No. 212.
Mr. Nelson to Mr. Fish.
Sir: In compliance with the instructions contained in the circular from the Department of State, dated the 19th of August last, I have the honor to submit the following facts and considerations respecting the present state of commercial intercourse between the United States and Mexico; the causes of the present prostrate condition of American interest here, and means which might probably be efficaciously employed by our Government to bring about a more prosperous state of affairs.
On the 1st of August, 1869, I addressed a confidential circular to all the American consuls and consular agents residing in the republic of Mexico, requesting them to furnish me with data concerning the political and material condition of the States in which they respectively reside. Replies were received from most of these officers, and copies of several interesting and valuable communications were transmitted by this legation to the State Department in the closing months of 1869, and the earlier portion of the present year. I respectfully suggest that a collation of these documents will furnish data upon many of the points covered by the Senate resolution.
As the chief practical inference from so many communications, and [Page 296] from my own observation, experience, and inquiries, I may state that the present commercial intercourse between the United States and Mexico is in a state of the utmost prostration and decadence. The reports of our consuls are unanimous upon this point. In this city, which is one of the largest in Spanish America, the number of American mercantile houses does not exceed two or three, and the total number of American residents is but a score or two. The same is the case in Vera Cruz, and in the principal ports of the Pacific, as well as, with greater reason, in the large cities of the interior.
The commerce of importation into this republic is almost exclusively in the hands of European merchants, chiefly English, French, and German. The large number of citizens of the Southern States of the Union who came to Mexico immediately after the rebellion, have almost all returned to the United States. The agricultural colony near Cordova, from which so much was expected, has been completely broken up and dispersed, and there is not at this moment in Mexico a single notability remaining out of the many confederate refugees. Of the few American commercial houses in Mexico, the greater part import more foreign than American goods, there being, I believe, but one house which deals exclusively in articles of American manufacture—that is to say, in arms and ammunition. On the Pacific coast our commerce via San Francisco is almost limited to the vessels of the Pacific Mail Steamship Company, which complains of a loss of trade, and is even said to be running at a loss. The importations by this line are chiefly confined to arms, and agricultural and mining implements, with small quantities of hardware and Chinese goods. The causes of this low state of American commerce in Mexico are but too easily explained. They may be summed up as follows:
1st. The force of habit; the Europeans having preceded us in establishing commercial relations here.
2d. The low rate of interest which European houses pay for their borrowed capital, contrasting with that of the United States in the proportion of from five to ten per centum.
3d. The fact that European manufacturers of cotton and fancy goods invariably consult the Mexican taste, thus enabling them to make little account of durability of material, and successfully to compete with American articles of stronger texture, but of subdued colors.
4th. The chronic insecurity of life and property, which has exerted and still exerts a fatal influence upon all foreign capital in the country, and whose effect on Americans has been absolutely to preclude its introduction.
5th. The entire want of railroad and telegraphic communication between the two countries along our 1,500 miles of frontier.
In respect to the proper remedies which might be employed by the Government of the United States to enable Americans gradually to assume that commercial importance in Mexico to which our proximity and political sympathies entitle us, they may be summed up, in general, as being those measures which will most effectually operate for the removal or neutralization of these five causes.
Undoubtedly, under favorable circumstances, something may be accomplished diplomatically to place the commerce of the United States upon a more favorable footing as toward the Mexican revenue system. By the continuance of the wise policy of giving moral aid and countenance to the present liberal and patriotic government of Mexico, we shall also contribute to the rapid development of that energetic protection to life and property which is of such urgent necessity, and which this government [Page 297] is doing all in its power to establish. In the line of active promotion of American interests in Mexico, I know of nothing more important to be consulted than the facility and rapidity of intercommunication by means of railway and steamship lines and telegraphs, both as between the two countries, and as within the extensive Mexican territories where the almost total absence of good means of communication is proverbial. However desirable American colonization may be to Mexico and to our interests, it cannot be effectually promoted in any other way. The construction of railways, then, through the State of Texas and the Territories of New Mexico and Arizona, to the Mexican frontier, is an object of the first importance for the interests to which this inquiry is directed. When such roads once exist to the frontier the Mexican government will undoubtedly make great efforts to promote their extension through the vast States, fabulously rich in mines and in agricultural wealth, of her northern zone. The unfriendly legislation which, under the name of the zona libre, and other burdensome clogs upon our commerce, would then naturally disappear. The growing prosperity of our Southern States, and especially the gratifying progress of the port of New Orleans, is destined to exert a speedy and beneficial influence upon our commerce with Mexico. It is worthy of inquiry whether our Government might not properly do something in aid of the reëstablishment of lines of steamships from New Orleans to the Mexican ports of the Gulf.
Finally, everything which promotes a knowledge in detail of the vast but undeveloped resources of the several States of Mexico will inevitably exert a powerful influence for good in the desired direction. The speedy construction of the Tehuantepec Railway will be an inestimable boon to the increasing community of interests between the two republics. The survey about to be made of that Isthmus by an expedition under the auspices of the American Navy Department, will, if successful in its object of establishing the feasibility of interoceanic navigation, do more than anything else that could be suggested to excite in our commercial houses that interest and curiosity which are the precursors of enterprise. Beside giving the widest publicity to the results of that survey, if favorable, might not our Government usefully undertake the scientific survey of other portions of Mexican territory contiguous to our own, with a view to other international public works?
The suggestion made in the closing paragraphs of the able preliminary report on this subject of the Department of State, concerning a congressional appropriation to employ statisticians of ability to collect and collate information upon this subject, seems to me eminently conducive to the attainment of important results, and, in case of its adoption, I would suggest that one or more persons be detailed to the special study of the subject upon Mexican soil. I have addressed a note to Mr. Romero, the secretary of the treasury, requesting him to furnish me certain information and statistics upon several of the matters involved in this inquiry, which I hope to be able to communicate to the State Department by the next steamer.