Papers Relating to the Foreign Relations of the United States, Transmitted to Congress with the Annual Message of the President, December 5, 1870
No. 294.
No 314.]
Mr. Nelson to Mr. Fish.
Sir: After a protracted debate, in which, the Mexican government, through the secretary of the treasury, Mr. Romero, has made great [Page 498] efforts for the abolition of the Free Zone, Congress, on the 5th instant, not only formally sanctioned that measure, but extended it over the frontiers of Coahuila and Chihuahua and to the northern district of Nuevo Leon. Notwithstanding the decisive vote by which this result was obtained, (85 to 37,) there is still hope that it may not become a law, as the President will undoubtedly use his constitutional prerogative of retaining the bill in his hands till near the close of the session, and then returning it with objections. Even should it become a law, Mr. Romero is confident that the great practical inconveniences of the measure will erelong become so apparent that it will be repealed after a very brief experiment of its workings.
I inclose a synopsis (A) of the latest speech upon this subject by Mr. Romero; also a synopsis (B) of a speech in its favor by the deputy Velasco, who represents the district in which the present Free Zone is situated.
A.
Synopsis of the speech of Mr. Romero, secretary of the treasury, before the Mexican Congress in the session of November 4, 1870, in opposition to the maintenance and extension of the
Mr. Romero began by quoting document in disproof of a charge made by Deputy Guzman, that the contraband trade upon the frontier might have been greatly diminished had the secretary of the treasury taken the proper steps to secure a vigilant administration on the part of the customs authorities. He then met another charge of the same deputy, to the effect that the executive had, of his own authority, conceded a reduction of duties to the frontier of Chihuahua, by the statement that that decree was issued when the national government was temporarily residing in that state, and was by virtue of the extraordinary powers” which the President then possessed, but that upon the return of the government to the city of Mexico that measure was rescinded In reply to another charge against the Government of the United States, Mr. Romero then spoke as follows:
“Another of the errors into which the same orator has fallen is that of stating that the Government of the United States solicited from the usurpers Miramon and Maximilian the abrogation of the Free Zone. In conformity with his plan of leading this chamber to believe that the opinion of the executive, in opposition to the Free Zone, is the result of its subserviency to the cabinet at Washington, he praises the conduct of those pretended governments by comparison with the present administration. I doubt whether the honorable deputy believes what he has told us, and, if he does, it only shows how easily he gives credence to the most unfounded and most improbable rumors, and how innocently he tries to make this chamber share his mistakes.
“The Government of the United States could never solicit from Miramon nor from Maximilian the suppression of the Free Zone, nor anything else, for the simple reason that it was never in relations with them. It is true that Mr. Forsyth, minister from the United States to Mexico in 1857, recognized Don Felix Zuloaga as president, but he did so without instructions, and soon after had to break off his relation with that so-called administration, before Don Miguel Miramon came to power. After this, the Government of the United States recognized the constitutional President of the Republic, then at Vera Cruz, and maintained relations with him until the close of the war of reform. The whole world knows, and it is wonderful that there should beany one here who does not know, that the Government of the United States never recognized either the intervention or the so-called empire, nor maintained relations of any kind with either the one or the other. Persons who are unacquainted with the rules which guide the conduct of the cabinet at Washington may assert that on one occasion or another it employed confidential agents; but this assertion will only prove their absolute ignorance of the established customs of that Government.”
Mr. Romero then argues that the non-interference of the imperial government with the Free Zone is easily accounted for by the fact that it was never in possession of the frontier, and that its hold upon Matamoras was always very precarious. Besides, he would not, if he could, have suppressed the Free Zone at a time when such a measure would have driven the frontier settlers into the ranks of the liberals. Maximilian would, however, have abolished the Free Zone ten times over, had it been possible, if by that means he could have obtained the recognition of the United States.
[Page 499]Mr. Romero then impugns the speech of the deputy from the northern district of Tamaulipas, (Mr. Emilio Velasco,) who had charged him personally with ignorance and incompetence. However this might be, the secretary of the treasury had presented himself in that chamber to express not merely his own opinions but those of the executive, upon whom the same charges would therefore fall. “Those who know the President of the republic know that he studies for himself all public questions, forms his own opinions, and has sufficient force of character to maintain them whatever may be the opposing interests. In the question of the Free Zone, as well as that of ports of deposit, his interest has been so great that the persons who have visited him recently, when he was lying upon what was supposed to be his death-bed, can testify that he concerned himself with these two subjects much more than with his own existence.
“Both of the orators to whom I am replying have thought fit, in order to defend the Free Zone, to have recourse to documents published by a foreign government, they have called the attention of Congress to the report of a committee of the United States Senate upon the Free Zone, treating it as a decisive document, almost as an oracle, each word of which is full of wisdom upon the various phases of the question of the Free Zone. The honorable deputy who has just spoken (Mr. Velasco) said that the committee which drew up this report was especially appointed to study the question of the Free Zone. This is a great mistake. The committee referred to is called the Joint Committee on Retrenchment, being composed of members of the two houses, whose duty it is to seek the means of alleviating the financial burdens of the country. This report of the Senate Committee on Retrenchment was presented May 16, of the present year. The newspapers of the United States reproduced its principal contents, and we thus learned its chief points before we saw the document itself. It may be asserted without exaggeration that this document is one of those which have been written with least foundation; and yet it is cited by the defenders of the Free Zone as a conclusive argument in favor of their theories. The members of this committee thought proper to take the sworn testimony of four witnesses, who deposed not merely concerning the Free Zone and the frauds which it shelters, but gave utterance to notoriously false statements concerning the intentions of the Mexican government toward the cause of the American Union, concerning our supposed sympathy for the southern rebels, our hypocrisy toward both belligerents, and the imaginary assistance which we lent to the rebellion. I have marked several passages in those depositions, which I am sure would stir up the patriotism of Congress were I to read them, but to be brief I will only make a slight summary of them. One witness says that when he was at Monterey the President of the republic went to his house to visit him. Those who know the President s character can judge of the probability of this statement j and besides, the President remembers perfectly well that while he was in Monterey he did not visit anybody, native or foreign.
“Another witness relates a conversation held with the President, in the presence of eight or ten witnesses, in which he expressed the greatest sympathy with the southern rebels. As the result of this conversation he states that a decree was issued, through the state and war departments, permitting the selling of arms to the Southern States. All who have ever spoken even once with the President know his natural reserve, and those who are better acquainted with him know that he never expressed an opinion upon a public subject in the presence of persons not on terms of intimacy, much less before strangers. Any one who may search for a decree issued while the President was at Monterey, relative to the exportation of arms to the Southern States, will easily ascertain that none such exists.
“Another witness asserts that the President s sympathy for the southern rebels went so far as to send them arms and ammunition We all know that if the President had then had any arms at his disposal he would have made good use of them in defense of the national cause, and never in favor of a cause linked with that of the French intervention in Mexico. We all know that this intervention was projected and carried out at a time when the success of the southern insurrection was considered certain. Those Mexicans who were hostile to the intervention, and I think that, the President of the republic may be considered as one of them, were then highly interested, if for no other reason than their own convenience, in the subjugation of that insurrection; and it is not probable that any one of them, much less the President, upon whom weighed such heavy responsibilities, would be disposed to contribute by word or deed to the triumph of the intervention. These statements, absurd as they are, were those upon which the report of the Senate Committee on Retrenchment was based. It may be understood, then, why it is so hostile to our country, so exaggerated and incorrect in regard to our actions.
“In honor of public opinion in the United States it is proper to state that it immediately perceived how lightly those Senators had acted-in giving credence to the false and improbable testimony of these four witnesses. It is, nevertheless, the same document to which the two orators, who have most energetically defended the Free Zone, have referred as to a model of exactness in its opinions, and of accuracy in its statements. I also might find in it an arsenal of reasons to prove the impropriety of our maintaining [Page 500] and extending the Free Zone; but I have preferred not to do so, because I think je have no need of appealing to foreign authorities in settling our own questions, and further reference to that document would only ascribe to it an importance which it does not, in itself, possess.”
Mr. Romero then alludes to the argument derived from the wonderful prosperity of the Mexican hank of the Rio Grande since 1858, and the recent corresponding decadence of the American hank. He attributes both these events to the effects of the American cavil war, to the temporary traffic in cotton upon the frontier, and the collapse of that traffic at the close of the war. He defends the United States Government from the charge of hostility towards that of Mexico on account of having established twenty military posts on the, frontier, and having opened several ports of deposit, showing that such is the custom of the American Government respecting all their frontiers.
“The desire of some of the defenders of the Free Zone seems to be to convert our side of the river into the basis of a contraband traffic with the United States. The executive cannot follow them upon this path, and, without losing sight of any of the national interests committed to his charge, thinks it is his duty to lay before Congress all the dangers’ and inconveniences of the Free Zone.”
B.
Synopsis of a speech of the deputy Don Emilio Velasco, in the Mexican Congress, October 29 1870, in favor of the maintenance of the Free Zone.
Mr Velasco begins by noting that when, in 1881, the question of the Free Zone was first discussed in Congress, it obtained 97 votes, while in the later discussion of 1869 it received 112 votes. He considers this fact as a happy augury for the result of the present debate.
In allusion to the fact that Mr. Obregon, the representative for the southern district of Tamaulipas, had delivered a speech in opposition to the Free Zone, which might imply that the interest of that state is not engaged in behalf of that measure, Mr. Velasco replies that he is himself a native of Tampico, where his family now reside, and that he has been the representative in Congress of the southern district of Tamaulipas, with which all his interests are identified, but that all smaller interests disappear in the presence of a great national question like the present.
The argument which has been most insisted upon against the Free Zone is that which alleges it to be a fruitful cause of contraband traffic. In order to give its due weight to this assertion, we must inquire, not whether such traffic now exists, but whether it has increased or diminished by the establishment of the Zone.
After the treaty of Guadalupe Hidalgo the Americans founded settlements along the Rio Grande, for the sole object of building up a contraband trade with Mexico. Their system of bonded warehouses, and the ease of procuring witnesses who should testify to the exportation of goods across the frontier, rendered it easy for them to defy the vigilance of our customs employés.
Official data, whose authority is unquestionable, prove how enormous was the contraband trade from the United States, at that period. Mr. Belden, a citizen of Brownsville, in a communication to the American Secretary of the Treasury, testifies that before the law of the Zone there used to be from one to three millions of goods constantly in deposit at Brazos de Santiago and Brownsville; but that since then commerce has so far ceased that the custom-houses at those places are now a source of expense to the United States. All this merchandise was destined to Mexico, for these frontier towns had no commerce except with us, At the same time our custom-houses were not paying expenses, which fact signifies that those millions of dollars in merchandise were being constantly and fraudulently imported into our territory.
From a report recently presented to the American Senate by one of its committees the following paragraph may be quoted in proof of the facts just stated: “It is impossible, says the report, “to prevent smuggling upon a line like that of the Rio Grande, when there are any inducements to it, and without doubt there was at this time (before the Zone) much smuggling from the American side of the river, to the detriment of the customs revenues and of the honest commerce of Mexico.”
The Free Zone profoundly modified the mercantile situation of both shores and interposed an obstacle to smuggling. The principle of the Zone is that goods do not pay duties at the time of their importation, but on their being dispatched to the interior of the republic. The object of smuggling is to avoid payment of duties, and, as there are none upon importations, all temptation has ceased. The advantage of the American system of bonded warehouses is thus neutralized, or rather a similar advantage is conferred upon all points of the frontier, so that foreign goods no burner seek those deposits, when they can, without expense, obtain storage in our own principal [Page 501] towns, which is at once more convenient to the merchants and an important guarantee for the collection of the duties should they be sent into the interior.
“I have,” says Mr. Velasco, “in vain endeavored to discover how the Free Zone can possibly be the cause of smuggling. In the discussion of last year the honorable secretary of the treasury, in reply to an inquiry of mine on this point, assured us that merchandise stored in any of our towns within the Free Zone may be extracted from the stores and sent in perfect liberty, without any interference from the custom-house, and without any kind of certificates, throughout the whole Zone. When the secretary-used this language he undoubtedly had not studied the text of the law of the Free Zone. If he will consult the fourth article of the law of March 17, 1858, he will there find the regulations, which were carefully drawn up, expressly to apply to the case of attempted frauds in the transportation of goods to the interior, under pretext of carrying them to other points of the zone.
“The citizen secretary of the treasury affirms that the passes and other documents relating to the transportation of goods from one point of the Free Zone to another are useless, because they are the same that are issued from custom-houses in other ports of the republic, and that in all ports alike they give occasion to frauds. I must insist that this system of judging the frontier by the rest of the country necessarily leads to great errors, and the secretary has fallen into a very grave one on this subject. In other ports the duties are paid on importation, but in the settlements of the Free Zone they are paid on being sent into the interior. Consequently the passes in the former case do not prove the payment of duties, while the passes given in the ports of the Zone contain the account-current of the duties, and therefore prove their payment. The documents of the custom-houses on the frontier are not, then, useless nor inefficacious, as the citizen secretary of the treasury imagines. On the contrary, a contraband traffic on the frontier can now only be effected by means of military seditions, or by the connivance of the employés of the treasury.
“As an example of the relative advantages of the two systems in a case of sedition, take that of Matamoras and Tampico, which both revolted against the federal government in 1867. Duties at Matamoros are paid on being sent into the interior. The passes given at that port were not recognized as valid during the insurrection, and, as a consequence, no interior commerce was permitted until the restoration of order. On the contrary, at Tampico, although the port was declared closed, this did not prevent heavy importations; and as the duties are paid on landing, the treasury suffered immense losses, since these importations left no trace behind. The Zone will thus always be an obstacle to the mutinies or seditions which might otherwise bestirred up for the purpose of protecting smuggling. As the duties are to be paid elsewhere, it very little concerns the treasury when a frontier town declares itself in rebellion.
“The Zone also renders much more difficult the contraband trade, which rests on the connivance of the customs employés. Without the Zone, when the goods were deposited in American warehouses, the fraud could be planned and carried into effect in twenty-four hours. Entire cargoes could thus be passed across the river in the shortest space of time. Now, however, the difficulties are immensely greater in effecting frauds with the connivance of employés through the more complicated system of documents which must be provided.”
Mr. Velasco proceeds to show that the recent revival of contraband traffic in some portions of the interior is owing to the suppression of the internal custom-houses, which rendered it sufficient to obtain the connivance of an officer of customs. The counter-inspectors are designed to correct this evil. If, then, there should at any custom-house of the frontier be committed any frauds upon the quantity and quality of the goods dispatched from the interior, it will be readily discovered by the counterinspection.
Mr. Velasco proceeds to draw a picture of the low state of commerce along the Mexican bank of the Rio Grande in 1858, and to contrast it with its present prosperity, which he ascribes entirely to the Free Zone. At the same time he points out the reverse condition of things upon the American shore as a proof that the former wellbeing of those towns was entirely owing to their having a monopoly of the Mexican trade, which the Free Zone has but transferred to the other side of the river, where it ought to be.
In reply to the proposition of the secretary of the treasury, who was willing to concede ports of deposit in lieu of the Free Zone, Mr. Velasco argues that as the Americans already possess them, and are in a condition to derive greater advantages from them, through their superior industry and enterprise, this concession would be entirely insufficient to maintain a commercial equilibrium between the two sides of the river, and the left bank would rapidly recover its former preponderance. Consequently, in the name of the people whom he represents, who are the inhabitants of the present Free Zone, Mr. Velasco declares that if the Zone is to be abolished, his constituents would regard the offer of ports of deposit as an insult added to injury, and would prefer to suffer in silence rather than be the object of a compassion very similar to irony.
After replying to various minor inaccuracies of the secretary of the treasury, Mr. [Page 502] Velasco proceeds to consider the Free Zone as a vital necessity for the frontier, and to show that it should be extended to the states of Coahuila and Chihuahua, as was the intention when the plan was first broached by the executive in 1852. He quotes at length from a message of the executive of that time to show that the Zone was considered to be but a just recompense to the people of the frontier for the privations and dangers which they constantly incur in behalf of the whole nation. He also shows the decadence of Paso del Norte and other northern towns through lack of this privilege.
In conclusion Mr. Velasco says that free consumption is an accomplished fact upon the frontier, for the reason that nature and the necessities of the people have so required, and any attempt to revoke this liberty might occasion the dismemberment of the republic.