Office of the Historian

Mr. Plumb to Mr. Seward.

No. 149.]
Legation of the United States, City of Mexico, June 24, 1868.

Sir: On the 16th of March last a commission was appointed by this government for the purpose of examining into the present state of mining in the republic, and especially into the system of imposts which now weighs upon that important branch of industry.

This commission was composed of a number of persons named by the government, and of delegates from each of the mining States, to be named by the miners themselves.

A translation is inclosed herewith of the order issued by the department of treasury appointing the commission, which fully explains the objects sought to be attained.

On the 25th ultimo this commission made a voluminous report upon the special subject of the existing imposts, which was submitted to congress by the minister of treasury just before the close of the last session.

This report concludes with the following important recommendation, viz: “The mining junta propose to the minister of treasury, as the sole means of rapidly raising this branch of industry to the grade of prosperity of which it is immediately susceptible, the absolute exemption of gold and silver from all duties.”

Should action be taken by the Mexican congress at its next session, or at an early period, in conformity with this report, it would be of incalculable advantage to the industrial and commercial interests of this country.

It is almost too much to hope, however, that such action will soon be taken.

[Page 503]

To show the burden resting upon the mining interests of Mexico, under the system of imposts in force at the date of the 1st ultimo, I inclose herewith a statement of the charges incurred by silver from the time it leaves the mine in bars until the proceeds are deposited in bank in England.

These charges, it will be seen, amount altogether to the enormous sum of twenty-five per cent., of which nineteen and one-half per cent. is for account of the government and the mint.

In addition to this burden, weighing upon this branch of industry, it is estimated that twenty per cent. or upwards of the silver contained in the ore is lost in the process of reduction.

It is very evident that against such obstacles mining in this country can progress only with difficulty.

I have the honor to be, very respectfully, your obedient servant,

E. L. PLUMB.

Hon. William H. Seward, Secretary of State, Washington, D. C.

Appointment of a board for the reform of the imposts on the products of the mines.

[From the Diario Oficial, March 17, 1868.—Translation.]

DEPARTMENT OF TREASURY AND PUBLIC CREDIT—SECTION 5.

Now that peace has been re-established in the republic, the President deems that the occasion has arrived for considering the subject of the improvement of the situation of the producing classes, and of providing such means as may be desirable for the encouragement of all branches of the public wealth.

One of those that requires, without doubt, the most particularly the care and protection of the government, is that of mining. It appears that nature has sought to make Mexico essentially a mining country, and there is every reason to believe that this important branch of the public wealth is scarcely yet explored. The government sincerely desires to encourage the mining interest by all the means that may be in its power, and especially that the system of contributions that now weighs upon it—and that many consider as an obstacle to its progress—shall be revised. It would certainly appear that the present system of imposts, which with such frequency press not upon the profits but upon the capital employed in that branch, is susceptible of improvement.

The President has observed with pleasure the earnestness with which the mining States have begun to promote this question, which is of a vital importance for the republic; and this has contributed to lead to the belief that the time has arrived to give attention to it.

As the great importance of the affair does not admit that it shall be decided precipitately, and without hearing the persons most directly interested in it, the citizen President has desired that there should be formed a mining board, composed of yourself and of Messrs. José Antonio Muchariaz, José M. Godoy, Ismael Castelazo, Augustin Tamora, Miguel Bustamente, and Antonio del Castillo, for the attentive examination of the present state of mining in the republic, and especially of the system of imposts which now weigh upon it, reporting to the government all the measures that may be believed desirable for the encouragement and development of this branch, and proposing a system of imposts that, while it shall not be an obstacle to the mining interest, shall not deprive the treasury of the revenues that are now actually received from this source.

The President also desires that, if it shall be possible, you will occupy yourselves with proposing to the government such reforms in the ordinances of the mints and assay offices as shall be considered desirable in view of the modern advancements in the sciences.

The President, desiring to give a direct participation in this important work of improvement to the persons most directly interested in it, that by their experience and special knowledge may contribute the most efficaciously to attain the result proposed, has thought proper to direct that this department shall invite the miners of the States of Guanajuato, Zaeateeas, Mexico, San Luis Potosi, Sinaloa, Sonora. Jalisco, Durango, Chihuahua, Michoacan, Guerrero, Oajaca, Puebla, and Vera Cruz, to send to the mining [Page 504] board a representative for each one of those States, who shall be accredited to the supreme government by the governor of the State by whom he is sent, name a person resident in this city to represent them.

The representatives of the mining States will have a voice and vote in the mining board, but will not receive any salary from the federal treasury.

To the end of giving time for the most distant States to accredit their representatives to the mining board, the President desires that the board shall be installed on the 1st of May proximo.

I repeat to you the assurances of my very distinguished consideration.

Independence and liberty! Mexico, March 16, 1868.

ROMERO.

The Citizen Mariano Gomez, President of the Mining Board, Present.

Statement of the charges on silver produced in the mines of Mexico, from the time of leaving the mine in bars until the proceeds are deposited in hank in England.

Per cent.
1. Freight from the mine, (say mines of Real del Monte, twenty-two leagues from the city of Mexico,) including the necessary escort, on account of the want of 1
2. Difference between the intrinsic value of the bars of silver arriving at the mint and the rate at which they are accounted for in coined dollars, being the compensation and profit of the mint, stated in official reports to be five and one-eighth per cent., and acknowledged by the mint to be four and one-half per cent. 4.50
3. Government duties and other charges made in the mint, 5⅗ per cent, to 7½ per cent., as per statement s herewith—say six and one-quarter per cent. 6.25
4. Agent’s commission in city of Mexico, receiving and forwarding dollars, one-half of one per cent. 0.50
5. Freight by government conductor to Yera Cruz, three-quarters of one per cent. 0.75
6. Circulation duty, two per cent.; export duty, live per cent.; federal contribution, twenty-five per cent, on amount of the two preceding duties, or one and three-quarters per cent., making eight and three-quarters per cent, government duties on dollars 8.75
7. Agent’s commission, receiving and forwarding at Vera Cruz, one-half of one per cent. 0.50
8. Petty charges at city of Mexico and Vera Cruz, as bags at Mexico, boxes at Vera Cruz, porter’s charges, &c., one-eighth of one per cent. 0.12½
9. Steamship agent’s charge for embarking at Vera Cruz, which includes boat-hire, one-eighth of one per cent. 0.12½
10. Freight from Vera Cruz to bank of London, one and one-eighth per cent. 1.12½
11. Insurance, five-eighths of one per cent. 0.62½
12. Brokerage on insurance, one-quarter of one per cent. 0.25
13. Agent’s commission, receiving and selling dollars in London, and depositing proceeds in bank to credit of miner, one-half of one per cent. 0.50
Total 25

RECAPITULATION.

Per cent.
Government and mint charges 19½
Freight in Mexico 1¾
Freight and insurance to Europe 1¾
Commercial charges 2
Total 25

The export of uncoined silver, as also of ores, is prohibited.

From the best authorities it is also learned that, of the silver contained in the ores raised from the mines and carried to the reduction works in the most advanced mines in Mexico, upwards of twenty per cent, escapes and is lost, even under the most improved processes now in use.

This important branch of industry, therefore, labors under the disadvantage not only of the failure to extract that portion of the silver contained in the ore worked over, but also of having to bear charges to the amount of twenty-five per cent. upon the silver actually produced, and this whether the mines are yielding any returns upon the capital invested or not.

The foregoing statement is of charges as existing May 1, 1868.

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1. Statement of return made of 166 bars of silver from the mines of Real del Monte, delivered to the mint at the city of Mexico for coinage.

Value reported at $8 25 per marc $193,678 99
Duties:
Three per cent. $5,810 36
Assay 166 00
Real per marc 2,934 52
8,910 88
Federal contribution, 25 per cent. on above 2,227 72
11,138 60
Net 182,540 39

July 13, 1867.—Percentage of duties on value reported, 5¾ per cent.

[It is to be observed that the intrinsic value of silver in bars is $9 41 per marc]

2. Statement of return made of 77 bars of silver from the mines of Real del Monte, delivered to the mint at the city of Mexico for coinage.

Value reported—silver $89,643 99
“ “ gold 1,058 49
90,702 48
Charges:
Separation, gold from silver $635 90
Government duties:
Three per cent $2,721 07
Assay 83 00
Real per marc 1,358 24
4,162 31
Feberal contribution 1,040 57
Municipal and desagua 75 70
5,278 58
5,914 48
Net 84,788 00

January 23, 1868.—Percentage of charges on value reported, 6.52 per cent.

3. Statement of return of 77 bars of silver from the mines of Real del Monte, delivered to the mint at the city of Mexico for coinage.

Value reported—silver $89,560 45
“ “ gold 1,730 04
91,290 49
Charges:
Separation $1,184 32
Duties:
Three per cent $2,738 71
Assay 89 00
Real per marc 1,356 97
4,184 68
Federal contribution 1,046 17
Municipal and desagua 111 22
5,342 07
6,526 39
Net 84,764 10

February 10, 1868.—Percentage of charges on value reported, 7.14 per cent.

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4. Statement of return made of 85 bars of silver from the mines of Real del Monte, delivered to the mint at the city of Mexico for coinage.

Value reported—silver 198,653 14
“ “ gold 139 23
98,792 37
Charges:
Separation $100 73
Duties:
Three per cent $2,963 77
Assay 84 00
Real per marc 1,494 74
4,542 51
Federal contribution 1,135 62
Municipal and desagua 119 34
5,797 47
5,898 20
Net 92,894 17

February 22, 1868.—Percentage of charged on value reported, 5.97 per cent.