No. 281.
Mr. Nelson to Mr. Fish.

No. 707.]

Sir: I have the honor to transmit herewith a printed copy of a letter addressed by me to the president of the Chamber of Commerce of New Orleans, in reply to a communication requesting my views as to the best mode of establishing and maintaining trade and commercial relations between the United States and Mexico. (A.)

I also inclose a copy of an editorial article from the Diario Oficial. (B.)

I have, &c.,

[Page 649]


[From the New Orleans Republican.]

commercial prospects and progress of new orleans.

A letter addressed by Hon. Thomas H. Nelson, United States minister at Mexico, to J. H. Oglesby, esq., president of the Chamber of Commerce of New Orleans.

Dear Sir: Instead of returning to my post of duty by way of New Orleans, as I had intended, I find, on the eve of my departure, that important considerations compel me to go by way of New York. I will therefore submit in writing some hastily prepared suggestions, in response to your communication in respect to the prospects and methods of establishing and maintaining commercial and mercantile relations with our sister republic.

Nothing is more common among persons who possess but a superficial knowledge of Mexico than the opinion that its present condition is infinitely less prosperous than before its emancipation from the yoke of Spain.

This statement, which first acquired currency in the United States about the time of the Mexican war, and which at that time was based upon plausible, if not upon correct reasoning, has obtained such strength by constant repetition as to have become one of the commonplaces of the American press, and one of the firmly rooted convictions of the American people. And yet, to those who know in what consists the real strength and prosperity of a people; to those who can distinguish between the interests of a limited class and those of a nation at large; to those who understand that the tawdry finery of a score of aristocrats, and the deceptive ostentation of a church endowed with the spoils of centuries, does not constitute national prosperity; to those, in short, who have instituted an intelligent comparison between the Mexico of to-day and the Mexico of the preceding generation, and with New Spain under its latest viceroys, it is apparent, not only that Mexico has made notable strides along the pathway of progress, but that she has passed through the furnace of political regeneration, has secured the great conquests of civil and religious liberty, and has opened wide her doors to the regenerating influences which will make her, in brief, a participant of the wonderful blessings which Providence has so lavishly bestowed upon our own favored land.

At the beginning of the present century, and for many years thereafter, Mexico was the most populous country in the New World, and its capital was the largest city in America. Since that time Mexico has nearly doubled in population, while it has lost two-thirds of its territory; but the miraculous rapidity with which the United States has advanced, leaving Mexico far behind, causes us to regard her slower growth as a retrogression.

The long series of revolutions of which Mexico has been the prey has given rise to the natural opinion in foreign countries that the Mexican people are essentially turbulent and impossible to govern. Those who hold this opinion are not aware of the causes which have lain at the bottom of Mexican commotions, and consequently of the reasons which may be adduced to show that the revolutionary epoch in Mexico is substantially closed.

Mexico at the time of achieving her independence had absolutely no education in self-government. The movement of independence, commenced in 1810 by the Priest Hidalgo, was drowned in blood after eight years of irregular warfare, during which the insurgents never succeeded in establishing a regular government. The movement of Iguala, which, in 1820, effected the separation from Spain, under the guidance of Augustine Iturbide, had in view merely her independence from the Spanish yoke, but without a thought of effecting any change in the form of government.

That Mexico is to-day a republic is primarily owing to the refusal of the royal family of Spain to send one of its princes as the monarch of Mexico; and, secondarily, to the reaction brought about by the Spanish party in Mexico, who were unwilling to see a native of the country seated upon the throne which they had destined for a Spanish prince. The republic was founded in 1824, after the fall of the ephemeral empire of Iturbide, not because there was not a republican party in Mexico, but because that was the only possible form of government in the absence of a monarch. The first generation of Mexican presidents and cabinet ministers was composed almost exclusively of persons who were at heart monarchists, and it is easy to divine the confusion which this fact introduced into all branches of the administration. Personal ambition took the place of administrative talent, and as armed force was the only certain means of satisfying such ambition, none but military leaders for nearly forty years ever occupied the presidency of Mexico. The first constitution, a hastily devised imitation of our own, could not flourish in such soil. The American Constitution had for its mission to unite colonies previously separated; the Mexican constitution erected semi-independent states in a country previously ruled by a centralizing system. It [Page 650] was natural that the first generation of the independent existence of Mexico should he filled with the complex strife between despotic and liberal institutions, between centralism and federalism, and that the strife should be the more bloody because largely made in the interest of personal ambition. The most representative man whom Mexico has produced, General Santa Anna, aptly symbolizes in his manifold career the war of ideas from which Mexico has but just emerged. Commencing life as a subaltern in the Spanish army, in waging war upon the early insurgents, we see him in 1821 acquire the rank of general by co-operating in the monarchical revolution of Iturbide; to be the first to pronounce against that unhappy Emperor in 1822. In the series of nearly fifty rulers who have held sway in Mexico since then, Santa Anna has waged open or secret war for or against every administration but his own. In his first presidency he was elected as a federalist, and overthrew the federal constitution. In his second term he again overthrew the existing institutions in favor of another plan of government. In his third presidency he restored the constitution of 1824, and his last administration made himself dictator, with the title of “His Serene Highness.” What Santa Anna did upon a grand scale many other military chieftains did upon the lesser theater of the state governments. The question of the form of government could never be said to be definitely solved for Mexico until the adoption in 1857 of her present constitution, and that event, as is well known, became the signal for the essentially religious contest known as the war of reform, which, in its turn, led to foreign intervention and to the evanescent empire of Maximilian.

The facts upon which the preceding résumé are founded fill the melancholy history of Mexico for half a century, and, it must be confessed, are quite sufficient to justify the popular impression of Mexico as an essentially turbulent country.

Yet, in the light of the above considerations, can it be wondered at that it has cost half a century of blood and suffering to conquer the assurance of a prosperous future under a genuinely republican system of government?

The history of Mexico during the fifteen years that have elapsed since the adoption of the constitution of 1857 is a sufficient guarantee that such a future is really before her. The great questions which have so long agitated the country have been, as I believe, definitely resolved. It is certain that Mexico is to continue without interruption under her present republican and federal régime; it is certain that the power and influence of the clergy, which for three centuries and a half preyed like a vampire upon her life-blood, is irretrievably gone; it is certain that the people have now received that education in self-government which will enable it easily to resolve the administrative problems of the future. Above all, there now remains no great question of the future, which, like the slavery question for a long time with us, was a standing menace for the perpetuity of her institutions. Strong in her costly acquisitions of liberty and independence, strong in the assured friendship of her powerful neighbor, rich in the countless treasures of her soil and climate, fortunate beyond calculation in her geographical position with reference to the commerce of the world, resolute in the adoption and naturalization of the great inventions of the age for abbreviating time and space, Mexico is now just entering upon an era of internal improvements which may be considered to date from the conclusion of the railway between the city of Mexico and the port of Vera Cruz at the end of the present year.

The competition of American and European capital for the lucrative privilege of providing Mexico with means of communication has fairly commenced, and the Americans are likely to gain the preference. Two great railroad enterprises, either of which, if fully carried out, is certain to revolutionize the commerce of Mexico, are now knocking at the doors of the Mexican Congress for permission to confer upon Mexico the greatest of blessings. I refer to the International Railway of Texas, which proposes to construct a line from the city of Mexico to the Rio Grande, and to the scheme of General Rosecrans for a system of railways to connect most of the important cities of the republic with its capital. It is probable that both undertakings will be successful in great part, and that five years hence it will be possible not only to leave New Orleans in a palace-car and arrive within a week in the city of Mexico, but also to visit in the same manner the eight or ten principal cities of the republic. Within the same period of time the Texas Pacific Railroad will undoubtedly be completed, skirting one-half of the northern frontier of Mexico, and intersecting at Paso del Norte with the narrow-gauge Denver and El Paso road, which will probably extend far beyond Chihuahua toward the interior of Mexico. The port of Guaymas will then be connected with the capital of Arizona by means of a railroad running due north and intersecting the Texas Pacific at another point.

When once these links of union shall have been established, the commercial relations between the United States and Mexico will rapidly assume enormous proportions. Each country seems to have been created expressly to become the natural feeder and the natural market of the other. Each abounds, by reason of its differences of soil and climate, in precisely the productions which are most needed in the other. While in the United States the area which can be successfully devoted to the cultivation of articles of such universal consumption as cotton, sugar, rice, and tobacco is necessarily limited, [Page 651] and for the three latter is sufficient to supply hut a small proportion of the home demand, the capacity of Mexico for the production of these four great staples is practically unlimited. In connection with our sources of supply of these articles a consideration arises which I think should have great weight with our Government in awarding the preference to Mexico above Cuba, Puerto Rico, and Brazil, which at the present time enjoy the profitable monopoly of these great staples of commerce. Since the moral sense of our nation, aided by the irresistible logic of events, pronounced its fiat of reprobation upon the institution of human slavery, the United States should be considered as essentially an anti-slavery nation, and, in despite of former prejudices, no section of the country has now any interest in defending the memory of that extinct abuse. It is now time that, having washed our own hands of that reproach by the events of a period to which I need not refer in detail, we now have a right to openly express our opinion of slavery in other countries, where it exists in forms so repugnant as almost to justify, by contrast, the milder system which cost us so much blood and treasure to extirpate. We have now a right, and many would maintain that it is a national duty, to discriminate in our tariff legislation between the product of free and slave labor, and such just discrimination would undoubtedly redound chiefly to the profit of Mexico. But it is not merely under philanthropical aspects that such legislation may be justified and recommended; it is equally desirable from the stand-point of the Monroe doctrine. The countries competing with Mexico in the staples above mentioned are not merely countries whose productive industry is based upon slave labor, but they are also ruled upon the monarchical system, which, at this period of the nineteenth century, ought to be considered an exotic upon American soil. None of the countries in question could justly complain of a discrimination based upon two such powerful and equitable considerations. It would constitute another great step in the onward march of our distinctively American international law, and would probably find imitators, as it would certainly merit applause and respect, among the more advanced nations of the Old World. It would be a signal national testimonial of friendship and encouragement to all the republics of the New World, and would be directly profitable, not only to Mexico, but also to the five republics of Central America, to Colombia, and Venezuela.

Moreover, from the materialistic stand-point of national and private interests, the policy I recommend has peculiar claims upon the people of the southwestern States, more particularly Louisiana and Texas. Their commercial future is so direct and intimately bound up in the growth and development of mercantile relations with Mexico, as to make it unnecessary to dwell further upon this point. Every legislative step which tends to foster such commerce is a step in favor of the Southwestern States.

Not only the four staples which I have mentioned above would share in the impulse given by a wise development of mercantile relations with Mexico; there are other articles of vast consumption, not produced upon our own soil, with which Mexico is capable of supplying the world. I need only mention coffee, chocolate, indigo, mahogany, and dye-woods. In return for these precious commodities Mexico would naturally receive from us the manufactures which she now buys chiefly from England, France, and Germany. Thus, our American manufacturers, availing themselves of our magnificent water-power, would take deep root in the Gulf States, and would elevate them to a degree of prosperity unknown in their palmiest days of old.

To attain this result the adoption of the legislation I have indicated would undoubtedly tend in no ordinary degree.

The completion of the projected line of railways between the two countries will certainly have a vital influence in the same direction, with or without the stimulus of such favoring legislation.

But for the inauguration of a vast and profitable commerce between Mexico and the Southwestern States, it is not necessary to await the tardy apparition of the iron-horse in the central States of Mexico, nor to follow the uncertain course of legislation. The road to the treasures of Mexico lies open to the merchants of New Orleans, and it is an unceasing wonder to me that that road has been completely abandoned. Mexico has done her part. In the years since the fall of the short-lived empire, she has increased the production of her Gulf States; she has reformed vexatious fiscal legislation, by means of a comparatively liberal tariff which went into force the 1st of July last; and, above all, she has completed the most important railway for the interests of her maritime commerce. Before the 1st of January next, trains will have passed from the capital of Mexico to her most important sea-port. Above all, she stands ready to give, if she has not already given, a liberal subsidy to a line of steamers from New Orleans to Vera Cruz. She has already aided the establishment of a line of coasting steamers, owned in New York, and which should begin its trips to all the Mexican ports in the Gulf in November or December of the present year. The importance of this line as a feeder to a New Orleans line cannot be ignored. And I have no doubt that, in the case of the adoption of the friendly American legislation to which I have before adverted, Mexico would be sufficiently grateful to her nearest neighbor and her best friend to [Page 652] make corresponding in fact, if not in name, something very like a reciprocity treaty, which will redound to the benefit of both countries.

In conclusion, I beg leave to inclose a copy of a dispatch addressed by me to the Department of State in November, 1870, which covers most of the inquiries contained in your communication.

I remain, &c.,


J. H. Oglesby, Esq., President of the Chamber of Commerce, New Orleans.

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 interests 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 from my own observations, 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 Cordoba, 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:

The force of habit; the Europeans having preceded us in establishing commercial relations here.
The low rate of interest which Europeans pay for their borrowed capital, contrasting with that of the United States in the proportion of from 5 to 10 per centum.
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.
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 upon Americans has been absolutely to preclude its introduction.
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.

[Page 653]

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 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, 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 re-establishment 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 railroad 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.

I have, &c.,

[Inclosure B.]

Extract from the Diario Oficial, Mexico, February 8, 1873.

hon. t. h. nelson, minister of the united states in mexico.

Our intelligent colleague, the Trait d’ Union has given us the satisfaction of a perusal of the letter written by Mr. Nelson to Mr. J. H. Oglesby, president of the chamber of commerce in New Orleans; it is a document of vast importance, which reveals on a grand scale, without forgetting for a moment historical exactness, the origin of past revolutions in Mexico, its political and social conquests up to the promulgation of the fundamental code of 1857, and of the laws of reform, a condensation of the progressive aspirations of the Mexican people against the tendencies of a past which it was no longer possible to accept.

Notable indeed are the impartiality and the observing and philosophic spirit which Mr. Nelson gives to the past and present situation of Mexico, in order to make this country known in his own, where so many prejudices have existed and exist against us, thanks to that unreflecting spirit which neither meditates nor analyzes. To the [Page 654] partisans of this school it is that Mr. Nelson addresses himself, with all the authority of his word inspired in the philosophy of history, in the practical knowledge acquired during his stay in the country, and in that elevation of ideas which should distinguish the politician and the statesman in order to judge a people and their institutions. These qualities shine forth in Mr. Nelson’s letter, and should increase the gratitude of the Mexicans, who are so frequently misjudged and worse understood abroad.

But there is more still. Mr. Nelson, in examining the future of Mexico by means of that regeneration which must be effected by railways, takes pleasure in indicating that vast horizon which he discerns for our agricultural productions and all our other products, the day when steam shall place us in contact with American markets.

All the advantages to-day enjoyed by the markets of Cuba and Brazil, says Mr Nelson, will be Mexico’s, whose fertility and abundance of products will suffice to satisfy the necessities of the whole world.

The philanthropic abolitionist proposes to his fellow-citizens, on this account, an idea worthy of being thought over by the American people. “Free labor,” says Mr. Nelson, “must be preferred to obligatory labor. And we,” he proceeds, “who have liberated millions of slaves, thus purifying our institutions and erasing that blot which stained them, must carry out this humane principle in all its parts.” The consequences of this theory would favor the products of free labor in Mexico and the South American republics which have abolished slavery. If, as is to be expected, the idea of Mr. Nelson prevails upon the intelligence of the American people, it would be difficult to find a more formidable weapon with which to destroy in America that human traffic which is condemned by the conscience of the civilized world.

That our readers may become acquainted with Mr. Nelson’s letter, we commence publishing it to-day, taking it from our colleague, the Federalista, whose proverbial activity has saved us the agreeable task of its translation.