicana," XVT, 453.
10 Ibid, XVn, 549.
11 Poor's Manual. 1889:76; 1893:1189; "Economist," LIX, 1368-9
(1901).
1' Great Britain, Diplomatic and consular reports, Misc. series, no. 170:2
(1890); U. S. Consular reports, XXXI, 91 (1889).
i« Martin, Railways of Mexico, "Railway News," LXXXV, 877-8, LXXXVI,
766-7 (1906).
[142]
INTEROCEANIC
carrU Oriental Mexicano) to take over the control. In 1909 it
obtained a lease of the Mexican Southern railway. In the
meantime, in 1903, the Mexican government acquired control
of the Interoceanic, which it turned over to the Mexican
National in exchange for a controlling interest in the National.
In 1909 the Interoceanic control passed to the National Rail-
ways of Mexico, but the corporate identity of the company has
been maintained.
[143]
CHAPTER XTX
MEXICAN SOUTHERN
THE- Mexican Southern railway {Ferrocarril Mexicano del
8ur), now a subsidiary of the Interoceanic, as a project
dates back to August 25, 1880, when the government of the
state of Oaxaca received a concession for a railroad — the Mexi-
can Meridional — from the port of Anton Lizardo on the Gulf
through Tehuacan, Oaxaca, and Tehuantepec to Port Angel on
the Pacific/ As agent of the state of Oaxaca, Matias Romero
transferred this concession to the Mexican Southern railroad
company, incorporated in New York by General U. S. Grant
in 1881.*
Grant had visited Mexico early in 1880. While in Mexico
and after his return to New York he advocated the construc-
tion of railroads as the best means of developing the resources
of the country To Romero came the idea that this could be
best accomplished by bringing the rival American interests
into harmony and in association with a man of Grant's great
prestige and strong financial backing. This was found to be
impossible, and the Mexican Southern project was launched
as a separate enterprise.
The list of incorporators included the names of representa-
tives of the Atchison, Southern Pacific, and Gould interests,
but there was no aflSliation with the Palmer-Sullivan group.
1 Pomento, "Legislacion," HI, no. IV, 641, V, no. 778.
' L. N. Y. 1881, c. 86; Nimmo, Trade between Mexico and the United
States, 89-40 (1884); Romero, "Informe respecto el ferrocarril de Oaxaca"
(1881).
[MS]
V
THE RAILROADS OP MEXICO
Gould was planning a Mexican extension to serve as a feeder
for his Southwestern system, the corporate name being the
Mexican Oriental, Interoceanic, and International railroad
company. His concession, granted to Francis De Gress on
November 5, 1881, provided for a line from the Rio Grande,
through Victoria, to the City of Mexico, as well as several
branches.* With the consent of the Mexican government this
project became affliated with that of the Mexican Southern
in May 1883, but a receiver was appointed in March 1884 and
the concession was soon forfeited.*
In the meantime Grant had obtained an amendment to his
concession which provided for a line from Tehuantepec to the
Guatemala border and also a concession for an extension into
Guatemala, but in May 1884 came the Grant and Ward failure
in New York, and with it the collapse of the original Mexican
Southern project.*
The Grant concession then passed to General Joaquin de
Mier y Teran of Oaxaca. On April 21, 1886, it was amended so
as to provide for a route from Puebla to Oaxaca. In May, 1888,
it was acquired in the name of H. Rudston Read, of the British
contracting firm of Read and Campbell, who obtained amend-
ments in 1889 and 1891. On May 9, 1889, the Mexican
Southern railway company was incorporated in London.
Construction was begun without delay, and the line was
completed from Puebla to Oaxaca in November 1892. Two
short branches out of Oaxaca were constructed, one as late as
1911 ; and the tramline between Tehuacan and Esperanza was
> U. S. Foreign Relations, 1881:780.
« ••Chronicle,'* XXXVI, 623, XXXVH. 99 (1888), XXWIH, 859 (1884).
* Brandt, Railway invasion of Mexico, Ms. 28-36, 116-20; Romero, Speech
on the 65 anniversary of U. S. Grant (1887).
[146]
MEXICAN SOUTHERN
acquired from the state of Puebla in settlement of a claim for
an unpaid susbidy/
In 1909 the Interoceanic obtained a lease of the property
from January 1910 to the expiration of the concession in 1982.'
•"Mexican Financier/' XVin, 432-6 (1891); "Engineering News,"
XXVI, 174-5 (1891); Martin, Railways of Mexico, "Railway News," LXXXV,
1030-1, 1072-3 (1906).
•"South American Journal," LXVII 98 (1909); Mexican year book
1914:48-9; Martin, Mexico as a field for investment, "Financial Review of
Reviews," no. 46:33-5, (1909).
[M7]
CHAPTER XK
TEHUANTEPEC
THE opening of a line of communication across the Isthmus
of Tehuantepec was proposed in the time of Cortez, and a
survey of a route for a canal was made in the eighteenth cen-
tury. As early as November 4, 1824, the Mexican government
took steps to attract proposals/ and on March 1, 1842, a con-
cession was granted to Jose Garay for a railroad line. This was
amended in 1846.*
Garay 's concession was sold in 1848 to the English firm of
Manning and Mackintosh, who, unable to finance the project,
assigned it to Peter A. Hargous of New York in 1849. The
Tehuantepec railroad company was then incorporated in
Louisiana, and a survey was made in 1850 under the direction
of General John G. Barnard. An elaborate report of this
survey was published in 1852.* Before construction work
could be begun, the Mexican government, fearful of American
influence, declared the concession void in 1851.* The result
of this action was to divert the attention of promoters to a
rival line, and a railroad was constructed across the Isthmus
of Panama during 1850-5, thus making it more difficult to
obtain capital for the Tehuantepec project.'
^ Fomento, "Legislacion,** I, no. 1.
> Ibid., no8. 8, 6. (See also nos. 8, 11-2, 14).
* Barnard, The Isthmus of T ehua ntepec, (1852) ; Oorthell, The Tehuantepec
route, "Railroad Gazette," XXXVTL 154 (1904); Martin, Railways of Mexico,
"Railway News," LXXXV, 879, LXXXVI, 167-8 (1906).
^ Fomento, "Legislacion." I, no. 16; Seward, Relations with Mexico, and
the transcontinental railroad (1868).
" Oorthell, as above, 164-6. [149I
THE RAILROADS OP MEXICO
Further attempts were made by the government to solicit
proposals in 1842,* and on February 5, 1853, a second con-
cession was issued to A. G. Sloo and company, composed of
Americans and Mexicans. This was declared forfeited in
1857/
A third concession was granted, September 7, 1857, to the
Louisiana Tehuantepec company. This was amended in 1859
and 1860; and on October 12, 1866, the eoncessionnaire
corporation got permission from the Maximilian government
to change its name to the New York-Tehuantepec Steamship
and Railroad company.®
On October 15, 1866, following the fall of Maximilian, the
concession was forfeited and transferred to the Tehuantepec
Transit company, controlled in the United States, which in
turn lost it through forfeiture in 1867.*
The next concession was granted on October 6, 1867, to
Emile La Sere, an American, as agent of the Tehuantepec
railway company, incorporated by Simon Stevens in Vermont.
This was amended in 1869, and on December 14, 1870, the
construction of a canal was authorized/® However, construc-
tion work on a railroad was begun in 1870. Both the railroad
and canal concessions were revalidated on May 22, 1872, and
a subsidy was granted in 1874 to the Tehuantepec railroad
• Fomento, "Legislacion," I, nos. 22, 24-6.
7 Ibid., nos. 29, 69. (See also no. 80); Secretaria de Fomento, "Memoria,"
1857:21; Oorthell, as above, 155.
> Fomento, "Legislacion,** I, nos. 60, 64, 70, 159-60; Oorthell, as aboye,
155; Rippy, Diplomacy of the United States and Mexico regarding the Isthmus
of Tehuantepec, "Mississippi Valley Historical Beyiew," VI, 603-81 (1920).
• Fomento, "Legislacion," I, nos. 161, 168; U. S. Message of the president
communicating . . . correspondence on the subject of grants to American citizens
for railroad and telegraph lines across the territory of the Republic of Mexico
(1867) ; Oorthell, as aboye, 155.
3^0 Fomento, "Legislacion," I, nos. 169, 192, 228. (See also nos. 198, 196);
The Tehuantepec railway (1869) ; Oorthell, as aboye, 155.
[ISO]
TEHUANTEPEC
company/^ In 1879, both La Sere concessions were declared
void."
Edward Learned of New York received from the Diaz gov-
ernment the next concession, June 2, 1879, through the activity
of Hayden H. Hall. He constructed about twenty-two miles
of railroad on the Atlantic side, but his concession was for-
feited in 1882 because of expiration of the time limit/*
The Gonzales government settled with Learned, and pro-
ceeded to construct the railroad through a contract with Delfin
Sanchez in 1882/* In this way abouty sixty-six miles of track
were constructed in two sections, most of the mileage being on
the Pacific side. This contract was abrogated in 1888. Resort
was now had to a foreign loan, and government bonds were
sold to a German syndicate which disposed of them in Berlin,
Amsterdam, and London. The government entered into a
contract with Edward McMurdo of London, who died within
the year, and the contract was abrogated in 1892."
On February 27, 1892, the government made a second con-
tract for the work ; this time with Joseph H. Hampson, Chan-
dos S. Stanhope, and Elmer L. Corthell. The proceeds of the
loan were insufficient, and the contract was dissolved by
mutual agreement in 1892. A new loan was negotiated in
1893, and the work was continued. On December 6, 1893, a
new contract was made with Stanhope, who completed the
railroad on October 15, 1894.'
16
11 Ibid., II, nos. 230, 232, 252, 801. (See also nos. 416, 426).
i« Ibid., ni, nos. 441-2.
i» Ibid., Ill, no. 444, V, no. 868; U. S. Foreign relations, 1879; 778, 790-9;
Oorthell, as above, 155.
i*Pomento, "Legislacion," V, nos. 888, 887.
IB Oorthell, as above, 155: Martin, as above, LXXXV, 379 (1906);.
•'Chronicle," XXXV, 557 (1882).
i« Oorthell. as above, 155; Martin, as above, LXXXV, 879; Terry, The
Tehnantepec railway, "Engineering Magazine," XXXTI, 535-50.
THE RAILROADS OF MEXICO
The operation of the railroad was assumed by the govern-
ment. It was found, however, that the construction work had
been poorly done, and that adequate terminal facilities would
be required to bring the enterprise to a paying basis. In 1898
and 1899 the government entered into contracts with S. Pear-
son and Son, Ltd., to reconstruct the railroad and to build
harbor works and port terminals at Salina Cruz and Coatza-
coalcos (or Puerto Mexico). The line was formally opened to
traffic on January 1, 1907.
For the operation of the railroad and terminals a partner-
ship agreement was entered into by the government and the
Pearson interests under the name of the National Railway
Company of Tehuantepec {Ferrocarril Nacional de Tehuan-
tepee). The contracts were dated. May 16, 1902; May 20,
1904 ; and May 7, 1908, and the arrangement was for a term
expiring in 1953.'^
In 1905 a traffic contract was arranged between the National
Railway of Tehuantepec and the American-Hawaiian Steam-
ship company, for the handling of sugar to the amount of
250,000 to 300,000 tons annually, but with the opening of the
Panama canal traffic fell off.^*
17 Oorthell, as above, 155-7; Martin, as above, LXXXV, 437-9; "Modern
Mexico," VII, 18-9 (1899); XIX, 21 (1909); "South American Journal,"
LXV, 178-9 (1908); U. S. Senate Oommittee on Foreign Relations, Hearings
... to investigate whether any interests have been or are now engaged in in-
citing rebellion in Cuba and Mexico; 778-80 (1913) See also MuUer, Report
on the Mexican Isthmus (Tehuantepec) railway, (1907); and Peimbert, "Fer-
rocarril nacional de Tehuantepec," Secretaria de Fomento, "Boletin," VI, 87-152
(1906).
i« "Chronicle," LXXX, 560 (1905); "Railroad Gazette," XXXIX, 74
(1905); "South American Journal," LXII, 106, (1907).
No attention has been paid here to the ship-railway project of Captain
J. B. Eads, which received much publicity but no support during the eighties.
[IS2]
CHAPTER XXI
TEHUANTEPEC CONNECTIONS, NORTH AND SOUTH
LONG before the Tehuantepec was more than a project,
plans were under way for a rail and river connection
between the Isthmus line and the City of Mexico; and on
March 26, 1875 the state of Vera Cruz received a concession
for a narrow-gauge railroad from Vera Cruz to the port of
Alvarado and from the San Juan river to Minatitlan/ The
line to Alvarado was built, but the other line was not. Instead,
the Tehuantepec built a branch from Juile to San Juan
Evangelista on the San Juan river. The Alvarado line, known
as the Vera Cruz (Mexico) railway {FerrocarU Veracruz y
Alvarado) , completed the connection by means of steamboats.
This line is owned by S. Pearson and Son, Ltd.
To link up the Tehuantepec line with the railroads to the
north was also the purpose of the Vera Cruz and Pacific rail-
road company {Ferrocarril Veracruz al Pacifko), which was
incorporated in West Virginia on February 28, 1898. The
concession, dated March 15, 1898, provided for a line from
Cordoba, on the Mexican railway, to a junction with the Te-
huantepec at Santa Lucrecia, and a branch from the main line
to Vera Cruz." This branch joins the main line at Tierra
Blanca. On account of the difficulties involved in construction,
the company became embarrassed, and control passed from the
original concessionnaires to the Maryland Trust company.
Upon the receivership of that company, the Mexican govem-
1 Fomento, "Legislacion," II, nos. 891, 410, 430, III, nos. 452, 541.
'Dublan, "Leglislacion Mezicana," XXXI, 167-9.
[IS3]
THE RAILROADS OP MEXICO
ment in 1904 acquired the property in return for a small out-
lay in cash and a guarantee of the outstanding bonds. The Vera
Cruz and Isthmus railroad company {FerrocarrH Veracruz al
Istmo) was then organized under Mexican laws as an operating
company, the corporate existence of the original company
being continued.' In 1910 the National Railways of Mexico
took over the controlling shares which had been held by the
government, and in 1913 the Vera Cruz and Isthmus was
merged in the National system.*
On the Pacific side of the Isthmus the Tehuantepec connects
with the line of the Pan-American railroad company (Ferro-
carrH Pan-Americano) at San Qeronimo. This company, in-
corporated in New Jersey in 1901, has a concession, dated
September 11, 1901, for a line from San Qeronimo to Puerto
Arista and the Guatemala boundary.' The line was completed
on April 1, 1909. Its importance is largely prospective, for a
satisfactory arrangement for crossing the Suchiate river and
effecting a direct connection with the Guatemala Central is
yet to be made.
Interests affiliated with the Pan-American obtained a con-
cession for a line north-eastward through the State of Chiapas
to Yucatan, where a connection would be effected with the
United Railways of Yucatan.
In 1910 the Pan-American control was purchased by the
National Railways of Mexico from David E. Thompson, former
United States ambassador to Mexico and chief promoter of the
enterprise.*
•"Economist," LXII, 988 (1904); Martin, Railways of Mexico, "Bail-
way News," LXXXV, 610-1 (1906); Mexican year book, 1914:58.
^ National Railways, Annual reports, 1910-14.
» Verdugo, "Coleccion legislacion," XXX, pt. 2:117-21.
Oonley, Making a system of Mexican railroads, "Railway Age," XUI,
344-5 (1906); Enock, Mexico, 848 (1909); National Railways, Annual reports.
1910-14.
[IS4]
TEHUANTEPEC CONNECTIONS, NORTH AND SOUTH
Between the Tehuantepec line and the Yucatan system of
railroads a connection has yet to be made, though there have
been several attempts to launch such an undertaking.
The Yucatan system itself is a group of small railroads
dgskned to put the sisal plantations in touch with the coast.
There is little in its history that is of interest. The oldest line
is that which connects Merida, the state capital, with the port
of Progreso. It was built in 1881 under a concession dated
April 22, 1874,^ and reconstructed in 1903. It was extended
inland from Merida to Zagmal in 1890 under a concession
granted on May 15, 1884.* It is of standard gauge.
The other Yucatan lines are of narrow gauge. Of these the
Merida and Valladolid was authorized December 15, 1880,* and
completed in 1906. This line also has a branch from Merida
to Progreso. The Peninsula line, connecting Merida with the
port of Campeche, is based upon two concessions granted Dec-
ember 20, 1880 and February 23, 1881,'" and consolidated in
1889. It was completed in 1898.
In 1902 the United Railways of Yucatan (FerrocarrUes
Unidos de Yucatan), a Mexican corporation, was organized to
take over these three lines, together with two pier companies
at Progreso. This company in 1908 absorbed the Merida and
Peto line, which had been built under a concession dated March
27, 1878."
Under consolidated management service was greatly ex-
tended and improved, new equipment installed, and much of
7 Fomento, "Legislacion," II, nos. 298, 806.
• Dublan, XVI, 727.
* Fomento, "Lesrislacion," IH, no. 557.
10 Ibid., in, nOB. 516, 559, IV, no. 592.
11 Ibid., II, no. 892, HI, 449, 468.
THE RAILROADS OP MEXICO
the roadway reconstructed. It was only after the consolidar
tion that separate trains were run for passengers and pas-
senger cars equipped with air brakes.
The system was largely built by Mexicans, and it is owned
by Mexicans, though foreign investors are largely interested in
its securities. **
i> "Modern Mexico," XXI, 39-40 (1906); Mexican year book, 1914:56-7.
[156]
CHAPTER XXn
WESTERN SIERRA MADRE PROJECTS
SOMETHING has been said already of the early projects
for railroads across the Western Sierra Madre. It re-
mains to present in summary form the history of later
attempts. In 1897 the Rio Grande, Sierra Madre, and Pacific
railroad company {Ferrocarril Bio Orcmde, Sierra Madre, y
Pacifico) was organized in New York by E. D. Morgan, Levi
P. Morton, and associates, to operate under a concession,
granted March 24, 1896, for a line from Juarez to Corralitos,
with an extension to Magdalena on the Sonora railway/
The line from Juarez to Corralitos was opened in 1897 and
later extended to Terrazas.
In 1897 the Chihuahua and Pacific {Ferrocarril Chihuahua
al Pacifico) was incorporated in New Jersey by Grant B.
Schley and associates to build westward from Chihuahua
under a concession confirmed June 6, 1892.* This company
in 1899 completed a line from Chihuahua to Minaca, near the
foot of the mountains,' and in 1905 extended a branch north-
westerly from a point near Minaca to Temosachic*
Control of the Rio Grande, Sierra Madre, and Pacific
passed in 1905 to the Greene mining and lumber interests,
who organized the Sierra Madre and Pacific (Ferrocarril
iDublan, • 'Legislacion Mexicana," XXVI, 74; " Chronicle," LXIII, 459
(1896), LXrV, 611, 1138 (1897).
•Dublan, XXII, 189-99; "Chronicle," LXVI, 573 (1898).
* "Chronicle," LXXI, 181; Lavis, Construction of the Chihuahua and
Pacific. "Engineering Record," IV, 241-8 (1907).
« Martin, Railways of Mexico, "Railway News," LXXXVI, 122 (1906).
[157]
THE RAILROADS OF MEXICO
Sierra Madre y Pacifico) and acquired concessions designed
to link up the Rio Grande, Sierra Madre, and Pacific and the
Chihuahua and Pacific, and also to extend to Guaymas and
Agiabampo on the Sonora coast.'
In 1909 a group of Canadians, led by Dr. F. S. Pearson,
acquired all three undertakings and incorporated in Canada
the Mexico North Western railway company {Ferrocarril Nor-
Oeste de Mexico) . The new interests also acquired the Sierra
Madre Land and Lumber company, and obtained from the
Mexican government a consolidated concession.* The gap
between Terrazas and Madera was closed in 1912, thus opening
a new through route between Juarez and Chihuahua/
In 1902, before the control of the Chihuahua and Pacific
passed from the original owners, trackage rights over that
part of the line from Chihuahua to Minaca were obtained
by the Kansas City, Mexico, and Orient railroad company
(Ferrocarril Kansas City, Mexico, y Oriente) . This company
had been incorporated in Kansas in 1900 by Arthur E. Stil-
well to build from Kansas City to Topolobampo (Sinaloa),
crossing the Rio Grande at Presidio del Norte, Texas, and
El Oro (Chihuahua) under concessions granted July 27, 1900.
On July 27, 1906, these concessions were consolidated.*
Construction was begun on three different sections of the
route, and when in March, 1912, work was suspended, three
disconnected segments had been completed in Mexico. These
run from Topolobampo to El Fuerte in Sinaloa, from Sanchez
» "Railway Age," XLTV, 808 (1907).
•Verdugo, ••Ooleccion liegislativa, * * XLI, pt. 2:570-6; "Chronicle, "
LXXXIX, 476 (1909); "Statist," LXIII, 503-4 (1909).
f "Chronicle," XCIV, 1627, XCV, 478 (1912), XCVI, 286, 1229, XCVH,
595, (1913).
•Dublan, XXXII, 230-2; Verdugo, XXXVH, pt. 2:1194-8.
[IS8]
WESTERN SIERRA MADRE PROJECTS
to Minaca,. and from Tolopobampo to Marquez in Chihuahua,
altogether 226 miles.*
» ' •Chronicle/' LXXIII, 662 (1901). LXXV, 1258-4 (1902), LXXXI, 559
(1905), XOni, 1105 (1911), XOIV. 698, XCV, 297, 1123 (1918); "Engineer-
ing News," XLIX, 80-1 (1908); •'Railway Age," XXXV, 441-4 (1908),
XLTVr, 808 (1907), XLY, 759-62 (1908); "Engineering and Mining Journal,"
LXXXVII, 712 (1909).
[159]
CHAPTER XXm
SOUTHERN PACIFIC
IN 1898 the Atchison, Topeka, and Santa Fe leased the
Sonora railway to the Southern Pacific company, which
thus obtained access to the port of Guaymas. In 1903 the
Southern Pacific acquired control of the Cananea, Yaqui
River, and Pacific {Ferrocarril Cananea, Bio Yaqui, y Pa-
cifico), which had built a short line from Naco on the Sonora-
Arizona boundary to the mining camp of Cananea under a
concession granted in 1900.
On October 27, 1905, the Southern Pacific interests ob-
tained a concession for a line from Guaymas to Guadalajara/
In 1909 the Southern Pacifico Railroad of Mexico {Ferro-
carril Sud-Pacifico de Mexico) was incorporated to take over
the lease of the Sonora and the operation of the Cananea,
Yaqui River, and Pacific. Two years later it obtained owner-
ship of the Sonora in exchange for the Needles-Mojave line
in California, — a transaction that is unique in railroad his-
tory ; and it assumed operation of the Sonora in 1912.*
The extension from Guaymas was begun in 1905 and com-
pleted to Mazatlan in 1909. When in 1913 construction work
was suspended, it had been pushed southward to Tepic.
From Orendain an isolated section had also been built as far
north as La Quemada (Jalisco), leaving a gap of about one
hundred miles through an extremely difficult terrian. At
Orendain a connection was made with the Guadalajara-San
iVerdugo, "Ooleccion Legislativa, * * XXXV, pt. 2:1501-7.
« "Ohronicle," LXXXVIH, 1622 (1909), XOVI, 560 (1918).
[i6i]
THE RAILROADS OF MEXICO
Marcos extension of the old Mexican Central, thus preparing
the way for through communication between northwestern
Mexico and the City of Mexico. On November 3, 1910, how-
ever, the Southern Pacific interests received a concession
for an independent line from Guadalajara to Mexico City.*
In 1909 provision was made for an extension from Guadala-
jara to the Isthmus of Tehuantepec, through concessions ob-
tained from the states of Jalisco, Michoacan, and Oaxaca.*
Branch lines have been constructed from Quila to El
Dorado in Sinaloa and from Navajoa to Alamos and from
Corral to Tonichi in Sonora, the last designed to connect
ultimately with the original line of the Cananea, Yaqui River,
and Pacific. The only connection now between the two parts
of the system is through a branch that has been constructed
from Nogales to Del Rio.'
•Verdugo, XLI, pt. 2:255-68; •'Chronicle," XCI, 1770 (1910).
* "South American Journal," LXVI, 150 (1909).
» "Ohronicle." LXIV, 609, LXV, 518 (1897) LXVn, 642 (1898), LXXXI,
1736 (1905), XOVI, 568 (1913); "Railroad Gazette," XLII, 458-9 (1907);
"Railway Age," XLTV, 802-3 (1907); Tays, The new railroad for the west
coast of Mexico, "Engineering and Mining Journal," LXXXI, 661-3(1906).
[162]
CHAPTER XXIV
MINOR LINES
THERE are many short lines in Mexico concerning which
little is known. Some of them are of only local impor-
tance, some are vestiges of projects that failed, and some are
elongated spurs which have been built to serve particular
industries. Their importance cannot be measured by their
mileage ; for some of them undoubtedly will serve as the basis
of more ambitious projects as the country develops, and
many of them provide the means for getting to market the
products of the rich mines with which the country abounds.
Not only is there little available information about these
small railroads, but such information as we have is generally
conflicting. Their concessions, of course, are matters of
official record, but one who would attempt to prepare a com-
plete and accurate statement as to the identity of their
builders, the history of their construction, their cost, capi-
talization, investment returns, or even their mileage, would
soon find that his efforts might well be directed to more im-
portant and productive fields of research.
One of these lines is the Mexican Northern (Ftrrocarril
Mexicano del Norte), standard gauge, which was opened in
1891 between Escalon (Chihuahua), on the main line of the
Mexican Central, and the mining camp of Sierra Mojada
(Coahuila). The company was incorporated in New York
in 1890 by Robert S. Towne, George Foster Peabody, and
associates, and its concession was granted March 20, 1890.
The line is operated under lease by the American Metals
[163]
THE RAILROADS OF MEXICO
Company. It promises to become more important with the
opening of the new extension of the National Railways from
Cuatro Cienegas to Sierra Mojada.
Another short line is the Nacozari railroad {Ferrocarril de
Nacozari)y the Mexican extension of the El Paso and South
Western from Agua Prieta to Nacozari (Sonora). It was
built in 1901 under a concession dated August 30, 1899, and
it is owned by the Phelps, Dodge mining interests. In time
it may be connected with the branch of the Southern Pacific
which now stops at Tonichi.
The Parral and Durango {Ferrocarril Parral y Durango),
incorporated in Colorado in 1898, owns a standard gauge line
from Minas Nuevas (Chihuahua), to Paraje Seco (Durango) '
built under a concession granted June 29, 1898. From Rincon
there is a narrow gauge branch to Parral, where connection is
made with the Parral branch of the old Mexican Central.
The Potosi and Rio Verde (Ferrocarril Potosi y Bio Verde) y
narrow gauge, was built from San Luis Potosi to Ahuacatal
in 1899-1902 by a company incorporated in New York in
1888 to operate under a concession granted November 4,
1886. It is owned by the Compania Metalurgia Mexicam^a, an
American corporation.
Little has found its way into print concerning the Coahuila
and Zacatecas railway {Ferrocarril Coahuila y Zacatecds),
which is a narrow-gauge line, built 1900-1, between Saltillo
and a mining camp at Concepcion del Oro. It is owned out-
right by the Mazapil Copper company, a British close cor-
poration, and its afifairs are without interest to outsiders.^
^ For information, generally fragmentary, on these and other minor lines,
see: Martin. Railways of Mexico, "Railway New8,'» LXXXV, 819-20, LXXXVI,
122-3 (1906) ; Bntman, Report on trade conditions in Mexico, 20-1 (1908) ;
Mexican year book, 1914:44-58.
[164]
PART III
CHAPTER XXV
RELATIONS WITH THE GOVERNMENT
TO understand the Mexican concession one must put out
of mind assumptions based upon the English system of
law. Mexican law is Spanish in origin, and Spanish legal
institutions are an inheritance from ancient Rome. In the
United States when the public authority grants a charter for
the construction and operation of a railroad over private
land to be condemned for the purpose, it neither acquires nor
retains any proprietary interest in the easement. In Mexico
a railroad concessionnaire receives what is in effect a lease,
for a definite term of years, of the line which he proposes to
build, largely or wholly out of private funds ; and the public
authority in the end automatically assumes proprietorship
over all fixed properties and an option upon those of a move-
able nature.
One analogy in the English law is the terminable leasehold
system, which is common in London and not unknown in
some of the older American cities; but the analogy is im-
perfect, for the ground rent comes within the scope of pri-
vate law. Another is the franchise granted to the builders
of certain public utilities in the United States, such as the
subways in the City of New York.
A concession is not a corporate charter ; nor is it a grant
of funds or other public property. It is rather a contract
providing for undertakings by both parties, and conferring
certain benefits and imposing certain obligations. Its terms,
within limits which may be prescribed by statute, are matters
[167]
THE RAILROADS OF MEXICO
for negotiation and agreement; and they are subject to
modification only as agreed upon by the contracting parties
or their successors.
The motive underlying the granting of a concession is to
promote economic development by encouraging the introduc-
tion of new industries, by fostering colonizing and agricul-
tural enterprises, by facilitating the opening of new ways of
communication and transportation, and by authorizing the
exploitation of natural resources in a manner conducive to
the public welfare.
An enterprise that is not concerned with the public service
may, and many do, operate without a concession ; but a rail-
road as a public utility cannot be built or operated without
one. Railroad concessions have been granted in Mexico by
state as well as national authority, but as only a single line
— the Hidalgo — ^has developed beyond local importance un-
der a state concession, such concessions need not be con-
sidered here.
The benefits derived, or at least anticipated, from a con-
cession, are mutual, and the obligations are reciprocal. This
becomes apparent upon examination of the documents them-
selves. These concessions have varied in their general terms,
but as the system has developed the tendency has been
toward uniformity; and this tendency has been accelerated
through general legislation. As to their detailed terms, of
course, there has always been great variety.
A Mexican railroad concession confers upon the recipient
or his assigns authority to condemn private property and to
locate, build, and operate a railroad and telegraph line over
a certain route, and to fix rates for various classes of service
within the prescribed limits. It exempts from customs duties,
materials brought into the country for purposes of construc-
[168]
RELATIONS WITH THE GOVERNMENT
tion and equipment within a period of five to twenty-five
years; and it exempts the property and capital of the con-
cessionnaire from all direct taxes for a period generally of
fifteen years. It may, and almost invariably does, provide
for a subsidy.
On the other hand, the concession reserves to the nation
certain rights and imposes certain limits and obligations
upon the concessionnaire. Among the rights commonly
reserved are : to the transportation at reduced rates — ^usually
one-half — of government employees on official business, of
colonists and immigrants, of military forces with their sup-
plies, munitions, ordinance, and equipment, and of articles
to be used in the public service ; to free transportation of the
mails and of postal employees ; to run government telegraph,
and sometimes telephone, wires upon the fixtures erected by
the concessionnaires ; to assume direct operation of the line
and to take over the personnel when in the opinion of the
national authorities the public safety requires, subject to
proper indemnification; and to suspend service or to render
the property unserviceable in the event of war or other
extraordinary circumstance, subject to indemnification or
replacement. Most important of all is the right to assume
full title to all fixed properties at the expiration of the
concession, the term of which is forty to ninety-nine years.
Corporations may be organized in foreign countries to
operate railroads, but they must be considered as wholly
Mexican and subject to Mexican law alone ; and no foreign
government may acquire an interest in any concession or in
any mortgage, share, or property subject thereto. Many of
the older concessions provided that the national government
should have representation upon the boards of directors of
concessionnaire corporations, and some of them restricted
[169]
THE BAILROABS OF MEXICO
the ownership of property within a certain distance from
the national boundaries. Others required the construction
of non-railroad properties for government use.
As summarized above, it would appear that the terms of
these concessions greatly favored the nation, — ^particularly
in view of the fact that Latin peoples are disposed to insist
upon a strict interpretation and rigid enforcement of written
agreements. The necessary equilibrium was maintained,
however, through the grants of subsidies, without which,
Mexicans themselves agree, few railroads of importance
would have been built.
Subsidies have been granted to practically all Mexican
railroads, the Mexican International, the Mexican Northern,
and the Southern Pacific being the only important excep-
tions. They have been paid in .cash, in securities, and in
customs certificates; and they have been generally figured
on a mileage basis, with reference to difficulty of construc-
tion or national importance, although the Mexican railway
received a fixed sum per annum. The proportion of the
subsidy to the total cost has varied from one-third to two-
thirds, the former being more nearly representative. In the
case of the unsubsidized railroads, the terms of the conces-
sions were made more liberal so that an equitable balance of
benefit might be maintained.
Altogether, Mexico has paid out over 100,000,000 pesos in
the form of railroad subsidies, not counting the 45,000,000
pesos granted in aid of the Tehuantepec, which is now na-
tionl property. The history of these subsidies has yet to be
written as a part of the financial history of Mexico itself.
It will not be attempted here. For the purpose of this dis-
cussion it is enough to say that subsidies were promised in
excess of the financial capacity of the national treasury, that
[170]
RELATIONS WITH THE GOVERNMENT
payments have been too generally delayed and sometimes
suspended, and that some of the larger grants have been
compromised as a matter of necessity. On the whole, how-
ever, the record of Mexico in the matter of meeting subsidy
claims is a creditable one, considering the extent of its other
obligations and the pioneer nature of the work which it
undertook to aid.
Government control of railroads has been the policy in
Mexico from the beginning. The period from 1837 to 1880
was one of special legislation, the respective rights of the
nation (or state) and the concessionnaires being set forth
in detail in the concessions. During this period concessions
were granted, but only a single important line — the Mexican
railway — ^was brought to completion.
In 1880 the period of general legislation was inaugurated.
On June 1 of that year an act was passed ''Authorizing the
president to amend contracts made for the construction of
interoceanic and international railroads." In this act an
attempt was made to establish a consistent principle which
should govern all future concessions to be granted by the
national government for the construction and operation of
railroads. This was the principle of standardization, set
forth in terms of maximum conditions. The most important
provisions of this act were : that the term of a concession should
not exceed 99 years, and upon the expiration of that con-
cession the title to all fixed property should pass to the nation ;
that the conditions of existing concessions should be observed
until modified by mutual consent, provided no modifications
should be made except such as would redound to the benefit
of the nation ; that sufficient guarantees as to the reliability of
persons seeking concessions should be required; that certain
maximum rates for freight and passenger traffic should be
[171]
THE RAILROADS OF MEXICO
fixed ; that rates should be subject to revision at intervals of
five years, and that rebates should be forbidden; that mails
should be carried free of charge; that all concessionnaire
companies should be deemed Mexican as to nationality; that
the method of payment of subsidies should be left to the
executive; that the states should retain all rights hitherto
acquired through any railroad concessions which they may
have granted; that concessionnaire companies should take
advantage of lines already built wherever possible ; and that in
case of forfeiture of a concession, the title to the fixed property
should pass to the nation free of encumbrance and at a valua-
tion to be determined by appraisers named by the parties in
interest/
Next came the act of December 16, 1881, which for the first
time defined the term ** general means of communication'', as
used in the constitution of 1857, as applying to ' * all railroads,
telegraph and telephone lines in the Federal district and the
Territory of Lower California ; those connecting two or more
states ; and those touching any port situated on the boundaries
of the Republic." These, it was declared, should be subject
exclusively to the national government in all matters relating
to taxation ; enforcement of terms of concession and national
laws; forfeiture; expropriation; rates; general service regu-
lations; construction and repairs; safety; accidents; national
contraband; interference with mail service; and liens.*
Railroad affairs were at first under the jurisdiction of the
Department of FomentOy and as early as 1877 the office of
Inspector of Railroads was created in this department. To
this department was entrusted the duty of formulating the
1 Dublan, "Legislacion Mexicana," XIV. 273; Fomento, '•Legislacion,"
III, no. 495; IV, nos. 741. 765; Robinson, The railroads of Mexico, "Railroad
Gazette," XLIII, 233 (1907).
* Nufiez, "Instituciones de credito," 197-200.
[172] _ .
RELATIONS WITH THE GOVERNMENT
rules and regulations to govern the operation and service of
railroads and the matter of inspection. With the develop-
ment of the country and of the system of national transporta-
tion, a new Department of Communications and Public Works
was created on May 13, 1891, and to it was assigned jurisdic-
tion in the matter of mails, telegraphs, telephones, railroads,
water transportation, ports, highways, and other subjects with
which this study is not concerned.
Through this department the government almost at once
began to exercise a more conservative and restrictive policy in
the matter of granting railroad concessions. This was largely
due to the growing power of Jose Y. Limantour, who in
1892-93, became secretary of the Department of Finance, and
as such became the dominant member of the Diaz government
and the initiator of its policies. The new attitude was not
stated in express terms, however, until September 8, 1898,
when Limantour presented to the President a special report on
the relations of the government to the railroads. ''Interesting
from every standpoint was this document'', says Macedo,
''which marks the precise moment in our railroad history in
which we paused to consider the ground covered, the methods
which we had employed, and above* all what was left to be
done and how to do it within the scope of a well defined
national plan.'"
In his report Limantour pointed out the necessity of modify-
ing the government's practice in the matter of concessions and
subsidies to the end that the financial strength of the nation
might be conserved and that lines to be authorized should be
only such as would round out the transportation routes of the
country into a great system designed to serve the country as
a whole rather than to promote purely local or special interests.
• Macedo, "La eyolucion mercantil, " 207 (1905).
[173]
THE RAILROADS OF MEXICO
He then proceeded to specify those routes over which construc-
tion should be encouraged and to emphasize the need for the
explicit definition of the respective rights of the government
and the concessionnaire.*
To make this plan effective Congress on December 17, 1898,
authorized the president to issue a decree subject to conditions
which it specified to the extent of 37 articles. The result
was a voluminous act of 187 articles divided into fourteen
chapters containing detailed provisions governing: Classifica-
tion of railroads; concessions; forfeiture of concessions;
nationality and legal status; franchises and exemptions;
reconnoissance and construction; operation; rights reserved
to the nation ; government inspection ; concessions prior to the
law ; port works ; penal responsibility ; jurisdiction over rail-
roads; and general enactments. This was issued by decree
under date of April 29, 1899.'
Among the notable provisions of this law are : the specifica-
tion of ** routes of prime importance'' over which no Railroad
lines had yet been built (Art.6) ; the limitation on the con-
struction of parallel lines (Art. 29) ; the limitation of sub-
sidies to lines built along routes of prime importance (Art.
77) ; and the granting of the privilege of 'Spooling'' traffic and
earnings (Art. 114).'
The execution of the railroad law was entrusted to the
* Secretaria de Hacienda, "Memoria," 1898-9 :401-15; Macedo, 208-23;
Diaz Dufoo, "Limantour," 129 (1910).
t <
B "Diario Oficial," no. 12, May 13, 1899; Secretaria de Oomunicaciones,
Ley sobre f errocarriles, " Mexico, 1905, 61_p. Nufiez, 255-337; Dublan, XXXI,
89-122; Verdugo, "Ooleccion legislativa, ' * XXXI, pt. 1:709-57; English text:
Mexican year book, 1908:653-85, and 1909-10:331-64; French text: "Annales
des Fonts et Ohauss6es," 2e Partie: "Lois decr6ts," etc., Paris, 1901, (8e
serie) I, 550-69, 644-72.
•See Gonzalez Roa, "El problema ferrocarrilero,** 35-40 (1915); Robin-
son, Railroad regulation by law in Mexico, "Engineering News," LVI, 242-3
(1906), also The railroads of Mexico, "Railroad Gazette," XUII, 233 (1907).
RELATIONS WITH THE GOVERNMENT
Department of Comnninieations and Public Works. To advise
it in the matter of railroad rates a revisory Tariff Commission
was created on January 1, 1900. This conunission consisted of
a president and four other regular members, nominated by the
department, all with private occupations, two representatives
of the railroads, one representative of the associated chambers
of conunerce, and one representative of the agricultural soci-
eties. Daily meetings were held in the City of Mexico, and
questions referred by the Department of Communications
were considered and acted upon, only the regular members
being allowed to vote. The plan appears to have worked
smoothly under stable conditions of government, and the
recommendations of the commission were almost invariably
followed by the Department.''
In Mexico as in the United States it was found that the
tendency toward railroad consolidation created new problems.
Here the problem was complicated by the fear that foreign
interests would become predominant in the country through
the acquisition of control of the shares of its railroads. The
lines to the north — ^the Mexican National and the Mexican
Central — ^were in the control of rival American interests led by
the house of Speyer and H. Clay Pierce, and each endeavored
to spread out to strategic points and to absorb smaller lines.
To Limantour's mind this situation could have but one result;
the rivals would compose their differences and enter into
agreements which might be prejudicial to the welfare of the
country. Says his biographer :
* * It was necessary to bear in mind, that though the railroad
7 Barker, Mexican railroads and railroad traffic, * 'Railroad Gazette," XLI,
264 (1906); Martin. Mexico of the twentieth century, I, 267 (1907); Mexican
year book, 1914:43; "Railway Age Gazette," XLVII, 8 (1909); "South
American Journal," LXII, 596 (1907). See also Oamara de Oomercio y la
Sociadad Agricola Mexicana^ "Estudio sobre el estado economico de los fer-
rocarriles Mexicanas." 76 p. (1900); also "Economista Mexicana," XXX, 213
(1900), XXXIV, 868-9 (1902).
[175]
THE RAILROADS OF MEXICO
rates might seem high to the public, they had not yet reached
the maximum indicated by the concessions. Until then the
fear of an increase had been prevented by the balance result-
ing from the diversity of interests. Would the same thing
occur when there was only one interest? In such a case the
Government and the public wotild be subject to a power exer-
cised by an insurmountable authority over all the sources of
public wealth.'"
The action taken was to buy securities that would give the
government a voice, and ultimately a controlling voice, in the
management. One of the rival lines — ^the Mexican National —
desired an outlet to the Gulf. This could have been effected
through acquiring control of the Interoceanic. Limantour in
1903 forestalled this by getting control of the Interoceanic
through successful open bidding for a new issue of its securi-
ties. He then came to terms with the National interests in an
agreement which gave to the National its desired control of the
Interoceanic but gave to the government control of the Na-
tional. At the same time the National received a territorial
monopoly in the North which effectually prevented the Mexi-
can Central from building a short line extension from its
main line toward the northeast which would have intensified
the competition for through traflSic'
In 1906 the Mexican Central was in financial need, and a
change of control seemed imminent. Limantour entered into
negotiations with the company and acquired a controlling
interest in its shares The next step was the organization of
the National Railways of Mexico, a gigantic operating com-
s Diaz Dufoo, 129.
* Mexican year book, 1908:848-51; Didapp, *'Explotadore8 politicos de
Mexico," 450-92 (1904).
[176]
RELATIONS WITH THE GOVERNMENT
pany in which the nation held a majority interest. The new
company began operations in 1909/°
Although much has been written of the great merger, there
is much about the deal that is still unknown to anyone except
those who were immediately concerned. Bankers are not
given to loquacity ; Limantour, now in retirement in France,
maintains his own counsel, and his former political and finan-
cial associates are spattered. Whatever the merits in the case,
the National Railways had but two years of normal existence
before the revolution broke out, and any conclusions based
upon the experience of the system would be of little value.
Viewed solely in its larger aspects the merger has been highly
commended by Mr. William M. Acworth, the British railroad
authority who says :
*^I believe the relation between the State and the national
railways is one of the most difficult and important questions
of modem politics, and that the one valuable and original con-
tribution to that question which has been made in the present
generation is due to the President of the Mexican Republic
and his Finance Minister, Senor Limantour. . . .
^^ Whereas under the old system the final appeal was to a
body of shareholders with no interests beyond their own divi-
^^ Secretaria de Hacienda, "Informe sobre ... Is consolidacion de los
Ferrocarriles Nacional de Mexico y Central Mexicano" Mexico, 1908. 152 p.;
same in "Memoria,*' 1907-8:490-528. English text of the report: *'The rail-
way merger,'* translated by L. 0. Simonds, Mexico, 1908, 39 p.; of the first
three appendices: Mexican year book, 1908:693-706. The remaining seven ap-
pendices contain the text of the agreement with the banking houses and a
variety of statistical material.
The best account of the merger in English appears in the Mexican year
book, 1908:689-714. See also Bell, The political shame of Mexico, 3-5, 8-18
(1914); Starr, Mexico and the United States, 222-3, 229, 249-51 (1914); Diaz
Dufoo, "Limantour," 129-37 (1910); Osterheld, History of the nationalization
of the railroads of Mexico, "Journal of the American Bankers' Association,"
VIII, 997-1003 (1916); Speare, The finances of Mexico, "American Review of
Reviews," XXXIX, 722, 725-6 (1909); U. S. Department of War, Monograph
on Mexico, 158-63 (1914); "Economist," LXV, 12, 453-4 (1907), LXXI,
1125-6 (1910); "Railroad Gazette," XLIII, 56-7 (1909); "South American
Journal," LXII, 38, LXIII, 448, 534 (1907), LXIV, 434, 502 (1908), LXVI.
21 (1909); "Statist," LXI, 715-6 (1908), LXIII, 1121-2 (1909).
[177]
THE RAILROADS OF MEXICO
dend, the majority shareholder is now the (Jovemment of
Mexico, with every inducement to regard the interests, both
present and prospective, of the country as a whole. . . .
*^ Faced with a powerful but local and temporary demand,
the Government may be able to reply that this is a matter to
be dealt with on commercial lines by the board of directors.
If, on the other hand, permanent national interests are in-
volved, the Government can exercise its reserve power as a
shareholder, can vote the directors out of office, and so prevent
the continuance of a policy which would in its judgment be
prejudicial to those interests, however much it might be to the
advantage of the railway as a mere commercial concern. ''^^
The government has not failed to ''exercise its reserve
power'' to change the personnel of the board of directors. One
of the aims of President Madero was to rid the National Rail-
ways of directors representing interests friendly to the Diaz
regime, and this was accomplished.^* His successors have
acted likewise, and the personnel has shifted materially during
recent years. ^*
That representative Mexicans are themselves dissatisfied
with the present working of the railroad law is evident fi:t)m
the transactions of the First National Congress of Merchants,
held in July, 1917. The following excerpts indicate the
nature of the reforms proposed :
''The railroad service at present does not answer the needs
of the public. The law on railroads, Article 153 whereof pro-
vides for the offijce of representative inspectors and lays down
11 Acworth, The relation of railways to the state, British Assoc, for the
Advancement of Science, "Report," 1908: LXXVIII, 777-8.
i« U. S. Senate Committee on Foreign Relations, Hearings before a sub-
committee ... to investigate whether any interests in the United States have
been or are now engaged in inciting rebellion in Cuba and Mexico, 746-85
(1913).
i» ••Chronicle," XCIX, 816 (1914).
[178]
RELATIONS WITH THE GOVERNMENT
the duties thereof, should again be enforced with all due
severity. The Department of Industry and Commerce always
possesses the best statistical data and it is in a position to know
at any time whether a given section of the country is becoming
enfamished or prosperous in consequence of the railroad
tariffs. Thus it behooves this Department closely to watch
the conduct of railroad affairs, and great advantage would be
derived from the Department's assuming of functions pre-
scribed under the above mentioned article. If the employees
know that the Government is watching their every act, irregu-
larities will cease or at least diminish very considerably. More-
over, all the duties imposed on the representative inspectors
would be discharged to great advantage by this Department
because, for special reasons, it would be in a much better
position than anybody else to investigate as to the damages
thereby occasioned. In England, France and the United States
the railroads are subject to offices similar to our Department
of Industry' and Commerce. For this reason it would be ad-
visable to establish in this Department a railroad section under
an Executive Board, a committee for the revision of tariffs,
contracts, agreements, etc.; a section for inspectors; another
for statistics; and another for advisory, for claims and com-
plaints.
**The Executive Board of the railroad section should be
made up of ^even persons, three of whom should represent the
Department of Industry and Commerce, two the railroads, and
two to be appointed by the assembly of Chambers of industry
and commerce. . . .
**In Mexico the railroads have not cooperated in the advance-
ment of our commerce; they have established their tariffs
under the protection of benevolent administrations to the
benefit of North American commercial firms. The Tariff Com-
[179]
THE RAILROABS OF MEXICO
mission in the Department of Communications and Public
Works does not fulfill its purpose ; it ought to work systematic-
ally and independently and it should constantly be given com-
plete statistical information which only the Department of
Industry and Commerce is in a position to furnish. It is only
through intimate contact with the varying needs of our com-
merce that matters relating to tariffs can be governed to the
real benefit of our national interests. The Commission, more-
over, should not be solely an advisory body, but it should be
vested with certain executive powers. Such a commission
(composed, if it be so desired, of five members. ... to repre-
sent commerce, industry, agriculture and other sources of
public wealth) should also be able to count upon a competent
body of inspectors and supervisors. The railroad service would
greatly improve, and what in normal times is only one of so
many necessities, under prevailing conditions constitutes a
most pressing one
^* Politics in Mexico, as in all countries, have always done
great injury to the railroad service. With us the Government
is the principal shareholder, but the Boards of Directors op-
erate independently. Unfortunately foreigners are not ex-
cluded from the personnel of the railroads, which need a very
thorough cleaning out. Our railroad legislation is wise and
clearly defines the intervention of the State. To begin with it
is absolutely necessary to inspect the acts of the railroad
Executive Board, which is at present not responsible for its
acts and renders no accounts to the Q-ovemment, and as a
matter of fact is altogether independent. Its present manage-
ment may cause our public debt to increase very considerably.
Nor is this Executive Board of the National Lines even sub-
ject to the limitations which are imposed upon private com-
panies. It is therefore necessary that the Department of
[i8o]
RELATIONS WITH THE GOVERNMENT
Communications should keep a strict watch on its work ; that
the Finance Department should inspect all its acts as is done
in all other offices that handle public funds ; and finally that
the Department of Industry and Commerce should prevent
arbitrary alterations in the tariffs and remedy the very grave
deficiencies to be found in the matter of freight. . . .
''In order to promote commerce and to facilitate the trans-
portation of merchandise, it would be well to establish a
'Technical Freight Office' to serve as an intermediary be-
tween merchants and the railroad compaaies; to furnish all
kinds of information, statistical data, etc., to the public, all of
which would tend to simplify and to expedite the purchase
and sale of merchandise ; to endeavor to obtain from the high
railroad officers a consistent equitable attitude, especially in
the matter of contracts for cars; to organize an 'Association
of Railroad Train and Car Owners'; and finally to concern
itself particularly with the matter of car shortage which is
now so seriously interfering with commercial transactions.
"The authors of this project undertake to organize such an
office, and they believe that the reorganization of the Revisory
Tariff Commission under the jurisdiction of the Department
of Industry and Commerce is a matter that is most urgently
needed.
"This Tariff Commission could at once consider the uniform
bills of lading ; the revision of the stipulations of such bills ; the
elimination of the note, now to be found on all receipts issued,
which nullifies the rights of the merchants against the com-
pany ; the reorganization of the express departments so as to
reform the methods followed in those offices and to prescribe
more equitable regulations with reference to freight, tariffs,
the classification of goods, etc. ; and the elimination of certain
[I8i]
THE RAILROADS OP MEXICO
unjust stipulations to be found at the foot of bills of expenses,
etc.""
Only one of these proposals was formally endorsed by the
Congress, the text of the resolution being as follows :
^^ Resolved: that the First National Congress of Merchants
ask the Supreme Government of the Republic to be pleased to
consider the following project when the law on railroads is
amended :
**A branch railroad department shall be established within
the Department of Industry and Commerce, having the fol-
lowing dependencies:
**A. — ^An Executive Board composed of seven members:
three to be appointed by the Diepartment itself; two represent-
ing the railroads, to be appointed by the latter; and two to be
. appointed by this Assembly, to represent industry and com-
merce.
**B. — ^A revisory committee on tariffs, contracts, agreements,
etc.
**C. — ^A section for inspectors.
* * D. — ^A section for statistics.
**E. — ^An advisory section for claims and complaints.
**The foregoing to be established without detriment to the
Department of Industry and Commerce giving the whole a
better organization, should it deem it advisable.""
Further evidence as to the existence of a general belief that
some remedial measures are desirable is furnished by the fact
that the secretary of the Department of Communications and
^^ First National Congress of Merchants, Snmmary of transactions and pro*
ceedings, 1917:98-9, 102-8, 104.
^^Ibid., 189-40.
[183]
RELATIONS WITH THE GOVERNMENT
Public Works in 1917 appointed a commission to consider the
revision of existing railroad laws and regulations/*
A railroad policy, thereforie, is still in process of develop-
ment in Mexico; but compared with the U^ited States, Mexico
has the better record in this particular, partly because it has
been able to profit from our experience.
There is no evidence that President Jaurez had any railroad
policy. He lived in a time of internal strife and of foreign
invasion, and his attention was necessarily devoted to such
matters. As to the attitude of his successor, Lerdo de Tejada,
there is disputed testimony. His detractors have attributed
to him the words ** Between strength and weakness let us
maintain the desert"; and this had been accepted as the epi-
tome of his attitude toward railroad communication with the
United States. But Pablo Macedo, a Diaz proponent, who
quotes this slogan, admits that there is doubt as to its authen-
ticity.^^
If there is such a thing as the **Diaz myth", of which
revolutionary writers tell us, it is the fanciful belief that from
the first, Diaz pursued a consistent railroad policy. Nothing
could be further from the truth. Diaz' railroad policy
changed from time to time, but it always indicated the facts
as he understood them. It developed as he himself developed
as a man and as a statesman. It changed when a new array of
facts was presented to him, — ^and it brought railroads to
Mexico.
Lerdo 's most vehement critic was Vicente Riva Palacio,
who has some standing as a historian. Riva Palacio wrote a
whole book on the administration of Lerdo ; but since this book
was written on the eve of the Diaz revolution by a man who
!• ••Mexican Review," Sept. 1917:16.
^7 Macedo, 199-200.
[i83]
THE RAILROADS OF MEXICO
was soon to sit in Diaz' cabinet, it must be considered as a
revolutionary tract, valuable less for what it says than for what
it indicates.
Reference is made in this book to an address of Lerdo's on
December 16, 1873, in which he speaks of * * the great benefits
to be derived from placing the Republic in close touch with
the United States.'' The sincerity of this statement is not
challenged, but for an earlier reference to the action on the
Plumb contract of May 29, 1873, the President is roughly
handled :
* * The President likewise in his speech of May 31, spoke of a
railroad propect already submitted to Congress, and action on
this project, as we have already seen, consisted solely in re-
jecting openly the plan of the Union Contract Company,
which offered all kinds of guarantees in order to accept ap-
parently that of the Texas railroad company, and have Con-
gress afterwards reject it; thus demonstrating that it is a
common thing in Mr. Lerdo to belie with his acts his most
flattering promises. "^*
Such charges are hard to prove. If this one be accepted on
circumstantial grounds what is to be said of the rejection of
the Palmer-Sullivan contract of November 12, 1877 ? Did this
action similarly reflect the attitude of the president — ^who was
then none other than Porfirio Diaz?
As to the other charge, reiterated at intervals throughout
the book, to the effect that Lerdo was personally interested
in the various enterprises projected by the Mexican railway
interests,** this may or may not be true. What is certain is
the fact that the English interests in control of the Mexican
^B Biva Palacio, "Historia de la administracion de Don Sebastian Lerdo de
Tejada," 295, 316 (1875).
i»Ibid., 102-12, 159, 168, 816-86, 44250, 461-4, 480-1.
[184]
RELATIONS WITH THE GOVERNMENT
railway got into very close touch with the Lerdo administra-
tion, so close that upon its downfall they lost heavily, and, in
the absence of a British minister, appealed to John W. Foster
for protection. In fact, one of the causes of the Diaz revolu-
ton was this very alliance.
Fernando Gonzales Roa, the most recent writer on Mexican
railroads, tells us of the first Diaz railroad policy, which, it
appears, was rather the policy of Riva Palacio.
* * The Secretary of Fomento, Don Vicente Riva Palacio, was
the first director of the railroad policy. It was his plan to
grant concessions to the governments of the several states,
extensive and liberal in terms, with the idea of promoting the
construction and development of a single great system. It is
to be supposed that General Riva Palacio advocated this policy
in order to enlist the influence of capitalists and local poli-
ticians, and to avoid distrust of our northern neighbors, in
the belief that the concessions would be financed by Mexican
capital. . . . This policy of Minister Riva Palacio, designed
as it was to solve the problem of railroad communication
through the creation of small lines, naturally suffered from
lack of coherence. The small companies had to disappear, and
thus it was that out of 222 concessions granted up to December
31, 1899, 135 were abandoned or declared forfeited, and among
these there remained only about a dozen important enter-
* ) 910
prises.
Thus the policy of Riva Palacio cannot be said to have been
conducive to railroad building on a large scale. In fact, it
prevented the giving of proper consideration to worthy pro-
jects which were being advocated by men who later demon-
strated their ability to carry them out. It was abandoned, as
we have seen, in the last year of Diaz' first term.
>o Gonzales Roa, 18-9. See also Macedo, 201-2.
THE RAILROADS OF MEXICO
Manuel Gonzales, who served as President from 1880 to
1884, had for his secretary of Fomento, Carlos Paeheco, who,
according to Gonzale Roa, *' Promoted the construction of
railroads with feverish enthusiam. The aim of his railroad
policy was to solve the railroad problem for the nation and
not for the states, inviting the foreigners to invest capital in
Mexican lines, and aiding them by subsidies.'"^
This was the policy of the second Diaz administration, and
it was modified only when Diaz, in the nineties under the in-
fluence of Limantour, decided that the time had come for
intensive rather than extensive development, — ^a policy em-
bodied in the railroad law of 1899.
That there were abuses under the early Diaz regime, as there
had been during the administration of Lerdo, we know from
the reports of men in Mexico at the time. Says one :
**The matter of granting railroad charters is by no means
new. They have been granted for thirty years or so, to
Europeans and natives, who did little or nothing with them.
It was only when under the adoption of a more enlightened
policy, they came to be granted to Americans, that the roads
were built and the charters had a value. At once everybody
who prided himself upon the necessary influence began to
desire a charter also. He might not want to use it at once,
but he could keep it and see what turn things were to take.
Or he might transfer it to some powerful ownership to which it
would be worth a consideration. This new ownership, too,
might wait to see what was likely to happen. If railways
promised to be profitable in the country, it was well for certain
great corporations in the United States to have their feeders
for extensions there ; at any rate, they could keep others from
the field till they should be satisfied of its character.
'^Gonzales, Roa, 19. See also Romero, Mexico and the United States,
117-9 (1898).
RELATIONS WITH THE GOVERNMENT
*'It is in this way, I surmise, that some of the present
franchises have been got, and are reflectively held. There have
been henchmen to procure them and then turn them over to
patrons, who wait a while before going to work, trusting to
influence to procure the proper extensions of time if needed.
* * Stories were afloat of practices employed in the obtaining
of concessions and subsidies, which I should prefer to believe
falsifications. I heard one or two of these, it is true, from
somewhat inside sources, and such practices are not unknown
elsewhere.""
As has been shown in a previous chapter, John "W. Foster,
who was witness to the events of this early period and familiar
with the persons involved, was far from hopeful as to the
outlook. This he showed not only in his epoch making * ' Trade
with Mexico" letter, but in such of his despatches to Washing-
ton as were printed in the ** Foreign Relations."
Many years later he wrote in a different spirit :
'*In spite of all our prognostications as to commercial
matters, based upon the past and then existing conditions.
President Diaz was able, through his successful administration
of affairs to accomplish that which at that time seemed hope-
less. He gave the country a long era of peace and order. He
forced Congress to grant liberal concessions for railroads
connecting with the United States. He established protection
and security to life and property. He restored public con-
fidence. He brought about a great development of the re-
sources of the country. Under his regime, commerce, internal
and foreign, flourished beyond the dreams of the most hope-
ful.""
Whatever may have been the shortcomings of Diaz as an
"Bishop, Old Mexico, 70-1 (1888).
' ' Foster, Diplomatic memoirs, I, 116.
[187]
THE RAILROADS OP MEXICO
administrator, through the development of a one-man poorer
under the guise of a democracy, there can be little doubt that
he will be remembered for his part in creation of Mexico's
railroad system.
[i88]
CHAPTER XXVI
EESULTS, POLITICAL AND ECONOMIC
A GREAT deal of nonsense has been written about the
effect of railroads upon the development of Mexico,
particularly by those who were unable to see anything but good
in the Diaz regime. Thus we were told that **The introduction
of railways into Mexico has roused the people from their
centuries of lethargy;''^ and that **In Mexico the railroad
has wrought a marvelous transformation in the social and
material aspect of the republic."* And Pablo Macedo de-
clared :
*'At the strident whistle of the locomotive crossing many
parts of its territory, the nation has awakened from its long
sleep. "Wealth formerly beyond the reach of human hands
has been made possible of exploitation. Veritable deserts
have been made fertile through labor, and, in a word, the
activity and warmth characteristic of healthy organisms
have been diffused throughout the country. Not in vain do
we children of this soil say that with the railroads were we
born into the life of civilized nations.'"
Such statements ignore the fact that a nation is as civilized
as its people, and that in modem times a country can develop
stable institutions only as it is able to raise the standards
of the people. The population of Mexico is made up largely
of Indians and of persons of mixed blood, and within recent
^Howell, Mexico, 75 (1892).
'Bancroft, Resources and development of Mexico, 95 (1898).
> Macedo, "La Evolucion mercantil," 228 (1902).
THE RAILROADS OP MEXICO
years immigration has been negligible. As a result stand-
ards of living are low, productive methods and equipment
generally are primitive, and individual wants are few. The
percentage of illiteracy is extremely high, and the facilities
for instruction inadequate. To raise the level of the people
will require much time, whether this be done through the
provision of better educational and economic opportunities
or through the encouragement of immigrants of a more ad-
vanced type. Failure to give proper attention to the needs
of the common people was one of the chief causes of the
downfall of Diaz.
Mexico, before the coming of the railroad, was a country
of large individual land holdings and of most uneven dis-
tribution of wealth; and such it is to-day. The owners of
land generally have not been disposed to sell, nor have they
actively concerned themselves with the introduction of more
intensive methods. If they have raised wages or improved
working conditions it has usually been to meet the better
terms offered by foreign interests, brought in because of the
railroads.
Nevertheless, one of the greatest changes wrought by the
railroad has been in agricultural development. It has put
new lands under cultivation and has broken down the bar-
riers between producer and consumer. It has reduced the
frequency and intensity of famines, and it has tended to
reduce prices of necessities to a more common level. By
providing markets, it has stimulated the introduction of
better equipment and machinery for harvesting; but it has
done little, nor could it have done much, to overcome the
reluctance of the laborer to adopt new facilities for working
the soil and planting.
Commerce, both domestic and foreign, has been increased
[190]
RESULTS, POLITICAL AND ECONOMIC
by the advent of the railroad, but there was comparatively
little at the outset, so an increase was to have been expected.
Communities, shut in by mountain barriers and connected
only by primitive roads, have been relieved from isolation,
and trading relations have followed as a matter of course.
Much was expected of the railroads connecting Mexico with
the United States, but it is significant that while the United
States is Mexico's best customer, the bulk of Mexico's for-
eign trade passes through its ports.
The railroads, in their attempts to encourage the develop-
ment of commercial activity, have been hampered by an
antiquated fiscal system, inherited from Spain, which tends
to discourage production, erects artificial barriers between
different sections, and makes diflScult the maintenance of
ordinary highways. They have contributed to the promotion
of industry, but often in lines which the country was not
prepared to enter on terms which would benefit the con-
sumer. This is not the fault of the railroads, but of the
nation whose high protectionism has only served to increase
inequalities in the distribution of wealth.
As has been shown in preceding chapters, there were two
theories underlying railroad promotion in Mexico. The most
commonly accepted was that of the direct line to a port or to
the Northern border. It was this motive that was behind the
Mexican National project. On the other hand the Mexican
Central was designed to develop the country through which
it ran, extending branches to sources of production and
absorbing feeders as they could be obtained. Both projects
must be counted as failures, measured by American stand-
ards ; but the Mexican Central failed not because its theory
was wrong, but because it was too heavily capitalized to
await the slow progress of internal development. The mis-
take made was in assuming that what could be done in the
[191]
THE RAILROADS OP MEXICO
southwestern part of the United States could be done with
equal speed south of the Rio Grande, where conditions were
more essentially different than they appeared to the men of
Boston whose monument is the Atchison.
If anything were needed to condemn the shortsightedness
of those who advocated the short-line theory it is the large
number of lines which have been built by mining interests.
Such lines in other countries are built not by the industrial
interests to be served, but by the railroads, and often on
their initiative.
Another unfortunate mistake, which has tended to retard
internal development, was the maintenance of high freight
rates based upon the **what-the-traffic-will-bear'' theory.
The Mexican railway has been the most conspicuous offender
in this respect ; but no one has been free from the practice.
This has tended to place emphasis upon mining products and
other forms of traffic which could stand the high rates and
yet yield a profit ; but it ignored the less important business,
capable of great development, which was based upon the
normal activity of the communities served by the railroads.
There is something wrong about a practice which allows a
railroad to be underbid on low grade traffic along its own
route and by an Indian and his donkey ; and yet we are told
that *'Even such cheap and heavy goods as coarse terra-cotta
jars are still carried by men from the valley of Toluca to the
City of Mexico, along the highway which, for some part of
the distance, runs parallel with the Mexican National Rail-
way."* This sentence was written a quarter of a century
ago, but the condition which it reflects is much less remote.
Much has been made of the argument that the railroad is
a pacifying agent, and that with its introduction throughout
^ Moses, The railway revolution in Mexico* 78 (1895),
[192]
RESULTS, POLITICAL AND ECONOMIC
Mexico the country would be ensured a stable government
and a high standard of public order. In a book which ap-
peared as recently as 1914 we find the statement, so fre-
quently seen in earlier works on Mexico, namely :
** Railway extensions have greatly diminished the chances
of successful revolution. In the old days it took so long to
travel from the capital to any of the big provincial centres
that revolution might be brought to a successful issue before
any considerable body of government troops could arrive.
All this is changed now, as with the aid of railways, tele-
graphs, and telephones, troops can be concentrated at any
place by special train at a few hours' notice. With such a
strong government as Mexico at present possesses, there is
consequently little chance of a revolution succeeding, even
temporarily.*'' This was written, of course, before the fall
of Diaz, and allowed to reappear in a revised edition which
would be the cause of mirth to one Francisco Villa, if it
should ever be brought to his attention; As an inducement
to foreign investment, this sort of statement was effective.
As an argument it was a good one ; until it became apparent
that employment given by the railroads and by the other
foreign enterprises which have been established had helped
to create that long-sought-f or middle class to which may be
attributed the credit for overthrowing Diaz and his suc-
cessors in a blind attempt to attain social justice.
It is not the purpose of the foregoing pages to deny that
from the standpoint of national wealth and welfare the
result of the introduction of railroads into Mexico has been
beneficial to the country and to its people. The foundation
work has been done, and with the development of some addi-
tional extensions and many branches, Mexico 's railroad sys-
* Oarson, Mexico, 147.
[193]
THE RAILROADS OP MEXICO
tern can do its part in the reconstruction period that now
seems to be approaching.*
Those who are fond of appearing as sponsors for back-
ward nations frequently resort to the charge that many of
the evils complained of are the result of exploitation by
foreign capitalists and their agents. By very few writers,
however, has this charge been made against the owners of
Mexican railroads. Money has been made in Mexico, as
elsewhere, by successful promoters whose profits came from
construction-company contracts; but much money has also
been sunk in unsuccessful projects, and Mexico's greatest
railroad, the Mexican Central, was constructed without the
intervention of a construction company. Investors in rail-
road bonds had no grounds for complaint until after the Diaz
regime. Shareholders are on a speculative basis, their hope
being that Mexico will sometime become stabilized and that
they may then share in the prosperity toward which they
have already contributed. Their hope, however, is of the
sort that is long deferred; for the Madero revolution came
just at the time when it appeared that greater returns might
soon be expected. From the investment standpoint, there-
fore, Mexican railroads have been a disappointment; while
to the '* speculative investor'' they oflfer an inducement
which, in view of the present general demand for capital, is
as strong as the belief in Mexico's ability to reestablish
herself among the respected nations of the world.
* See Moses, The railway revolution in Mexico, 90 p. (1895) ; also Gonzales
Boa, "El problema ferrocarrilero," 41-88 (1915).
[194]
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National Railways of Mexico. Railroad Age Gazette. N. Y.,
1909 : XLVII, 1226-7.
National Railways of Mexico. Railway Age Gazette. N. Y.,
1910: XLIX, 994-6; 1911: LI, 1162-3; 1913: LIV, 4-5; LV,
1211-2.
[2I8]
BIBLIOGRAPHY
National Railways of Mexico. South American Journal. London,
1919 : LXXXVI, 280-1.
National Railways of Mexico. Statist. London, 1908: LXI,
715-6.
Neue Eisenbahnen in Mexiko. Archiv fiir Eisenbahnwesen. Ber-
lin, 1909 : XXXII, 1569-72.
A NEW DEPARTURE BY THE MEXICAN GOVERNMENT. Statist. LoudoU,
1903 : LI, 1167-1197.
Merger.
A NEW TRANSCONTINENTAL COMPETITOR. Railroad Gazette. N. Y.,
1905: XXXIX, 74-5.
Tehuantepec. ^
Obstacles to a Mexican transcontinental line. Railroad Ga-
zette. N. Y., 1905 : XXXIX, 72.
The outlook for Mexican railways. South American Journal.
London, 1908: LXV, 254.
The Pacific extension of the Mexican Central railway. Engi-
neering News. N. Y., 1907 : LVII, 376-7.
The present railroad situation in Mexico. Bradstreet's. N. Y.,
1885 : XII, 18.
Same. "Mexican railways." Engineering News. N. Y., 1885 :
XIV, 40.
Progress of the ELansas City, Mexico and Orient. Railway Age.
Chicago, 1908 : XLV, 759-62.
The proposed redemption of the Mexican railway subsidies.
Economist. 1890 : XLVII, 585-6.
Railroad building in Mexico. Railroad Gazette. N. Y., 1900:
XXXII, 741.
Railroad condition in Mexico. Railway Age Gazette. N. Y., 1916 :
LXI, 863-4.
Railroad conditions in Mexico. Railway Age Gazette. N. Y., 1915 :
LIX, 1096-7.
Railroads in Mexico. Commercial and Financial Chronicle. N. Y.,
1881 : XXXIII, 193.
Railway building in Northwestern Mexico. Railway Age Chi-
cago, 1907 : XLI V, 802-3.
Railway policy and operation in Mexico. Railroad Age Gazette.
N. Y., 1909 : XLVII, 2-3.
Merger.
[219]
THE RAILROADS OF MEXICO
The railway situation in Mexico. Railway Age Gazette. N. Y.,
1914: LVI, 1229-30.
Railways op Mexico. South American Journal. London, 1907:
LXII, 596.
The serious condition of the railways in Mexico. Railway Age.
N. Y., 1918 : LXV, 307-9.
Southern Pacific railroad building. Railroad Gazette. N. Y.,
1907 : XLII, 458-9.
Statistics of railway construction, Mexico. Engineering News.
N. Y., 1890 : XXIII, 413, 421-2. Map.
The Tehuantepec railroad and the Mexican government. Com-
mercial and Financial Chronicle. N. Y., 1882 : XXXV, 557.
The Tehuantepec railway. South American Journal. London,
1907: LXII, 106.
VeKEHRSVERHALTNISSB UND WIRTSCHAFTLICHE AuSSICHTEN AUF DEM
Isthmus von Tehuantepec. Berichtb uber Handel und In-
dustrie. Berlin, 1908 : XII, 146-61.
[220]
INDEX
INDEX
Acapulco, MoreloB, Irolo, and Vera
Cruz Interoceanic railway, 141.
Acworth, W. M., on railroad national-
ization, 177-178.
American Metals company, lease of
Mexican Northern, 86, 163-164;
corporate railroad equipment, 47.
American-Mexican company, project
104.
Atchison, Topeka, and Santa Fe in-
terests, relation to Sonora railway,
123-125, to Mexican Central, 127,
180, to Sinaloa and Durango, 131 n;
leased Sonora railway to Southern
Pacific, 161.
Coahuila and Zacetecas railway, con-
trol, 5-6, 36, 164; service, 58.
Concessions, description, 112-113, 116-
120, 167-172; controlled by general
law, 171-174; abuses, 186. See also
Legislation.
Constitutionalist railways of Mexico,
28-34. See also National railways.
Constitutionalist railways of Yucatan,
state operation, 35. See also United
railways of Yucatan.
Corthell, E. L., railroad builder, 151.
Diaz, Porfirio, railroad policy, 1, 3,
7, 10, 109, 111, 127, 183-188.
Barnard, Gen. J. G., surveyor of
Tehuantepec, 149.
Bigelow, John, on railroad projects
and jprospects, 117-119.
Blair, D. B., promoter, 108, 109.
Camacho, Sebastian, promoter, 107-
108, 109, 123, 128.
Cananea, Rio Yaqui, and Pacific, con-
cession, 161; construction, 161; ac-
quired by Southern Pacific company,
161.
Carranza, Yenustiano, railroad policy,
70-73.
Central railroad of Mexico, concession,
108, 109, 184. See also Mexican
company, Ltd.
Chihuahua and Pacific railroad, con-
cession, 167; construction, 167; ac-
quired by Mexico North Western, 8,
168; trackage rights acquired by
Kansas City, Mexico and Orient, 8,
158.
Claims, against the nation, 18, 20, 26;
basis of adjustment, 78-79.
Claims, against the railroads, 63-68.
Coahuila and Pacific railway, acquired
by Mexican Central, 129-130.
Eads, J. B., ship-railway project, 162 n.
Equipment, damage and destruction,
19-21; military use, 26, 81-32, 68;
repair and replacement, 18, 22-24;
present condition and supply, 21-24,
43-45, 52, 64-55, 60; private own-
ership, 46-48.
Escandon, Antonio, promoter, 101-102.
Foster, J. W., on railroad projects and
prospects, 107, 110-118, 116, 117;
on Diaz' railroad policy, 187-188.
G
Garay, Jos6 de, first Tehuantepec eon-
cessionnaire, 149.
Gonzales, Manuel, railroad policy, 186.
Gonzales Roa, Fernando, on Liman-
tour's railroad policy, 4n; on Diaz'
policy, 185; advocacy of "Mexican-
ization" policy, 72-73.
Gorsuch, R. B., promoter, 101, 106.
Gould, Jay, failure as a Mexican rail-
road promoter, 145-146.
Grant, Gen. U. 8., promoter of Mexi-
can Southern, 146-146.
Griffin, Solomon, on railroad projects
and prospects, 120.
[223]
INDEX
Hampson, J. H., railroad builder. 151.
See also Mexico, Ouernavaca, and
Pacific.
Hidalgo and Northeastern railroad,
control, 5; state concession, 168:
acquired by National railroad of
Mexico, 135.
Highways and travel conditions. 91-98.
Huntington, C. P., rivalry with Atchi-
son interests, 123-125, 128; builder
of Mexican International.
Imperial Mexican railway, organized,
102-103. See also Mexican railway.
Interoceanic railway of Mexico, con-
trol, 4-5; concessions, 139-142; con-
struction, 140, 142; acquired San
Marcos and Nautla (Mexican Baat-
ern). 142-143; leased Mexican
Southern, 143; acquired by nation,
135, 143; acquired by National rail-
road of Mexico, 143; acquired by
National railways, 143; loss and
damage, 16, 19; government opera-
tion. 28-30; interrupted and sus-
pended operation, 37-39, 59; fi-
nances, 65-66.
Investments, foreign, 1-3.
Kansas City, Mexico, and Orient rail-
way, control, 5-6; concessions, 158;
acquired trackage rights over Chi-
huahua and Pacific, 8, 158: con-
struction, 8, 158-159; loss and dam-
age, 13-14; interrupted and sus-
pended operation, 42; receivership,
35, 67.
Legislation, development, 171-174;
general law 1899, 3-4, 7, 25-27. 69-
71, 174, 186.
Lerdo de Tejada, Sebastian, railroad
policy. 183-184.
Limantour, J. Y., railroad policy, 3-4,
173; report of 1898, 178-174; gen-
eral railroad law, 3, 174, 186; na-
tionalization scheme, 3-5, 176-178.
Louisiana Tehuantepec company, 150.
McMurdo, Edward, Tehuantepec con-
tract, 151.
Mexican company, Ltd.. concession,
107-108, 127. See also Central
railroad of Mexico.
Mexican railway, control, 5-6; concea
sions and construction, 9, 100-108
interested in Mexican company, Ltd.
and Central railroad projects, 107
109, 184; loss and damage, 14, 18
20; government operation, 27-35
S resent condition, 17; service, 58
nances, 67.
Mexican Central railway, control, 4.
concession, 127-128 ; construction,
128-129, 194; acquisition of residu
ary lines of Mexican National Con
struction company, 130; construe
tion of Mexican Pacific rilway, 7,
129, 130; acquired Monterey and
Mexican Gulf, Mexico, Cuernavaca,
and Pacific, and Coahuila and Pa-
cific, 129-130; results, 130-131, 91-
92; acquired by nation, 131, 175-
177; merged in National railways of
Mexico, 131, 175-177.
Mexican Eastern railway, organization,
142; finances, 66.
Mexican International railroad, con-
trol, 4-5; concession, 137-138; no
subsidy, 137, 170; construction, 8,
137-138; acquired by Mexican Na-
tional railway, 135, 138; full con-
trol acquired by National Railways,
138; liquidation. 138.
Mexican Mineral railroad, control, 86.
Mexican National Construction com-
I)any, concession, 133; residuary
lines, 134; acquired by Mexican
Central, 130.
Mexican National railroad, successor
to railway. 184; reorganized as Na-
tional railroad of Mexico, 135, which
see.
Mexican National railway, concession,
183; construction, 134, 191; leased
Michoacan and Pacific, 135 ; acquired
Mexican International, 135; reor-
ganized as Mexican National rail-
road, 184, which see. See also Na-
tional railroad of Mexico.
Mexican Northern railway, control, 5-6 ;
concession, 163 ; construction, 163 ;
no subsidy, 170 ; leased by American
Metals company, 36, 163-164; sus-
pended operations, 42; finances, 68.
Mexican Oriental, Interoceanic, and In-
ternational railroad, concession and
receivership, 146.
Mexican Pacific railway, nucleus, 134;
construction, 7, 129, 130.
Mexican Southern railroad, conces-
sions, 145-146; failure of Gen.
Grant's project, 146; concession
passed to Mexican Southern rail-
way, 146, which see.
[244]
INDEX
Mexican Southern railway, control, 4-
5; construction, 11, 146; leased to
Interoceanic, 143, 147; loss and
damage, 16-17, 19; interrupted oper-
ation, 39;' finances, 66.
Mexico and Morelos railway, conces-
sion, 139.
Mexico and United States railway,,
project, 104-105.
Mexico, Cuernavaca, and Pacific rail-
road, project. 9; acquired by Mexi-
can Central, 129.
Mexico North Western railway, con-
trol, 5-6; concession, 158; construc-
tion, 8, 158; acquired Chihuahua
and Pacific, Rio Grande, Sierra
Madre, and Pacific, and Sierra Ma-
dre and Pacific, 158; acquired Sierra
Madre Land and Lumber company,
35-36, 158; loss and damage, 14-18;
interrupted and suspended operation,
39-40; seizure threat, 36, 71; serv-
ice, 53 ; finances, 67.
Michoacan and Pacific railway, control,
4-5; acquired by Mexican National
railroad, 135; finances, 65.
Mileage, 1, 5, 6. 11.
Monterey and Mexican Gulf railroad,
acquired by Mexican Central, 129.
N
Nacozari railway, control, 5-6, 36;
concession, 164; loss and damage,
16; service, 53-54.
National railroad of Mexico, control,
4-5; successor to Mexican National
railway, 135; acquired Interoceanic,
135, 143 ; acquired Hidalgo and
Northeastern, 135; acquired by na-
tion, 135; merged in National rail-
ways of Mexico, 135, 175-177. See
also Mexican National railroad.
National railways of Mexico, organiza-
tion, 4, 175-177; acquired Mexican
International, 138; acquired Pan-
American and Vera Oruz and Isth-
mus, 154; abandonment of lines, 11-
12; loss and damage, 15-22; repairs
and replacements. 22-24; present
condition, 17, 21-22; government
operation, 27-34, 78; independent
operation, 36-38, 177; service, 52,
67; finances, 63-66.
National railway of Tehuantepec, gov-
ernment ownership, 34. See also
Tehuantepec National railway.
National Interoceanic railway, conces-
sion, 141.
Nationalization, 3-5, 175-178.
New Tork-Tehuantepec Steamship and
Railroad company, 150.
New York, Texas, and Mexico rail-
road, project, 9-10.
Nickerson, Thomas, builder of Sonora
and Mexican Central, 124. 127.
Occidental railway, succesBor of Sina-
loa and Durango, 8, ISln.
Osterheld, T. W., reorganiiation
scheme, 75-78.
Palmer, Gen. W. J., promoter, 110;
rivalry with Atchison interests, 123,
127-128, 133.
Pan-American railroad, control, 4-5;
concessions, 154; construction, 7,
154; acquired by National railways,
154; loss and damage, 19-20; gov-
ernment operation, 28-29, 34.
Parral and Durango railroad, control,
5-6; concession, 164; independent
operation, 164* finances, 68.
Pearson, Dr. P. 8., promoter, 158.
Pearson, S. and Son, Ltd., Tehuantepec
partnership, 5. 34, 152; ownership
of Vera Cruz (Mexico) railway, 153.
Pierce, H. C, control of Mexican Cen-
tral, 131, 175.
Plumb, E. L., promoter, 106, 108, 109.
Potosi and Rio Verde railroad, conces-
sion, 164; ownership, 36, 164.
Prendergast, F. E., on railroad projects
and prospects, 116-117.
Read, H. R., railroad builder, 146.
Regulation, government, 172-175; sug'
gested changes, 178-183.
Rio Grande, Sierra Madre, and Pacific
railroad, concession, 157; acquired
by Green interests, 157; acquired
by Mexico North "Western, 8, 158.
Riva Palacio, Vicente, railroad policy,
183-185.
Romero, Matias, reply to Foster, 113 ;
reply to Bigelow, 119; interest in
Mexican Southern railroad project,
145.
Rosecrans, Gen. "W. S., promoter, 105-
107.
S
San Marcos and Nautla railway, ac-
quired by Interoceanic, 142. See
also Mexican Eastern.
Sanchez, Delfin, promoter, 140, 151.
Sierra Madre and Pacific railroad, con-
cession, 157-158; acquired by Mexi-
co North Western, 158.
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